The Railroad Question Part 11

Payable where desired. Maker, ---- Endorser, Judge ---- Mr.

----, the maker, is clerk of the United States Circuit Court at ---- Judge ---- the well known attorney of the ---- and ---- Railway Co., of ----, stated to us to be worth $150,000 to $200,000. Can you use it?"

While railroad managers rely upon servile courts as a last resort to defeat the will of the sovereign people, they are far from losing sight of the importance of controlling the legislative branch of the government. By preventing what they are pleased to call unfriendly legislation they are more likely to prevent friction with public opinion, and they avoid at the same time the risk of permanently prejudicing their cause by an adverse opinion upon a const.i.tutional question which they may find it necessary to raise in order to nullify a legislative act. There are three distinct means employed by them to control legislative action. First, the election to legislative offices of men who are, for some personal reason, adherents to the railroad cause. Second, the delusion, or even corruption, of weak or unscrupulous members of legislative bodies. Third, the employment of professional and incidental lobbyists and the subsidizing of newspapers, or their representatives, for the purpose of influencing members of legislative bodies and their const.i.tuencies.

There are probably in every legislative body a number of members who are in some way or other connected with railroad corporations. No doubt, a majority of these are personally irreproachable and even so high-minded as to always postpone private for public interest; yet there are also those whose political advancement was brought about by railroad managers for the very purpose of having in the legislative body servile members who could always be relied upon to serve their corporate masters.

Nevertheless, were railroad interests restricted to the votes of these men for their support, the public would probably have no cause for alarm on account of the presence of railroad representatives in legislative bodies, but, as many other interests seek favorable legislation, railroad men are often enabled to gain support for their cause by a corrupt bargain for votes, and it is thus possible for them to double, triple, and even quadruple, their original strength, by a policy of reciprocity.

As in Congress and State legislatures, so these representatives of the railroads may be found in our city councils. The leaders of the railroads in Congress and in the legislatures of the various States usually rely upon discretion for obtaining their end, but railroad aldermen with but few exceptions seek to demonstrate their loyalty to the cause to which they are committed by a zealous advocacy of extreme measures, and will not unfrequently even gain their end through the most unscrupulous combinations. If their votes, together with such support as they obtain by making trades, are not sufficient to carry out or defeat a measure which the railroad interests may favor or oppose, even more questionable means are employed to gain a sufficient number of votes to command a majority.

Outright bribery is probably the means least often employed by corporations to carry their measures. While it may be true that the vote of every weak and unscrupulous legislator is a subject of barter, money is not often the compensation for which it is obtained. It is the policy of the political corruption committees of corporations to ascertain the weakness and wants of every man whose services they are likely to need, and to attack him, if his surrender should be essential to their victory, at his weakest point. Men with political ambition are encouraged to aspire to preferment and are a.s.sured of corporate support to bring it about. Briefless lawyers are promised corporate business or salaried attorneyships. Those in financial straits are accommodated with loans. Vain men are flattered and given newspaper notoriety. Others are given pa.s.ses for their families and their friends. Shippers are given advantages in rates over their compet.i.tors; in fact, every legislator disposed to barter his vote away receives for it compensation which combines the maximum of desirability with the minimum of violence to his self-respect.

Those who attempt to influence or control legislative bodies in behalf of interested parties are collectively called the lobby. As a rule, the lobby consists of prominent politicians likely to have influence with members of their own party; of men of good address and easy conscience, familiar alike with the subject under consideration and legislative procedure, and last, but not least, of confidential agents authorized and prepared to enter into secret negotiations with venal members. The lobby which represents the railroad companies at legislative sessions is usually the largest, the most sagacious and the most unscrupulous of all. Its work is systematic and thorough, its methods are unscrupulous and its resources great. Yet all the members of a legislative body cannot be bribed, either by money, or position, or favors. Some of them will not vote for any proposed measure unless they can be convinced that it is for the public welfare. These legislators, if their votes are needed, are turned over to the persuasive eloquence of those members of the lobby who, apparently, have come to the capital moved by a patriotic impulse to set erring legislators right on public questions. Their familiarity with public matters, their success in public life, their high standing in political circles, their apparent disinterestedness and their plausible arguments all combine to give them great influence over new and inexperienced members. In extreme cases influential const.i.tuents of doubtful members are sent for at the last moment to labor with their representatives, and to a.s.sure them that the sentiment of their districts is in favor of the measure advocated by the railroads.

Telegrams pour in upon the unsuspecting members. Pet.i.tions in favor of the proposed measure are also hastily circulated among the more unsophisticated const.i.tuents of members sensitive to public opinion, and are then presented to them as an unmistakable indication of the popular will, although the total number of signers forms a very small percentage of the total number of voters of the districts in which these pet.i.tions were circulated. A common method employed by the railroad lobby in Iowa has been to arouse, by ingenious arguments, the prejudices of the people of one part of the State against those of another, or of one cla.s.s against those of another cla.s.s; for instance, the East against the West, or that portion of the State the least supplied with railroad facilities against that which is best supplied; or the river cities against the interior cities; or the country people against the city people; or the farmer against the merchant, and always artfully keeping in view the opportunity to utilize one side or the other in their own interest.

Another powerful reinforcement of the railroad lobby is not unfrequently a subsidized press and its correspondents. The party organs at the capital are especially selected to defend as sound measures, either from a partisan or non-partisan standpoint, legislation of questionable propriety desired by the railroads. When such measures are advocated by party organs, partisan members, either from fear or prejudice, are apt to "fall into line," and then to rely upon these organs to defend their action. Editors, reporters and correspondents are even retained as active lobbyists and give the railroad managers' cause the benefit of their prestige. To such an extent has the abuse of the press been carried that a considerable number of its unworthy representatives look upon railroad subsidies as legitimate perquisites which they will exact through blackmailing and other means of compulsion if they are not offered. A case may be cited here to ill.u.s.trate their mode of operation, as well as the ethics of railroad lobbies. During one of the sessions of the Iowa legislature a newspaper correspondent came in possession of some information which reflected severely on the railroad lobby. He made his information the subject of a spicy article and showed it to a friend who stood close to the gentleman chiefly implicated, with the remark that nothing but a hundred dollar bill would prevent the transmission of the article by the evening mail to the paper which he represented. Before sundown the stipulated price for the correspondent's silence was paid, and an enemy was turned into a friend.

Professor Bryce says of the American lobby system: "All legislative bodies which control important pecuniary interests are as sure to have a lobby as an army to have its camp followers. Where the body is, there will the vultures be gathered together." To such an extent is the lobby abuse carried that some large corporations select their regular solicitors more for their qualifications as lobbyists than for their legal lore. It is a common remark among lawyers that a great company in Chicago pays a third-cla.s.s lawyer, who has the reputation of being a first-cla.s.s lobbyist, an extravagant salary and calls him general solicitor, while it relies upon other lawyers to attend to its important legal business. The readiness of members of the bar to serve wealthy corporations is fast bringing the legal profession of America into disrepute abroad. The author just quoted, in speaking of its moral standard, says: "But I am bound to add that some judicious American observers hold that the last thirty years have witnessed a certain decadence in the bar of the great cities. They say that the growth of enormously rich and powerful corporations, willing to pay vast sums for questionable services, has seduced the virtue of some counsel whose eminence makes their example important, and that in a few States the degradation of the bench has led to secret understandings between judges and counsel for the perversion of justice."

There are, of course, able and honorable attorneys employed by railroad companies, but often railroad lawyers are selected more for their political influence, tact and ingenuity than for legal ability, and, as a rule, the political lawyer receives much better compensation for his services than does the lawyer who attends strictly to legitimate legal work.

The danger from railroad corporations lies in their great wealth, controlled by so few persons, and the want of publicity in their business. Were they required to render accounts of their expenditures to the public, legislative corruption funds would soon be numbered with the defunct abuses of railroad corporations, and, with bribes wanting in the balance of legislative equivalents, the representatives of the people could be trusted to enact laws just alike to the corporations and the public, while a.s.serting the right of the people to control the public highway and to make it subservient to the welfare of the many instead of the enrichment of the few. A wise law regulating lobbies exists in Ma.s.sachusetts. Every lobbyist is required to register, as soon as he appears at the Capitol, to state in whose interest and in what capacity he attends the legislative session, to keep a faithful account of his expenses and to file a copy of the same with the Secretary of State.

Were a similar law enacted and enforced by every State legislature, as well as by Congress, the power of railroad lobbies would be curtailed.

Railroad managers never do things by halves. Well realizing that it is in the power of a fearless executive, by his veto, to render futile the achievements of a costly lobby and to injure or benefit their interests by pursuing an aggressive or conservative policy in the enforcement of the laws, they never fail to make their influence felt in the selection of a chief magistrate, either of the Nation or of an individual State.

No delegate, with their permission, ever attends a national convention, Republican or Democratic, if he is not known to favor the selection of a man as the presidential candidate of his party whose conservatism in all matters pertaining to railroad interests is well established. At these conventions the railroad companies are always represented, and their representatives do not hesitate to inform the delegates that this or that candidate is not acceptable to their corporations and cannot receive their support at the polls. During the Chicago convention of 1888 the statement was openly made that two of the Western candidates lost Eastern support because they were not acceptable to a prominent New York delegate who had come to Chicago in a threefold capacity--that of a delegate, a presidential possibility, and special representative of one of the most powerful railroad interests in the country. This same man appeared again last year at the Minneapolis convention as chief organizer of the forces of a leading candidate. His counterpart was in attendance at the Chicago convention looking after the same interests there.

It is the boast of prominent railroad men that their influence elected President Garfield, and the statement has been made upon good authority that "not until a few days before the election did the Garfield managers feel secure," and that "when the secret history of that campaign comes to be written it will be seen that Jay Gould had more influence upon the election than Grant and Conkling." It cannot be said that railroad managers, as a cla.s.s, have often openly supported a presidential candidate. This may be due to the fact that with the uncertainty which has for years attended national politics they deem it the part of discretion to pretend friendship for either party and then shout with the victor. In conformity with this policy, a well-known New York railroad millionaire has for years made large and secret contributions to the campaign funds of both political parties. He thereby places both parties under political obligations, and believes his interests safe, whichever turn the political wheel may take. After the contest he is usually the first to congratulate the successful candidate. In the national campaign of 1884 this railroad king completely outwitted a prominent Western politician and member of the Republican national campaign committee who has always prided himself on his political sagacity. This gentleman had taken it upon himself to enlist the rich and powerful New Yorker in the Republican cause, and to obtain from him, as a token of his sincerity, a large contribution to the Blaine campaign fund. He succeeded, at least so far as the contribution was concerned; but when the struggle was over and the opposition, in the exuberance of joy over their victory, told tales out of school, he was not a little chagrined to find that the managers of the Cleveland campaign had received from the astute railroad millionaire a campaign contribution twice as large as that which he had obtained from him. The diatribes which for weeks after the election filled the columns of his paper reflected in every line the injured pride of the outwitted general.

Judging from the laxity with which the railroad laws have been enforced in a considerable number of States, their executive departments are as much under the influence of railroad managers as are the legislative departments of others. This cannot be surprising to those who know how often governors of States are nominated and elected through railroad influences, and what efforts are made by corporations to humor servile and to propitiate independent executives. The time is not far remote when nearly every delegate to a State convention had free transportation for the round trip. This transportation was furnished to delegates by railroad managers through their local attorneys, or through favored candidates and their confidants. It was only offered to those who were supposed to be friendly to candidates approved by the railroad managers; and as free pa.s.sage was looked upon as the legitimate perquisite of a delegate, but few persons could be induced to attend a State convention and pay their fare. As a consequence, the railroad managers found it too often an easy matter to dictate the nomination of candidates.

Since the adoption of the Interstate Commerce Law convention pa.s.ses, as such, have largely disappeared; but many a prominent politician in going to and returning from political conventions travels as a railroad employe, though the only service which he renders to the railroad companies consists in manipulating conventions in their favor. If all the railroad candidates--and the companies usually take the precaution to support more than one candidate--are defeated in the convention of one party, and a railroad candidate is nominated by the other party, the latter is certain to receive at the polls every vote which railroad and allied corporate influence can command.

One might suppose that an attempt would at least be made to hide from the general public the interference of such a power with the politics of a State; but railroad managers seem to rely for success as much upon intimidating political parties as upon gaining the good will of individual citizens. To influence party action, the boast has in recent years repeatedly and boldly been made in Iowa that 30,000 railroad employes would vote as a unit against any party or individual daring to legislate or otherwise take official action against their demands, and forgetting that, with the same means used in opposition to them, a few hundred thousand farmers and business men could be easily organized to oppose them. Unscrupulous employers often endeavor to control the votes of their employes. This is particularly true of railroad companies, and they use many ingenious plans to accomplish it. In the Northwest, and especially in Iowa, they have for several years organized their employes as a political force for the purpose of defeating such candidates for State offices as were known to favor State control of the transportation business. They have even paid the expenses of the organization, although they have made every effort to make it appear as if the movement was a voluntary one on the part of their employes. They are employing this method in Texas and other States at the present time, in opposition to the effort that is being made by the people to secure just and reasonable treatment from the railroads.

That the chief executive of a State should be influenced in the discharge of his official duties by such favors as pa.s.ses, the freedom of the dining- and sleeping-car, by the free use of a special car, or even a special train, one is loath to believe; yet it is a fact, and especially during political campaigns, that such favors are frequently offered to, and accepted by, the highest executive officers, and it is equally true that many of these officers often connive at the continued and defiant violations of law by railroad officials. While the men who manage large railroad interests do not always possess that wisdom which popular reverence attributes to them, they certainly possess great cunning, and expend much of their artfulness in efforts to win over scrupulous, and to render still more servile unscrupulous executives.

The general railroad diplomate never omits to pay homage to the man in power, to flatter him, to impress him with the political influence of his company, to intimate plainly that, as it has been in the past, so it will be in the future its determined policy to reward its friends and to punish its enemies. If the executive proves intractable, if he can neither be flattered, nor coaxed, nor bribed into submission, he does not hesitate to resort to intimidation to accomplish his purpose. This is by no means a rare occurrence. There are few public men who, if determined to do their duty, have not been subjected to railroad insult and intimidation. The author may be permitted to give an instance from his personal experience. Soon after his inauguration as Governor of Iowa a general officer of one of the oldest and strongest Western railroads called at his office and importuned him with unreasonable requests. When he found that he had utterly failed to impress the author with his arguments, he left abruptly, with the curt remark that these matters could be settled on election day, and he emphasized his statement by slamming the door behind him.

A servile railroad press has always been ready to misrepresent and malign executive officers who have refused to acknowledge any higher authority than the law, the expressed public will and their own conception of duty. This abuse has even been carried so far that the editorial columns of leading dailies have been prost.i.tuted by the insertion of malicious tirades written by railroad managers and railroad attorneys; and the fact that public opinion has not been more seriously influenced by these venal sheets must be solely attributed to the good judgment and safe instinct of the ma.s.ses of the people.

However persistently railway organs deny it, it is a matter of general notoriety that railway officials take an active part in political campaigns. Hundreds of communications might be produced to show their work in Iowa, but the following two letters, written by a prominent railroad manager to an a.s.sociate, will suffice for the purpose. It will be noticed that one was written before and the other after election.

Comments upon their contents are unnecessary:

"----, Iowa, Nov. 2nd, 1888.

"DEAR SIR: I have just discovered this P. M. that the Central Committee have sent electrotypes to all the printing offices in the State of the State ticket, with the names of the Railway Commissioners and Supreme Judge in so small a s.p.a.ce as to make it very difficult, if not impossible, to write in the names. I am having slips made with Commissioners' names and Judge written on them, and they will be sent to all agents, not later than to-morrow, to paste over the printed names on the ticket, and thus beat this scheme. Have you seen any tickets yet? And what do you think of this plan?

"Yours truly, "----"

"----, Iowa, Nov. 11, 1888.

"DEAR SIR: Repeating the old and time-honored saying: 'We have met the enemy and we are theirs.' The Democratic Granger and the largely increased Republican vote was too much for us. Many friends voted with the railway men, but to no purpose. The comparison between Granger and Smyth will tell more than anything else the strength of the railway vote. But we are badly used up, and may as well take our dose.

"Yours truly, "----"

While the result of this election was indeed a bad dose for speculating railway managers, it is the opinion of the ma.s.ses and of railway stockholders, who are more interested in the general welfare of the roads than in speculation in their stocks, that the dose was well administered, and should be repeated whenever the necessity for it may again arise.

It is probably true that railroad managers have lost much of their former influence in politics. As their means of corruption have become generally known they have become less effective. The public is more on the alert, and corrupt politicians often find themselves unable to carry out their discreditable compacts.

But it is unreasonable to expect the evil to cease until the cause is removed. The trouble is inherent in the system, and the fault is there more than in the men who manage the business, and not till the great power exercised by them is restrained within proper limits will the evil disappear. All this can be accomplished when there shall be established a most thorough and efficient system of State and National control over the railroad business of the whole country.

CHAPTER X.

RAILROAD LITERATURE.

The cause of the railroad manager has never been without time-servers.

Not to speak of those newspaper editors who, for some consideration or another, defend every policy and every practice inaugurated or approved by railroad authorities, there has always been a school of literati who felt it their duty to enlighten, from a railroad standpoint, their fellow-men by book or pamphlet upon the transportation question, to correct what they supposed to be false impressions, and to round up with an apology or defense for the railroad manager, who is invariably represented by them as the most abused and at the same time most patriotic and most progressive man of the age.

The benefits derived from the railroad are great. It has been an important factor in the development of our country's resources and the advancement of our civilization. Its value is fully appreciated, but there is no reason why the men who have utilized the inventions of Stephenson and others, and have grown rich by doing so, should be eulogized any more than those who are ministering to the wants of the public by the use of the Hoe printing press, McCormick's reaper, Whitney's cotton gin, or any of the thousands of other modern inventions.

These authors doubtless are prompted by various motives. Some have been educated in the railroad school and are therefore blind to railroad evils. Others naturally worship plutocrats, because they hold the opinion that capital is ent.i.tled to a larger reward than brains and muscle, for the reason that the latter is more plentiful than the former.

But there is a third cla.s.s of railroad authors, who, there is reason to believe, enter the literary arena in defense of railroad evils not solely for the love they bear the cause, but as the paid advocates of a cla.s.s of men who feel that their cause is in need of a strong defense at the bar of public sentiment. It would be difficult to account in any other way for the extravagant statements and one-sided arguments made by this cla.s.s of writers. Yet railroad literature has not confined itself to the retrospective field. Its scope has grown with the significance of its contributors. In more than one instance have men at the head of large railroad corporations, influenced by temporary interest, become the authors of doc.u.ments containing a.s.sertions and prophecies highly pathetic at the time, but subsequently shown to be so replete with falsehoods and absurdities that few railroad managers would to-day be willing to father them. Thus Alexander Mitch.e.l.l, the late president of the Chicago, Milwaukee and St. Paul Railroad Company, addressed on the 28th of April, 1874, shortly after the pa.s.sage of the Wisconsin Granger Law, a letter to Governor Taylor, containing the following pa.s.sages:

"That it [the Wisconsin law] has effectually destroyed all future railroad enterprises, no one who is acquainted with its effect in money centers will for a moment doubt.... The whole amount received on the investment [Chicago, Milwaukee and St. Paul Railroad] for interest and cash and stock dividends, amounts to only six per cent. per annum of the actual cost of the property. I submit to your Excellency, and through you to the people of the State, whether this is more than a fair and reasonable return for the capital invested in these improvements. Is it not far below such reasonable amount? The best and most careful economists admit that no less than ten per cent. per annum should be allowed on such investments.... The directors of this company have at all times had a due regard to the interests of the public, and a desire to furnish transportation at the lowest possible figures, and, although not receiving a fair and reasonable return on their investments, they have for the last four years prior to 1873 steadily reduced their rates of freight and pa.s.sengers from year to year, as will be seen from the following tables, showing the charge for freight per mile, and the average per mile for pa.s.sengers for each year, from 1868 to 1873 inclusive:

Charges per ton Average pa.s.senger rate per mile--cents. per mile--cents.

1864 .04 1868 .03 40-100 .03 86-100 1869 .03 10-100 .03 92-100 1870 .02 82-109 .03 85-100 1871 .02 54-100 .03 75-100 1872 .02 43-100 .03 54-100 1873 .02 50-100 .03 42-100

"The law in question proposes to reduce our pa.s.senger rates twenty-five per cent. and our freight rates about the same, thus deducting from our present tariff about twenty-five per cent. of our gross earnings.... This act, as we have seen, proposes to take from us twenty-five per cent. of our pa.s.senger and freight earnings, and the additional tax of one per cent. of our gross earnings, all of which is equivalent to taking from us twenty-six per cent. of our gross earnings. Therefore, deducting this amount, equal to twenty-six per cent. of our entire gross earnings, from thirty-three per cent., our average net earnings on business, would leave us only seven per cent. of our gross earnings as the entire net earnings of the road, out of which must be paid the interest on the bonds and the dividends to our stockholders. It is therefore manifest that this law will take from us over three-fourths of the net income received under our present tariff.... The board of directors have caused this act to be carefully examined and considered by their own counsel, and by some of the most eminent jurists in the land, and after such examination they are unanimous in their opinion that it is unconst.i.tutional and void.... The board of directors are trustees of this property, and are bound faithfully to discharge their trust, and to the best of their ability to protect it from spoliation and ruin. They have sought the advice of able counsel, and, after mature consideration, believe it their duty to disregard so much of said law as attempts arbitrarily to fix rates of compensation for freight and pa.s.sengers.... Being fully conscious that the enforcement of this law will ruin the property of the company, and feeling a.s.sured of the correctness of the opinions of the eminent counsel who have examined the question, the directors feel compelled to disregard the provisions of the law so far as it fixes a tariff of rates for the company, until the courts have finally pa.s.sed upon the question of its validity."

The letter was at the time regarded by railroad men as a very strong doc.u.ment, and the railroad journals were filled with lengthy editorials in praise of the soundness of the doctrines and arguments which it contained. The disinterested of the enlightened portion of the community even then realized that the "eminent jurists" whom the company had consulted were hired attorneys and greatly biased in their views as to the const.i.tutional rights of corporations, and that President Mitch.e.l.l on his part had painted by far too dark a picture of the situation. It is now quite generally admitted that many of Mr. Mitch.e.l.l's statements were as false as his counsel's interpretation of the Const.i.tution and the law was erroneous. From the a.s.sertions made in this letter one is led to infer that the then stock-and bondholders of the Milwaukee road had paid in full every dollar of the capitalized value of the road, and that they derived from their investment an income of only about six per cent. on the money actually invested by them. The cost of the entire Chicago and Milwaukee system in Wisconsin was stated in the letter as being $38,000 per mile. It is not likely that this line of road ever cost to exceed $25,000 a mile, or that those who then owned the road paid much more than two-thirds of its actual cost for it. The road, as the letter itself admits, was bought at sheriff's sale, and no mercy whatever was shown to the farmers who had mortgaged their farms to aid the railroad company in raising funds for the construction of its line.

The letter contains other misstatements equally grave. Mr. A. B.

Stickney, the president of the Chicago, St. Paul and Kansas City Railroad, in his recent excellent work, "The Railway Problem," reviews Mr. Mitch.e.l.l's letter as follows:

"Mr. Mitch.e.l.l states the average rate per mile in 1873 for pa.s.sengers at 3.42 cents. It was well understood that this was an average rate received from those pa.s.sengers who paid anything, and that, had the average rate been obtained by using as a divisor the total number of paying pa.s.sengers plus the number of those who rode free the average would have been much below three cents, the price fixed by the law, and consequently, if the company would collect the legal rate from all alike and abolish the free list, its revenues from the pa.s.senger business would be increased rather than decreased. If the same test is applied to the freight rates it becomes equally evident that this statute did not reduce the rates in Wisconsin below the average rate of 2.50 cents per ton per mile, which, according to Mr.

Mitch.e.l.l's statement, was the average for the year 1873. For proof, it may be stated that the law cla.s.sified freight into four general cla.s.ses, to be designated as first, second, third and fourth cla.s.ses, and into seven special cla.s.ses, to be designated as D, E, F, G, H, I and J. The rates on the four general cla.s.ses were made the same as were 'charged for carrying freights in said four general cla.s.ses on said railroads on the first day of June, 1873,' and the rate per ton per mile was fixed at certain rates for the first twenty-five miles, a less for the second twenty-five miles, and a fixed rate per mile after, as follows:

1st 25 Miles 2nd 25 Miles. All Over 50 Miles.

D 4-4/5 cents 3-1/5 cents 1 3/5 cents.

E Same as cla.s.s above.

F 4 cents 2 cents 1 cent.

G 3-1/5 cents 2 cents 1 cent.