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ARGUMENT 
 
 OF 
 
 HOI CHAUFCEY I. DEPEW. 
 
 GENERAL COUNSEL OF THE NEW YORK CENTRAL AND HUDSON 
 RIVER RAILROAD COMPANY. 
 
 BEFORE THE 
 
 ASSEMBLY COMMITTEE ON KAILRQADS, 
 
 IN OPPOSITION TO THE BILL 
 
 “AN ACT TO REGULATE THE TRANSPORTATION OF FREIGHT 
 BY RAILROAD CORPORATIONS.” 
 
 AND ALSO THE BILL 
 
 “AN ACT TO CREATE A BOARD OF RAILROAD COMISSION- 
 ERS AND TO DEFINE AND REGULATE THEIR 
 POWERS AND DUTIES.” 
 
 MARCH 17, 1880. 
 
 ALBANY : 
 
 PRINTING HOUSE OF CHARLES YAN BENTHUYSEN & SONS 
 
 1880. 
 
ARGUMENT 
 
 M/s.l/i.'f 
 
 OF 
 
 HOI. CHAUNCEY M. DEPET. 
 
 GENERAL COUNSEL OF THE NEW YORK CENTRAL AND HUDSON 
 RIVER RAILROAD COMPANY. 
 
 BEFORE THE 
 
 ASSEMBLY COMMITTEE ON RAILROADS, 
 
 IN OPPOSITION TO THE BILE 
 
 “AN ACT TO REGULATE THE TRANSPORTATION OF FREIGHT 
 BY RAILROAD CORPORATIONS.” 
 
 AND ALSO THE BILL 
 
 ‘AN ACT TO CREATE A BOARD OF RAILROAD COMISSION- 
 ERS AND TO DEFINE AND REGULATE THEIR 
 POWERS AND DUTIES.” 
 
 MARCH 17, 1880. 
 
 ALBANY : 
 
 PRINTING HOUSE OP CHARLES VAN BENTHUYSEN & SONS. 
 
 1880. 
 

 
n 9ia.7 c.>vs 
 
 
 O 
 
 M 
 
 4 
 
 ARGUMENT. 
 
 The Chairman — The Committee will come to order; Mr. Depew has 
 the floor. 
 
 Mr. Chairman — I have appeared many times in the last fifteen years 
 before committees of the Legislature in the discussion of these freight 
 problems and measures affecting the railways of the State. Heretofore 
 I have been almost alone, surrounded on all sides by hostile elements 
 and regarded as the incarnation of that monopoly which the English 
 dictionary failed to furnish a vocabulary sufficiently large to characterize 
 and foreign tongues were brought in by those who understood them. 
 But I am here to-day, at the close of a discussion, the most extraordi- 
 nary ever witnessed in this State, and in the midst of a gathering 
 before this Assembly committee the most wonderful we have ever seen, 
 in which the business, manufacturing, industrial, and agricultural repre- 
 sentatives of the State have appeared on the side of the railway com- 
 panies, and we, instead of standing in the front and battling for our 
 lives, have been compelled to take a back seat. 
 
 Now, then, Mr. Chairman, this most extraordinary spectacle has been 
 brought about by processes to which it is necessary briefly to allude. The 
 appeal to the Legislature which resulted in the appointment of this 
 special committee did not come from any interior town, did not come 
 . from any interior city, did not come from any manufacturing, farming 
 or business interest in the State, save one. By processes which we could 
 not control, and which nobody could control, the jobbing trade of the city 
 of New York had largely slipped out of the hands of the merchants in the 
 city of New York, who had had the monopoly of it for a hundred years, 
 and a portion of it, by the natural laws of trade, was transacted in the 
 great centers in the central and western parts of the State. The jobbing 
 interest of New York, consisting of about thirty-two houses engaged in 
 this business, noting this fact, determined to get it back, and they 
 came to the Legislature pleading their cause ; but here they were met 
 by the whole State on one side, they being on the other. Then they 
 began an agitation, and worked it up with a shrewdness and ability 
 
4 
 
 which arouses my earnest admiration. Mr. Thurber admitted upon 
 this floor last week that he set this ball in motion and brought about 
 these resuHs by the free use of printers’ ink. There is, and always has 
 been in the State of New York, a sort of slumbering feeling, on the part 
 of the agricultural classes, that the western trade was interfering with 
 their products and farms. It originated long before the railroad was 
 built. It began when the Erie canal was put through and brought the 
 farmers of the northwestern States in competition with the farmers of 
 this State ; and the farms of the Mohawk in competition with the 
 farms of the Hudson river, the farms of the St. Lawrence river and of 
 the southern tier. In looking back over the discussions of that day, I 
 find that the farmers of these localities fought with the fiercest energy 
 and unanimity the building and opening of the Erie canal, and claimed 
 that they would be ruined by these transportation facilities bringing 
 the cheaper and richer lands of the interior and western part of the 
 State, and of the western Territories, in competition with them. The 
 present outcry against the railroads, from all sources, bears no com- 
 parison to the feeling exhibited against the canal at that time, by the 
 farmers alone. 
 
 Now Mr. Thurber and his committee appealed to this agricultural 
 element, and formed an organization which was partly agricultural and 
 partly political. His committee furnished it with its pabulum of docu- 
 ments, filled with a skillful blending of facts and fancies, admirably 
 calculated to arouse local passions, and on that created a sort of repre- 
 sentation in the country. Then came the unparalleled business depres- 
 sion, succeeding 1873, with its panic, when, owing to excesses growing 
 out of speculations following the war, universal bankruptcy fell upon the 
 whole land, and all enterprises were either stagnant or ruined, when 
 thousands of men were thrown out of employment and thousands of 
 industrious men became tramps upon the highway. Appealing to these 
 misfortunes, which we could not control and in which we were all 
 sufferers, he said “ the railroads are the cause ; let us go to the Legisla- 
 ture and get relief.” Well, gentlemen, he came to the Legislature and 
 they gave him his committee. It sat for eight months and its labors are 
 before you. We are here to discuss both its report and the statutes 
 which it formulated. 
 
 Now in regard to that committee I have no words except those of com- 
 mendation and praise. That committee was composed of men of intel- 
 ligence, integrity and character ; but it had the misfortune, which is 
 inevitable in all such cases, of having upon it gentlemen who were not 
 familiar with the great transportation problems of the day, arid whose 
 education must come not from experience but from the limited oppor- 
 tunity afforded by the investigation. There was upon it none of the 
 
5 
 
 great shippers who control this vast business which has created New 
 York; there was upon it none of these manufacturers whose interests have 
 been presented here with such force and emphasis during the past two 
 weeks; but the committee went to work with rare intelligence, great 
 skill and industry to develop the facts bearing upon these complaints to 
 see if they really existed ; if remedies could be devised. They threw 
 their doors wide open. The Associated Press and every machinery of 
 advertisement was brought to bear to bring before them every possible 
 grievance and every possible complaint. Wherever in the State a com- 
 plaint was made there they went and sat, in order that no excuse could 
 be offered that it was impossible for these people, on account of their 
 poverty or their inconvenience, to reach the place where they could get 
 their grievances before the committee. After sitting for eight months, 
 after advertising to the North, the West, the East, the South, and the 
 interior of the State, if any locality has a grievance we do not ask it to 
 come to us we will go where it exists. What is the result P It is before 
 you in these five large volumes. No representative of the great manu- 
 facturing interests of this State appeared, no locality in which this thriv- 
 ing business is done appears. 
 
 The Produce Exchange is unrepresented, the Chamber of Commerce 
 is unrepresented, the Butter and Cheese Exchange is unrepresented, the 
 American Exchange is unrepresented ; these great bodies, and others 
 which hold in their hands all the commerce and all the trade of the great 
 metropolis are wholly unrepresented in the testimony before this com- 
 mittee. The manufacturers, the jobbing and retail merchants of Syracuse, 
 of Utica, of Rochester, of Albany, of Troy, are none of them to be found 
 here with one single word of complaint ; and outside of the testimony 
 which was taken from the lips of the railroad officers and employees, 
 there is no testimony bearing upon this transportation question’, except 
 that of one or two witnesses in the city of New York who swore to imma- 
 terial facts; the millers of Rochester and the pork packers of Buffalo. 
 All the grievances of the twenty millers of Rochester and of the half- 
 dozen pork packers of Buffalo were due to causes beyond the reach 
 and past the control of the railways of the State of New York, and 
 wholly within the jurisdiction and within the control of railways 
 chartered by other States and outside of your power to reach or to limit. 
 On the one side, in these five bulky volumes of testimony, there is 
 arrayed only the testimony of these limited interests, represented by 
 less than twenty witnesses; and on the other side, the great manufactur- 
 ing, the great industrial and the great agricultural interests of the 
 State stand silent because they had no complaint to make. When the 
 work of this committee comes before you for your action, what then 
 happens ? When they are called upon to present their bills, they find 
 themselves facing a problem which has received the attention of the 
 
6 
 
 best administrative, the best railway, the most experienced talent in 
 this and other countries, resulting in a confessed inability to solve it. 
 In their report, with great ability and fairness, they state the difficulties 
 which surround them ; and I am not surprised that when they come to 
 formulate these difficulties into bills, those bills meet the opposition 
 which here presents itself, because it was impossible, with their ex- 
 perience and with any knowledge which they acquired in that investi- 
 gation, if they had possessed the combined talents of Daniel Webster, 
 Henry Clay and John C. Calhoun, to have presented bills to meet these 
 difficulties without crippling the railways and ruining the industrial 
 interests of the State. Nothing better illustrates the exact condition of 
 this question than the presentation of it which has occurred here before 
 yourselves. Who appear here on the one side, and who on the other ? 
 
 In the two days the manufacturers, merchants and produce deal- 
 ers were here, there came 1,200 to 2,000 men, and they represented 
 between three and four hundred millions capital, and some 300,000 
 employees, and in the families dependant upon those employees, in the 
 incidental business, grouped around and dependant upon their factories, 
 stores and dealings, they spoke for not less than 3,000,000 of the popu- 
 lation of this State ; and against that 3,000,000, who appear on the other 
 side ? The call is loud, the drums beat, the alarm is sounded and every 
 element favorable to these measures which could possibly be mustered came 
 here last Thursday, they were less than a score in number, only the old 
 jobbing interest of the city of New York, which set this ball in motion, 
 the representatives of the affiliated political agricultural organization 
 which they had created, and two or three honest and well-meaning men 
 who spoke only for themselves. Mr. Sterne came, prophet and apostle 
 of railway reform; Mr. Sterne, an able and learned lawyer, but 
 
 who never shipped anything in his life except himself ; who has 
 
 studied the railway problem and read books upon it, until it can 
 
 almost be asserted that 4 4 much learning hath made him mad ; ” 
 
 he told me that he had read every one of the amalgamated English 
 reports, which are three feet square and form a pile five feet high, 
 and no man could wade through them without serious danger of per- 
 manent water on the brain. (Laughter and applause.) He developed 
 his usual and well-known views on this subject, and what do they 
 amount to ? Simply, that upon general and broad principles there must 
 be an equality of dealing all over the world, and unless there is, we are 
 in constant peril of universal disaster. I do not propose to criticise Mr. 
 Sterne’s address any further than this : when we were together before 
 this investigating committee, I said to him, “ Mr. Sterne, suppose your 
 theories prevailed ; suppose you tie up with an iron-clad statute, or any 
 statute, the railways of this State to-day, which drives them out of 
 competition for the through business and raises their local rates and 
 
7 
 
 diverts over affiliated lines with short hauls in this State the business of 
 the State to Philadelphia and other seaboard cities, what then ? ” 
 “ Why, sir,” said he “ you will establish the great principle of truth and 
 justice in the State of New York, and as soon as Pennsylvania and 
 Maryland and New Jersey and Massachusetts see it they will not let 
 New York suffer many years before truth and justice will prevail 
 in those States.” (Laughter.) 
 
 The only trouble with his proposition is that the business men of this 
 State, the manufacturers, wholesale and retail grocery men, dry goods 
 men and farmers of this State, have not in them that sublime spirit of 
 martyrdom which will permit them to loose their fortunes in order to im- 
 press these moral lessons upon rival and neighboring localities which are 
 benefited and enriched by their devotion to this view of truth and justice. 
 (Applause.) My eloquent and versatile friend, Senator John O’Donnell, 
 came here. The President of the Utica & Black River Road has stated 
 his magnitude as a shipper. He paid me many compliments for which I 
 am much obliged : but one statement that he made I think fairly charac- 
 terizes the accuracy of the whole of his argument. He said that Mr. 
 Vanderbilt and himself started in life together, that he knew him when 
 he had only a few thousand dollars and that he died worth a hundred 
 millions; while he, Senator O’Donnell, with equal industry and abilities, 
 and working just as hard had accumulated but little in comparison. 
 The Commodore died five years ago at the ripe age of eighty-two, and 
 Mr. O’Donnell as he stood here and fulminated his vigorous eloquence, 
 struck me as the best preserved orator I ever saw in any assembly 
 whatever. (Laughter.) Then John O’Donnell No. 2, (for we had two 
 dromios in this farce), (laughter) appeared and said that he was a high 
 officer in the State Farmers Alliance, and unless this legislature did what 
 he told them the vengeance of the people would take their political lives 
 at the first opportunity. A member of Assembly who stood behind me 
 said, “ who is that ? ” said, I “ One of the great officers, I don’t know 
 what they call them, of the Farmers Alliance in this State.” “ He a 
 farmer ? ” “ lie so states” “why,” says he “he has been arguing before 
 my committee this afternoon to have us report a bill to raise the rates 
 for legal advertisements because he publishes a country paper down in 
 Jamaica, Long Island, and wants them increased so that he can have a 
 special rate for the benefit of that local journal. (Applause.) 
 
 Then Mr. Kilmer came. Now, Mr. Kilmer is a genius in his way. 
 Kilmer is the great milk man — representative of the milk dealers. 
 Kilmer came here last winter, and brought not only his association of 
 middle men, but also the milk producers of Orange, Westchester, 
 Dutchess and Columbia, for the purpose of demanding a reduction 
 in the tariff on milk. The pressure was so great that we called to- 
 
8 
 
 gether the farmers. I said to them, “ I am authorized by Mr. Vander- 
 bilt to say to you, that without any bill we will reduce your rate 
 twenty-five per cent., one quarter, and then I will stake my existence 
 against a russet apple that you do not get one farthing of it ; that the 
 consumers get no benefit from it, and that it will simply take money 
 out of our treasury, and put it into the pockets of these dealers. What 
 was the result ? We made the reduction of one-quarter in our rate, 
 and when we got Mr. Kilmer on the stand, on a cross-examination, we 
 made him swear, that as a middleman and milk dealer, he never gave 
 one penny or one farthing of it to the farmer, never gave a penny or a 
 farthing of it to the consumer, but he and his associates pocketed it all 
 themselves, and when Mr. Tozier of your committee asked him last 
 week if that was not so, what was his answer ? Mr. Tozier said, “ Did 
 you give the farmer any benefit of this?” “Yes.” “Well, how?” 
 “ Why, if the railroad hadn’t reduced the rate, we would have reduced 
 the price to the farmer.” The answer reminded me of the argument of 
 the brigand, who claimed the mercy of the court because if the victim had 
 not given up his money he would have taken his life. It is unnecessary 
 to go through with the other gentlemen. My friend, Harris Lewis, is one 
 of those honest, well-meaning men for whom I have a great respect. 
 He has the integrity of his convictions and of his life behind him. 
 He submitted both of them to the popular verdict last fall. He got 
 9,000 votes out of 900,000, and he told me, as he sat here during the 
 debate, that the only reason why he didn’t get them all, was because 
 he could not induce the people of this State to look at the question just 
 as he did. (Laughter.) 
 
 Now, then, gentlemen, another spectacle. When this bill was first 
 presented to the legislature, it received, as all such things do, the assent 
 of nearly all the men both in and out of the legislature. When I spoke to 
 one or two members, and endeavored to point out to them some difficult- 
 ies which I thought existed in the bill, they looked at me as a railroad 
 lunatic who could not be satisfied; as much as to say, “ when we have 
 the ability to crucify you and only propose to put you in the stocks, how 
 unreasonable you are ? ” But, gentlemen, when this bill was subjected 
 to the criticism of the experienced railroad men of the State, when it 
 was subjected to the criticism of the business men and manufacturers of 
 the State, when it was subjected the criticism of the men who do the 
 business of the State, then the theoretical reformers who favor the meas- 
 ure, saw and acknowledged the defects and consented to remove them. 
 They made five important amendments to this bill, which otherwise and 
 heretofore was so perfect that it could not be touched. They took out 
 the passenger clause, they took out the pro rata clause, they took out 
 the express clause, they guarded against the terminals and if they had 
 stayed here one more day the bill would have been disemboweled and 
 
9 
 
 nothing but the title left. The report of the special committee iterates 
 and reiterates with great emphasis precisely the difficulties of this situa- 
 tion which they attempted to solve. Here on page 72 of the report they 
 say, “ we might cripple the prosperity of New York ; we might enact 
 laws that would build up Jersey City and transfer the legitimate growth 
 of New York to the Jersey coast. It is as imperative that such conse- 
 quences be avoided as it is that present wrongs be redressed. While the 
 laws of commerce ignore political divisions wholly, our jurisdiction is 
 circumscribed by the limits of the State of New York.” 
 
 Then on page 74 they say “our railroads should be forbidden to make 
 secret rates, and compelled to treat all shippers alike ; but the propriety 
 of compelling the publication of rates, and the publication of all pro- 
 posed changes is a matter for your serious consideration.” And yet the 
 bill in its practical effect amounts to that. 
 
 On page 75, they say : “ The business of transportation requires the 
 greatest freedom of management of any business extant. This is mani- 
 fest to the most casual observer.” Now, there is no business extant that 
 is hampered by the iron law of statute ; there is no manufacturing in- 
 terest, no commercial interest, no agricultural interest that is restricted, 
 except by the universal laws of trade ; and if this railway business, in 
 the language of this committee, requires greater freedom than any 
 business extant, what propriety or necessity is there for these bills, 
 which impose limitations and restrictions under which no other indus- 
 tries could live ? The trouble with all this question is, that the com- 
 plainants are gentlemen who never use the railway. The parties who 
 are satisfied are the people who do. 
 
 An occasional farmer who tills a few acres, who never ships anything, 
 but sells all he raises at home, and finds a ready market for more than he 
 can supply at the village, factory, or store in his immediate neighborhood ; 
 the local politician who is looking for an issue upon which he can work him- 
 self into office as the people’s friend ; the citizen who has no occupation, but 
 sits on the dry goods box, or the nail keg, and plays the oracle upon all 
 questions, these people, and there are many of them, read the tracts of the 
 board of trade and transportation, and retail them in support of this legis- 
 lation. But the farmers who ship over the road, the produce buyers who 
 give them New York prices at their own doors, the merchants who re- 
 ceive their stock by rail, the manufacturers whose existence is depend- 
 ant upon freight charges, the dealers of every kind who keep trade 
 flowing through these great arteries, are unanimously opposed to it. 
 
 The difficulty with all this question is the limited and circum- 
 scribed jurisdiction of the State. This great railway system was 
 never contemplated when the Constitution of the United States 
 was framed. To-day it has leaped over all political limitations, and 
 ** 
 
10 
 
 New York and San Francisco, New York and St. Lonis, New York 
 and Chicago, are the terminii of continuous lines, and all that this Leg- 
 islature can do is to take the railways of the State of New York by the 
 hair of the head and lift them out of the national system, and hang 
 them up to dry. But if they do, the great business of the country will 
 go on around New York just as well, just as profitably, just as economi- 
 cally as it does through the State, and the only community injured, the 
 only people injured will be our own citizens, our own industries and our 
 own business. 
 
 This bill necessarily adjusts the local to the through freight under 
 heavy penalties. With the rates of the great through business of this 
 country the railways of the State of New York have no more to do than 
 the man in the moon. They are fixed at some 300 points in the great 
 west, and they are fixed there by competing and connecting lines for 
 the purpose of getting business. The western cereals pour into some 
 reservoirs, like Chicago, Milwaukee, St. Louis, Detroit, Cleveland, 
 Toledo, Indianapolis and Cincinnati, and there the Grand Trunk wants 
 them to take through Canada to Boston ; there the Pennsylvania road 
 wants them to take through Pennsylvania; there the Baltimore & 
 Ohio road wants them to take through Maryland to Baltimore ; there 
 the Mississippi river and its barges want them to take down the Missis- 
 sippi to New Orleans ; there the Chesapeake and Ohio wants them to 
 take down to Norfolk, and there we want them to bring to the State of 
 New York. The only way we can get them is by competition with rail 
 lines, lake lines and river lines, all hostile to our interests and the inter- 
 ests of our State. Yet we do successfully compete because we say to these 
 western lines, “ make whatever rate you find necessary, only get the 
 business, give it to us and we will take care of it, and take our share of 
 it, whatever it may be. We have from 150 to 200 miles longer haul ; 
 we have a lighterage charge in the city of New York which Balti- 
 more has not, Philadelphia has not, Boston has not, that in effect 
 adds 200 miles more to our route, and yet, in spite of all that 
 we will bring this business through the State of New York if you will 
 make the rate that gets it.” And the bringing of that business through 
 the State has made the State of New York all that she is to-day. 
 Without it what would have been the State ? It would have had a 
 limited population at its seaboard, and limited industries in its interior. 
 Without it the State would have had none of these great cities and 
 thriving towns which dot it everywhere. Without it she would have 
 been provincial ; while to-day she is an Empire, dominant over all of her 
 sister States — first and foremost in population, wealth and prosperity. 
 Gentlemen fail to appreciate the magnitude, vastness and importance 
 of this through business when they talk so lightly about this matter. 
 We bring to the city of New York more of the product of the West than 
 
11 
 
 are carried to all the other seaboard cities combined, and the handling 
 of that vast commerce brings back the imports to the city of New York, 
 places in our hands hundreds of millions of dollars a year, which roll over 
 into manufactories, roll over into country cities, roll over into business, 
 roll over into everything which creates localities, business, population 
 and prosperity. 
 
 When the Erie canal was opened the farmers of the State of New 
 York had the West brought in competition with them ; but the com- 
 pensation to the farmer of the State of New York is, and has been, that 
 the handling of those immense continental products, brought here by 
 canal and rail, has created and produced, within the limits of the State 
 of New York, those industries, here and there and everywhere, which 
 have made centers of population and local markets which absorb all he 
 can raise. If there is any surplus the produce buyer goes out to the 
 farmer who has a few bushels of apples, potatoes or wheat which he 
 could not ship to the city of New York employing commission mer- 
 chants and incurring necessary expenses without losing the whole profit. 
 The produce buyer first comes to the railroad and gets a special rate 
 that will enable him, on account of the quantity, to move his full carload 
 very cheap ; then he goes to the small farmer and buys from him at the 
 market price, saves him his commission, and gives him the benefit of that 
 special rate and ten times more. The competition is so active among 
 these produce buyers that the highest market prices are always paid. 
 reckon eight-tenths of the farmers of this State sell their products directly 
 to .the commnity around the manufactories which exist in their localities, by 
 main strength of a special rate, and the other two-tenths dispose of them, 
 at a New York price, to a produce buyer, who gives them the benefit of his 
 wholesale freight rate as an inducement for the purchase. So that prac- 
 tically, in the distribution and dissemination of rates, the people of this 
 State are not discriminated against even in the smallest shipments, and 
 at the same time they derive incalculable benefits from the through busi- 
 ness. The volume of this through business has been such that it has 
 enabled the railways of this State, within the last eight years, to reduce 
 the rates upon all classes of local merchandise more than one-half ; 
 whereas, if we were deprived of that great traffic and doing exclusively 
 a local business, we would raise our local rates necessarily, and the 
 farmers of the State would have neither the home manufactory right at 
 his door to sell to, or be able to live on his farm and get his products to 
 the city of New York. These gentlemen say the policy of the New 
 York Central railroad is to crush out, and that it has crushed out, 
 the local business on its line ; yet since 1872, in the face and eyes of 
 this great commercial depression, the local business has increased thirty- 
 five per cent. There are 500,000 farms in this State, and 36,000 new 
 ones have been brought under cultivation during that period ; a result 
 
12 
 
 which would have been impossible unless the railways of the State had 
 furnished the farmer a manufactory in his neighborhood, or a produce 
 buyer so that he could live and make money. The railroads of the 
 State of New York furnish cheaper passenger fare and furnish cheaper 
 freight rates than any railroads in the world. The passenger rates in 
 Connecticut, on all the railroads in the State, are four and a half cents 
 per mile per passenger. In Maine they are from four to five cents per 
 mile per passenger. In Pennsylvania they axe three and a half cents 
 per mile per passenger. In Michigan they are three and a half cents 
 per mile per passenger. In Illinois they are four cents per mile per 
 passenger. In Minnesota they are four to five cents per mile per pas- 
 senger. In Colorado they are ten cents per mile per passenger. In 
 England they are four cents per mile per passenger. On the continent 
 of Europe they are from four and a half to five cents per mile per pas- 
 senger, and in the State of New York they are three cents per mile, 
 and on the New York Central & Hudson River Railroad they are two 
 cents per mile per passenger, one-half the average rate of all the com- 
 bined railroads in the world. (Applause.) The railroads in Connecti- 
 cut, taking them all together, charge six and a half cents per ton per 
 mile for freight. In Maine four and a half cents. In Massachusetts 
 four and a half cents. In Pennsylvania, five cents. In Ohio six and three- 
 quarter cents. All the railroads in New York, altogether, big and little, 
 through and lateral, charge three cents per ton per mile, and the New 
 York Central charges ninety-three hundredths of a cent per ton per 
 mile. (Applause.) That is what this grasping and overshadowing 
 monopoly, does for the State of New York. The railroads of the State 
 of New York earn ninety millions of dollars a year of which sixty 
 millions is taken, by way of toll, out of the products, and people of the 
 great northwest, and every dollar is spent in the State of New York. 
 There are seventy railway corporations in this State of which only 
 seventeen pay dividends, and on the total cost of the railways of 
 this State their total net earnings only yield three per cent upon the 
 investment. There is not, from one end of these five volumes of testi- 
 mony to the other, one iota of evidence that a freight rate was ever given 
 for favoritism, for corruption, or for reward. The combined testimony of 
 every man who appeared before that committee, and of every man who 
 did not appear, is that the rates given by the railways of the State of 
 New York are given for business reasons with business justifications; 
 that they are given upon principles which must regulate all railroad 
 transportation, magnitude, bulk, haul, time, expense, and movement ; 
 that they are given for the purpose of developing and doing the 
 business. Why, gentlemen, if the New York Central Railroad, situated 
 as it is, had followed a policy during the last twenty-five years, such as 
 would be enforced by the operation of a law regulating and depending 
 
13 
 
 every local shipment, upon every through transaction and special rate, 
 either by distance, or maximum rates per ton, per mile, or any of the 
 panaceas which are presented, from time to time, all the business of 
 this State would have been done at New York and Buffalo, and the rest 
 of the line would have been a sparsely populated farming commu- 
 nity. "When this committee states that competition can no longer 
 regulate the railways of the country, when they say the Legisla- 
 ture must step in, because competition has failed, they must except 
 the New York Central Railroad. The rule might apply to a lateral 
 road, and does where it is the only outlet and only inlet to the ter- 
 ritory it feeds ; it might apply in some measure to the Erie road on a 
 portion of its line. But look at the situation of the New York 
 Central. In its through business it meets every competitor on the con- 
 tinent. In its local business the canal and Hudson river touch it at 
 every station, and the captain of the steamboat, sloop, barge or canal 
 boat at every station steps into every store and into every shop, and 
 competes with it for business. Every twenty miles a railroad from a 
 neighboring State reaches the line of the New York Central, and tries 
 to take away its business, so that this road has for nine months in the 
 year the canal and the Hudson river touching every single station, and 
 the whole year round, at Buffalo, Batavia, Rochester, Utica, Syracuse, 
 Oneida, Albany, Schenectady, Troy and other points, roads with only a 
 limited line in the State, and the rest running outside the State, outside 
 of your jurisdiction, competing for its business and fixing and regulat- 
 ing its rates. Railroads owned and controlled in the State of Pennsyl- 
 vania, running to the city of Philadelphia by a shorter line from the 
 same points than we have to the city of New York, are every one of 
 them to-day saying, “ For God’s sake, gentlemen of the legislature, tie up 
 the New York Central Railroad, and we will get rich and carry the product 
 of the State to the city of Philadelphia.” No such competition — so 
 active, so terrific — exists anywhere as that which assails the New York 
 Central & Hudson River railroad. When you talk about discrimina- 
 tion, do not these discriminations exist everywhere ? Where do they 
 prevail more than on the line of the Erie canal, Lake Champlain and 
 on the Hudson river? The proprietor of a line of boats on Lake 
 Champlain told me last night, “ We charge more for twelve miles than 
 we do for one hundred and fifty.” This bill does not propose to regulate 
 water-ways. Says I, “ Why do you do that ?” He says, “ For the 150 
 miles we have our equipments complete at both ends, and it costs 
 us nothing additional to put freight on the boat. For the twelve miles 
 we are obliged to keep up an expensive equipment, which does not pay 
 at a pro rata, or even a limited part of the through rate. We have to 
 employ special men, stop the boats, and lose steam, and so we charge 
 more for twelve miles than we do for 150.” Take the canal ; the State 
 
has made it practically a free water way. The State has discriminated 
 in its toll sheet against its own citizen. The State has given to many 
 agricultural products raised in the west, coming in direct competition with 
 the farmers along the line of the Erie canal, an absolute freedom from tolls. 
 It has imposed toll upon wheat, but wheat has ceased to be a material 
 product of this State, because our wheat lands have given out, and the 
 testimony of the millers of Rochester, was that the wheat of the Gene- 
 see Valley was now of so poor quality that it could not be milled to com- 
 pete with flour made from western grain. Canal discrimination works 
 in this way. The canal boatman goes into a village along the line of 
 our road and steps into a store and says, “ I am coming back empty, 
 have you got anything in New York you want brought up ? ” “ Yes, I 
 
 have some flour, some sugar, some molasses, and some timothy seed ; 
 what will you bring it up for ? ” “I will bring it up for twelve cents a 
 hundred.” “ Can’t stand that ; Captain Jones offered to bring it up for 
 ten cents a hundred.” “ I will bring it for eight cents.” “ All right,” 
 he goes to a rival store keeper across the way and says : “ Have you got 
 anything in New York you want to bring up ? ” “ Yes, sir ; some 
 
 molasses, some sugar, some flour and timothy seed; what will you 
 bring it up for ? ” “Ten cents a hundred.” “Ido not care enough 
 for it to pay that.” “ I will bring it for eight cents a hundred.” 
 “ I do not care enough for it to |>ay that.” I will bring it up for 
 five cents.” “All right, bring it up.” That occurs every day in 
 the week — discriminations, such as the railroads never practiced, and 
 could not live under for a single hour, are of daily occurence on the 
 highway which cost ninety millions of dollars to the people of this State, 
 and is made free to the boatman. There is not a bill in the Legis- 
 lature to control this discrimination of the water carriers and not an 
 effort in the Legislature to correct it : yet it is seriously proposed in 
 this bill to tie our hands so that we cannot compete with either water 
 ways or the foreign railways which tap our road. This is 
 the trouble with competition on the line of the New York Central 
 Railroad. Suppose you establish by law that no more shall be charged 
 for a short haul than for a long one, that cotemporaneous ship- 
 ments shall be preciselythe same under all circumstances, and fix 
 a heavy penalty for every violation. What follows ? Why, if at 
 Rochester, Syracuse, Geneva, or Lyons, we want to get business 
 and prevent it going to Pennsylvania, and keep it in the State 
 of New York, and take it to the city of New York, and knowing that 
 we are bound by the law while they are free, these Pennsylvania com- 
 panies compete and we try to meet it ; we have got, on that day and 
 at that time, to lower and regulate all our rates along the whole line to the 
 reduction at the competing point, or else suffer the penalty or abandon 
 the business, and no people understand this better than these lateral 
 
15 
 
 lines. They know that we must permit them to take the whole of the 
 business at a single point rather than lower our rates along the whole 
 line of our road to keep the business at that place. Then the question 
 arises, how do we keep the business in competition with them at that 
 single point now? Simply, because if the Lehigh Valley attempts to 
 steal away our business at Geneva or Lyons, or the Pennsylvania road 
 at Rochester or Buffalo, or the Delaware & Lackawanna at Syracuse, 
 Oneida or Utica, we meet them at that point on terms upon which they 
 can get no business at all ; and knowing that we hold that club, they 
 do not dare do otherwise than fairly treat with us the business of that 
 locality and take their legitimate proportion. And, holding this power, 
 we can enforce equity of rates to competing and non-competing points 
 alike. But if we had to adjust the business along 450 miles to the com- 
 petition of one single station, then, of course, the road that reached that 
 station in competition with us, running outside the State beyond the 
 jurisdiction of your law, would take the business of that locality and 
 carry it to foreign States and cities. Within one year after this bill be- 
 came a law the whole business of the city of Syracuse, of which we now 
 do ninety per cent, would be done by outside lines partly running to the 
 city of New York, and partly diverging to the city of Philadelphia. 
 While rates would be made from the city of Syracuse, which would 
 make competition and business at places like Auburn, which are not 
 reached by outside lines, utterly and wholly impossible. The bill under 
 consideration is the product, as I understand it, of enactments partly in 
 existence, and partly repealed in three or four States in the Union. 
 I make this bold assertion : that in the States where the parts of 
 this statute are now in effect the local conditions under which they were 
 passed, are wholly different from the local conditions affecting the New 
 York Central Railroad. 
 
 A statute might be passed which the Boston & Albany Railroad 
 in Massachusetts could live under, having none of these competitions on 
 its line, but which would absolutely ruin the New York Central Railroad, 
 and drive it out of business. The experience of the Western States is 
 suggestive. They entered into this business of legislation with 
 unanimity and with great force and vigor, but when the blight of 
 industrial manufacturing and agricultural depression fell upon their 
 farms and business; when their credit failed, and they could get no 
 money for their enterprises, they rescinded all their granger laws. But, 
 while they were in force, seventeen railroads in the State of Illinois, 
 and eleven in Wisconsin, went into bankruptcy, and the losses of the 
 people of those States cannot be calculated in money, because it 
 reached population, development and confidence, which, once lost, cen- 
 turies cannot replace. Iowa, with its long lines far distant from each 
 other, and having no local competition by rail or water, presented a fine 
 
16 
 
 field for this kind of legislation, and conditions exactly the reverse of 
 those which exist in this State. Yet Iowa, after a full trial, last year 
 repealed most of her laws, because they proved equally injurious to the 
 State and the railroads. 
 
 I will read the Iow'a law, and you will see how much more liberal and 
 elastic it is than the bill under consideration: “No railroad company 
 shrill charge any person, company or corporation for the transportation 
 of any property a greater sum than it shall, at the same time, charge 
 and collect from any other person, company or corporation for a like 
 service from the same place, and upon like conditions ; and all conces- 
 sions of rates, drawbacks or contracts for special rates, founded upon 
 the demands of commerce and transportation, shall be open to all per- 
 sons, companies and corporations alike.” 
 
 That law w T as repealed, and yet the New York Central Railroad, with 
 hardly an exception, lives up to like principles to-day. 
 
 What I have said here upon the general question will largely 
 apply to the second section of this bill. The trouble with your equal 
 rate for a cotemporaneous shipment, regardless of different conditions, 
 and applying alike to the man who contracts for a year and one who 
 makes only single and casual shipment, is this : All the manufacturers 
 who were before you testified that it was absolutely necessary for them 
 to make time contracts ; that befort they had the cotton or the wool in 
 their mills they had sold the manufactured product ; and they could not 
 sell that manufactured product unless they knew what the freight rate 
 was going to be at the time it would probably be shipped ; therefore 
 they must have a contract in advance for the purpose of making their 
 transactions. The contract is made, for instance, with the New York 
 Mills at Utica, and upon that they base all their bargains and sales. 
 The contract is a low one, because of the certainty and volume of the 
 business, and is made for the purpose of fostering an industry in our 
 State in competition with rival establishments in other States. But 
 under this bill, on any day in the year, a like shipment of a single car- 
 load for a single specific purpose must receive absolutely the same rate 
 as we get on that day under that contract. The manufacturer loads 
 and unloads his own freight, furnishes his own side-tracks and ware- 
 houses, gives us his whole business all the year round, and all of it goes 
 out of the State to a distant market ; and yet all of our local and purely 
 State business must every day be done at the same rate as that manu- 
 facturer pays. This bill applies to the leased lines. The absolute cost, 
 as far as it can be ascertained, of hauling a ton of freight over the New 
 York Central, on account of its grades and the magnitude of its through 
 business, will be ninety one-hundredths of a cent a ton a mile. The 
 absolute cost of hauling a ton of freight over the New York & Harlem 
 
17 
 
 railroad, which we lease, and which is a local line with only a local 
 business, is six cents a ton per mile ; and yet under these provisions we 
 would be compelled to transport freight from some point on the line of 
 the New York Central to a point equally distant on the New York & 
 Harlem railroad at the same rate as we do upon the New York Central. 
 If two shipments were made from the same point on the Central, one to 
 go partly on the Harlem and the other wholly on the Central, the one on 
 the Harlem might be the shorter and yet cost us five times as much as the 
 one on the Central ; but if we charged any more, we should be liable to all 
 the penalties of this act. Then there is a clause in reference to making a 
 combination rate over two connecting lines. That has been tried in the 
 State of Massachusetts, and the Massachusetts people say they find it 
 impossible to carry it into effect, that they can get no light from 
 the railway commissioners upon the subject, and that practically it 
 is a dead letter. For the simple reason that you cannot so adjust by 
 law that the line which receives the goods shall fix for a connecting and 
 independent road to which it may deliver them the price that road may 
 choose, nor can you say that whatever the New York Central charges 
 from New York to Syracuse, it shall make no greater rate over the 
 Utica & Black River road to Watertown, when what would be a 
 profit to the New York Central, would bankrupt this expensive lateral 
 line for the same distance. 
 
 . • 
 
 The third section of this bill prohibits special rates. I assert that 
 the present position of the State of New York in its relations to the 
 other States of the Union both justify and demand special rates, if New 
 York would retain her local industries. There was a time when New 
 York and the Eastern States furnished the West and South with all the 
 manufactured articles they consumed ; but facilities for transportation 
 and the laws of trade are such that in the sharp competition of modern 
 business, production and consumption every day come closer and closer 
 together. To-day every kind of manufactory is in successful operation 
 in Illinois, Kansas, Missouri, Wisconsin, Iowa, and Minnesota, right at 
 the place where the products are to be sold. Under these circumstances 
 iron foundries, agricultural machine works, cotton or wollen mills, stove 
 works, wagon, glass and other factories, supplying the wants of those 
 Western States have no business to exist in the State of New York. 
 They remain here and prosper unnaturally and by violence. One of 
 the speakers here last Thursday said, that if they did exist here 
 unnaturally — then let them be blotted out. But as a citizen of New 
 York, that man did not understand what he was talking about. If there 
 is an agricultural machine factory at Auburn, Poughkeepsie or Hoosic 
 Falls, and we carry the raw material to them for practically nothing, 
 and then carry their manufactured products without profit to us and put 
 them in Chicago along side of McCormack’s manufactory so they can 
 
be sold, in competition with him, who is injured in this State ? 
 What business is injured in this State ? On the contrary we build up 
 at Auburn, Poughkeepsie or Hoosic Falls a great manufactory which 
 sustains and supports directly and indirectly, ten or fifteen thousand 
 people. We get their local business to transact at local rates, and 
 the State gets the use of that capital and the taxation upon that 
 property. What business have iron industries at Spuyten Duyvil or 
 Albany or Troy, when the same industries are located at Pittsburg 
 hundreds of miles nearer to Chicago, fostered and encouraged by the 
 Pennsylvania Railroad, and receiving a special rate, or located at or 
 so near Chicago that they have no freight charges to pay. What busi- 
 ness has the Troy or Albany stove works to compete with them ? Only 
 by such a violation of the laws of trade and transportation as would 
 be impolitic and impossible if the United States had no state lines, and 
 uniform laws governed every railroad in the country, and the statute 
 which prohibited the New York roads from making special rates bound 
 also the roads of New Jersey, Pennsylvania, Ohio, Maryland and Mich- 
 igan. But we can make a rate for iron to the Troy and Albany 
 foundry ; we can make a rate for stoves from the Troy and Albany 
 foundry, the raw material to it and the manufactured article from it 
 which is secret and unknown to the Pittsburgh or Chicago foundrymen, 
 but will place those stoves in Chicago, and the foundry can stay in Troy 
 and Albany. It can draw millions of dollars a year from the people of 
 Illinois, Iowa, Wisconsin and Kansas ; it can bring that money back 
 into the State of New York, to be spent in Albany and Troy. Twenty, 
 fifty, yes a hundred thousand people can be supported and sustained, 
 where we get the local rate on their local business, where the State gets 
 the taxes and the benefit of the expenditure, and who is injured ? 
 Why, the stove works at Pittsburgh or Chicago are injured ! The stove 
 works at Pittsburgh or Chicago are discriminated against. And are we 
 to legislate to transplant these stove works to Pittsburgh or Chicago 
 because we have to violate the generally accepted laws of transportation, 
 and to discriminate in order to unnaturally keep the business within 
 our own State ? (Applause.) 
 
 There are four hundreds of millions of dollars invested ; there are 
 three to four hundred thousand men employed to-day in the State of 
 New York in manufactories, scattered from New York to Buffalo, making 
 the prosperity, the population, the industry of every locality where they 
 are, which receive their raw product from without the State, and trans- 
 port and sell their manufactured articles without the State, in a distant 
 market, in competition with similar industries located right at those 
 markets, by discrimination, by evading the regular laws of transporta- 
 tion, by concealing the fact from their competitors in those States, and 
 living at those markets. Who is injured ? Why, men doing similar 
 
19 
 
 work at Detroit, at Toledo, at Cleveland, at Milwaukee, at Chicago, at 
 St. Louis, they are injured; they are discriminated against; they fiujl 
 these manufactures of New York, with all the expense of transportation 
 which ought to be charged upon them, coming there and competing suc- 
 cessfully with them in their own market. What is the result ? The 
 result is, that four hundred millions of capital are employed ; that 
 four hundred thousand men are busy and thriving; that three millions 
 of the population of this State are supported, the towns thrive, and the 
 farmers find a local market.* The State can be made the first manufac- 
 turing and agricultural, and the richest and most prosperous State in 
 the Union, and yet we must stop it all to help Mr. Thurber to sell groceries 
 in Syracuse. (Applause.) When I look at the spectacle presented here ; 
 the magnitude of the interests on the one side ; the absurdity of the 
 demand for restrictive legislation on the other, I am reminded of a 
 lecture once given by the celebrated orator, Tom Marshall of Kentucky, at 
 Buffalo. Wonderful as were Marshall’s powers he never was more 
 brilliant, more magnetic, more superb than on that occasion. The hall 
 was crowded to its utmost capacity. Every time one of his splendid 
 bursts of eloquence thrilled the audience so that the slightest whisper 
 could be heard all over the house, the climax would be spoiled by a 
 voice in the rear of the audience shouting “ louder, louder.” (Laughter.) 
 Finally Marshall roused to profoundest indignation said, “ when the 
 end of the world shall come, and in the wreck of matter and the crash of 
 worlds, Gabriel shall blow his trumpet, and the sound of that magnifi- 
 cent music shall fill the universe, and call the dead of all time from the 
 sea and from the land, there will be a man from Buffalo, standing 
 in that countless throng, shouting 4 louder, louder.’ ” (Laughter and 
 applause.) I do not want to be personal on Mr. Thurber or his com- 
 mittee. (Laughter.) 
 
 Mr. W. C. Clark — No, for he is a good deal better man than you are. 
 
 Mr. Depew — Thank you for the compliment ; because I know now 
 just how good a man I am ; and by the way, as my friend here says Mr. 
 Thurber is a much better man than I am, a statement I will not dispute, 
 allow me to digress for a moment, and read some extracts culled from 
 his speeches and the publications of his committees, in illustration of the 
 opinions he and his associates have of us railroad men : “ an ‘ organized 
 body’ of ‘reckless,’ ‘unscrupulous,’ ‘ dishonest,’ ‘ insolent,’ ‘despotic,’ 
 * grasping,’ ‘ terrible,’ extortioners,’ ‘ grinding down the people with an 
 iron heel,’ ‘ destroying all industries,’ ‘ recognizing no responsibility to 
 the government or State,’ ‘ guilty of intrigue,’ ‘ robbery,’ ‘ rapacity,” and 
 
 •In 1870 the amount of capital invested in this State in manufacturing alone was >#.'566,994,820 — 
 giving employment to 3)1,800 persons who were paid #142,466,758. The value of the products 
 was 8785,194,651. In ten years the capital and labor employed, and the value of the products 
 have increased, at the very least, fifty per cent. 
 
20 
 
 ‘bribery; ‘soulless,’ (but some how or other ‘crossing the chasm of 
 death ; ’ ) ‘ terrible foes to political aspirations ; * ‘ more dangerous than 
 Robespierre,’ and ‘ worse tyrants than Nero,’ though, as he says in 
 another connection, ‘ no better or no worse than the rest of mankind.” 
 (Applause.) I am an old school Presbyterian and believe in total 
 depravity and eternal damnation ; but I think my friend Thurber has a 
 worse view of it than I have. (Laughter and applause.) Gentlemen 
 who hereafter in these discussions are at a loss to find terms in which 
 to express their hostility to the railroads, ought to be very grateful to 
 me for collecting this exhaustive vocabulary from which they can select 
 at pleasure. 
 
 While it falls to my duty to criticise the position and views of Mr. 
 Thurber, on these questions, and the methods by which he seeks to en- 
 force his opinions, I respect the great energy and ability with which he 
 prosecutes all his undertakings. I have seldom had an opportunity to 
 agree with him, but the admissions made by him here last Thursdaj 7, 
 seem to me to surrender every excuse for the passage of this bill. In 
 response to a question by a member of your committee, he said he 
 thought the manufacturers in this State ought to be protected by 
 special rates in their competition with manufacturers outside the State. 
 Then you cannot pass this bill in its present shape, or in any form which 
 has been suggested. Once admit the necessity of these discrimina- 
 tions and legislation becomes impossible. You cannot frame any gene- 
 ral act which will not stop, at once, the granting of these privileges 
 which the energetic and able leader of the friends of this measure here 
 publicly declared to be both necessary and wise. 
 
 Why, gentlemen, to build up these manufactories there have been, 
 within the time you have been members of this House, great numbers 
 of. bills introduced to exempt them from taxation, on the plea that the 
 locality was willing to bear all the burdens to induce capital to start 
 these industries in the neighborhood. Towns and villages have gone 
 even further, and four or five years ago a perfect flood of bills were pre- 
 sented to enable villages to contribute to the capital of local manufactur- 
 ers, and they were only defeated because they were unconstitutional. 
 
 I will call attention to only one other feature of this bill, which provides 
 like rates for like classes of freight ; this would compel us to carry pig 
 iron, flour, sugar, molasses, grain and great numbers of articles in the 
 same general classification, but totally different in bulk and value at 
 the same rate. Railroad classifications are made for the convenience and 
 not price. This law would compel us to make a different classification 
 for every single article we transported, and make a volume larger than 
 the Session Laws. Nothing better exhibits the jumble of conflicting 
 statutes from which this bill is copied, than its various provisions in ref- 
 
21 
 
 erence to charges by distance. The second section prohibits charging 
 more for a shorter than a longer distance. The third section prohibits 
 the same thing twice, and in different form and language ; it also con- 
 tains a strict pro rata clause. It is doubtful, upon any construction of 
 all these provisions, if any business could be done without endless liti- 
 gation. The limit of the car load I shall not discuss ; that has been thor- 
 oughly exploded by others. The penalty part, I will say a few words upon. 
 This bill provides that for every violation of it, no matter what it may be, 
 or how innocently done, and you all see how difficult it is to interpret it, the 
 party, aggrieved shall recover the amount of his damages, and also $100; 
 the $100 being in the nature of an informer’s fee. Now, gentlemen, just 
 see how this would work : a train load of fifty cars comes into Buffalo ; in it 
 are cars gathered from all over the west, each one with a rate made at some 
 one of three hundred different places, so that our proportion of the freight 
 charge, from the point of shipment to New York, varies with every car. 
 One car may come from San Francisco, one from St. Louis, one from Mil- 
 waukee, one from Kansas City, and so on. Under the rates that are 
 made, some competing, and some under the pool, every car in that train 
 will have a different rate to New York, and our proportion of that rate 
 from Buffalo to New York will be different on each car. Now, we can- 
 not charge any more for a short haul, than we do for a long one. Then, 
 how are we going to find out whether a contemporaneous shipment of a 
 car-load of the same kind from Buffalo that day is charged more than 
 some car-load in that train ? The only way we can do it is to stop that 
 train at Buffalo, examine the way-bills, telegraph to the points of 
 departure for information, and have a committee of experts to sift and 
 arrange each shipment, to ascertain what is the lowest rate on any car in 
 that train, and then adapt our Buffalo, and our Rochester, Utica, and all 
 intermediate rates, so as to avoid the penalty, to the lowest rate on that 
 train. If it happens to be a tim'e of cut-rates, when every train that 
 arrives will have a different rate for every car, because the rate at Chicago 
 changes every hour, then we have got to hold them until we can ascer- 
 tain the lowest rates and notify every station along our line. That is 
 simply impossible. To get this information, and adjust our local tariff 
 at every station would compel us to hold every through freight train in 
 Buffalo three days. In the first place, shippers would not stand it. In 
 the next place, the connecting roads would not stand it, and we would 
 have to give up that business, otherwise the Lake Shore & Michigan 
 Central, and all our connecting lines would, as they could, give the 
 whole of their business to the Pennsylvania at Erie, or to the Grand 
 Trunk, and avoid all these difficulties. I do not want to multiply 
 illustrations, but if you can get over that one I would like to have 
 you do it, and have us escape the penalty and not violate the laws. If 
 you can get over the illustration of the Lehigh Valley road either taking 
 
22 
 
 all onr business at Geneva and Lyons, or compelling us to adjust all rates 
 over the whole line to any rate they see fit to take under this bill, at those 
 points, I would like to have you do it. Now, as to these penalties, the 
 people, you say, would never go to the expense of enforcing them. 
 There is a syndicate of lawyers in this State who make it a business to 
 sue the railroads. There are lawyers in every city and village along 
 the line of our road (and I know it because I am the general counsel of 
 this company, and it all comes to me, and barratry is no longer pun- 
 ished in this State) who are in collusion with sheriffs, justices of the 
 peace, coroners and even our own agents, for the purpose of notifying 
 them at the earliest possible moment of any grievance whatever, real or 
 imaginary, against the railroad, whether it be a personal injury, a land 
 case or a damage case of any kind. The moment they are notified 
 they go to that man and ask him to sign a contract which reads about 
 as follows : “ I agree with John Doe to retain him to conduct this case 
 
 against the New York Central Railroad Company, he to keep me harm- 
 less against expense, and I to divide with him one-half* of the recovery.” 
 I have on my calendar to-day five hundred such suits brought in that 
 way, and with the idea that we will settle rather than fight them, 
 because following close on the heels of the summons comes the lawyer 
 to us, who says : “ It will cost you five hundred dollars to fight this 
 case. If you will give me a hundred dollars, I will settle.” There are 
 now only few opportunities for this business, but you see how diligently 
 they are improved. But enact this law, and with our two millions of 
 transactions a year what would happen ? Why, these lawyers in every 
 place in the State would ask every shipper in their town to send his 
 freight bills to their offices. They would have experts to look them over 
 and examine them, and out of these way bills every day they would 
 pick a dozen law- suits. Do the best we could, with all the railroad tal- 
 ent in the world and the purity of archangels we would make mistakes 
 under this bill which would subject us to a thousand suits a month. 
 The penalty under the passenger act is fifty dollars for each vio- 
 lation. In that case it is only a question of distance, and easily ascer- 
 tained. It prohibits onr charging more thau two cents per mile. It 
 is our duty to know whether the distance is correctly measured 
 or not. But even under those circumstances we .made a little 
 mistake in the western part of the State, involving the difference of a 
 few cents. Two enterprising lawyers found it out. They employed 
 men for a year to ride up and down on the road, and take a minute of 
 each passage. Then they brought suits. As soon as they were com- 
 menced the secret was out, and great numbers of attorneys went into 
 the business. They sent to every man in Lockport, Tonawanda and 
 Buffalo who had ridden on the New York Central road for six years, 
 over that little piece, and said to them : “ Can you recollect, so you 
 
23 
 
 can swear to it, how may times you have ridden over the New York 
 Central & Hudson River railroad, between Tonawanda and Buffalo, 
 in the last six years; if so put it down and I will get you fifty dollars for 
 each ride, providing you will divide the recovery ?” Then the unprin- 
 cipled ones enlarged it still further, and took names irom the hotel 
 registers, and among others the names of some of our directors, with the 
 intent of having some loafer personate the party and swear he was the 
 man who rode over the road on that day. We had no defense. We 
 could not tell whether Jack Cole or Dick Turpin rode over the road on 
 any particular day. We had nothing to identify him. That man could 
 come into court and swear, “I rode that day.” We were utterly help- 
 less. The aggregation of penalties in those suits reached the sum of four 
 millions of dollars; and then we paid about three hundred thousand 
 and bought them off. Under this bill we would pay three millions a 
 year to buy them off; but it would be a boom for the lawyers. 
 (Laughter.) 
 
 Much has been said in this discussion of the Pennsylvania constitu- 
 tion and its provisions in reference to railroads. But the friends of this 
 measure persistently conceal and misrepresent the situation in Pennsyl- 
 vania. When that constitution was adopted it was provided that if at 
 any time thereafter any railroad company desired any legislation in its 
 favor it must stipulate to accept the anti-discrimination clauses of the 
 constitution, otherwise their charters ante date that instrument, and it 
 has no application to them. The Pennsylvania railroads need no legis- 
 lation, and are, therefore, all free from the restrictions these gentlemen 
 seek to place upon the roads of New York. Greatly as the Pennsylvania 
 roads might desire to tie up their New York rivals with these provisions, 
 which they reject, it is only ignorance of the relations of the Pennsyl- 
 vania railroads to that constitution which could lead any one to hold up 
 here for your guidance Pennsylvania’s example. 
 
 The passage of this bill would work such a revolution in the devel- 
 opment and power of this State, as no other single act has ever done. It 
 would stop its growth and prosperity, close great numbers of its manu- 
 factories and active industries, and destroy the value of its farms. In 
 the close communion of every kind of business with every other, and 
 the interdependent relations of farms to factories, factories to centers 
 of population, busy and thriving populations to general wealth and 
 progress, legislation intended to cripple and restrict channels of 
 commerce is the most dangerous of experiments. It is not claimed that 
 this bill will help the universal revival of business, the blessings of 
 which are felt everywhere. The most its best friends claim for it are 
 some local and partial advantages to a few and limited interests, while 
 it may prove a lasting calamity, not so much to the railroads, as to the 
 
24 
 
 whole State. It is in proof already before you that one mill at Utica, 
 with its capital of $300,000, all subscribed, is unable to collect its sub- 
 scriptions until the fate of this act is decided, and if it should become 
 a law, I predict, that not only will that mill never begin operations, 
 but in less than five years a special session of the Legislature will be 
 devising methods to place New York once more in her old but lost posi- 
 tion as the Empire State. Behind the corporal’s guard who have come 
 here to advocate this measure, stand the Pennsylvania, the Baltimore 
 & Ohio, the Grand Trunk and the Lehigh Valley railroads, waiting 
 anxiously to reap rich harvests from the trade diverted from New 
 York over their lines by this supreme folly. 
 
 The Commission Bill. 
 
 There is one bill here which has n*ot been discussed ; that is the one 
 relative to the appointment of railroad commissioners. This commis- 
 sion bill in its general provisions, is like the one which has made its 
 annual appearance here for many years, and I presume is largely copied 
 from the Massachusett law. It is purely a recommendatory commis- 
 sion which costs $45,000 per year. All that that commission can do, 
 to correct any matters brought out in this testimony, is now done by 
 the State Engineer and Surveyor, and with the bills already passed 
 his powers are complete. I want to say right here, I hope the gentlemen 
 of the investigating committee will not feel sensitive at my criticisms, 
 I make them in the hope of shedding the greatest possible light on all 
 sides of this question. When they say the result of their investigation 
 is embodied in these six bills, and unless they all pass their effort is a 
 failure, I think they are in error. Railroad legislation can be distinct- 
 ively defined into two classes ; one purely experimental, and whenever 
 tried a failure, to run the business of the companies by statute, so that 
 every freight agent must make a rate or a contract with a shipper, 
 with a volume of the session laws in his hands ; the other regulating the 
 integrity of their management and control, and the proper and truthful 
 exhibit of their affairs to the public. The testimony developed that 
 there had been scandal in the use of proxies, that they had been bought 
 by speculators who had thus secured the control without owning any 
 stock. The committee have met and have overcome that difficulty. 
 There has been great feeling against stock watering and the evils which 
 flow from it. The committee have met that and overcome it. There 
 has been great complaint of the evils that result from consolidation and 
 the piling up of capital and debts. The committee provided success- 
 fully against that. 
 
 The main grievance of the professional railroad reformer for the past 
 five years has been that railway reports were defective and the true 
 
25 
 
 condition of the companies could not be ascertained. During the first 
 days of the investigation, when the prosecution was groping around for 
 greivances, this question of full and inquisitorial exhibits for the benefit 
 of stockholders, bondholders and the public, was the burden of their 
 eloquence. The committee, with great care and ability, have prepared 
 a form of report to the State Engineer and Surveyor which shows the 
 operations, and exhibts the exact condition of the railroads for the 
 examination and information of any person who wishes to look at them. 
 Every secret of the road in regard to its condition, its solvency, its 
 management under the oath of responsible officers, who can be impris- 
 oned for perjury, is laid before the State Engineer and Surveyor for the 
 inspection of the public, the State and the Legislature. So that in 
 these bills the interior of this question, the real greivances of railroad 
 management, are met and overcome with great ability and clearness. 
 
 When it comes to a commission, I cannot see what a commission can 
 do more than the State Engineer and Surveyor, an officer elected by the 
 people. In every State where a commission exists to-day, the commis- 
 sioner has no ministerial functions, simply because the transportation 
 problem is one of national importance ; the commissioner’s authority 
 stops at the boundaries of his State ; he might possibly take his State 
 out of the national system, but that he dare not attempt ; he is tied 
 hand and foot, and he is simply the recipient of the reports of the rail- 
 ways, and the transmitter of them to the Legislature. 
 
 If we had a commission in this State, it would be substituting three 
 healthy patriots and their dependants to draw $45,000 a year to perform 
 the duty, now done by a bureau in the office of an officer elected by 
 the people of the State and provided for in the constitution. In 
 the bill itself is a singular anomaly. It authorizes the commis- 
 sioners to recommend, if they think proper, the increase of trans- 
 portation accommodations and rolling stock, alterations at stations, 
 and changes in fares and freight. If the company does not accept 
 their recommendations, they can report the company to the attorney- 
 general for him to take action for the abrogation of their char- 
 ters. If the company do adopt their recommendations, the fact that 
 the commissioners made the recommendation under threat of loss of 
 chartered rights if not adopted, does not relieve the company from legal 
 liability for having followed the recommendation. Then the roads 
 must stand between the two horns of the dilemma. We had a railroad 
 commission in this State once ; it lasted between two or three years. 
 The people got tired of the commission, because it accomplished no good, 
 and was thought to act in the interest of the roads. The railroads got 
 tired of it, because it was a perpetual annoyance, and with the common 
 consent of the people and the railways the commission was abolished. 
 
26 
 
 A generation has passed since then, and there has been no attempt 
 to revive it, until brought here in the last few years under pretence of 
 railroad reform, but really to make places for the gentlemen who were 
 disinterestedly giving their time to lobby it through. Will we have 
 any better commission now ? Are the times improved ? Can the legis- 
 lature, any more safely now than then, delegate its powers to three 
 politicians ? I do not believe much in paternal government, nor do I 
 believe much in State supervision. We have had State supervision in 
 this State for the last twenty-five years — the Bank and the Insurance 
 Departments, created in each case to meet a political and not public 
 exigency, to take care of individuals and not to protect the people. I 
 know their origin. They were taken, one out of the the Comptrollers, 
 and the other out of the Secretary of State’s office, and created into 
 departments with all the machinery of high salaried officers and 
 deputies and clerks, and the ever increasing and costly paraphernalia 
 of power. What is the result of twenty-five years of State super- 
 vision and State responsibility for these institutions ? I say that 
 it is a farce and a fraud. Fifty millions of dollars have been lost in this 
 State within the last twenty-five years in Savings Banks, in State Banks, 
 in Life and Fire Insurance Companies. Why ? Because the State said 
 to the depositors, the State said to the stockholders and policyholders, put 
 in your money, never inquire, we will look after everything. The State 
 put forth that pretence, and when the banks failed and the Insurance 
 Companies became insolvent, the investigation always showed that the 
 directors as well as the depositors and policyholders relied upon the 
 paternal care and pledge of the State, instead of exercising for them- 
 selves constant scrutiny and watchfulness. If the State had required 
 frequent and full reports of the condition of these companies to a respon- 
 sible State officer, and said to the stockholders and creditors, with this 
 data, you must exercise constant vigilance and inquiry, for the State 
 neither guarantees or reimburses, who doubts that millions might have 
 been saved. 
 
 But the conditions which apply to places of deposit — places that 
 take care of other people’s money — do not apply at all to the railroad. 
 The stockholders and the bondholders look out for themselves; and so 
 long as the railway commissioner must stop at the State line, and cannot 
 reach beyond it, so long as he can neither touch or control lines outside 
 the State competing with roads under his jurisdiction, so long he re- 
 mains simply a bureau for the receipt and dissemination of information. 
 It is claimed that, under this bill, the commissioners would look after and 
 provide against accidents. What protection has a similar power given 
 in other States ? The commissioners of the State of Connecticut did 
 not prevent the frightful, and almost inexcusable, accident at Tariff- 
 ville, and when called upon to explain why it had not discovered in 
 
27 
 
 time the defects of the structure which led to it, what did the State do ? 
 Upon the State rested the responsibility for the life of every man, 
 woman and child who died miserably and horribly at Tariffville, because 
 the State had said to all passengers: “We will see, by a responsible 
 officer, that no accident of that kind occurs, and relieve both the travel- 
 ing public and the railways of either care or responsibility ? When the 
 holocaust at Ashtabula happened, wffien fifty miserable people roasted 
 alive in the gulch, where was the commission, and where was the State ? 
 Each one of those men, women and children traveled upon the faith 
 and credit of State protection and supervision, and there burned and 
 died in agony, because State supervision was a farce and a fraud. The 
 claim is made that the commission can better watch the solvency of 
 railroads, and protect the investing public ; but under the very eyes of 
 the Massachusetts commission — admitted on all sides to be the best 
 ever formed — the Eastern railway collapsed, and the Boston, Revere 
 Beach & Lynn Railway went into bankruptcy, causing frightful and 
 ruinous losses to innocent people who were relying solely and wholly 
 upon the protecting care and delusive promise of the State. 
 
 There is another reason — for we are talking plainly this afternoon — 
 why I object to a State commission. I am not afraid of it ; the New 
 York Central road is not afraid of it ; there is nothing in the business of 
 the New York Central railroad, nothing in its management, that will 
 not bear the scrutiny of the State. It is run with that business ability, 
 rigid economy, sharp lookout to get business and do business, and con- 
 stant watchfulness of the money which comes in and goes out, which 
 enables it to live and pay these dividends these gentlemen complain of, 
 notwithstanding the wildest and widest competition. The New York 
 Central is run by honesty and brains. Eliminate intellect and integrity 
 and it will never pay another dividend. What public interest is to be 
 advanced by testing the question whether a commission shall run the 
 railroad, or the railroad run the commission P We do not want to be 
 put in a position where, at the behest of a commission of this State, we 
 shall be compelled to run the road to put one party in power and the 
 other party out of power. Do not deceive yourselves with the idea that 
 such will not be the case. The conditions which exist in the State of 
 New York apply nowhere else. 
 
 Massachusetts, Ohio, Michigan, all the States where they have these 
 supervising commissioners are little teapots where you can lift the lids 
 and look over the edge and see and count every leaf, compared with 
 this great State with its 5,000,000 of people, with its great city of New 
 York, with her demands and needs, with its other cities outstripping 
 the largest cities of other commonwealths, and all the spoil of party, 
 with conflicting interests struggling for the control of a State which is 
 
28 
 
 an empire in itself, struggling for the control of the legislature, the State 
 offices and boards, the public works and State prisons, and the handling 
 and manipulating of vast patronage and millions of money. The tem- 
 ptation is too great for partizans to resist the opportunity to use every 
 agency to get into power, and once in, to stay there. Do you think the 
 corporations would resist? Gentlemen, do not mistake the nature of a 
 corporation. A corporation is simply a score, or a 100, or a 1000 people 
 putting their money into an enterprise, requiring more capital than 
 any one of them possesses, and they elect directors and officers to con- 
 duct that business. The stockholders expect them to do one thing, use 
 their best efforts to promote that business and to see that it is not in- 
 jured. Now, the corporation under such circumstances is always, and 
 at all times the most subservient and supple tool of the governing power. 
 Talk about monopoly, talk about the grasping power of the corporation ! 
 The corporation stands with trembling knees in the presence of power, 
 because power created and power can destroy it ; power gave the pledge 
 under which these people put their money into the enterprise, and 
 power can violate the pledge and destroy the money which is in the 
 enterprise. No courtier at the court of St. Petersburg is more obser- 
 vant of the temper of authority, than is the corporation whose life is 
 dependent upon the will of the governing body. Now, then, if for the 
 purpose of carrying a State or controlling a convention these three com- 
 missioners who are to stand between us and the legislature, who are to 
 stand between us and the people, between us and harm, come to 
 our office and say : “ The necessities of the political situation 
 
 require that certain political henchmen of the party shall receive 
 employment upon your line,” would they be denied ? If they should 
 come and say that certain useful henchmen of the party, useless in busi- 
 ness, but useful in caucuses, must be placed upon the pay-roll, would 
 they be denied ? If they should indicate that at some centers, where 
 a large number of men are employed, an obnoxious candidate against 
 the machine must be beaten in the caucus, do you think there would 
 fail to be enough votes in that caucus to mash him? Not much. 
 (Laughter.) Now, the politics of the raihoads of this State are abso- 
 lutely colorless. Any superior officer on the line of the New York Cen- 
 tral & Hudson River railroad who should threaten the humblest track 
 walker at a dollar a day with the loss of his place if he did not vote for 
 this or that candidate would have his head cut off as soon as the news 
 got down to the Grand Central Depot. I have stood here battling 
 and resisting the hostility of powerful senators and members who 
 have made their support or opposition to measures calculated to help or 
 injure the New York Central dependent entirely upon the removal of 
 local agents of the company, faithful in their business, but politically 
 obnoxious to these legislators. Mr. Vanderbilt has always, and without 
 
29 
 
 regard to consequences, protected the employes of the company under 
 such circumstances. 
 
 Remember, all railroad men are natural politicians. The business of 
 a railroad in its sharp competition, in its contact with men, makes every 
 agent, conductor, brakeman, baggageman, sandbank man, alert on all 
 public questions, and active in the politics of his neighborhood, on one 
 side or the other. 
 
 We do not care how he votes or acts, so long as he does not prostitute 
 the road to carry his purposes in the caucus, or at the polls. If his 
 enemy, in the party or out of it, wants that man removed on account of 
 his vote or his views as a citizen, there is no power to do it. I have 
 known municipal officers to say, “unless certain changes are made, 
 which are required by the party exigencies at our place, you cannot rely 
 upon local or municipal favor,” and at the loss of thousands upon thou- 
 sands of dollars a man whose place was not worth a breath, whose salary 
 was under a thousand dollars a year, was protected in his rights because 
 the president would not permit any single political consideration in a 
 locality to dominate over the business interests of the road. (Applause.) 
 But, gentlemen, let that dominating power be concentrated and centered 
 in the State itself, represented by three political commissioners who can 
 molest every branch of our business, leave us alone or interfere with us, 
 cripple our energies or permit us to work out our own prosperity, and 
 then we have no resource but to protect our stockholders, creditors and 
 patrons by making the best terms with the commissioners we can. 
 
 While bald corruption may not characterize the relations of the com- 
 pany to the commission, this thing frequently happens. All their impe- 
 cunious relatives, their “ sisters and their cousins and their uncles and 
 their aunts,” find their way upon the pay-rolls of the corporation. All 
 politicians have men dependent upon them, whose use and value in the 
 party organization are thoroughly understood, and in some way they 
 must be protected and cared for. Then, brothers-in-law, friends who 
 cannot be denied; men in power, who must not be offended, have inter- 
 ests in patent rights and devices. The commissioners have the power 
 to recommend their use. Where they do not choose to do that, there 
 are a hundred ways in which a commissioner can indicate that his 
 pleasure or displeasure will follow the company’s treatment of the appli- 
 cation. It is comparatively easy for the companies, at some expense and 
 loss, at great annoyance and discomfort, to secure perpetual immunity. 
 But you will inaugurate a great and growing public scandal, abhorent to 
 the sense and judgment of every right minded man. 
 
 Gentlemen of the committee, I trust, that in the consideration of these 
 great questions, you will not be governed by hasty judgment, or base- 
 less prejudice. Remember that it is not the corporation which stands at 
 
30 
 
 the bar of this house. It is not the railroad alone to be executed or go 
 free, but every business and industry in the State, the commonwealth 
 itself, have all their interest at stake. Prosperity everywhere prevails, 
 and ninety-nine hundredths of the people, the localities, and the enter- 
 prises of the State are satisfied ; the little isolated exceptional cases of 
 discrimination or of injury, cannot be corrected by any general law, 
 and in making the attempt, take care, that in amputating the little 
 finger, you do not destroy the life of the whole body. Remem- 
 ber that with the inter-dependent relations of the railway system of this 
 State, in the great western traffic and the local business of the State 
 itself, both of which contribute to make her the empire in population, in 
 commerce, in finance, you cannot afford so to tamper or interfere, as to 
 leave New York in a condition where she will be fatally injured. Mr. 
 Sterne criticised Mr. Blanchard, because he said that the railroads, if let 
 alone, will make this State greater^and greater every year, as insolent 
 and king like ; but Mr. Sterne had his mind full of continental ideas 
 and German notions of govermental control and bureaucratic govern- 
 ment. Mr. Sterne did not take into consideration the one dominant, 
 controlling fact that the New York roads under conditions of longer haul 
 and greater expense at their seaboard, are doing their best to retain for 
 themselves and the State, and the city of New York, the business of the 
 continent, and unless fatally restricted, and lifted out of the railway 
 system of the country by your action, will retain it, and make and keep 
 New York State and New York city, the one, Empire among States, 
 and the other, metropolis of the western hemisphere, and the most 
 important city in the world. (Great applause.)