THE RAILROAD QUESTION. SPEECH OF ON. JAMES F. BRIGGS, BEFORE THE RAILROAD COMMITTEE OF THE HOUSE OF REPRESENTATIVES, JULY 20, 1887. Concorb, ft. |j. PRINTED BY THE REPUBLICAN PRESS ASSOCIATION. 1 88 7. Digitized by the Internet Archive in 2018 with funding from University of Illinois Urbana-Champaign Alternates https://archive.org/details/railroadquestionOObrig THE RAILROAD QUESTION. SPEECH ' OF * HON. JAMES F. BRIGGS, BEFORE THE RAILROAD COMMITTEE OF THE HOUSE OF REPRESENTATIVES, JULY 20, 1887. (Eontorfr, ft. M). PRINTED BY THE REPUBLICAN PRESS ASSOCIATION. 1 8 8 7. 3>S5. \ SPEECH OF HON. JAMES F. BRIGGS. Mr. Chairman , Gentlemen of the Committee , and Members of the House of Representatives: After you have listened to the remarks that have been made by the distinguished gentlemen who have preceded me, what few suggestions I shall make to you may appear tame and uninter¬ esting ; but having some views that I wish to present upon the questions which are before you, I hope and have no doubt that you will give these suggestions whatever weight they may be entitled to. And first, I want to speak somewhat of the legislation of 1883. Prior to that time it had been the policy of the state to retain in the hands of the legislature substantially the entire control of all our railroads, wherever they were, or whatever their length or their value. Prior to that time no man nor any body of men could organize a railroad corporation in this state without first obtaining the sanction of its legislature. That had been its uni- form policy from the granting of the first charter down to the time when the Colby bill and the railroad commissioners’ bill were passed. It has been attempted in this discussion, and by discussions which have taken place in the public press, to create the impression that the Colby bill was passed simply to enable the Concord, the Boston, Concord & Montreal, and the North¬ ern roads, and the roads that lead through this valley, to unite and form the Central system ;—and further, to permit the Boston & Maine and the Eastern to form another system, either by union, consolidation, or lease : that they termed the Eastern system. And it has been stated still further, that inas¬ much as the Boston & Maine and the Eastern have united, and the roads up through this valley have not united, according to 4 this claimed intent and purpose of the Colby bill, therefore you should pass something to relieve the Concord Railroad and these other railroads, and allow them to unite. Now I say here, gentlemen,—and I know what I sav, because I was in the legislature myself and took some part in the dis¬ cussions of these various measures,—I sa}? that that house and that senate intended something beyond the mere question of a union of the roads in this valley, and something beyond a union of the Boston & Maine with the Eastern. It was claimed then that the policy which New Hampshire had pursued from the be¬ ginning should be changed. It was claimed then, and advo¬ cated upon this floor, that other states—thirty-one or more of the states and territories of the Union—had adopted general railroad laws, and had allowed railroad corporations to be cre¬ ated and established and railroads to be constructed under gen¬ eral laws, without special legislation in each particular case ; and it was urged that if you would give railroad corporations the power to organize under a general law, and the power to unite, either by lease or by consolidation, under the general law —under the restrictions which that law imposed—and place them all under a board of commissioners invested with extraordinary powers, it would be legislation for the best interests of the people of New Hampshire, and in accordance with the progressive leg¬ islation that has characterized other states and territories in the Union. So I say, no matter who makes the claim, no matter for what purpose it is made, he who claims that it was for the sole purpose of creating a Central or an Eastern system belittles the legislation of 1883. It meant more than that. It meant an absolute and an entire change in the legislative policy of New Hampshire. Why, gentlemen, if, as these gentlemen claim, or as it is pretended, it was simply to enable certain corporations to unite or to lease each other, what earthly necessity is there for «/ V the first sixteen sections of the Colby bill? Every single one of them, from one to sixteen, relates to the creation of railroad cor¬ porations and the construction of railroads under the general law. The legislature of the state never intended such restrictive and narrow legislation as these gentlemen now claim. It is true, and it should be stated, that the roads in this valley supposed they could unite under the Colby bill by lease or by 5 consolidation. It is true that the friends of the Eastern and of the Boston & Maine railroads supposed that under that bill they could unite, either bv lease or by consolidation. And this nobody questions or denies. They could unite,—or any other two roads, whether in this vallev or in the eastern or the western part of New Hampshire, that come within the provisions of sec¬ tion seventeen and some of the following sections, could unite also,—and either form one corporation, or one operate the other by lease. That was the policy that the state adopted. That it was the intent and the purpose of the legislature is perfectly clear and indisputable, and the proper reading of the Colby bill, coupled with the commissioners’ bill, establishes it beyond cavil and beyond dispute. There is another thing I wish to say in relation to that legis¬ lation. These two bills travelled along side by side nearly all the way through. The Colby bill passed both houses first. Common rumor said that it lay upon the table of the executive, and he declined to affix his signature to it and to give his ap¬ proval to the measure until the other bill, which created and established a board of railroad commissioners, had passed the house and the senate. They were part and parcel of the same legislation, intending to reverse or change the railroad policy of New Hampshire. The governor did not want one, neither did I, unless he had the two. The two were passed, this legislation was secured, and the policy of New Hampshire in dealing with its railroads was radicallv changed. Gentlemen, I have stated that I opposed that legislation. I tried to perfect that bill after I saw that it was the sentiment of the house to pass it. Certain amendments were proposed. I thought then that the same or substantially the same provisions should apply to the leasing of railroads as applied to their consolidation. My position theu was, and I had an amendment —one of the series that would have reached the result—that some tribunal should pass upon the question of the public exi¬ gency ; and another was for appraisal of the interests of dissent¬ ing stockholders. I thought that at that time this was wise and prudent, and if that had been attached to the bill this question would not be here before you for adjudication ; for I believe, with that provision, the laws that were made would have been 6 sustained by the court. Still, that is a mere matter of opinion : it may be worth something, it may be worth nothing. Now, sir, it may seem strange that an opponent of that meas¬ ure should stand here and ask for the passage of the Hazen bill. There may be a reason for that. There is a reason, and it is this : We have tried the union under the Colby bill. The Bos¬ ton & Maine have leased the Eastern ; the Boston, Concord & Montreal and the Northern, and their branches, have been leased or attempted to be leased to the Boston & Lowell. The Boston & Lowell have operated those roads under the lease until the lease of the Northern was terminated by a decision of the court. The validity of the Montreal lease is still in question, but the Lowell road still continue to operate the Boston, Concord & Montreal. Now, gentleman, what has been the result of this policy thus far in New Hampshire? I say it here, without fear of contradiction, and the testimony of every witness who has been upon the stand, I think, save two—and those were special cases—has been, that on the Northern and its branches, and on the Montreal, they have had increased railroad facilities ; they have had better trains and more of them ; they have had reduced fares and reduced freights. And not onlv that, but a system that formerly prevailed on some of the roads of giving special rates to special individuals or to special localities has been broken up, and all men and all localities have received substantially the same fares and the same freights, and equal privileges have been granted and conferred upon all. Now I ask you if that is not the fact from this testimony? Mr. A. L. Brown testifies — you remember what he savs, and I only call your attention to how he operated under the old rule, and what the result has been under the new,—and I say that it is conclusively established that the people, the patrons of these roads all up and down the lines, have been better and more cheaply served than under any other system that ever pre¬ vailed in the state of New Hampshire. Now there is another thing. So far as the Boston & Lowell are concerned, this trial has been under difficult and embarrass¬ ing circumstances. The legality of their lease of the Northern was called in question, and the effect of breaking that lease upon the lease by which they held the Boston, Concord & Mon- 7 treal was uncertain ; and such has been their situation, not knowing whether this system was to continue and this lease to be upheld, that they have not expended the money that would have been expended, and those roads have not been put in the condition which they would have been put in, could these men have been assured of the continuance of the leases for the time stated. Now, sir, with such results through this consolidating or leasing, with such results as you find on the Boston & Maine and its branches, I ask you, men of intelligence, men of sense, if it is worth while to turn back to the policy which existed prior / to 1883, or whether it is not better to continue the policy then adopted and allow these improvements to go on, and allow leas¬ ing to continue and the people to enjoy the fruits of it for a while longer, before it is destroyed and thrown aside. There is another thing in connection with this matter, al¬ though I do not wish to trouble you too long in considering it. I hold in my hand a report of the railroad commissioners for 1887. I have told you the result of the operation of the leased lines under these contracts made, or attempted to be made, under the Colby bill, the beneficial results that have followed from them, and the advantages which the public have derived. Now let us see what the effect has been upon the railroads them¬ selves. If you will turn to the sixth page of this report, you will find a table showing the appreciation of New Hampshire railroad stocks in eight years. The increase in value since 1883 in the roads named—I will not trouble you by reading it all, because you have access to this report—is as follows : The increase on the Boston & Lowell has been $61 per share ; on the Nashua & Lowell, $19 ; on the Boston, Concord & Montreal, preferred, $4 ; on the Northern, $20 ; Pemigewasset, $4 ; Bos¬ ton & Maine, $69 ; Eastern, $96 ; Eastern (N. H.), $22 ; Ports¬ mouth & Dover, $6 ; Portsmouth, Great Falls & Conway, $96 ; Worcester, Nashua & Rochester, $84; Concord, $23; Man¬ chester & Lawrence, $44 ; Cheshire, preferred, $60 ; Connecticut River, $32. Now let me go a little further. This report says,— Taken together, the stocks that have been continually listed since 1878 have more than doubled since that time—the average 8 value of $100 shares in each being $73 then and $155 now, an average gain of $82. This appreciation is, except in one or two cases, in no way due to stock board manipulations, but to in¬ creased confidence in prospective dividends, the resultant of a large increase of business, and consolidations which promised large reductions in the percentage of expenses to gross earn¬ ings. Then, upon the opposite page is another table, showing the gross expenses and earnings in 1885. The total receipts from passengers was $17,989,140.56 ; the gross expenses were $14,225,966.04. The net income in 1885 was $3,763,174.06. The next year, 1886, the total income was over $20,000,000 ; and the report says,— The gain in receipts is 12.75 per cent, (that is in one year), and in net income only 20 per cent, over the preceding year. In this connection it is interesting to note that the increase in the earnings of the seventy-six roads taken by Bradstreet as representatives of the railroad business of the whole country was but 6.2 per cent. And the report gives the result of different groups of rail¬ roads. So, after this experience with the Colby bill, I say you cannot point to an industry, you cannot point to an individual, to a locality, to a railroad, to a stockholder, who has not been benefited by the change that was made in the railroad policy of the state in 1883, and by the experiments we have made in the operation of these roads under these leases. Is it worth while to change it? You have two bills before you, and this hearing is upon both of them. One of them is what is denominated the Atherton bill, and the other is the Hazen bill; but before I go to that I want to say one thing further about this Colby bill. There were four things—and perhaps others, but there were four leading things—provided for by that bill and intended to be accom¬ plished by it—that and the commissioners’ bill, for they go to¬ gether. The first you find in* the first sixteen sections, whereby rail¬ roads could be established under a general law. Then you find, in section seventeen, an attempted provision whereby one rail¬ road might lease or operate another ; and you find in the balance of the section provision whereby two or more railroads may con- 9 solidate and form one corporation. Thus were three things secured. There are other provisions, stating to what roads this law applies, and other restrictions in relation to the raising of fares and freights. But these three things which I have men- tioned were accomplished by the Colby bill. And the fourth was the placing of all the roads under the control of the railroad commissioners, creating and establishing that tribunal, and in¬ vesting it with extraordinary powers. These were the four general things secured by that legislation of 1883. And after the experience we have had with it. I ask, Are you, as legislators, going to turn your faces backward? or are you going to carry this state along with the other states of the Union, leaving all these matters to general legislation, and not requiring special legislation in these particular instances? There has been noth¬ ing worthy the name of an argument given for making this re¬ turn back to the old policy and to the old wavs. You have two bills before you for your consideration. One is the Hazen bill, one is known as the Atherton bill. What is the Hazen bill? I am not going to detain you long, because Judge Foster has analyzed it, and given you, perhaps, a better exposi¬ tion of all its provisions than I am capable of doing. But that bill, gentlemen, is a general law. It is a law brought into ex¬ istence, or introduced here, for the purpose of amending or perfecting the Colby bill. That is substantially all there is to it. Amend the Colby bill by the passage of this Hazen bill, and then you have given any two roads that come within the provi¬ sions of that bill, if two thirds of their stockholders, at a meeting duly called and holden for that purpose, vote to unite, the power to do so. Amend the Colby bill by passing the Hazen bill, and let the corporations unite under it according to its terms,—and the value of the stock of the dissenting stockholders is to be ap¬ praised and paid to them under the provisions of this bill,—and I do not know any reason why any railroad coming within the provisions of the Colby bill cannot be leased or united under it. That is the fact, as I understand it. Then, if that perfects the Colby bill and makes its applica¬ tion general, as it does, why is not that all that this legislature is required to pass? Why is it not all that anybody interested in the railroads of the state of New Hampshire should ask for, and whv is it not something they should be satisfied with? 10 The Atherton bill is a different bill. And here is a thing that just occurs to me: Under the Hazen bill a two-thirds vote is required to unite or to lease corporations. Under the Atherton bill, on the other hand, a majority of the stockholders present and voting can unite the two corporations. Now, is there any reason whv that should be changed? We do not ask for anv such change. We are willing to stand where the Colby bill left us with these amendments, and not permit the union, and not ask to unite two corporations, upon the bare vote of a major¬ ity of the stock. We think that an enterprise, or a purpose, or an object of that kind should be able to commend itself to the judgment and to the support of two thirds of the stockholders present and voting upon it. Now, sir, this Atherton bill proposes—what? I am not go¬ ing through with the details of it, but I am satisfied, gentlemen, if you give the provisions of that bill your careful attention and examination, that the intelligent, level-headed business men of this house never will give it their sanction or their approval, by a vote either in the house or in the committee. The Hazen bill is general in its provisions. It is not restricted in its applica¬ tion. It applies anywhere and to all roads which can bring themselves within the terms of the original Colbv bill. But the Atherton bill is narrow and restricted. It is passed fora single purpose, and that is to allow the Concord, the Nashua & Low¬ ell, and the Boston. Concord & Montreal roads, any two of them that physically connect, to unite and form a unit. Now let me put this question to you right here, gentlemen : If the Boston, Concord & Montreal Railroad, and the Concord Railroad, and the Nashua & Lowell Railroad want to unite and form a union to consolidate their roads into one corporation, will you tell me why they cannot do it under the Colby bill as it stands to-day? No railroad has attempted to try a consolida¬ tion under the Colby bill. That provides for a consolidation and a union. Why cannot that be done to-day, and why could it not have been done any day since the Colby bill received the sanction of the governor of the state of New Hampshire, if these roads by a two-thirds vote had been willing to have been con¬ solidated and united into one? It means something beyond that, gentlemen. It means that these roads shall have the right 11 to unite and form one corporation, and lease certain other lines that connect with them, and bn} 7 certain other roads that the Concord Railroad owns, to form a Central svstem in the state of New Hampshire under one control; that no other railroad in this state shall be granted such privileges or have bestowed upon it such extraordinary powers. That is what this Atherton bill means. But it means even more, gentlemen. It means that no rail¬ road in this state—for this is what the sixteenth section says,— “ No railroad in this state shall unite with or be leased or op¬ erated by any railroad that is wholly or partly out of the state, unless specially authorized thereto by this or some subsequent act of the legislature.” What would be the effect of that decision upon certain roads that are operated by the Eastern road, or are operated bv the Boston & Maine road? “ No railroad in this state shall unite with, or be leased to, or be operated by, auv railroad that is wholly or partly without the state,” no matter when these leases were made ; no matter whether they received the sanction of the railroad commissioners, or of the governor and council, or of the legislature. They cannot be continued, and such a railroad cannot operate such leased lines, except under this particular act, or under the authority of some subsequent legislature. Then take the next clause : “ So much of the act passed Sep¬ tember 14, 1883, entitled 4 An act providing for the establish¬ ment of railroad corporations by general law,’ as is inconsistent with this act, and all other acts inconsistent with this act, are hereby repealed.” Now I am not going to discuss the legal and practical effect of the passage of this law and the adoption of these provisions ; but I ask you, gentlemen, as men of intelli¬ gence and integrity, before that bill receives your sanction or approval,—I ask you to examine it carefully, and see to what the passage of that bill with those sections contained in it would lead. But that is not all. After this corporation is formed, what can it do? 4i Such new corporation may lease, for a term not exceeding ninety-nine years, the road, property, and franchises of the Manchester & Lawrence Railroad, and of any of the cor¬ porations named in the first section of this act, not forming a 12 new corporation, and also of any of the corporations whose roads are leased to or are operated by either of the corporations forming the new corporation which have not availed themselves of the provisions of section two upon such terms as may be mutually agreed upon by votes of a majority in the interest of the stockholders of the lessor and lessee corporations present and voting at meetings duly notified and holden for that purpose ; and such new corporation shall , within one year after its forma¬ tion, take a lease for a term of ninety-nine years of all the rail- roads, branches, equipments, railroad property, and franchises of the Northern Railroad, the Concord & Claremont (New Hampshire) Railroad, and the Peterborough & Hillsborough Railroad, including all rolling-stock, equipment,” etc. It is made compulsory upon them, in case these corporations should yote to unite. But when you pass this bill, gentlemen, you are going to con¬ solidate the North Weare with this corporation. Who owns the North Wqare ? The Concord Railroad. They are the lessor, if they are going to lease ; they are the lessor and the lessee, rep¬ resenting both parties to the trade. If they are going to con¬ solidate, then they represent both parties to the consolidation, or there is but one party. Take the Acton road. The Concord Railroad own the con¬ trolling interest in the stock of that road, and they own sub¬ stantially all the indebtedness—fiye hundred thousand dollars in the capital stock, five hundred thousand dollars of indebtedness. The Concord Railroad own that to-day. Under this bill they are authorized to buy that, if sold at public auction or in any other wav, and to lease and to operate the road ; that is, they are substantially authorized to buy their own property, and then lease it to their own corporation. That is not all. They are authorized, also, to consolidate or to unite with or to lease the Boston, Concord & Montreal Railroad. Who owns that road, or the controlling- interest in its stock? A syndicate of gentle- men,—eighteen or twenty ; I do not remember the number, but you have had their names. Seven of them are directors in the Montreal road, seven of them are directors in the Concord road. And that syndicate—as it has been stated upon the floor of this house, and it has not been denied and will not be—if it is, I 13 want to see the books of the Concord Railroad that we have called for—that syndicate, composed of these eighteen or twenty gentlemen, hold a controlling interest in the stock of both of these roads ; and they are to make a lease to or to consolidate with themselves. That is one of the beauties of this bill. The decision of the court in the Pearson case was, as you know, that the directors in the Northern and in the Boston, Con¬ cord & Montreal, acting, also, as directors in the Concord road, could not legally act or perform their duties in making contracts between the respective corporations ; that their position was that of trustees ; that they could not act in both capacities at the same time, because they were representing conflicting inter¬ ests ; that, if they w^ere acting as directors of the Concord road, they should act solely in the interest of that road ; and that the Concord road was entitled to their best judgment and their ac¬ tive efforts. The court said it was improper for them to hold their position as directors in the Northern road ; and they went out. But here in this case, with the full knowledge of every gentleman who sits before me, with the knowledge of every member of the committee and of every man who has heard the testimony, they propose by this bill to unite these corporations— the North Weare, which the Concord own, with the Concord ; to purchase and lease the Acton, which the Concord already own, and let that come into the union ; and to unite with or lease the Montreal, which this syndicate control, this syndicate controlling a majority of the stock in both the Concord and the B., C. & M. corporations. Now I ask you if there was ever such a bald proposition presented to a committee of the legisla¬ ture—a proposition as monstrous—with the idea and expectation that the committee would give it their assent and approval. There are other provisions in that bill, gentlemen ; and I ask you to read them carefully. The original bill, as it stood at first, contained a clause which allowed the watering of stock. That bill was drawn with care. It was put in here for some pur¬ pose, and it w r as put in with the expectation of passing it. Why was that stock-jobbing section left in the bill as presented to you? When it came to be discussed, to be analyzed, these gen¬ tlemen amended their bill and attempted to withdraw that offen¬ sive section. But what have they done? Have they left it clear 14 that there is to be no stock-watering, no stock-jobbing? Not to my mind. They have postponed the time when they shall reap the fruits of this legislation, but it is only a postponement. Let them take the Boston, Concord & Montreal under a lease or under a union, according to the provisions of the bill; let them issue three kinds of preferred stock and their common stock— this syndicate own some eight thousand shares of the stock, some old, some new, and some preferred,—let them unite these corporations, and what will be the result? What, indeed, is the purpose? The Concord Railroad earns a large sum over and above its ten per cent. That has been proved here ; there can¬ not be any question about it. And they propose to pool their issues, and to take those surplus earnings of the Concord road, over and above the ten per cent, which belongs to the state of New Hampshire, and which to-day, two millions of it, ought to be in the treasury of this state,—they propose to take those sur¬ plus earnings and pay the debts that are hanging over the Bos¬ ton, Concord & Montreal Railroad, and lift their preferred stock, their old stock, and their new stock up to a dividend-paying stock, and put thousands upon thousands of dollars into the pockets of this syndicate that own that stock. [Applause.] Are you going to sanction that? They have attempted to throw some safeguards, some provisions, around it; but I ask you if the course I have marked out will not be pursued. And I ask you, further, if that is not the purpose, and if that is not the object, of the men who are pushing and urging this legislation. I have nothing to say against this syndicate of gentlemen, but I want to put this inquiry to you : If this syndicate had not been organized, if it had not bought up the Boston, Concord & Mon¬ treal stock and did not hold it to-day, and if these gentlemen were not interested in the Concord Railroad, would they be here asking you to sanction and approve such a bill as this Atherton bill, even with its amendments? They would not have been heard from in my judgment, and they would not have been here. While we are on this question of syndicates, you remember that the other day, during the progress of these hearings, Col. Sinclair, without notice, without anv suggestion that he was to be called upon to testify, sitting here in his seat in this hall, was called upon the witness stand. He was asked in regard to his 15 transactions in relation to the Worcester & Nashua stock. He told vou frankly all the connection he had with it. But the question was put to Mr. Sinclair, Was there not some stock in the treasury of the Nashua & Worcester Railroad? Yes. How many shares? Well, about so many, and he told the number— 4,805. What was done with that stock? Distributed pro rata among the present stockholders. And then the question was asked if anybody paid anything for that stock. Mr. Sinclair said he did not pay anything for that stock ; and he did not for that special stock. But let me put this matter to you fairly : The stock was in the treasury of that railroad company, and when a man bought a share of the Nashua & Worcester stock, he bought an interest in that asset. The Manchester & North Weare Railroad is owned by the Concord road: that is one of its assets, part and parcel of its property. If I buy a share of the Concord Railroad stock, I am necessarily entitled to my proportion in all the assets of that company. And you see, gentlemen, that in this case of the Nashua & Worcester there was no earthly pecuniary object to be gained by making a divi¬ sion of the stock. The stockholders had rented their road for 8250,000, or substantially that. Now, if that stock had been cancelled and destroyed, and never had been issued, the rental of the Worcester & Nashua road would have been the same. It would have been the same whether the stock was destroyed or divided. The stockholders would have got the same in either case, for there was the $250,000 to be divided among them. They simply get a smaller per cent, of dividend, because they own a larger number of shares than they otherwise would. So it made no difference to the public, and it made no difference whatever to the stockholders, as a matter of fact. But Mr. Sinclair says that he took counsel of the best attor¬ neys he could find. I think he stated that he consulted with Mr. 4 / Frink, and with General Stevens, and with lawyers in Boston. He consulted with the best attorneys he could find in Massachu¬ setts and in this state as to what disposition should be made of that stock, and in the disposition that was made of it the advice of those distinguished attorneys was followed. Now let me read you an opinion : 16 Boston, October 17, 1885. Charles A. Sinclair , President Worcester , Nashua & Rochester Railroad Company: Dear Sir : At your request I have giveu careful considera¬ tion to the right of the Worcester, Nashua & Rochester Co. to deal with the 4,805 shares of its capital stock now belonging to the company and standing in its name. I find the shares in question are fully paid, were acquired by the company under the consolidating statutes and agreement in 1883, and are ex¬ pressly authorized by the special statutes of the commonwealth of Massachusetts and the state of New Hampshire. In my judgment the company may dispose of them either at private sale or pub¬ lic auction, may distribute them as a dividend among its stock¬ holders, or may cancel them on complying with the statutory requirements for the reduction of capital. Truly yours, Richard Olney. Now it seems to me that was pretty safe counsel for Mr. Sin¬ clair, the president of the Worcester & Nashua Railroad, to act upon ; that it was pretty safe counsel for the directors of that railroad to act upon in the disposition of those shares of stock. But Mr. Sinclair did not stop there. He wanted to fortify him¬ self and make the matter sure beyond all question, so he obtain¬ ed an indorsement of the opinion of Mr. Olney, which is as fol¬ lows : Littleton, N. H., February 1, 1886. I have read the within opinion, and agree with the legal con¬ clusions on the facts assumed. Harry Bingham. I do not think, acting under the advice, as he did, of such eminent legal gentlemen, not only in Massachusetts but in New Hampshire, that that action ought to be brought up here to the injury and the detriment of Mr. Sinclair. Do you, gentlemen? I have alluded to this syndicate and to these two bills, stating that the Hazen bill is a general law, and that the other is a spe¬ cial law. I have pointed out some of its provisions, and if it were not for wearying your patience I would like to call your attention to others ; but that is not necessary. Now, I ask you if there has been any reason given, from any source, from any man, why you should approve of the Atherton bill. Has there IT been any reason given why you should reverse the policy of the state in relation to railroads, adopted in 1883? Has any reason been assigned by anybody? If it has, it has escaped me. Has there been any reason given or assigned why the Concord Rail¬ road should receive these extraordinary powers? I have not heard any. Is there anything in the history of that railroad from the day its charter was given in 1835, or from the time this railroad was completed, about 1840, why these extraordi¬ nary powers and privileges should be conferred upon that cor¬ poration ? The Concord Railroad occupies a position in the valley of the Merrimack, a rich valley with large manufacturing industries. It is a road of easy grades and easy curves, and can be as cheaply and as easily and as economically operated as any rail¬ road in New England or in this country- Let me illustrate : An engine on the Concord Railroad will haul down seventy cars as easily as the same engine will haul fifteen over the grades of the Montreal Railroad, or as easily as that same engine will haul seventeen cars over the Northern Railroad ; and in coming back it will haul fifty up as easily as it will haul fifteen on the Montreal or seventeen on the Northern. That shows the char- acter of the two roads. Now, occupying this valley, with its easy grades, with the cheapness with which it can be operated, and with the large local traffic upon its lines, let me ask you what that railroad has done in its whole history to build up the business on the line of the Boston, Concord & Montreal, on the line of the Northern, on the line of the Concord & Claremont, or that of any other road, except, perhaps, the Suncook Valley? Did it, in the early struggles of the Montreal Railroad, when it was wending its way up into the northern section of this state, threading the valleys and penetrating the wilderness to bring that large lumber country within easy access of the market,—did the Concord Railroad at any time, in the early or in the late struggles of that Montreal corporation, ever lend it a helping- hand on any occasion or under any circumstances? If so, name the place, and the time when. So of the Northern Railroad, so of the Concord & Claremont and Hillsborough railroads. They struggled, and they struggled alone; they fought with poverty and with adversity ; they built their roads over a rough and for- 18 bidding country; they brought in the fruits of their labors and the fruits of their money, and poured them into the lap of this Concord Railroad, which has been enabled to pay its ten per cent, year after year, and to purchase railroads out of its surplus. But never in its history, to mv knowledge, has it done anvthino- to aid these struggling roads, or to contribute in any way to sustain them and to build them up. Years ago—and you will find out all about that in the report of the commissioners,—years ago a railroad was started from Manchester which was intended to go through Henuiker and Bradford and Newport and Claremont, and to strike the Con¬ necticut river, thus making a through line for the business of that section of the country. It became embarrassed; it became substantially bankrupt. A large amount of money was lost— how much I do not know ; perhaps $600,000 or §800,000, per¬ haps more. That road was built through to Henuiker. When it reached Henuiker it crossed the Contoocook Valley Railroad, and that road ran six miles beyond, up into the region of Hills¬ borough. The new road was in competition with that line. One Sabbath day a train of cars, bearing laboring men with picks and shovels and all the implements that section-men use, passed through Manchester up on the North Weare, and they devoted that day to tearing up six or seven miles of this new railroad ;— the connection was broken, and it has remained broken from that day to this. What has been the result? The freight and pas¬ sengers from that whole section of country, instead of going direct to Henuiker and down over the North Weare Railroad to Manchester, a distance of perhaps thirty miles, have been brought around through Concord and carried the entire distance over the Concord Railroad, and been obliged to pay tribute to that railroad. Who did that? It was done bv the manager of the Concord Railroad. Was it done in the interest of that road? I do uot know what their records show ; but the fact is, it was done by the manager of that road, and it resulted in benefit to that road by giving it the long haul from that section of the country on all the passengers and all the freight; and ultimate¬ ly the North Weare Railroad finds itself in the hands and in the control of. and the property of. the Concord Railroad, which holds it to-day. 19 Now, that is not all. How has this Concord Railroad oper¬ ated in connection with certain other railroads? Let me call your attention to these facts,—and this all bears upon the ques¬ tion whether this road has done anything to entitle it to receive these great privileges which are asked in its behalf. A railroad was built from Manchester to Lawrence, a competing line through that section in connection with the Boston & Maine to Boston. In 1860 a contract was entered into between the Con¬ cord Railroad and the Manchester & Lawrence Railroad, where¬ by competition was destroyed and the two roads were run as one corporation. Previous to the formation of that contract business from the upper roads had been divided, and had gone to Boston both ways. People had the choice of the routes through to Boston, either by the way of Lawrence and by the Boston & Maine, or bv the wav of the Concord, Nashua & Lowell and Boston & Lowell. As a result of the contract of 1860, freight and passengers were diverted from the Manchester & Lawrence and sent down the other way. Another contract was made between the Boston & Lowell, the Nashua & Lowell, and the Concord railroads, whereby substantially all the freight for Boston was sent by Lowell. The people became indignant. They came here to the legislature and appealed to the house and senate for the passage of what is known as the anti-monopoly act; and the legislature of 1867 passed that law, breaking up such combinations, making it criminal to continue them and to carry them on. But the thing kept on as before, and Mr. Currier brought a bill in equity to restrain the Concord road from oper¬ ating in that way. Now here is what Judge Bellows says about the bill: The object of the bill is to obtain an injunction to restrain the consolidation of the two roads (Concord and Manchester & Lawrence), to prevent their being operated in such way as to avoid competition. It alleges that they are rival or competing roads, but that to prevent competition an arrangement was made between the roads in December, 1860, to commence De¬ cember 1, 1861, to continue twenty years, by which the two roads were consolidated, and made to share equally in propor¬ tion to their capital stock in the joint earnings of the two roads Tand this way they divide now], and the sole control of the Man¬ chester & Lawrence Railroad placed in the control of the Con¬ cord road. 20 It alleges that this contract was in violation of the charters of both roads ; that afterwards, in January, 1865, the Concord road made a contract with the Nashua & Lowell Railroad and the Boston & Lowell Railroad, bv which all through business was diverted from the Manchester & Lawrence Railroad. The bill then recites the law of July 5, 1867, to prevent railroad monopolies, and charges that notwithstanding this act, the two railroads have substantially continued their connection, and have thus continued the consolidation and have prevented the competition which the law was designed to procure. The bill asks for an injunction and other relief. That is what the bill sets forth. That is the complaint which this bill made. Now let us see what Judge Bellows finds. He savs,— The first question in the natural order of inquiry is, whether the Concord Railroad and the Manchester & Lawrence Railroad are rival or competing lines of route within the meaning of the act passed July 5, 1867, entitled ‘An act to prevent railroad monopolies . 9 That is the first question. Then he goes on and states what has been proved, and his answer is this : We are therefore brought to the conclusion that these rail¬ roads must be regarded as parts of rival and competing lines, within the meaning of the statute. That is his first finding upon the first question. Continuing, he savs,— The next question is, whether by some existing arrange¬ ment or contract between the two railroads they have been con¬ solidated, or one of said railroads has been run or operated by the other, contrary to the provisions of the act before cited. He discusses the evidence upon that question, states what is proved and by whom, and in answer to the second inquiry he savs,— The conclusion is therefore inevitable, that the two railroads were operated after August 1, 1867, substantially as they were before, upon an arrangement that, according to their understand¬ ing and expectations, would give them an equal interest in pro¬ portion to their capital stock in the earnings of both roads, and made their interests, in fact, identical. 21 That is the second finding. The third question was as fol¬ lows : Whether the agreement between the two roads of December 27, 1860, was valid, and if so, whether it remained valid after the law of July 5, 1867, so as to justify a continuance of these connections formed under it. The answer to that is,— Upon the whole, we think it unquestionable that by this agreement, if valid, the Concord road would acquire a right to the use of the Manchester & Lawrence road, within the meaning of section eight in the law of 1850 ; and therefore, as the con¬ tract was for more than five years, and was not sanctioned in writing by the railroad commissioners and approved by the gov¬ ernor and council, it comes within the prohibition of that sec¬ tion. That is the third finding ; and his last conclusion, the conclu¬ sion of the whole matter, is,— We are therefore prepared to go so far as this : To decree that the Concord and Manchester & Lawrence railroads are rival and competing lines of road within the meaning of the law to prevent railroad monopolies passed July 5, 1867, and that the running of those roads in the way and manner they have been run, both before and since August 1, 1877, is a violation of the provisions of that act, and should be restrained by injunction, unless justified under the contract of December 27, 1860 ; and for the reasons we have assigned we think it cannot be. We have thought proper to announce these views, although the Lowell line of roads is not brought in, because we are unable to conceive that different views could be presented if they had been made parties, and because of the delay in interposing this objection. We are inclined, however, to defer making the final decree till those parties are brought in, that more complete jus¬ tice may be done. 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O Jz; S3 -+4 OJ0. • rH 03 03 ci ^ Ph 03 rH 03 C CD X X <1 X O £T\ rH 'o ^ ^4 X X <5 rvj a & ^.S PP ^ d3 ^ pi a ~ 03 o ^ 3 H C£) c5 5° CC 03 • rH ¥ d £H X c5 •f 03 rH s o £5 TABLE showing local freight rates between Boston and various stations via the Boston & Maine and Eastern railroads before lease of Eastern to Boston & Maine, in comparison with rates between same stations after lease; also, showing local freight rates between Nashua, N. H., and various stations via Concord Railroad, for same relative distances, on 32 Class ^ L'- O © q^noj rn pum O iO Ci r*t h rH puooag L— N M CO iO rH i—H rH 8 9 14 17 19 Hates in cents per 100 pounds via Con¬ cord Railroad between NASHUA and Reed’s Ferry, N. II., God ’s Falls, Concord, “ Epping, “ Fortsmouth, “ •souk 9 13 35 40 59 Class PHMX 3 4 7 7 10 10 puooag 4 5 8 9 13 15 1SJL1 lO CO O rH 00 O rH rH r-H Rates in cents per 100 pounds, after lease, between BOSTON and Lynn, Mass., Salem, “ Haverhill, Mass., Newburyport, Mass., Rochester, N. H., Portland, Me., Class PHMX 3 4 8 7 11 10 puooag rH LQ O CP hH LO rH rH —h 1S-UX to CO Cl rH 00 O rH rH rH Ol t- CO CO CO © _ o « £ s«2 O O o c o o > - X o .a —' cS O rH Ci *—I rM o CO o c C3 •seme vO *-» CO o to CO c3 bo CO c3 rH ci go 0) pq rH V—4 ^ pq Cb o VO 03 o Y, c H cc O PQ The report of the Railroad Commissioners of New Hampshire for the year ending in 1887 shows the average rate of local freight per ton per mile as follows: Boston & Lowell, $2.76 Boston & Maine, $2.78 Concord, $3.12 Manchester & Lawrence, $3.58 33 BOSTON & MAINE RAILROAD. FREIGHT DEPARTMENT. Boston, July 23, 1887. Hon. John W. Sanborn, Concord, N. H.: Dear Sir :—So much has been said relative to freight rates between Haverhill, Mass., and stations on the Boston & Maine Railroad, that I have thought best to give you a few facts showing class rates in force since operating the Boston & Maine and Eastern railroads under the present lease, in comparison with rates prior to the lease. The very important reduction in rates wdiich has resulted to and from Haverhill since the lease as compared to rates prior to the lease, will be best understood by an examination of the following table: Rates in cents per 100 lbs. between Haverhill and Prior to lease. Since the lease com¬ mencing Feb. 1, 1885. First class. Second class. Third class. First class. Second class. Third class. Boston, Mass. 12 10 8 10 8 7 Lawrence, Mass. 6 0 4 5 4 3 Lynn, Mass. 15 13 ii 10 8 7 Portsmouth, N. H. . . . 15 13 11 15 11 9 Wolfeborough, N. H. . . 25 21 17 25 17 12 Salem, Mass. 16 14 12 12 10 8 Amesbury, Mass. r 13 11 9 10 8 7 A comparison of rates in force since the lease with rates prior to the lease, will show corresponding reductions between nearly all local stations on Eastern and local stations on Western division. Yours truly, W. F. Berry, A. G.F. Ag't. BOSTON & MAINE RAILROAD. FREIGHT DEPARTMENT. Portland, July 23, 1887. W. J. C. Kenney, Esq., G. F. A.: Dear Sir :—In answer to yours of the 22d inst., with testimony of Mr. Brown attached, I would say, the charge of $1.00 per car for placing on wharf was never wholly abolished : the Berlin Mills and W. & C. R. Milli- ken are the only shippers who did not pay for placing. I was talking with Mr. Edwards, Mr. Brown’s partner, a few days ago, and asked him how Mr. B. figured an advance in rates after the lease, and he said he supposed it was on account of our charging for placing on wharf. Yours truly, R. A. McClutchy.