THE 
 
 Railroads and the Public 
 
 ADDRESSES 
 
 The Contemporary Club 
 
 George G. Crocker, Esq. 
 Joseph D. Potts, Esq. 
 Joseph S. Harris, Esq. 
 George B. Roberts, Esq. 
 
 12 January, 1892 
 
 PHILADELPHIA 
 
 privately printed for the contemporary club 
 1892 
 

 
 
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THE 
 
 Railroads and the Public 
 
 ADDRESSES 
 
 DELIVERED BEFORE » . , ; v 
 
 The Contemporary Club 
 
 BY 
 
 George G. Crocker, Esq. 
 Joseph D. Potts, Esq. 
 Joseph S. Harris, Esq. 
 George B. Roberts, Esq. 
 
 12 January, 1892 
 
 PHILADELPHIA: 
 
 privately printed for the contemporary club 
 1892 
 
Digitized by the Internet Archive 
 in 2017 with funding from 
 
 University of Illinois Urbana-Champaign Alternates 
 
 https://archive.org/details/railroadspublicaOOcroc 
 
565. t 
 C 16 r 
 
 Mr. C. Stuart Patterson, the President of the Club: 
 
 Any phase of the railway question is an appropriate 
 subject of discussion before this Club, for there is nothing 
 more contemporary than the railway. Men now living 
 witnessed its birth. We all have seen its development 
 from independent transporting corporations into the great 
 railway systems, which carry passengers without trans¬ 
 shipment, and freight without breaking bulk, from Maine 
 to Texas, and from the Atlantic to the Pacific. 
 
 The railways are so much a part of our daily life that 
 it is difficult to realize that there ever was a time when the 
 movement of passengers was limited by the endurance of 
 horses, and when the cost of transportation interposed so 
 effectual a barrier to the movement of freight that the limit 
 of the profitable carriage of a cord of wood was twenty 
 miles, and of a barrel of flour one hundred and fifty miles. 
 
 The growth of the railway system and the development 
 of the prosperity of the country have been to each other 
 reciprocally cause and effect. The railways have invited 
 immigration by their development of that great northwest 
 in which the immigrants have found their homes. They 
 have made the toil of the farmer productive by bringing 
 the markets of the world to his door. They have rendered 
 available the mineral wealth of the country by moving the 
 ore to the mint and the furnace. They have stimulated 
 manufactures by the rapid transportation of the raw ma¬ 
 terial to the factory, and the manufactured product from it. 
 They have built up great cities in carrying the trade by 
 which those cities live, and the prosperity of the cities has 
 been reflected in the prosperity of tracts of tributary terri¬ 
 tory. They have made foreign commerce profitable, by 
 creating markets for imports, and by providing return car¬ 
 goes in agricultural, mining and manufacturing exports. 
 
 ( 3 ) 
 
4 
 
 More than this, they have overcome the disintegrating in¬ 
 fluences of distance and of conflicting sectional interests. 
 They have secured the permanence of the Union. With¬ 
 out the railways the original thirteen States, separately 
 developed, would never have remained united. The rail¬ 
 ways have, therefore, bound together the union of the 
 States with bands of steel. 
 
 At the end of the year 1890 this country had more 
 than one hundred and sixty thousand miles of completed 
 railway, whose construction was capitalized in stock and 
 bonds at about ten billions of dollars. In that year more 
 than five hundred millions of passengers travelled upon the 
 railroads of this country, and more than six hundred million 
 tons of freight were moved, each ton being carried on an 
 average one hundred and twenty miles. The railway busi¬ 
 ness of a continent cannot be conducted without some fric¬ 
 tion. Rival railway lines have conflicting interests, and 
 their respective managers cannot always agree. Passen¬ 
 gers and owners of freight clamor for low rates and oppose 
 unjust discrimination, either local or personal. Bondhold¬ 
 ers and shareholders naturally desire their stipulated inter¬ 
 est and the maximum of dividends. You can run a railway 
 train by machinery, but you cannot manage a railway by 
 machinery. For that you must employ human instrumen¬ 
 talities, who are necessarily fallible, and who have indi¬ 
 vidualities which cannot be altogether repressed. 
 
 From this it follows that individual rights are some¬ 
 times trampled upon. What ought to be done ? What can 
 be done? 
 
 It is not for me to answer to-night, in the presence of 
 our guests, the questions which I have put. 
 
 One answer that has been given to these questions is 
 the appointment by the government of the United States, 
 and by the governments of some of the States, of railroad 
 commissions, with greater or less power of supervision and 
 control over the railways. Of all these commissions, the 
 
one which has been most successful is the Massachusetts 
 commission. It has succeeded because the powers of the 
 commission have been limited. They have been authorized 
 to advise and not to adjudge. They have depended, as Mr. 
 Adams has said, upon “ the eventual supremacy of an en¬ 
 lightened public opinion.” Another element of their suc¬ 
 cess is in the fact that the commissioners have been so able 
 and so impartial that their recommendations have had the 
 force of judgments. 
 
 I have the pleasure of introducing to the Club, Mr. 
 Crocker, the Chairman of the Massachusetts Board of 
 Railroad Commissioners. 
 
Mr. Crocker: 
 
 The railroad is about sixty years of age. For years 
 after its birth it had a struggle for existence with its great 
 competitors, the canal and the turnpike. It was a weak 
 thing, constantly appealing to the public for favors, and 
 holding out the promise that the debt would be abundantly 
 repaid by the commercial prosperity and growth which it 
 would induce. This promise has been fulfilled. In their 
 wildest flights of hope and fancy, the original builders of 
 the railroad never dreamed even of what was to be its 
 future greatness and power. The growth of the railroad 
 system has been unequalled in the history of the world by 
 that of any other industrial enterprise. It is to-day ac¬ 
 knowledged as the instrumentality which has made possi¬ 
 ble the magnificent progress of our country in wealth and 
 population—a development which is the wonder and the ad¬ 
 miration of the world. Upon the railroad absolutely depends 
 the continuance of that prosperity and growth. Nay, 
 more, the railroad is the life-blood of the nation. If the 
 operation of our railroads should cease, the result would be 
 not simply widespread stagnation, but widespread starva¬ 
 tion. 
 
 It is generally true, with reference to industrial enter¬ 
 prises, that their prosperity depends upon the public; but 
 it is not true of any other industrial enterprise as it is of 
 the railroad, that upon it the public is absolutely dependent, 
 not simply for prosperity, not simply for comfort, but for 
 the means of existence and for the preservation of life 
 itself. 
 
 In considering therefore, the relations of the railroads 
 to the public, the first thing to be borne in mind is that 
 each is necessary to the existence of the other—that there 
 is a vital mutuality between them. Not only are the rela- 
 
 ( 6 ) 
 
7 
 
 tions between them of vital importance, but these relations 
 are complicated to a degree seldom realized; and it is my 
 purpose to-night, in my brief talk with you, simply to 
 direct your attention to a few of these complications and 
 to impress upon you that the railroad problem, so called, 
 is no simple question which can be dealt with by the ignorant 
 without disaster, but that it is one of the most difficult and 
 important problems now before the people of these United 
 States, and that those who know the most about it are the 
 ones who will express themselves most conservatively in 
 regard to the best means of correcting great evils which 
 undeniably exist. 
 
 Marvellous is the story of engineering skill and inven¬ 
 tive genius displayed in the construction of our roadbeds 
 and the rolling-stock equipment. Each detail of the road¬ 
 way, whether it be of the ballast, the tie, the spike, the joint, 
 the rail, the switch, the signal, each detail of the compli¬ 
 cated structure of the locomotive, each detail of the more 
 simple construction of the car, not only of those parts of 
 the car which are essential to safety, namely, the axle, the 
 box, the wheel, the brake-shoe, the brake apparatus and the 
 coupling, but also of those parts which promote the com¬ 
 fort of the passengers, such as racks, windows, seats and 
 heating apparatus, has an eventful and interesting history. 
 
 Some men know about some of these details. Few 
 men are masters of them all, and yet it is far more easy to 
 find men who understand the problems of construction 
 and of mechanical operation than it is to find men who 
 understand other problems connected with railroading, to 
 which I desire to direct your attention. 
 
 The roads first built were short roads and generally 
 within the limits of a single State. They were isolated. 
 There were no other railroads connecting with them. The 
 problem of their operation was a simple one. They were * 
 of local importance only. This condition of affairs con¬ 
 tinued down to about 1850, when, by the building of exten- 
 
8 
 
 sions and the construction of connecting lines, the inter¬ 
 state business began to assume important proportions. 
 This was only forty years ago. History since that date 
 has been history contemporary with many of those here 
 present. It was not until 1870, or a little over twenty 
 years ago, that the railroad traffic became interoceanic 
 traffic. Since that date history has been contemporary 
 with all of those present. 
 
 During the wonderful growth of our railroad system, 
 amounting now in the United States to 160,000 miles, the 
 process of merger, consolidation and reoganization of com¬ 
 panies has been constantly going on. It is now unusual 
 to find a railroad which is wholly within the limits of a 
 single State. The Atchison system with its seven thou¬ 
 sand miles of roadway runs in thirteen States and terri¬ 
 tories. 
 
 In coming here from Boston by what is known as the 
 Shore Line, I have been in six different States. 
 
 There are 47 States and territories, and each one of 
 them has a legislature of its own consisting of two branches. 
 
 The average number of legislators in each State is one 
 hundred, so that there are 47 State or territorial legislatures 
 composed of 4,700 legislators passing laws relating to rail¬ 
 roads. Of these legislators some are wise and some ignor¬ 
 ant, some honest and some corrupt, some strong and some 
 weak, some unprejudiced and some prejudiced, some public- 
 spirited and some selfish, some independent and some seek¬ 
 ing for votes, some conservative and some destructive. 
 Each State or territory has its own laws relating to rail¬ 
 roads, and to those laws each railroad corporation is sub¬ 
 ject, so far as its roadbed and the operation of its road in 
 that State are concerned. We have here the elements not 
 only of confusion but also of conflict. It might well have 
 been thought that through traffic could not be carried suc¬ 
 cessfully under such conditions. There has, however, been 
 no serious trouble. The difficulties which have, in fact, 
 
9 
 
 arisen have been few, and there has been little or no con¬ 
 flict of authority. 
 
 In the laws relating to the execution of wills and other 
 documents, in relation to insolvency and in relation to mar¬ 
 riage and divorce, there is great lack of harmony, but with ref¬ 
 erence to railroads, where there was an opportunity for con¬ 
 flict a thousand times greater, though there has been diver¬ 
 sity, there has been but little incongruity. This is due 
 partly to the genius of the American people, but more espe¬ 
 cially to the fact that the railroad companies have themselves 
 seen to it that they are not crippled by inharmonious and 
 unwise legislation. They have had able and learned counsel 
 to protect their interests, and through their care and jealous 
 oversight injurious conflict has been happily avoided. 
 
 Not only are our railroads subject to the legislation of 
 each State through which they run, but they are also sub¬ 
 ject to the authority of the United States under its consti¬ 
 tutional power to regulate commerce between the States. 
 State authority is limited by State boundaries, but the con¬ 
 stitutional power of the United States extends to the regu¬ 
 lation of the transportation of every passenger and pound 
 of freight going from one State to another, and to all the 
 means and methods by which such transportation is 
 effected. This power extends not only to those railroads 
 which run from one State into another, but also to those 
 railroads which are wholly within the limits of a single 
 State, in so far as they are engaged in the transportation 
 of passengers or freight coming from or going into another 
 State. 
 
 The Supreme Court of the United States, in speaking 
 with reference to the power of Congress to regulate com¬ 
 merce, has said, “ It is the power to prescribe the rules by 
 which commerce shall be governed : that is, the conditions 
 upon which it shall be conducted. It embraces within its 
 control all the instrumentalities by which that commerce 
 may be carried on and the means by which it may be aided 
 
10 
 
 and encouraged.” The declaration of the scope of this 
 constitutional right to regulate commerce has within the 
 last decade been greatly broadened. It would seem that it 
 is within the power of Congress not only to regulate 
 fares for passengers and freight, but also to determine how 
 the cars for the transportation of passengers and freight 
 shall be built, what their dimensions shall be, what their 
 appliances for convenience and safety shall be, what shall 
 be their rate of speed, what stops they shall make, what 
 shall be the method of construction and the weight of 
 locomotives, what shall be the method of construction and 
 the supervision of roadway, of tracks and of bridges, what 
 system of road signals shall be used, what shall be the 
 character of the station accommodations and how the 
 public shall be protected at such stations, what regulations 
 shall be enforced in regard to the operation of the road, 
 and what regulations shall be prescribed as to the compen¬ 
 sation of employees and the limitations of their hours of 
 labor. 
 
 In considering the relations between the States and 
 the United States, it must be borne in mind that State 
 traffic and interstate traffic are not now separate, nor can 
 they be considered separable. State traffic and interstate 
 traffic are carried on the same railroads, in the same trains, 
 and in the same cars. 
 
 Thus far the regulation of the operation of our railroads 
 by Congress has been small as compared with the extent 
 of its powers. The chief purpose of the Interstate Com¬ 
 merce Act was to prevent unjust discrimination between 
 individuals and communities, and that act does little more 
 than to lay down certain general principles governing rates 
 and the interchange of traffic, and to require publicity of 
 rates and due notice of any increase of the same. 
 
 Thus far there has been no conflict between regulation 
 by the United States and regulation by the States, but 
 conflict is possible. Aldace F. Walker, late a member of 
 
II 
 
 the Interstate Commerce Commission, in a recent paper 
 relating to railway associations, writes that the State and 
 the United States authority over railroads cannot, in his 
 opinion, coexist for many ycais. 
 
 Railroad managers have, however, to meet other diffi¬ 
 culties than those growing out of the fact that railroads are 
 subject to the legislation of many States, and to the control¬ 
 ling and all-pervading legislation of Congress. These are 
 the difficulties growing out of their own corporate limits. 
 There are now over 1,700 separate railroad corporations in 
 the United States, and the number of operating roads is 
 about 400. Corporate lines of division are made without 
 reference to State lines. The termini of railroad systems 
 are not State lines, but cities. In travelling between 
 Philadelphia and Boston, a passenger is carried over the 
 iron of five distinct corporations. 
 
 Generally speaking, the passenger experiences no in¬ 
 convenience when he passes from the road of one corpora¬ 
 tion to the road of another. The line between corporations 
 is as easily passed as the line between States. As a rule, 
 a passenger is subjected to no more frequent changes of 
 cars than he would be if all roads were controlled by one 
 corporation and subject to a single jurisdiction. The same 
 is true of freight. It can generally be billed through to its 
 point of destination upon a single payment. Uniformity in 
 the classification of freight has not yet been attained, but 
 individual classifications have from time to time been 
 merged and consolidated, so that there are now four great 
 classifications covering the whole country. 
 
 To thus carry passengers or freight, on the iron of sev¬ 
 eral corporations without change of cars and on a single ticket 
 or way bill, requires joint tariffs, joint earning contracts, 
 interchange of cars, car mileage and repair agreements, and 
 a credit system in which each railroad is recognized as the 
 financial agent of others directly or indirectly connected 
 with it. The division of the money received for fare and 
 
12 
 
 freight between the various roads over which passengers 
 or freight are carried, and the settlement of the accounts 
 growing out of the use and repair of cars render necessary 
 a most elaborate and expensive accounting system. 
 
 The struggles for advantage between corporations 
 forming parts of through lines present most perplexing 
 difficulties, but they are simple and mild indeed as compared 
 with those struggles which are the outgrowth of compe¬ 
 tition between parallel lines. Competition has worked 
 wonders in this country. It has developed our railroad 
 system with fabulous rapidity. In promoting safety, com¬ 
 fort and speed it has been a most effective agency, an agency 
 far more efficient than government supervision or regulation 
 can be. In railroading, competition has wrought the work 
 of improvement more wonderfully than in any other indus¬ 
 try. Competition has compelled economical management, 
 and has caused continual reductions of rates until they have 
 reached a point at which they are seldom complained of as 
 too high, but only because they lack uniformity and stability. 
 Great, however, as is the debt which we owe to competition, 
 its work has not been free from injurious elements. The 
 advantages, open or secret, which, largely as a result of com¬ 
 petition, had been given to individuals and to sections, and 
 by which the strong were made stronger and more wealthy, 
 and the weak weaker and impoverished, were the immediate 
 cause leading to the Granger movement in the West and the 
 passage of the Interstate Commerce Act. Unbridled com¬ 
 petition has been the parent of discrimination, and it is the 
 foe of publicity. Competition loves darkness rather than 
 light. 
 
 The making of joint and competitive tariffs and the 
 division of rates among railroads is largely the work of the 
 various so-called railroad associations. It has been found 
 much easier to make these agreements than to secure adher¬ 
 ence to them after they have been made. 
 
 Judge Thomas M. Cooley, at the National Convention 
 
13 
 
 of Railroad Commissioners, held at the rooms of the Inter¬ 
 state Commerce Commission in Washington, in March of 
 the present year, in opening the convention, discussed the 
 question as to what should properly be understood by the 
 term “railroad problem,” and he reached the conclusion 
 that the greatest railroad problem was as to the best method 
 of making and changing the rates for passenger and freight 
 transportation. Let me quote a few words from his ad¬ 
 dress : “ So long,” he said, “ as five hundred bodies of men 
 in the country are at liberty to make rate-sheets at pleasure, 
 and to unmake or cut and re-cut them in every direction 
 at their own unlimited discretion, or want of discretion, 
 and with little restraint on the part of the law, except as 
 it imposes a few days' delay in putting changes in force, 
 the problem will remain to trouble us. The existence of 
 the power makes such disorder and confusion constantly 
 imminent.” 
 
 The difficulties resulting from the multiplicity of our 
 corporations have been greatly diminished of late. The 
 transportation of through traffic has been simplified by con¬ 
 solidation of connecting lines, and the serious evils which 
 have developed as a result of competition have been in some 
 measure checked by the consolidation of competing lines. 
 As has been stated, the roads of 1,700 distinct corporations 
 are now operated by about 400 operating companies. In 
 fact, 69 corporations operate 64 per cent, of the railroad 
 mileage of the United States. 
 
 This consolidation of interests has progressed with 
 remarkable rapidity of late years, and has met with little 
 opposition from the public, but it is not an unquestionable 
 good. Corporations may become of such size and power 
 as to be a menace to the rights of the people. 
 
 In so far as competition is done away with, we avoid 
 the evils which have resulted from it, but we lose also its 
 benefits. As competition, on the whole, does much more 
 good than harm, the result is a net loss to the public. 
 
14 
 
 Such are some of the perplexities which grow out of 
 the operation of our railroads by a large number of sepa¬ 
 rate corporate existences, each one of which is subject to 
 the will of the legislatures of the States through which 
 the road runs, and each subject also to the overruling 
 power of Congress. Certainly, the difficulties have been 
 surmounted in a remarkable manner. The results are 
 much better than could have been expected. 
 
 It is wonderful that railroad traffic under such circum¬ 
 stances can be conducted with so little inconvenience to 
 the public and with so little indication of the obstacles 
 which have been encountered. The disturbing elements, 
 however, still exist, and nothing but wise and progressive 
 treatment will prevent them from making serious trouble 
 in the future. 
 
 There is a panacea for all these troubles, and that is 
 to have the railroads operated by the strong arm and the 
 single power of the United States. It is urged that then 
 the utmost simplicity would be reached. 
 
 There would be one management instead of 400 man¬ 
 agements. 
 
 The struggles between those 400 managements for 
 advantage would be eliminated. 
 
 There would be no more stock-jobbing management. 
 
 There would be no more watering of securities. 
 
 The evils of competition would be done away with. 
 
 One part of the country would be served as well as 
 another part of the country. 
 
 Passengers and freight could be carried by the shortest 
 route at the lowest rate. 
 
 The paying lines would support the unprofitable lines, 
 and the railroad system would be practically, therefore, 
 one immense pool. 
 
 In rates, as in everything else, there would be uni¬ 
 formity and simplicity. There would be stability and 
 publicity. There would be no competition to lead to dis- 
 
15 
 
 crimination, and everybody and every section would be 
 treated fairly and equally. 
 
 Such is the argument of the Nationalists. Not long 
 ago it was stated in the papers that of forty-one Congress¬ 
 men who had responded to a circular letter addressed 
 them by some farmers’ alliance, eleven had declared them¬ 
 selves in favor of having the United States own and 
 operate our railroads. Although it is probable that an 
 amendment of the Constitution would be required in order 
 to carry out such a proposition, still its merits should be 
 discussed. 
 
 Assuming for the moment that the management of 
 the railroads by the United States would be better than 
 their present management, it by no means follows that the 
 work of operating the railroads should be undertaken by 
 the United States. Of the magnitude of the problem and 
 of the results which would be likely to follow government 
 ownership and operation we can gain some idea from a com¬ 
 parison of our railroads with the Post-office Department. 
 
 In executive ability the present Postmaster-General 
 has few equals in the United States. In his report for the 
 fiscal year ending June 30, 1889, he writes as follows : 
 
 “To the Postmaster-General of the United States is 
 committed the management of the largest business concern 
 in the world, consisting of a central establishment with 
 almost 60,000 branches and employing over 150,000 people. 
 It agents embrace one-half of the civil list. It maintains 
 communication between the near and the remote places of 
 the country with frequency, celerity and security. . . . 
 
 The capital in use in carrying on this vast business was 
 last year $1 to each man, woman and child in the United 
 States. ... In twenty years the transactions of the 
 Post-office Department have doubled. In ten years more, 
 by all the laws of growth, they will nearly have doubled 
 again. To-day’s work, the routine forms, the methods of 
 operation, the relations of clerks and officials, are almost 
 
i6 
 
 as crude as they were in the beginning. . . . The 
 
 Postmaster-General, in taking up the duties of the Post- 
 office Department, generally finds, with his own advent, 
 that other new officers also enter the service. The whole 
 organization from the top is changed and the work falls 
 into untrained hands. During a period of ten years there 
 were eight different Postmasters-General. In our form of 
 government this constant change will continue, but from a 
 business standpoint thus to unsettle the service and to be 
 always educating new sets of men cannot be beneficial to 
 any department. However able any new Postmaster- 
 General and his associates in the Assistant Postmaster- 
 Generalships may be, there must be a course of training, 
 which time and experience alone can give, before any of 
 them are able to handle with real effectiveness the divi¬ 
 sions placed in their charge. Even with each of them 
 well skilled and at his best, it is not possible to keep up 
 with the work.” 
 
 He further states that the business growing out of 
 the necessary appointments and removals in the army of 
 employees, the complaints of irregular or poor service, the 
 demands for enlarged service, for the building of new post- 
 offices, improvements in postal facilities and in the number 
 of deliveries for the large post-offices, and for the procuring 
 of supplies, the details of mail operation, the time schedules, 
 the determination of routes and rates, the making of con¬ 
 tracts, the collection of dues and the delivery of stamps 
 and envelopes, make up a complicated mass of business 
 which is unequalled by any other similar department in 
 the world. 
 
 “ Think for a moment,” he writes, “ of a city of 60,000 
 population and the daily changes by death, defalcations, 
 lapses and necessary removals, and an idea will be sug¬ 
 gested of the labor attending this oversight. No man can 
 do the work as it is now organized except in a superficial 
 way. No great business establishment can succeed that 
 
changes its principal officers once in fifteen months. The 
 Post-office Department cannot do it any more than the 
 Pennsylvania or the New York Central Railroad.” 
 
 He plainly states that the equipment of post-offices 
 varies according to the zeal of the postmaster; that the 
 postmasters who are aided by members of Congress and 
 who are most persistent get the most; and that extensions, 
 development and improvement depend almost altogether 
 upon some kind of pressure from outside. 
 
 He declares that the touch of the Department upon 
 post-offices throughout the country is very slight; that the 
 machinery is set up and then let alone, if only certain 
 formal reports are made at stated times ; and that the 
 offices and the Department are generally in an unfriendly 
 attitude because each postmaster has wants which the 
 Department is not ready or able to grant. 
 
 The Postmaster winds up his report as follows : “ The 
 Postmasters-General have been men of great ability, but 
 the country grows so fast that the Post-office Department 
 unconsciously has lost step and fallen behind in the steady 
 march of quickening enterprise.” 
 
 Now let us turn from the post-office to our railroads. 
 There are 60,000 post-offices in the United States. There 
 are about the same number of railroad stations. The rail¬ 
 road system has also 160,000 miles of track and over eleven 
 hundred thousand cars. 
 
 Our railroads carry 500,000,000 passengers per year 
 and over 600,000,000 tons of freight, each passenger being 
 carried on the average twenty-four miles and each ton of 
 freight 120 miles. 
 
 The railroads further carry the mails for the Post-office 
 Department. One-half of the whole expenditure of the 
 Post-office is paid for the transportation of mails, and most 
 of this work is done by the railroads. 
 
 The Postmaster-General reports that the capital used 
 in carrying on the post-offices amounts to one dollar for 
 
i8 
 
 every inhabitant of the United States. The capitalization 
 —that is, the capital stock and net debt of our railroads—is 
 $10,000,000,000, or $160 per inhabitant, 160 times as much 
 as the capital used in carrying on the Post-office. 
 
 The total annual receipts of the Post-office Depart¬ 
 ment, according to the report referred to, were $46,000,000. 
 The total annual receipts of the railroads are $1,000,000,000, 
 or more than twenty times as much. 
 
 The total number of employees of the Post-office is 
 150,000. The total number of employees of our railroads 
 is 750,000; and if we had in this country as many employees 
 on our railroads per mile of track as they have in Germany, 
 instead of having 750,000 employees we should have over 
 2,000,000 employees, or fourteen times as many as are em¬ 
 ployed in the Post-office. This number of 750,000 employ¬ 
 ees does not include the vast number of people who are 
 employed in providing supplies and material, in construct¬ 
 ing railroads and building cars. 
 
 Can our form of government stand such a strain ? 
 Can we afford to subject it to the test? To the dangers 
 of immense patronage will be added the vastly more potent 
 influence which unscrupulous politicians may exercise for 
 party purposes, by discriminations in accommodations 
 or rates between different States or between different 
 communities in the same State. The experience of Anglo- 
 Saxon Australia in the governmental operation of its rail¬ 
 roads is not encouraging. Let us not fly from the ills we 
 have to those we know not of. The people have many 
 causes for complaint in those countries where the roads 
 are operated by the government as well as in our own 
 country. 
 
 Wonders have already been accomplished, and the 
 difficulties which are now pending and impending through 
 corporate management are not so great as those which 
 have been already overcome. In modern English railway 
 history, although there is fierce competition, harmful dis- 
 
ig 
 
 criminations are unknown. The railways of England and 
 the United States, for the speed of trains, the accommoda¬ 
 tions furnished, and for their energy of management, stand 
 at the head of the list of the railways of the world. Fur¬ 
 ther than this, it may be said that in England the American 
 railway is held up with commendation as a bright example 
 of cheapness of service, flexibility of management and 
 technical progress. We must not, however, shut our eyes 
 to the fact that serious evils exist and serious dangers 
 threaten. 
 
 Danger lurks in complexity, instability, discrimination, 
 and secrecy. Safety depends on simplicity, stability and 
 publicity. 
 
 Mr. Patterson : It has been pleasant to hear the 
 voice of Massachusetts upon this question; it will be 
 equally pleasant to hear the voice of Philadelphia. We 
 have with us to-night one who has had a long and varied 
 experience as a railway official, and as the head of a great 
 transporting organization which was itself a freighter upon 
 the railways. I now present to the Club an honored 
 citizen of Philadelphia, Mr. Potts. 
 
Mr. Potts : 
 
 Mr. President , and Ladies and Gentlemen : 
 
 The question of Transportation, certain phases of 
 which you have just heard discussed, is one of the weight¬ 
 iest of living topics. It has grown more rapidly than it 
 has been comprehended ; and the commercial health of the 
 nation requires that this condition be changed; that its 
 essential principles be broadly understood, and the proper 
 regulation of its great power be intelligently, justly, and 
 completely established. 
 
 I hope you will not consider it unfitting if I refer, by 
 way of a short prelude, to what may be deemed the Gen¬ 
 esis of Transportation; to the imperative character of the 
 instincts it has been created to gratify—instincts which 
 have grown, and which will continue to grow in volume 
 and force, as means for their gratification increase in ex¬ 
 tent, in excellence, and in cheapness. 
 
 The impulse to movement, to motion, to change 
 of locality, seems inherent in all matter. The great 
 spheres which occupy space are forever moving ; the infin¬ 
 itesimal atoms of which matter consists are never quiet, 
 excepting under restraint. Animal life has its recurring 
 periods of restlessness, and the human animal, man, is 
 dominated by the same irresistible law. Only the re¬ 
 straints of inconvenience, lack of physical power, and lack 
 of time, keep mankind within reasonable bounds of 
 quietude. The possession of money in modern times 
 somewhat lessens the force of these restraints, and the pal¬ 
 pable results of such possession have led an acute observer 
 to say that “ when a rich American has built himself a 
 house in the city, another in the country, and a cottage by 
 the sea or in the mountains,—then—he travels.” The 
 motives to movements are multitudinous ; to movements 
 
 (20) 
 
21 
 
 of persons, of property, of ideas ; motives of pleasure, of 
 sorrow, and of gain ; the supply and reception of news, and 
 the demand and supply for and of materials for use and grat¬ 
 ification. These motives are endless in quantity and vari¬ 
 ety, but they are all in constant activity; and they all im¬ 
 pel and compel movement. 
 
 The palliation and the partial removal of the forms of 
 restraint just named, which so hamper these ever-present 
 impulses to movement, has become in modern days one of 
 the greatest of human industries. It is the Science and 
 the Art of Transportation. 
 
 Let us glance briefly at some of the achievements of 
 this immense industry. Instead of the rugged and broken 
 natural surface of the earth, to be wearily and slowly 
 plodded over on foot, in danger, with exhausting toil, with 
 great loss of useful time, and with the most barbaric dis¬ 
 comfort, we have the smooth railway and the vestibule 
 train, and we eat and sleep in luxury, comfort, and safety, 
 while gliding easily along at fifty miles an hour. The 
 great water surfaces of the globe, upon which in his early 
 history man could not safely venture, are now traversed 
 in huge vessels, safely, comfortably, and swiftly, and with 
 such certain punctuality that spaces of thousands of miles 
 are covered with variations of but a few hours in the times 
 of the voyages ; and, indeed, under favoring conditions of 
 sea and weather, these differences are measured by 
 minutes. 
 
 Our ideas are passed from point to point with still 
 greater perfection of method. The telegraph, the tele¬ 
 phone, and the extraordinary postal systems of civilized 
 countries, especially that of the United States, make the 
 interchange of ideas rapid and cheap to a degree which but 
 a short time since would have appeared impossible, unless 
 it had been wrought miraculously. 
 
 If we turn from what has been done in the way of re¬ 
 moving restraints on the movement of man and his belong- 
 
22 
 
 ings to the effect which such partial removals have 
 worked, we will find the most abundant confirmation of 
 the declaration already made, that the tendency to move¬ 
 ment is constant and all-pervading, and that nothing but 
 natural hindrances prevent its increasing conversion from 
 tendency to deed. 
 
 Bear in mind that Transporters have not wholly re¬ 
 moved difficulties ; they have only modified some of them, 
 and this, in part, by converting them into a new form of 
 difficulty, the new form being a charge of money. In¬ 
 stead of spending time and strength in tramping from 
 place to place, the traveller buys a ticket, for which he dis¬ 
 burses money ; instead of carrying his goods on his back 
 through the wilderness, he pays a freight rate, and for the 
 sending of his letters three thousand miles, he uses a 
 stamp which costs him two cents. 
 
 He can earn the requisite cash for the ticket, for the 
 freight rate, and for the stamp, with much less outlay of 
 time and of labor than was required, when, by his own 
 efforts, his person or his property was moved ; so that, 
 while his movement is still under restraint, still subject to 
 whatever difficulties may be represented by the rates of 
 charge and the conditions made by Transporters, his re¬ 
 straint has been greatly lessened, and the extent of move¬ 
 ment has, therefore, been greatly enlarged. 
 
 I don’t wish to worry you with statistics, but I will 
 venture to give you a few figures, because in no other way 
 can you be so briefly shown how increases in movement 
 have followed the physical improvements and the lessened 
 cost already established by Transporters. 
 
 Take an example from the movement of property :— 
 On the railroads of the United States the aver¬ 
 age c’harge for moving one ton of property 
 one mile was— 
 
 In 1880. lyVo cents 
 
 In 1890. T Vo cents 
 
23 
 
 The tons moved one mile per each person of 
 the entire population of the United States 
 were— 
 
 In 1880. 645 
 
 In 1890.!. 1,265 
 
 That is, the reduction in rates was a little more than one- 
 fourth per ton, while the increase in movement, per per¬ 
 son, was nearly doubled. 
 
 Take an example from the movement of letters : 
 
 The rate of letter postage charged by the 
 
 United States was— 
 
 In 1880, for half an ounce or less. 3 cents 
 
 In 1890, for an ounce or less. 2 cents 
 
 The movement of letters through the mails dur¬ 
 ing the same years, for each person of the 
 
 entire population, was— 
 
 In 1880, approximately. 21 
 
 In 1890, approximately. 30 
 
 Disregarding the effect of the change in maximum 
 weight, as an effect, the extent of which cannot now be 
 ascertained, we find the result to be a deduction in charges 
 of one-third per letter, and an increase in movement of 
 nearly one-half per person. 4 
 
 All hindrances to movement, however, are not yet 
 represented by a charge. Some loss of time is yet involved, 
 and in the cases of long journeys, very much time 
 which often can be illy spared. Our practical speed, how¬ 
 ever is yet slow—not over fifty miles an hour—and better¬ 
 ments in this respect can be reasonably hoped for. It is 
 much slower than certain varieties of birds are said to have 
 attained, and what birds have done, man can probably do. 
 Some bodily wear and tear is yet a necessity, and this may 
 never be wholly removed, but it is certainly lessened 
 yearly. 
 
 The chief hindrances of to-day are represented in part 
 by the tariff conditions of Transporters, and by their rates 
 
24 
 
 of charge, especially by the irregularities and discrimina¬ 
 tions of such rates, and by their sudden and severe fluctua¬ 
 tions. They are also represented, in part, by suddenly 
 developed incompetencies of Transporters to meet sud¬ 
 den growths of movement; or to meet, promptly, clearly 
 foreseen increases in demands for track, power, and car¬ 
 riage facilities. And they are, finally, also represented, to 
 a large extent, by the evil results of many unwisely con¬ 
 ducted struggles for traffic, and for monopoly of position, 
 which are waged between railway corporations, and which, 
 by a curiously weak misnomer, are classified under the 
 title of Competition. 
 
 It is to a consideration of some of these existing obsta¬ 
 cles, which bar our way to more effective transportation 
 conditions, that I will now ask your attention. 
 
 Perhaps our perception of the evils we suffer from, 
 and of the possible remedies for them, may be quickened 
 and clarified by first making plain to our minds, what con¬ 
 ditions of transportation capacities we would like to have 
 —what conditions, which, in the light of present knowl¬ 
 edge, will probably be improvements on those we now pos¬ 
 sess, and yet not be beyond a reasonable hope of practical 
 attainment. To set forth these new and desirable condi¬ 
 tions with any approach to adequate fulness, I have found 
 to be quite impossible within the limits of time permitted 
 by a proper regard for your patience. I can therefore but 
 hint at a few of their outlines ; and, indeed, I have been 
 obliged to restrict these hints to the subject of property 
 movement only, and that by railway within the United 
 States. 
 
 First, then, we must have reasonable rates of charge, 
 and reasonable stability in such rates, so that the great 
 interchanges of traffic will not have possible ruin always 
 impending over their owners, through sudden and violent 
 changes in tariffs. To-day all traffic is so exposed, and 
 many severe and costly demonstrations of this truth have 
 
25 
 
 made the boldest commercial minds, timid and halting in 
 their movements, excepting when they can procure, in ad¬ 
 vance, and from competent authority, assurances against 
 such risks. Communities which possess two or more really 
 competitive routes, equally effective and far-reaching, are 
 less exposed to this danger than others. It is indeed a 
 frequent practice for a Transporter to maintain high 
 charges to or from points which no other Transporter can 
 reach, while making low rates to and from other points 
 which are in competition with rivals. There are few prac¬ 
 tices more tempting to the Transporter, but none more ill- 
 judged, nor more permanently harmful to both Transporter 
 and locality. It is an abominable evil, which should be 
 absolutely suppressed. 
 
 Stability must be attained, however, by means that 
 will not stifle improvement. Destructive competition has, 
 as its one good effect, the betterment and cheapening of 
 methods ; but surely our civilization is not at this day so 
 crude that progress in method cannot be won in better 
 ways than by the destructiveness of the savage. 
 
 Next: we must have a greater approximation to uni¬ 
 formity in rates of charge, and absolute freedom from in¬ 
 equitable discrimination between shippers. The big ship¬ 
 pers must not be charged so much less than the little ship¬ 
 pers, that the little ones shall perish and the big ones find 
 their business increasingly swollen. It is proper and 
 necessary to have a wholesale rate and a retail rate of 
 charge ; but the basis of the wholesale rate must, both for 
 the public benefit and the interest of the Transporters, be 
 small enough to be attained by the many, and not so large 
 that it can only be reached by the few. 
 
 Again : we must have a separation of terminal and 
 transfer charges from the road charges. Terminals and 
 transfer facilities are costly, and their expenses cannot be 
 easily cheapened. The great future economies will be 
 made in the movement between terminals, and it is this 
 
26 
 
 movement which the individual members of the public can¬ 
 not provide cheaply, each for himself. It is here that the 
 main usefulness of the great Transporter is found. Many 
 shippers prefer to provide their own terminals and do their 
 own terminal work. When they can do so they should have 
 the right to do so, and they should not be charged for what 
 they do themselves. 
 
 Again: we must have a separation of road charges 
 into charges of a certain amount when cars are furnished 
 by the road-owner, and charges of a less amount when cars 
 are furnished by others. Many prefer to furnish their own 
 cars, and should be allowed to do so, and such division of 
 the total road charges should be made as will fairly appor¬ 
 tion them according to the relative capital and risk of each 
 interest. This should apply, whether the car-owner carries 
 traffic for himself or for others. Under this regulation, 
 shortage in car supplies will become less frequent, and the 
 railway will approximate the character of a Common High¬ 
 way ; a result much to be desired. 
 
 Again: we must have, within defined limits, a practi¬ 
 cal blending, for the movement of cars and property, of all 
 the railroads of the country, as they are now, and as they 
 may be hereafter, into a single effective system. That is, 
 the rates of road charges should be on a mileage basis, and 
 should apply to the total mileage any shipment may make, 
 regardless of the fact that it may, in its transit, pass over 
 many roads differently owned. This will be easily accom¬ 
 plished if the divisions of the road charges already sug¬ 
 gested be made, and if every road be compelled to move, 
 with impartial promptness, over its tracks (but not into its 
 terminals) every suitable car which may be offered to it. 
 
 Proper rules as to such interchange of cars, including 
 also just requirements as to the character of the cars, 
 should, of course, be established. 
 
 Again : railroad-owners, as one of their duties, should 
 be under compulsion to be suitably supplied with tracks 
 
2 7 
 
 and power. This is a question of difficulty, and ought not 
 to be adjusted inequitably; but it should not be left, as it 
 now is, wholly to the degree of providence or foresight, 
 financial skill or commercial courage, possessed by each 
 such road-owner. 
 
 These leading changes impress me as absolutely essen¬ 
 tial to be made, and made as speedily as may be consist¬ 
 ent with equity, legal power, practicability and good judg¬ 
 ment. They will constitute, I believe, a set of fairly effec¬ 
 tive remedies for the main imperfections yet developed in 
 our present system of Inland Traffic Movement. There 
 are, of course, other difficulties needing cure, including 
 difficulties local to cities and to all closely-settled com¬ 
 munities, which I cannot touch on now. 
 
 If what I have said be correct, we have then to con¬ 
 sider the equities involved in these changes ; afterward 
 the legal power to make them; and, finally, the practical 
 method, if any can be found, of accomplishing them. 
 
 And first, what equities are to be considered? I take 
 it no American, in his moments of sober thought, will feel 
 that any readjustments of conditions can stand, or ought 
 to stand, or will produce permanently useful results, unless 
 they be founded on equity. 
 
 When, early in this century, the movement began 
 among civilized nations, looking to inland transportation 
 upon a scale beyond all precedent, each large community 
 turned naturally to its governments, Municipal, Provincial, 
 State or National, as the only available organizations com¬ 
 petent to provide for a common need ; the cost and appar¬ 
 ent risk of which were so much beyond the range of in¬ 
 dividual power. Moreover, the idea of a Common High¬ 
 way was properly a dominant one. Hence States built 
 canals and railways, and, later, lesser communities joined 
 interests with individuals in constructing like works. The 
 National Government of the United States built a great 
 macadamized road. European governments embarked 
 
28 
 
 largely in the improved form of highways. Certain disad¬ 
 vantages in many cases were soon developed under govern¬ 
 mental ownership and operation. Political necessities often 
 took precedence of commercial necessities, and the gov¬ 
 ernmental management became frequently incompetent 
 and tainted. 
 
 Most communities in this country grew satisfied that 
 the element of individual interest must be introduced to 
 secure transportation efficiency, and avoid governmental 
 deterioration. The introduction of such an interest soon 
 became, with a few exceptions, the general rule here, and 
 forms of corporate organization were evolved, in which, 
 under restrictions for the public protection, thought at the 
 time to be sufficient, but which have often since proved 
 inadequate, the private interest of the Transporter became 
 the leading motive, and the convenience and interest of 
 the public subordinate considerations, excepting when 
 and as it became clear to the Transporter that deference 
 to the latter motives would contribute to his own prosperity. 
 
 Vast amounts of individual money have been invested 
 in this form of public service, under the belief that this 
 relation of interests would always continue. 
 
 It would be unfair to sacrifice to any improper degree 
 these individual interests, thus authoritatively called into 
 existence; but the time seems to have arrived when, 
 through the processes here suggested, or such other pro¬ 
 cesses as may seem to be wiser, but in any case by processes 
 which shall be mutually just, the public service must take 
 the front place as a motive, and the private interest of the 
 Transporter an equitable, but a secondary, position. 
 
 The next point, that of legal power, is one which I 
 think need hardly be considered at present. Under our 
 form of government, whatever a sufficient number of the 
 people ultimately, and after full consideration, decide shall 
 become the law, will be made the law, and the present 
 moment is the time for discussion and for experimenting. 
 
2.9 
 
 and not for much law-making. We therefore come, finally, 
 to the consideration of methods of reformation. 
 
 Railroad-owners are clearly unable to introduce such 
 methods unaided. They have tried to harmonize in various 
 ways ever since the dawn of competition among them, and 
 their efforts have been but a continuous succession of short¬ 
 lived pacifications, alternated with longer periods of mutual 
 reproaches, impartially distributed breaches of faith, and 
 bitter and destructive rate wars, track wars, and wars over 
 every other species of difference between them. The pub¬ 
 lic look with disfavor upon peace conferences between rail¬ 
 road companies, and in fact have now made Pooling unlaw¬ 
 ful. The Pool was, perhaps, the most nearly successful 
 form of traffic combination, on a great scale, ever made in 
 this country; but it was only imperfectly maintained; and 
 when its provisions seriously pinched the prosperity of any 
 member, the Pool was only preserved because those mem¬ 
 bers whose interests it was aiding, winked at the secret 
 remedial methods resorted to by the member whose inter¬ 
 ests it was harming. 
 
 The public disfavor would not have been unwise had 
 the Pool been perfect. Such a huge combination of almost 
 unchecked power over the fortunes of citizens would have 
 certainly been unwholesome, and might easily have grown 
 dangerous. But the natural existing conditions make Pool¬ 
 ing substantially harmless at present, and its illegality is, 
 therefore, at this time a needless safeguard. 
 
 The separate States are clearly incompetent to estab¬ 
 lish efficient regulations. Their jurisdiction is limited to 
 their own boundaries, while the controlling traffic is Con¬ 
 tinental. 
 
 There is but one power which can deal with the subject 
 effectively, and that is the Government of the United 
 States. This power has made a movement in this direction 
 by enacting, and, to some extent, enforcing, the Interstate 
 Commerce Law. The movement has been useful, but less 
 
30 
 
 so than was hoped for. It has cured something, and has 
 probably tended to prevent more harm than it has discov¬ 
 ered or punished. The commission created under it has 
 labored under a radical disadvantage in not having among 
 its members either trained transporters or capable mer¬ 
 chants or manufacturers, and of being loaded with duties 
 which entirely overtax a single tribunal. If it was confined 
 to the duty of interpretation, and if the duty of enforcement 
 was divided among a number of other tribunals, the results 
 should be better. The power it claims, of determining 
 absolutely the rates of charge, is a dangerous power, which 
 Transporters are naturally contesting, and which, if it exists, 
 should doubtless be modified. 
 
 The precise relation which the National Government 
 should adopt toward this question is very uncertain in the 
 public mind. Government ownership and operation are 
 urged, but I think this view is not held by those who have 
 carefully studied the subject. Such a course is open at 
 present to many objections, some of which seem vital. 
 
 Probably the wisest relation it can now establish is 
 that of a Controlling Regulator. Tariffs of charge and tariff 
 conditions cannot be made with good judgment, excepting 
 by trained experts, and such experts are to be found almost 
 wholly engaged in performing the active duties of Trans¬ 
 porters ; therefore such tariffs should be primarily framed 
 by the Transporters themselves. 
 
 Railroad-owners can be forced by suitable National 
 Legislation to wholly forego participation in foreign or 
 interstate business, unless they unite in certain prescribed 
 relations. 
 
 These relations should comprise proper regulations and 
 agreements for the proper conduct of all their business, and 
 proper tariff conditions and rates of charge; all upon the 
 bases finally determined upon. Such agreements, after 
 formulation, should be subject to the judgment of a National 
 Tribunal composed of capable lawyers, transporters, and 
 
3i 
 
 shippers. In cases of irreconcilable differences between 
 that Tribunal and the Transporters, such differences should 
 be controllingly passed on by the Supreme Court of the 
 Nation. Variations in form or essence from such rates and 
 regulations while in force, should be punishable by heavy 
 penalties, both corporate and individual; and the detection 
 of such offences and their punishment should be done at 
 the National cost, and before any one of a sufficient number 
 of National courts to insure convenience and prompt results. 
 A few important convictions and punishments would prob¬ 
 ably make the subsequent legal business of this sort quite 
 limited in quantity. Changes in either rates or rules thus 
 established should be made only by the same authorities, 
 and through the same formal processes as the originals. 
 
 These suggestions, and perhaps all suggestions having 
 similar purposes, will hardly commend themselves to the 
 existing railway-owner. No curtailment of privilege or 
 power ever seemed wise at first, to him who suffered such 
 loss. But it should not be forgotten that this power is, in 
 the aggregate, greater over the fortunes of the people than 
 any ever before possessed, even by governments in times 
 of peace, if the governments were free. The people of 
 several of our States have already grown so restless under 
 the existence of this power and some of its evil results, that 
 laws bearing a painful leaning toward confiscation have been 
 enacted. Such laws, of course, hurt both sides, as all in¬ 
 equitable action always does; but they have been made, and 
 will probably have worse successors, unless enlightened and 
 competent remedies, consistent with peace, be established. 
 
 But I must close. The subject is illimitable, and does 
 not easily adjust itself to condensation. 
 
 Permit me to thank you heartily for your patient 
 attention to a topic which is so much more technical than 
 dramatic. 
 
Mr. Patterson : 
 
 We have listened to the discussion of the relation of 
 railways to the public as presented from the point of view of 
 the railroad commissioner, and as presented from the point 
 of view of the customer of the railway. It is now our good 
 fortune to have the same subject presented from the point 
 of view of the railway official. I now present to the Club, 
 Mr. Harris, President of the Lehigh Coal and Navigation 
 Company. 
 
 Mr. Harris: 
 
 Ladies and Gentlemen: It may not seem wise for me 
 to take much of the short time allotted to me this evening 
 to discuss how the transportation interests of the country 
 have drifted into their somewhat antagonistic relation to 
 the other business of the community, so that they rather 
 than other occupations should be thought to require govern¬ 
 mental control. 
 
 It is, however, wise before attempting to change an 
 existing order, especially one whose growth has been 
 natural and gradual, to consider how such conditions 
 came to be. 
 
 It is not much beyond the memory of living persons 
 when this people first recognized that if the broad domain 
 of the United States were ever to become one country, 
 better means of intercommunication must be established 
 than those furnished by nature in river navigation. 
 
 Improved roads are older than the century, but the 
 canal system grew up in its first 50 years, and the railroads 
 have been built within the recollection of middle-aged men. 
 
 When it became fairly understood that our greatest 
 industrial problem was so to cheapen and hasten transpor¬ 
 tation and intercourse over the millions of square miles of 
 
 (32) 
 
33 
 
 our domain that there should be no danger of a divorce of 
 interest or affection between remote districts of diverse 
 production, this people set themselves to work with all the 
 men that were available or that could be imported, and 
 all the money that they could spare or could borrow, 
 to solve the problem in the shortest possible time; and 
 for fifty years there has been no business career more 
 attractive than that of the railroad constructor or railroad 
 manager, and no pursuit which has been more profitable. 
 
 In this railway development we have expended over 
 nine thousand millions of dollars, and for most of the time 
 during which the work has been progressing, all new com¬ 
 munities at least have considered railroads an absolute 
 good, have welcomed their advent, and have done every¬ 
 thing in their power to promote their construction. 
 
 But the attitude of the public has changed of late ; 
 sanguine youth is succeeded by critical middle age, and 
 the universal question is, What net good has this great ex¬ 
 penditure brought us ; and How shall we distribute the 
 wealth developed, so that the railroads shall not secure 
 large returns at the expense of agriculture, manufactures, 
 mining, and trade ? 
 
 All the just and unjust criticism of railroad manage¬ 
 ment, all the wise and unwise legislation upon the subject 
 is based on these questions ; and their solution must be 
 found before their discussion can be abandoned. 
 
 The American people is not intentionally unjust, but 
 it has awakened to the fact that before it had the education 
 of experience it did grant powers to railroad companies 
 which it now sees were given too lavishly, and which have 
 been often used selfishly and unmercifully. 
 
 It now asks, How shall these corporations be taught 
 that they are the servants and not the masters of the 
 people; or to come to particulars, How shall the arch 
 offender, the traffic manager, who for twenty years has 
 been able to make or mar the fortunes of men and cities, 
 
 3 
 
34 
 
 be taught that he dare not use his powers to build up that 
 in which he has a personal or corporate interest, or to 
 destroy that which he does not favor ? 
 
 Governmental control is the only force that has seemed 
 adequate to cause this evil to cease, and the attempt to 
 exercise this control has led, in the hasty impulsive West to 
 some legislation, unjust and oppressive to railroads, and 
 therefore injurious to all business interests; in the more 
 conservative East to careful experiments whose results 
 have on the whole been good; and more lately to national 
 action, which has been beneficent, and which has in the 
 main been welcome to the railroads themselves. 
 
 For the great machinery which they have set in motion, 
 whose only recognized regulator was unlimited competition, 
 and whose unrecognized governor was a system of conces¬ 
 sions to the favored few, was fast proving an ungovernable 
 monster, and seemed only too likely to destroy its creators. 
 
 And further, the railroads are thoroughly conscious 
 that there resides in the people a power which is their 
 master whenever it chooses to assert itself; and they are, 
 therefore, not averse to a wise and reasonable control, which, 
 while not fettering enterprise, shall rigidly and positively 
 forbid , and effectually prevent all discrimination of service 
 or charges. 
 
 Now that the public recognizes that unwise meddling 
 is sure to injure other interests than the railroads, and the 
 railroads feel that concessions are necessary to avert radical 
 interference, the time seems auspicious to consider what 
 can be done to conserve all interests, doing the most good 
 with the least harm. 
 
 To answer this question satisfactorily requires the de¬ 
 velopment in practice of an idea which is only beginning 
 to be influential in American life, that the large business 
 interests of any community can only be well cared for by 
 the business men themselves, and that they must be organ¬ 
 ized for this purpose. 
 
 No legislature composed of men from the professions, 
 
35 
 
 including the profession of politics, artisans, merchants, 
 and farmers, can possibly understand the needs of the iron 
 industry, or the potteries of a particular section, so well as 
 the associated ironmasters or the potters themselves ; nor 
 can any commission , however able or impartial, administer 
 wisely laws for the regulation of commerce without being 
 in closest touch with those who originate that commerce. 
 
 Hitherto in this new and rich country, where there 
 was so much room for everyone’s enterprises, each one 
 thought it sufficient to attend to his own business, but 
 spheres of activity begin now to impinge on one another, 
 and room for all can only be obtained by careful study of 
 the welfare of the whole. 
 
 The practical measures necessary then would seem to 
 be, organization of trades to care for trade interests, and of 
 boards of trade to guard and foster the welfare of commu¬ 
 nities ; and conferences of these bodies with legislative 
 commissions, who should be appointed to study subjects for 
 industrial legislation, and with the government officers ap¬ 
 pointed to administer the laws so made. 
 
 Schools to instruct the young in practical business life 
 should be fostered, but they can only give general training 
 in principles; the practice must be worked out by busy 
 men, who must make ever new applications of these prin¬ 
 ciples to the ever-varying problems that constantly press 
 for immediate solution. 
 
 And if we are to succeed in adjusting these now jarring 
 interests, each side must come to the study of the ques¬ 
 tions involved with the belief that at bottom the intentions 
 and desires of the other are good, and that its errors were 
 largely caused by imperfect vision. 
 
 Such study, approached in such a temper, cannot fail 
 to find a satisfactory solution of the difficult problem of how 
 to adjust the transportation interests and the other interests 
 of the community; nor to convince the world that a free peo¬ 
 ple can be trusted to settle its own industrial differences as 
 well as it has settled and will settle its political questions. 
 
Mr. Patterson : 
 
 We have another guest to-night, whose right to speak 
 with authority upon any question relating to railways can¬ 
 not be gainsaid by any one. I now present to the Club, 
 Mr. Roberts, the President of the Pennsylvania Railroad 
 Company. 
 
 Mr. Roberts: 
 
 Mr. President , and Ladies and Gentlemen: I did not 
 come here to-night with the expectation of addressing 
 you at length upon a subject which has been an every¬ 
 day one with me all my life, especially as I knew it would 
 be pretty well exhausted by my friend from Massachusetts 
 and the two boys who have just preceded me; I call them 
 boys, though it is now well on to half a century, or a little 
 this side of forty years, since they were with me laying 
 out some of the first railroads of this Commonwealth, roads 
 with which they have grown up, and over which nearly all 
 of you, I hope, have travelled in safety and comfort. 
 
 I understood the subject to be discussed here was the 
 “ Relations of the Public to the Railroads of the Country.” 
 
 The railroads of the country are nothing but the 
 original highways of the country improved ; some of those 
 here to-night think that they are not quite as well im¬ 
 proved as they ought to be ; and one of the gentlemen who 
 preceded me speaks of fifty (50) miles an hour as slow 
 speed. While I do not claim to be a fast runner, I have 
 been able to overtake and jump on and off the trains 
 which travelled over the road owned by the Commonwealth 
 of Pennsylvania; and I take it that none of you to-day 
 would attempt to put your hand on the swift passenger 
 trains which pass over the same railroad at the present 
 time. We have certainly made great progress in the 
 rapidity of locomotion, to say nothing of the comfort. 
 
 ( 36 ) 
 
37 
 
 Over the original highways, I believe the most rudi¬ 
 mentary forms of government have always claimed more 
 or less control. If I mistake not, our forefather Nimrod, 
 in the wilds of Abyssinia, claimed the right to say who 
 should use the highways and how they should be used. It 
 is, therefore, not unreasonable that that claim should still 
 be advanced in civilized and educated countries. The 
 principal highways of the country were nearly always pro¬ 
 vided by the government : they were paid for out of the 
 government’s money; that is, money collected from the 
 people who came under its jurisdiction. That policy was 
 pursued in our own Commonwealth, with the turnpike, 
 the canal, and finally the railway. There are many rea¬ 
 sons why this should have been so, aside from the politi¬ 
 cal or military necessity that the governments should con¬ 
 trol the highways. The controlling one was that new 
 communities were not able to amass the funds or means 
 to improve the highways except through the strong arm 
 of the government; but we find that as soon as those 
 countries grew in wealth and prosperity they began to 
 relieve the highways from the paternal control of the 
 government. 
 
 This has gone on until now nearly all the highways of 
 the country are, as you may call it, private highways ; 
 they are not under government control; and, while they 
 are open to the use of each inhabitant, yet they are largely 
 private in their nature. 
 
 This separation of the government from their control 
 has driven the highways and their improvements into 
 the hands of private individuals, and where the individual 
 was not strong enough to make the improvement, into 
 the hands of corporations ; but the feeling remains that 
 the government should still have some control over these 
 highways, on the general principle that the land belongs 
 to the government, and that the private corporations only 
 have the easement over it. As the railways have grown 
 
38 
 
 in strength, and become important factors in the im¬ 
 provement of the country, they have called to their man¬ 
 agement the best intelligence at their command, and have 
 largely increased their capital and have naturally been 
 brought into antagonism, as all such improvements are to 
 a certain extent, with the rest of the community. Now, 
 this is probably as it should be, but we should be careful 
 that this antagonism does not grow too strong, and that 
 repressive or unfriendly legislation does not run to an ex¬ 
 treme. 
 
 It is not fair to censure the railways of the country 
 for all the evils that we find in their administration. They 
 have been allowed largely, like Topsy, to grow. There 
 was no legislation for the government of railways, and 
 charters had to be as liberal as possible, to induce capital¬ 
 ists to invest in such enterprises. The railways were fre¬ 
 quently relieved from taxation, their right to make charges 
 in many instances was unlimited, and, even where these 
 were restricted, the rates would now be considered 
 exorbitant. The government, not understanding clearly 
 to what dimensions the railways would attain, permitted 
 them to go on without that restraint which it has placed 
 upon almost all other enterprises, and now it is brought 
 face to face with controlling the largest and most progres¬ 
 sive undertakings to be found in this country. 
 
 The people who manage these railways are intelligent, 
 shrewd, have money at command ; their influence is great; 
 and the struggle between them and those who wish to place 
 their hands upon them is naturally severe. 
 
 Those who approach this subject dispassionately, I 
 think, will find that the intelligent railroad manager is 
 not restive under any proper and well-framed laws that 
 either the State or Federal Government desires to enact. 
 
 The railway companies are only afraid of State com¬ 
 missioners and interstate commissioners, from the fact 
 that the laws that are passed, and placed in their hands to 
 
39 
 
 enforce, are generally enacted without a very intelligent 
 consideration of the subject which they are expected to 
 regulate. This government is young and energetic, quick 
 in its action, brooks no delay, and instead of appointing 
 commissioners to frame proper laws, and giving them 
 sufficient time for that purpose, it generally approaches 
 the subject hastily, enacts rough and ill-considered legis¬ 
 lation, and then appoints a commission to endeavor to 
 carry it out. Notwithstanding I am a railroad mana¬ 
 ger, I cannot but believe, as has been said by one or two 
 who have preceded me, that the great development of 
 this country, in railways, has been due largely to competi¬ 
 tion. It is the activity of the brain of our people which 
 has enabled us to compete with the wealth of other coun¬ 
 tries. The best tariff law that can be enacted in this 
 country is the education of our brains to enable us to per¬ 
 fect our railways and machinery, and thus make the manu¬ 
 facturing of any product outside of this country, so as to 
 compete with our own products successfully, practically 
 impossible. 
 
 ^ I cannot help referring at this time, although it may 
 not be connected with the subject under consideration, to 
 the construction of steel and iron ships, which is now in 
 its infancy in this country. We all know that it is impos¬ 
 sible here to take the iron ore and manufacture the raw 
 product as cheaply as it can be done in foreign countries ; 
 but a good many of us know that machinery is now being 
 made and brought into perfection by the activity of brain 
 of the Yankee that will take that product and put it into 
 a ship, so that the difference between the cost of the raw 
 material in this country and other countries is gradually 
 being overcome by our superior facilities in bringing it 
 into the form which makes it useful in the construction of 
 the vessel. It will not be long before a tariff will not be re¬ 
 quired in this country, to enable us to build vessels as 
 cheaply as they can be built in any other part of the world. 
 
40 
 
 We have reached that point in locomotives. It is but a 
 few years since we could not build locomotives as cheaply 
 here as in England. We now send into the colonies 
 of England, to Australia, a better and cheaper locomotive 
 than they can send from England. 
 
 If the government will enact laws that will protect not 
 only the shipper, but also the property invested in railways, 
 first making those laws the subject of thorough investiga¬ 
 tion as to their adaptability and practicability, and will 
 then enforce them so that the man who manages a railway, 
 and does not break the law, will not be placed at a dis¬ 
 advantage with his competitor who disregards it, I think 
 it will find that little or no real antagonism exists between 
 the railroad interests of the country and those of the 
 general public. It is unfortunately the case that these 
 laws are now so crudely approached and so unadvisedly 
 passed, that when they come to be applied to the manage¬ 
 ment and government of our transportation interests, they 
 uproot the old systems which have obtained for so many 
 years, and substitute nothing that is practical in ttair 
 place. The railways of the country have grown to tRir 
 great strength and usefulness, simply from the fact that 
 they have been largely untrammelled by any laws what¬ 
 ever, and have been let alone to develop the enterprises 
 that have been committed to their care in such manner as 
 they thought would conduce best to their own benefit, but 
 unquestionably at the same time to that of the community 
 which they endeavor to serve. 
 
 A few words on the question of governmental control 
 of railways, and then I will detain you no longer. We 
 have heard it pretty ably expounded by our friend from 
 Massachusetts. I heartily agree with all he says on the 
 impolicy of either the Federal or the State governments 
 endeavoring in any way to control the railway system of 
 this country; in fact, the thing to me is so absurd that it 
 is hardly worthy of serious discussion. The idea of any