Co-Operation 
 
 Between the Railway Owner, The 
 Railway Employe and The 
 Railway User 
 
 ADDRESS 
 
 BY 
 
 HOWARD ELLIOTT 
 
 PRESIDENT, NORTHERN PACIFIC RAILWAY 
 
 AT THE 
 
 Montana State Fair 
 
 HELENA, MONTANA 
 September 26, 1910 
 
CO-OPERATION 
 
 BETWEEN 
 
 THE RAILWAY OWNER, THE RAILWAY EMPLOYE 
 AND THE RAILWAY USER 
 
 It is a compliment indeed to be asked to speak to this gathering 
 of the good people of Montana, on an occasion of this significance 
 and importance. In a state like Montana, practically on the thresh- 
 old of its argicultural development, every agency promoting the 
 same, and stimulating better farming methods is important, and 
 certainly not the least of these agencies is a well managed State 
 Fair such as this, with its splendid display of agricultural object 
 lessons. No one can visit such an exhibition without profiting 
 thereby, but especially should be commended its high educational 
 value to the farmer of the state. My remarks are to deal with 
 another of the important agencies for promoting agricultural de- 
 velopment, the railways. Co-operation is defined : “The association 
 of a number of persons for their common benefit,” and my purpose 
 is to show the absolute necessity, if prosperity and progress are to 
 continue, of “Co-operation between the Railway Owner, the Rail- 
 way Employe and the Railway User.” 
 
 The In order to consider this question, a brief statement 
 
 Railways, must be made showing what the railway system of 
 the United States is to-day; what it represents; the 
 work it does, and the work it must prepare to do if safe and 
 adequate transportation is to be furnished to the people of the 
 United States. The railways of the country, in their present 
 form, have been built since the close of the Civil War, or in 
 
 3 
 
 358 
 
less than fifty years, and are the wonder and admiration of 
 students of the transportation problem who come here from 
 other countries. There are 234,182 miles of railway, and more 
 than 340,000 miles of track in this country, as compared with 
 a trifle less than 300,000 miles of railway in all the other coun- 
 tries of the world combined. There are nearly 58,000 loco- 
 motives ; more than 45,000 passenger train cars ; nearly 2,200,- 
 000 freight and service cars. 
 
 Work On these tracks, and with these engines and cars 
 
 Done. were run in the year ending June 30, 1909, freight 
 
 trains for 560,602,557 miles, and passenger trains for 
 491,903,107 miles, or an average of 2,883,577 miles every day 
 in the year. This is equal to a trip around the world at the 
 equator 116 times each 24 hours. 
 
 These trains handled in the year ending June 30, 1909, 
 217,756,776,000 tons of freight one mile and 29,452,000,000 pas- 
 sengers one mile. The significance of these figures will be bet- 
 ter understood by stating that they are the equivalent of haul- 
 ing a ton of freight 2,419 miles for every man, woman and child 
 in the United States, and giving each of them a ride on a pas- 
 senger train of 327 miles. 
 
 The number of tons of freight moved over each mile of 
 railway during a year is the measure of the freight work per- 
 formed for the country by the railways. There was 
 
 In the United States 969,000 tons one mile in 1909 
 
 In England 530,000 tons one mile in 1908 
 
 In Germany 880,000 tons one mile in 1908 
 
 In France 497,000 tons one mile in 1907 
 
 showing that the American railways are furnishing a greater 
 service per mile of railway than the older countries. 
 
 Right here in Montana the Northern Pacific for the year 
 ending June 30, 1910, furnished freight transportation equal 
 to 1,586,801 tons one mile for every mile of its track in the 
 State, over mountains and through heavy snow storms for part 
 
 4 
 
of the year. On parts of the main line more than 3,000,000 tons 
 of freight per road mile were moved, or transportation in excess 
 of the average of the United States railways. 
 
 Need for Since 1889 the miles of railway in the 
 
 Increased Facilities. United States have increased 5 2.7% ; the 
 
 passengers carried one mile on those rail- 
 ways have increased 154.8%, and the tons of freight carried 
 one mile 224.3%; the number of employes 116.2%, and the 
 taxes 230.8% 
 
 With 90,000,000 busy people in this country the next 20 
 years must see a constant addition to the railway facilities of 
 the country if the commerce is to be moved satisfactorily, and 
 the Railway User must see to it that the Railway Owner has 
 sufficient margin to justify the enormous additional investment 
 that must be made in order to provide the needed transpor- 
 tation. 
 
 Passenger Service The passenger trains of the United States 
 and Rates. earned on the average for the year end- 
 
 ing June 30, 1908, $1.27 per train mile, 
 and the average cost per train mile for expenses, not allowing 
 anything for taxes, using the total freight and passenger train 
 miles, was $1.47. 
 
 From this it is plain that there is no margin in the passenger 
 business for taxes, interest and dividends, and that passenger 
 train service, as a whole, is furnished without profit, and often 
 to the detriment of the freight business, which must be moved 
 promptly for the development of the country. 
 
 This country, as it grows in population and wealth wants 
 more and better passenger train service, and better stations, 
 just as it wants more and better hotels and more and better 
 street paving and lighting, more and better restaurants; but 
 in the case of the hotels, paving, lighting, restaurants and many 
 other things, the public are willing to pay more, and do pay 
 more for the better facilities. Not so with the railways; with 
 
 5 
 
more trains, heavier trains, faster trains, more luxurious trains, 
 and better track, there has swept over the country a wave of 
 legislation for a 2-cent fare. The 2-cent maximum fare is 
 unjust, and retards the development of the very things the Rail- 
 way User wants, because it is obvious the Railway Owner must 
 sooner or later stop doing so much work without any margin 
 of profit at all. 
 
 In England the first-class passenger rate is 4 cents; second- 
 class 2*4 cents, and the third-class 2 cents. 
 
 In Germany, the first-class is 3 cents; second-class 2.55 
 cents; third-class 1.79 cents, but the second and third-class 
 accommodations in England and Germany are nowhere near 
 as good as those furnished the traveler in the United States. 
 
 Freight Service In Great Britain the average freight charge 
 and Rates. for handling a ton of freight 100 miles was 
 
 $2.31 in 1907 and $2.33 in 1908. 
 
 In Germany the average charge was $1.42 in 1908; in France, 
 $1.46; Austria, $1.39; Belgium, $1.22. 
 
 The great freight service of the American railways was 
 furnished in 1908 and in 1909 — at an average charge of 75 cents 
 for handling a ton 100 miles. 
 
 In 1888, the average rate per passenger mile in the United 
 States was 2.35 cents, and in 1908 only 1.937 cents, and yet 
 the accommodations provided have constantly improved in 
 quality. 
 
 In 1870, the average rate for handling a ton of freight 100 
 miles was $1.99, and in 1909 75.4 cents, or a reduction in 40 
 years of 62%. 
 
 Saving to the Railway The Railway Owner, by his courage, 
 User Through energy and intelligence in adopting 
 
 Decline in Rates. advanced methods, has been able to 
 
 improve the railway system of the 
 United States steadily in the last 40 years and still maintain 
 and operate his property in spite of this reduction in rates. 
 
If the Railway User had paid, for the year which has just 
 passed, the same average freight rates as in 1870, he would have 
 paid $2,691,473,751.36 more than he did pay; if he had paid 
 the same average rates per passenger mile as in 1888, the addi- 
 tional payment would have been $147,260,000, the two amounts 
 being greater than the entire earnings of all the United States 
 railways in the last year. 
 
 Limit of But the Railway Owner is now put to it to main- 
 Economy. tain and operate his property on the basis of 
 present rates, present wages, present prices for 
 material, present taxes, present rigid government restrictions, 
 and the growing demand of a prosperous people for more and 
 better service. 
 
 Railways are using rails of 90 and 100 pounds weight to the 
 yard ; freight cars carrying 50 and 60 tons of freight ; passenger 
 cars weighing 50 and 70 tons often carrying only a dozen people, 
 or five tons of dead weight for one passenger, and locomotives 
 weighing 300,000 to 600,000 pounds, with 58,000 pounds on a 
 single axle. The Railway Owner can go no farther in using 
 larger tools in his plant and must depend for any further econo- 
 mies upon an improvement in the work of the Railway User and 
 Employe in using that plant. If the Railway User fails to load 
 and unload the cars promptly, if the Railway Employe is care- 
 less and inefficient, the railway cannot be used to its full effect. 
 
 Capitalization. The American railways to-day are represented 
 by a capitalization of $13,600,000,000, or a trifle 
 less than $58,000 per mile of road, and less than $40,000 per 
 mile of track. Compare this total capitalization with the total 
 reported for farm values — $20,514,001,838 for 1900, and in man- 
 ufacturing — $12,686,265,673 for 1905, and it will be seen that 
 the railway is the second great industrial interest in this coun- 
 try. The railways in Europe are capitalized per mile as fol- 
 
 lows : 
 
 United Kindgom $275,040 
 
 France 1 39 * 39 ° 
 
 7 
 
Germany 
 Austria . 
 Russia . . 
 Belgium 
 
 $109,788 
 
 112,879 
 
 80,985 
 
 169,806 
 
 Here is evidence that the American Railway Owner has 
 produced a piece of machinery with far less average capitaliza- 
 tion than in any other country; which does more work in 
 moving the commerce of the country per mile of railway than 
 in any other country, and which has steadily reduced the prices 
 charged to the Railway User in spite of increasing costs and 
 complications in doing the buisness. The American railway 
 system of to-day could not be reproduced for a figure anywhere 
 near what it stands for on the books. Monthly, daily, almost 
 hourly, improvements have been made, and the railways are 
 becoming seasoned and better adapted to the great work they 
 have to perform. Go to any of the large cities and growing 
 towns and try to acquire sufficient terminal ground to do even 
 a moderate business. Not long ago in New York, an investiga- 
 tion was made with the idea of seeing what it would cost to 
 get an entrance to the city and a moderate terminal area, from 
 the northern boundary down to about Fortieth Street. One 
 of the best real estate agents in New York made a calculation, 
 and a right of way down through Manhatton Island sufficient 
 for two tracks and with a limited terminal at the end, he thought 
 might be obtained for $170,000,000, but would probably cost 
 $200,000,000. This would be an investment of $170,000 or 
 $200,000 a mile for the New York terminal alone of a railroad 
 between Chicago and New York, and in addition right of 
 way between the two cities, intermediate terminals, and the 
 railway itself must be obtained. And every man of his own 
 knowledge is aware of the fact that property suitable for ter- 
 minals, in common with other real estate, has advanced very 
 much in value in all cities, big and little, in the United States 
 in the last 25 years, and that the Railway Owner is paying 
 taxes on those increased values and is surely as much entitled 
 to a return on the increased value as is the owner of a farm, 
 or the owner of a business block. 
 
 8 
 
THE RAILWAY OWNER. 
 
 Now, who is the owner of this enormous and complicated 
 piece of machinery built up in the last 50 years? The best figures 
 obtainable as to the number of stockholders show 440,000, and 
 while the number of bondholders cannot be determined with the 
 same accuracy, information about a few roads indicates that the 
 number of bondholders exceeds the number of stockholders, and 
 that 1,000,000 is not an unfair figure to represent those holding 
 railway securities. Many of these holders are women and children, 
 charitable and educational institutions, National banks, Savings 
 banks, trust companies and insurance companies. The average 
 for each owner of railway property in this country is $13,600. Of 
 course, some individuals hold more than this, and very many hold 
 much less, but the statement that railways are owned and controlled 
 by a few very rich men is not correct. These 1,000,000 owners 
 represent at least 4,000,000 people in the United States whose daily 
 bread and butter depends more or less on the success or failure 
 of the railways. 
 
 Now, this Railway Owner, with an average ownership of $13,- 
 600, is dependent entirely as to a return on his investment, and as 
 to the safety of his principal, on the honesty, intelligence and effi- 
 ciency of the Railway Employe, and to the sense of justice and fair 
 treatment of the Railway User. The Railway Owner, if he does 
 not like his investment, cannot shut up shop and wait a while until 
 business is better. He cannot even abandon his business and pocket 
 his loss. He must go on, whatever the conditions may be, with 
 the hope that the ultimate good sense and justice of the American 
 people will give him even a part of that protection and encourage- 
 ment that is given to those who may be engaged in agriculture and 
 in manufacturing. 
 
 Then, in 1909, there were 8,831,863 depositors in savings 
 banks, having $3,713,405,710 on deposit. In 1908, there were 25,- 
 852,405 separate life insurance policies held in this country with a 
 face value of $14,518,952,277. Every savings bank depositor and 
 every holder of a life insurance policy is interested in having rail- 
 way securities safe and profitable, because the savings banks and 
 
 9 
 
the Life Insurance Companies are all holders of Railway securities, 
 and anything that affects the welfare of those two great institu- 
 tions affects millions of people outside of the owners of railway 
 stocks and bonds. In 1909 there was $33,117,068,129 of fire in- 
 surance written in the United States and $126,171,492 fire losses 
 paid. The large Fire Insurance Companies, like the large Life In- 
 surance Companies are investors in railway bonds and stocks. The 
 Savings Banks and Insurance Campanies must have assets that pay 
 a sure return and that can be converted easily and quickly into 
 cash and their ability to pay depends in part upon the stability and 
 earning power of the great railway corporations. 
 
 Earnings of For the years 1906, 1907 and 1908, complete 
 the Railways, statistics are furnished by the Commerce Com- 
 mission. These were three years of fairly 
 good business in the country, when farmers and manufacturers 
 did well. 
 
 In round figures, the results to the railways of the country from 
 the transportation of persons and property were : 
 
 1906 1907 1908 
 
 Total Earnings $2,325,765,167 $2,589,105,578 $2,394,780,410 
 
 Total Exp. and Taxes 1,611,662,886 1,828,828,189 1,754,951,949 
 
 Net Earnings 714,102,281 760,277,389 639,828,461 
 
 These are very large sums, but the net earnings only represent 
 on an average valuation of $13,000,000,000, 5.49% for 1906; 
 5.85% for 1907; 4.92% for 1908 — not a very large return if the 
 Railway Owner could take it all, but he must of necessity, use a 
 liberal share of any such net earnings for a multitude of improve- 
 ments and additions to the railways, for as the Commerce Commis- 
 sion says in its report for 1908, “Every safely administered rail- 
 road should recognize the difficulty of bringing operating expenses 
 under control, and in times of prosperity provide against the con- 
 tingency of reduced traffic.’ , 
 
 The Railway Owner recognizes this, for there was paid for in 
 interest and dividends, in the years named, 1906 — $518,893,000 
 or 3.99%; 1907 — $551,129,000 or 4.24%; 1908 — $571,114,000 
 or 4.39%, the balance going back into the property. In fact, in 
 
order to keep up a great piece of machinery like the railway, sub" 
 ject to damage in many ways, and needing constant additions, an 
 amount at least equal to 60 % of that paid in dividends should be 
 put back out of current earnings into the property each year. How 
 many farmers, merchants and miners in Montana think these 
 returns are attractive enough to justify their engaging in the busi- 
 ness? 
 
 What Use is Made of 
 Each Dollar of Earnings? 
 
 Labor — direct payment 
 
 Labor in materials purchased 
 Labor in fuel and oil 
 
 Out of every one hundred dollars 
 of gross earnings of the railways in 
 1908 there was paid for: 
 
 $ 43- 36 
 
 777 
 
 6.88 
 
 Total for labor $ 58.01 
 
 Fuel and oil — less labor $ 1.72 
 
 Material — less labor 3.33 
 
 Hire of equipment and buildings 2.46 
 
 Hire of tracks and terminals 4.60 
 
 Damages and injuries 1.80 
 
 Taxes 3.56 
 
 Interest 13.34 
 
 Deficits 2.39 
 
 Total $ 91 21 
 
 Betterments to property, etc $ 4.37 
 
 Dividends 4.42 
 
 , $100.00 
 
 Out of each one hundred dollars ninety-one dollars was paid 
 out for labor, material, taxes, rents, interest, all of which must be 
 paid if the Railway Owner is to keep out of the hands of the Sheriff. 
 The balance, nine dollars, was available for improving the property 
 and for dividends and the margin is very small. 
 
 11 
 
THE RAILWAY EMPLOYE. 
 
 There are 1,525,000 railway employes including the officers, rep- 
 resenting at least 6,000,000 of the population of this country. They 
 are equal, in honesty, intelligence, industry, and character to the 
 average of American citizens engaged in other pursuits. They are 
 trying to do their part in managing and operating this great piece 
 of commercial machinery that the Railway Owner has created. As 
 they are human, they make mistakes, and sometimes forget that they 
 assume an obligation when they enter the railway service, to be 
 honest, fair and loyal to the Railway Owner, and to the Railway 
 User. The great army of railway employes in their efforts to ob- 
 tain the highest wages possible must remember that there are only 
 100 cents in a dollar; that it is possible to force wages to a point 
 beyond the ability of the Railway Owner to pay and still maintain 
 his plant for the benefit of the Railway User, and that the constant 
 wage increase has already discouraged the Railway Owner, and will 
 tend to discourage him more unless additional revenue can be ob- 
 tained from the Railway User. The Railway User often fails 
 to understand the wage situation, and the Railway Employe and 
 the Railway User must remember that in fixing wages they must 
 consider the ability of the business to pay the wages demanded. 
 
 In 1908, the official figures show that there were 1,458,244 rail- 
 way employes receiving $1,051,632,225.00 in wages, or an average 
 of $721.16 per year. For the year 1907, the average pay of rail- 
 way employes in the United Kingdom was $260.00; in Germany 
 $371.00; in Switzerland $292.00; in Belgium, where the railways 
 are owned by the state, firemen received $15.00 to $23.00 a month, 
 the higher rate only after 15 years service; enginemen from $22.50 
 a month to $28.00 a month after twenty-four years service; con- 
 ductors from $15.97 a month to $34.70. The average railway 
 worker in Belgium gets 43 cents a day. Certain classes of Amer- 
 ican railway employes get more in a month than Belgium railway 
 employes average in a year. 
 
 The advances made in wages in 1906 and 1907 increased the 
 pay rolls of the railways about $120,000,000 and increases since 
 then and now under discussion mean $60,000,000 to $75,000,000 
 
 12 
 
additional. These two increases are equal to 7% per year on a 
 capitalization of from $2,500,000,000 to $2,750,000,000, a sum of 
 money that would go a long way in adding to the transportation 
 facilities of the country. 
 
 Responsibility of the The Railway Employe has a respon- 
 Railway Employe. sibility to the Railway User to be 
 
 sober, industrious and careful, so as 
 to furnish the best and safest transportation to the public, 
 and he has a responsibility to the Railway Owner to furnish 
 a full day’s honest and efficient work for the compensation 
 that he receives, whatever it may be. The industrial suprem- 
 acy of America cannot be maintained unless that is done, 
 and every patriotic man, no matter what his employment, 
 should stop waste in labor as well as in material, and expect 
 hard work and rigid economy. 
 
 Suppose each one of the railway employes should, by bet- 
 ter work and greater care, save only 1 cent a day; that would 
 mean for the country $5,566,250 a year, or enough to buy be- 
 tween 5,000 and 6,000 freight cars; or, enough to build 200 
 miles of branch line railway in Montana. If they could save 
 10 cents a day, it would mean $55,662,550 a year, which could 
 be applied to adding to the railway facilities in the country. 
 
 Employes in Mines In addition to the 1,525,000 employes 
 and Factories. working directly for the railways, there 
 
 are 2,500,000 in coal mines, steel mills, 
 manufacturing plants, all supplying what is necessary for the 
 railways in their operations, who represent at least 10,000,000 
 of our total population. So the railway employes, and the 
 employes of the industries dependent more or less on its main- 
 tenance on a sound basis represent approximately 16,000,000 
 people whose rights must be considered. 
 
 Purchases of The railways are the great purchasers of mate- 
 Railways. rials of many kinds, and the moment they are 
 forced to stop buying the effect begins to be 
 felt in the forest, the mine, the mill, and the factory. 
 
 19 
 
THE RAILWAY USER. 
 
 Of the 90,000,000 people in the United States, there are, as 
 already pointed out, about 4,000,000 interested directly as Rail- 
 way Owners, and their dependent families; 6,000,000 as Rail- 
 way Employes, and their dependent families, leaving 80,000,000 
 as Railway Users, with an indirect interest in the prosperity of 
 the railway. Some of these 80,000,000 are vitally interested, 
 because they work for industries dependent upon the purchas- 
 ing power of the railway for their success; others because they 
 have their savings in banks and Trust Companies; others because 
 they hold life insurance policies for the protection of their fam- 
 ilies, and fire insurance policies for the protection of their homes 
 and business, and all are interested in having enough transportation 
 and good and safe transportation. 
 
 True Interest of The Railway User, however, is too apt 
 Railway User. to think that his interest lies in having 
 railway rates constantly reduced, railway 
 wages constantly raised, and railway taxes constantly in- 
 creased, forgetting that it is equally important to him, and 
 really more important, to have the railway system of the 
 United States so handled that capital will feel safe in adding to 
 investments necessary to furnish the transportation that the 
 business of the country demands. Already, in certain parts of 
 the country, the margin between adequate and inadequate 
 transportation is too small. Only last winter, between the Mis- 
 souri River and Chicago, and in the vicinity of Chicago, the 
 railways could not furnish that prompt and regular service that 
 is essential for a satisfactory movement of the commerce of the 
 country. 
 
 Montana is entering upon a great era of development and 
 will need many new branch lines, but suppose that the railways 
 east of the Mississippi River, when your grain and cattle reach 
 there, are unable to handle your product satisfactorily, to the 
 Middle West and the far East! Such failure will affect every 
 farmer in the State. 
 
 14 
 
The Railway User needs safe and adequate transportation, 
 and it will be furnished just so long as the business pays. The 
 Railway Owner cannot constantly be borrowing money for 
 every minor improvement and addition to the property. The 
 cry is sometimes raised that the railways should not make im- 
 provements out of current earnings; they should not make all 
 of their improvements out of current earnings; but they should 
 put back into the property every year a substantial amount of 
 their earnings for improvements like better passenger stations, 
 more side tracks, better rails, better ballast, safety appliances, 
 and other forms of improvement of which the present genera- 
 tion of railway users get the immediate benefit, as well as en- 
 abling a higher development of the country for their children 
 and grandchildren. 
 
 Co-operation. The Railway Owner, the Railway Employe, 
 and the Railway User must co-operate, and 
 all must remember the definition : “The association of a num- 
 ber of persons for their common benefit.” In the long run 
 it will not benefit the Railway User to crowd down rates so low, 
 and raise taxes so high that he takes away all chance of profit 
 from the Railway Owner. The Railway Employe must re- 
 member that in the long run he will not profit if he crowds up 
 wages so high that the Railway Owner has not sufficient mar- 
 gin for the development of the facilities along progressive and 
 safe lines. On the other hand the Railway Owner must in fixing 
 the rates do so in such a way that a healthy development of the 
 country will be promoted. 
 
 Individually, the Railway Owner, the Railway Employe, 
 and the Railway User, when they discuss the subject, are fair, 
 and agree there should be fair treatment to all. 
 
 Importance of There is, however, a school of politi- 
 
 Correct Information, cians who make wild and extravagant 
 
 statements and who are assuming, 
 without knowing the facts, and with- 
 out adequate study of the situation, that great injustices are 
 being done. It is important for the Railway Employe and for 
 
 15 
 
the Railway User to post themselves about this general subject 
 if they are to continue to exercise their present control in the 
 management of the business of the Railway Owner. His busi- 
 ness is now an open book, and every transaction is recorded in 
 plain black and white and reported at frequent intervals to 
 Railway Commissions, State or National. The charges that 
 he makes for service performed are largely decided by statute 
 or by Railway Commissions. Many of the rules under which 
 he conducts his business are made by law, or by various boards. 
 The Railway User, if he wants the best railways and pro- 
 gressive development of them, must see to it that his law- 
 makers and his boards of one kind and another are the right kind 
 of men, and that they look at this question, not in a narrow, par- 
 tisan way, but in a broad, far-sighted manner. 
 
 OBEDIENCE TO THE LAW. 
 
 On January 16, 1905, Senator Elkins introduced into the United 
 State Senate a resolution asking the Interstate Commerce Com- 
 mission for a statement showing the work done by that body with 
 respect to formal and informal complaints, hearings, decisions of 
 the court, exorbitant rates and rebates during the preceding 18 
 years, or since the creation of the Commission. 
 
 On May 1, 1905, the Commission furnished figures showing 
 that the total number of complaints which reached the Commission 
 was 9,099; the total number disposed of through the friendly offices 
 of the Commission 9,054, or more than 99% of the total. The 
 cases appealed by the Commission to the courts were only 45 — 
 about one-half of 1 % of the total number of cases. Of the 45 
 cases appealed to the courts by the Commission, only 8, or less 
 than one-fifth, were sustained by the courts, all of which involved 
 unjust discriminations (always a difficult question in our com- 
 plicated commercial life) and not a single case involved an exor- 
 bitant rate. Of the total number of complaints made to the Com- 
 mission, 8,319, or 91%, were of so simple and unimportant a 
 character that they were disposed of informally. 
 
 16 
 
During these 18 years the separate freight transactions of the 
 railways in the United States were in excess of 3,000,000,000, or 
 * there was one complaint for each 330,000 separate commercial 
 transactions, and not a single serious complaint about exorbitant 
 rates. Certainly a marvelous record of compliance with a law, 
 and one not equalled anywhere in the history of the statutes reg- 
 ulating human conduct — a compliance that should refute com- 
 pletely the idea that the railway business needs some peculiar treat- 
 ment by law that is not required by other business and of the idea 
 that the railways do not try to obey the law. 
 
 The cost to the county of the Commerce Commission in 1888 
 was $97,867 and in 1909 $988,936. 
 
 Politics and In the past, complaint has been made because the 
 Business. railways engaged in politics; to-day, the country is 
 confronting a danger which is just as serious, if 
 not more so, because politics are now taking charge of the railways 
 and other forms of business, and assuming the responsibility of 
 many parts of the management, but with no responsibilty for the 
 financial results. 
 
 What is the The Railway Owners, and the railway officers and 
 
 Right Spirit? employes are just as loyal, high-minded, and ener- 
 
 getic and industrious citizens of the United States, 
 as a class, as any other body of men in the country. They have a 
 great task imposed upon them, which they are manfully trying to 
 carry out, and at times it seems as if every man’s hand was against 
 them. 
 
 Edward Everett Hale, one of the grand old men of the nine- 
 teenth century, who passed away about a year ago, put into four 
 short sentences some very sound philosophy about life, as follows : 
 
 “Look up, and not down ; 
 
 Look out, and not in ; 
 
 Look forward, and not back; 
 
 Lend a hand.” 
 
 Will not greater progress be made in trying to put this great 
 railway business on a sound basis if all who are interested 
 “look up” at the best features of it, and of the men engaged in 
 
 IT 
 
it, and not assume without knowing that the business is conducted 
 improperly and that the men giving their lives to the work are 
 incompetent or dishonest? Will not the best results come if all 
 “look out” from their own surroundings and see the difficulties 
 confronting others as well as themselves instead of thinking only 
 of their selfish, local advancement? Will not the best results be 
 obtained if all “look forward” with hope to the future instead of 
 repining over the mistakes that may have been made honestly in 
 the past in the effort to put the United States on a sound industrial 
 basis? Better than all, will not the best results be obtained if 
 every one “lends a hand,” and helps instead of raising all sorts 
 of objections, many of which are not justified when the facts are 
 known, magnifying the errors and minimizing the good work done? 
 
 Future The future welfare of the railway system of the United 
 Welfare. States is largely in the hands of the Railway User, and 
 what will he do? Will he crowd the Railway Owner 
 so hard that the latter cannot produce the increasing amount of 
 transportation needed for the free flow of the commercial life 
 blood of the Nation? Then what? The Railway User will have 
 several courses open to him. He can have a less rigid sys- 
 
 tem of regulation and government red tape and encourage the rail- 
 way business and the Railway Owner to go on as does other busi- 
 ness, subject to the great laws of supply and demand, competition 
 and the natural desire af the owner to manage his business in such 
 a way that it will be a success, with the hope of profit, which is the 
 main incentive of all business. Or, he can take over the 
 
 ownership and management of the railways and become responsible 
 for their operation and for the money needed for additions and bet- 
 terments to existing properties, and for the building of new ones. 
 In the present state of politics in this country, such a plan is almost 
 terrifying in its possibilities, because the government has not shown 
 that it can do work of this character as efficiently and economically 
 as private individuals can. Government ownership, management 
 and development of the railways would become a matter for the 
 politicians to trade upon. Just recently, in Austria, there has been 
 
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considerable discussion because the railways were taken over by 
 the State on the theory that better service and lower rates would 
 be given to the public. Now, there is agitation to put them back 
 into private hands for, instead oL proving profitable, there is a 
 heavy annual deficit, which the general taxpayer has to make up. 
 The service has deteriorated and railway expansion has ceased. 
 
 Or he can continue the present system of rigid governmental 
 control and supervision, and interference with the judgment and 
 management of the owner, which is rapidly having a deadening and 
 discouraging effect on the development of the business, and is pre- 
 venting those additions and improvements so much needed in a 
 growing country like the United States. Or, he can con- 
 
 tinue the present system of government regulation and con- 
 trol, but guarantee to the railway owner some minimum re- 
 turn upon his investment, so he will be willing to put money 
 into the business. Such a plan, however, means that the non- 
 user of the railway will be taxed for the benefit of the user. 
 
 To my mind the first course, of more commercial freedom, is 
 by far the better for a growing and expanding country like the 
 United States. We have not yet reached the state of perfection, 
 politically or socially, where government ownership and bureau- 
 cratic management of the large, complicated and delicately adjusted 
 railway system of the country will be a success. Putting a govern- 
 ment uniform on a railway employe does not at once endow him 
 with a new kind of intelligence and supernatural powers, and it 
 will reduce his feeling of responsibility. 
 
 Shortage of If the Railway User and the Railway Employe 
 Transportation, are not careful to see that justice is done to the 
 Railway Owner, and if he is not protected and 
 encouraged a little, the time is rapidly coming when the Railway 
 User will go to buy some transportation for his wheat, his coal, 
 his cattle, his manufactured articles, and he will be confronted with 
 the statement from the Railway Owner that all the transportation 
 he has has been sold, and furthermore, that he cannot produce any 
 more transportation because he cannot get any more money, and 
 if the Railway User desires an increased quantity or quality of 
 
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transportation he must organize and produce it for himself. The 
 Railway Employe will find that the monthly pay day is not so reg- 
 ular and certain as it used to be, and that the wages paid are lower 
 than they now are. 
 
 Justice from The ultimate good sense of the American peo- 
 
 American People, pie and their belief in the rights of property 
 will, in the long run, I believe, prevail over 
 the misstatements and misrepresentations of some public men, who, 
 without careful study and full knowledge of the situation, and with- 
 out due regard to the effect of their extravagant language, make 
 indiscriminate attacks upon the railway system of the United States, 
 and upon the men who are giving the best that is in them to the 
 work of advancing that system. 
 
 RECAPITULATION. 
 
 This wonderful American railway system has been created by 
 the Railway Owner and capitalized at from one-half to one- 
 fifth of the European railways. It does twice as much work at 
 rates from one-half to one-third of, and pays wages from two to 
 five times as much as are paid by European railways. The size 
 of the United States and the wide distribution of the products are 
 such that it is necessary to have a large use of the railways and 
 low rates. To accomplish this, there must be an expansion of 
 facilities; the Railway Owner has done his part; further ex- 
 pansion can only be brought about through the help of the 
 Railway Employe and the Railway User. 
 
 The Railway Owner, the Railway Employe, and the Railway 
 User form an “association of persons who should act for their 
 common benefit ;” not for the benefit of one and the injury of 
 the other, but for the common benefit of all. There has just been 
 a meeting in St. Paul where there was much discussion about the 
 Conservation of Natural Resources. It is high time for the Rail- 
 way User to consider carefully the Conservation of the Railway 
 System of the United States. Common sense, publicity, plain 
 statements of the facts, and justice to all interests, whether indi- 
 vidual or corporate, will help to settle this question properly. 
 
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