ik mm if M ^ - • ■■ -■ The Pennsylvania Tunnel Franchise. Some of the Reasons Why It Should Be Granted; Stated by The Merchants’ Association of New York at the Hearing Before the Railroad Committee of the Board of Aldermen, November 26, 1902. Digitized by the Internet Archive in 2017 with funding from University of Illinois Urbana-Champaign Alternates https://archive.org/details/pennsylvaniatunnOOmerc 3S6'21 H+ip G O it's & sr Mr. Chairman and Members of the Committee on Railroads: HE committee representing The Merchants’ Association of New York appears before you urging the approval by your committee and the Board of Aldermen of the Pennsylvania tunnel franchise as now before you and as recommended by your special committee in its report dated November 18th. As a result of the close scrutiny which the Board of Aldermen has given to this subject, a number of impor¬ tant amendments have been incorporated in the franchise which unquestionably will prove of great benefit to the city and to its taxpayers. Of the alterations in the franchise suggested by the Board of Aldermen through its committee which were not adopted, the one most in controversy is that there should be embodied in the franchise a condition that but eight hours of work a day for laborers engaged in con¬ structing the tunnel should be required. The Pennsylvania Railroad Company has positively stated that upon the inser¬ tion of such a condition as that it would be compelled to give up the proposed improvement. We earnestly protest against the insistence upon this provision, for the following reasons. 1: Because it would defeat this great benefit to the city, voluntarily offered not only without expense 76621 3 to the city, but with provisions for compensation to the city. 2: Because the best legal opinion is to the effect that under the decisions of our highest court such a provision would be of doubtful constitutionality. 3: Because, even if constitutional, such provision would be non-enforcible on the part of the city, for the reason that the city as a corporation would suffer no damage from a breach of such contract. 4: Because, even if constitutional and enforcible, it would still be a dangerous precedent for a munici¬ pality or any franchise-granting power to attempt to dictate as to the terms of private contracts be¬ tween employer and employee, to which private contracts the franchise-granting power can in no sense be a party. 5 : Because the establishment of such a precedent would act as a powerful retarding influence upon capital which otherwise would seek investment here in the development of large constructive improvements. 6: Because the defeat of this improvement, incurred by the insistence upon such provision, would stop the expenditure of some $50,000,000, the bulk of which would of necessity be distributed in the form of wages to the citizens of Greater New York. 7 : Because the failure of this improvement would result in a direct financial loss to the City of New York 4 * V - of revenue derived both from the franchise itself and also the increased value of taxable property in the city. 8: Because the failure of this improvement would be against the best interests of our wage-earning citizens, in that it would prevent continuous em¬ ployment, at good wages, of a large body of citizens and would prevent the opening up and rapid devel¬ opment of outlying sections of our city and locali¬ ties contiguous thereto where cheap homes could be obtained. 9: Because the defeat of this improvement would not only seriously retard the growth and development of the commercial interests of our city, but would make it even more difficult to maintain its present position in competition with other trade centers of the country. The City of New York has a population of about 4,000,- 000, with a suburban population, living in the immediate vicinity and doing business in and dependent upon New York, of almost 3,000,000 more, making a total of about 7,000,000 people who will be affected beneficially by the con¬ struction of the proposed terminal facilities under the fran¬ chise now before you. Of this 7,000,000 not more than 100,000 belong to the organizations which are insisting upon the insertion of this eight-hour labor clause. We respectfully submit, is it right, is it just, that a benefit to such a vast majority should be defeated in the alleged interests of such a tremendously small minority? The con¬ trast is still more striking when it is realized that of this small minority of 100,000, not more than 4,000 or 5,000 can receive employment in prosecution of the proposed work. To insist upon this condition in the franchise, in view of the absolute declination upon the part of the company to accept the franchise with such a condition attached, would be of no benefit even to this small minority, because there would be no employment of labor. If, on the other hand, the franchise is granted without the clause objected to, then the project will go forward. The labor organizations could then properly and effectively negotiate with the constructing company as to the terms and conditions under which the labor should be employed. Behind all such negotiations would stand the powerful force of public opinion. If the conditions urged by labor organizations be just, then public opinion would compel the acceptance by the constructing company of such demands. Moreover, the very nature of the work itself and the history of the Pennsylvania Rail¬ road Company in its dealings with its employees in the past both stand as guarantees that the employment of labor would be upon terms fair and just under the physical conditions existing. The city has never hitherto exacted from any corpora¬ tion to which it has granted a franchise compensation bear¬ ing any fair proportion to the value of such franchise, except 6 in the recent case of the Rapid Transit underground road. Now the Pennsylvania Railroad Company voluntarily offers to do for this city, without cost, that which the city urgently needs—namely, to build at its own expense a great terminal system giving access to New Jersey and Long Island, and has offered to pay for the privilege of conferring this benefit upon the city about forty times the rate hitherto paid for similar franchises. It is demanded of you that you shall so use your public powers as to interfere with the free right of contract between employer and employee. The Board of Aldermen has no constitutional power to regulate private relations. Its duty is to consider the public interests, and the public interests only. On the one hand, is a great public improvement of most pressing necessity and of great value to the whole body of the people. On the other hand, is a demand made upon you that your proper powers be so abused as to attempt to bring about an interference in private relations for the tem¬ porary benefit of possibly 5,000 men, with the certainty that if that demand is granted the tunnel will not be built and the individual and commercial interests of six or seven million people will suffer greatly. The interests of these 5,000 people are strictly local, while the commercial interests of the city are both local and national. The commercial interests are dependent not only for their further development but for their present maintenance upon the development of every 7 public improvement which will aid in giving to those commercial interests every proper advantage in competition with other trade centers. The interests of even the 5,000 workmen are dependent upon the prosperity and develop¬ ment of the commercial interests, which give employment to probably 90 per cent, of our people. The commercial industries of New York are constantly endeavoring to build up the manufacturing and trade of the city, upon the prosperity of which the citizens are depend¬ ent, and to that end they seek to obtain the necessary public improvements and constantly keep an army of commercial men of over fifty thousand traveling throughout the whole country, to whom are paid annually salaries ranging from $1,000 to $10,000, with expenses. What for? To keep New York before the country and world at large as the greatest business center, and to fight its commercial battles with other trade centers who are constantly trying to make incursions into our trade. We believe in labor organizations. We believe that when properly organized and conducted upon a just basis they have the confidence of our entire citizenship, but when they step beyond the proper sphere of self-protection and attempt to claim for themselves rights and privileges which interfere with the proper rights and privileges of other interests in our community, when they attempt to dictate to the vast pro¬ portion of our people for their own unjust advancement, when they hold up the red light of danger warning capital not 8 to come to this city for investment and thus retard the growth and prosperity of the city, then they become unjust and detrimental to the prosperity not only of the.city, State and nation, but of themselves. We believe in justice to, and fair treatment of, labor, but we also believe in the same measure of justice to and fair treatment of the interests of the vast majority of our citizen¬ ship and of capital. We are not opposing the proposition of an eight-hour day for labor, but we are maintaining that this is not the proper forum, nor is the method now sought to be employed the proper method for consideration of that sub¬ ject. The brains, the capital and the labor of our community, working together, have already secured for the development of our city the advantage of the widening and deepening of the channels leading into this harbor, which will insure to our city the control of the export and import trade of the United States. They have also fought for years to obtain an ade¬ quate improvement of the Erie Canal, which would open a line of transportation of small resistance from New York to the Great Lakes and the West. Their efforts in this direction now bid fair to be crowned with immediate success. As a link necessary to supplement these two great im¬ provements, comes a third—namely, the proposition of the Pennsylvania Railroad Company to develop this magnificent terminal in this city at an expense to them of some $50,000,- 000. This third and necessary improvement is now within 9 I our grasp, provided the franchise is granted without undue obstructive conditions. Such an obstructive condition is the proposed eight-hour labor clause. If this clause is inserted it means the beginning of an additional diversion from this city of commercial, financial and manufacturing industries. The disastrous results of such a movement would fall upon the city in its entirety, but would bear with special stress upon the wage-earning interests, the constancy of whose employ¬ ment and the rate of whose wages depend absolutely upon the prosperity and development of the trade and commerce of our port. The responsibility for such a result now rests solely upon the Board of Aldermen of the City of New York. It is to call attention to this responsibility, thus resting upon the body of which your committee is a part, that the delega¬ tion of The Merchants’ Association of New York is present¬ ing this matter before you at this time, believing as we do that an improvement of such magnitude and of such vast importance to the whole municipality will be insured by favorable action on the part of your committee and by the Board of Aldermen. Respectfully submitted, William F. King, Chairman; Henry R. Towne, George L. Duval, John C. Eames, S. C. Mead, Secretary. Committee. New York, Nov. 26, 1902. 10 3 0112 061414162 ECONOMIST PRESS, NEW YORK.