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Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, January 22, 1881, Image 1

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DAILY Cin«V SERIES-TCi. L'.V-.VO. ?::»».
Monday, Jan. 24th.
Our Partnership Arrangements
Will change on TUESDAY, FEBRUARY 15, 1SS1— our date for STOCK-TAKING—
when a new member will enter the firm. On that date we want as
few goods in our store and
Commencing Monday, Jan. 24, 1881,
US- The Prices on these goods will be SPECIALLY FIGURED TO BEING
IMMEDIATE CASH, and in many cases goods will be marked at a sacrifice— aim
being to realize on every piece of goods we can.
t& oik KEi;ri.iit mires ark
srr.riALi.v fk.i red. a reyelatiox
In the Eastern market, being ourselves Eastern men. We arc familiar with the
traditions, the changes, and the best points of that market. Our firm has been well-
known in it for the past 40 years ; and our Mil. O. A. HALE has just returned, having
visited it, so as to be on hand immediately before all the large Houses there "Take
Stock," when they are very desirous of clearing out their goods to get CASH for them,
just as we are now.
-■■ l r
Money is what ire want, and our prices will show it.
Ipgp^Bearin Mind,
The goods we propose to sell are not old, shelf, shop-worn goods, the collected
"TAILINGS" of six or seven years ; but ours are NEW AND DESIRABLE GOODS,
MONDAY, JAN. 24, 1881.
LADIES who can do so should visit us early in the day,
to avoid the afternoon crushes.
..".-.-. ■ ■ ■ ■ ■■■■
MtGHA NIC 8' $$$
Wednesday Morning, Jan. 26,
We Shall Offer For Sale in Our
Such Lines of Goods as we are desirous of Closing Out.
OXiJTX*i.rb^^ JL JCjl l^Vl %J JM JL JtZs Jt&&*,
Will lie Marked at Prices that Must Clear
Them Out at Once.
In closing out these lines, we desire to make room
for our
Spring Importations,
Now being, selected in the EASTERN MARKET by our
These Goods will be Marked at
[Prices that will make them an
inducement to purchasers, and
the goods are not confined to One
Line, BUT TO ALL Depart-
ments throughout the House.
Weinstock & liUDin,
w/ c sv s"^
\os. 400, 402, 404, 406, 408 X street, Sacranientc.
The Protection of the Inalienable
Rights of Citizens, the True
Function and Foundation of
Republican Government.
The Regulation or Control of Private
Property Inseparable from its
The Classification of Railroad Freights
Ably Discussed and Fully
j Explained,
An Able, Elaborate and Original Pre
sentation of the Question of the
Relation of Railroads to
the Government.
The Influences that Determine Rates
and the Business Principles which
Actuate Railroad Managers.
Letter of Ex Governor Leland Stanford,
President of the C. P. R. R. Co.,
to the New York Chamber
of Commerce.
The Chamber of Commerce of the city of New
York recently addressed a communication to a large
number of prominent citizens, presumably well
informed upon the subject, requesting response to
a serifs of interrogatories calculated to secure ex
pression of the opinions of those addressed up n
the question of the true policy of the Government
in the matter of the regulation of freights and fares
upon railway lines of transport The follow
ing 19 the reply of ex Governor Inland Stanford,
President of the Central l'acific Railroad Company.
The sub-headings in the letter are those of. this
journal :
San Francisco, January 20, ISM.
Charles S. Smith, Jackson S. Shulli, B. B. Sher
man, /'. B. Thnrier ami C. C. Dodge, a Special
Committee on Trantportition of the Sew Fork
Chamber of Commerce.
Gk.stlemes : I have received from you several
documents, among others a list of questions
pertaining to railroads and railroad matters;
- also Judge Black's answer to these questions.
I shall not undertake to answer the questions sepa
rately and specifically, but will, in a general man.
' ner, endeavor to substantially cover the essen
tial points of all. The general scone of your ques
tions goes to the control, to a greater or less extent,
of property which the stockholders in railroad com
panies believe to be of right their own. Here it is
pertinent, it seems to me, to call attention to the
principles upon which our Government is founded.
They are laid dowa in that great Bill of Rights
known as the Declaration of Independence. There
it is clearly enunciated that governments are insti
tuted to secure the people in their inalienable
rights^ — life, liberty and the pursuit of happiness.
This was a new departure in government, and in di
rect antagonism to that theory of government which
1 was based up. the Divine ri«ht of Kings— to gov
ern, to control, and to arbitrari'y fix burdens upon
the people for their own personal aggrandizement.
The "rights of sovereignty" is a phrase common
throughout all our law-books, but if the origin of
these "rights" be closely scanned, they will be
found to be almost invariably in conflict with the
fundamental idea of our Government. Tariffs and
the supervision of commerce and trade originated
I in a barbarous age, and were the direct offspring of
robbery ami rapine enforced by the hand of might.
The Question of Ownership It In Control.
If the question of the control of railroads were to
be treated purely from a legal stand-point I should
have nothing to say, because it is etare deems. The
essence of ownership is in control. The value of
property consists in its use or the rents and profits
to be derived. In the celebrated " Granger cases,"
so called, the use, the profits and the control were
declared to be the subject of legislation. The piin
ciplein these cases, especially as enunciated in the
' " Warehouse " case, was that the right of the Legisla
ture to control the use ami the benefits of the prop
erty of private individual-!, in connection with their
own personal services, v.as to be determined by the
nature of the business or the number of people with
whom the business might be transacted.
To sustain these decisions there was a violent as
sumption of fact. It does not follow that the ware
houseman necessarily does business with a large num
ber of people. A single individual might tax to
the utmost the capacity of the warehouse— and, in
deed, of several. To illustrate : one citizen of Cali
fornia, from a single crop, had forty thousand tons
of wheat. This would have filled eight warehouses
of a capacity of five thousand tons each, and under
the decisions in the case referred to this farmer
might have had appropriated to his benefit these
eight warehouses, and the personal services of
those engaged in attending to the business.
In such a case, if one or more individuals may use
the property and appropriate tho services of one or
more persons, there is no limit to which the rower
mar be exercised over all kinds of business. Then
where is the harmony between a decision of the
Courts sustaining this doctrine and the fundamental
principles of our Government, to which allusion has
before been made! These decisions sustain Judge
Black's assertion* but there can be no denying that
they are a most flagrant violation of the principles
of free government, and are entirely in harmony
with that theory of government which rests its
foundation in might and asserts the divine right of
kings. The idea of our system of government was
that men should be free, independent and self-re
liant ; that every man should depend upon himself
for his success in life. The establishment of com
missions of espionage, the appointment of officers
to inquire into or to regulate men's business affair?,
and the attempt of the Government to rrake con
tracts for individuals, all tend to destroy this inde
pendence, and are departures which should be care
fully consider: d. It was never intended that this
should ba a paternal government, yet does it not
begin to assume that form when it is claimed that it
should fix the terms of contracts between independ
ent parties, by attempts at regulating tho rates
shippers shall pay and carriers shall receive for
their services 1 Cut I proceed to treat the subject
in its politico-economic aspects.
Do the Stales Create the Railroad* ?
In your first interrogator}- you seem to beg the
whole question, 'and assume that " railroads are
public highways and common carriers, and derive
their franchise and existence from the public." I
do not think that the assumption is proper. Cor
porations are formed, I believe, throughout all the
States of our Union under general incorporation
laws, and they are formed by the individual incor
porators. . The property of the incorporation is con
tributed by the stockholders, and the State no more
creates the corporation or its property than it cre
ates a joint partnership between individuals or the
' partne-ship property. I take it that there is a wide
misapprehension as to what the State d:es for the
various railroad corporations. ' There is an idea that
the State confers a franchise of value. This, I
presume, grows out of the ideas associated
with and derived from that species of cor
poration, now nearly obsolete, created by
special Acts of the Legislature b?f>re
the existence of our general incorporation laws,
and which was necessarily a monopoly. To incor
porations created in this way there were granted of
course franchises supposed to be of value, but to
the modern corporation the State gives nothing but
the right to exist The corporation obtains nothing
which cannot be had by any set of individuals who
choose to associate themselves together, as a corpo
ration, for the same purp se ; and all it costs in the
State of California to create such a corporation,
with the privilege of paralleling every mile of rail
road in the State, is the mere fee for filing the
articles of incorporation (amounting to about $10).
If a thing has a greater value than it can be had for
at any time by anybody, I am unable to perceive it.
: The Bight or Eminent Domain.
Many have the impression that there is a right of
eminent domain attaching to this railroad corpora
tion which is of Talus. To this I say that the right
of eminent domain is not exercised by the railroad
company, but by the State, in whom only exists
this power, and is exercised upon the theory that
the investment by the railroad incorporators of
their time and private j property is of a character
highly beneficial to the public The State does not
do it for the benefit of the railroad company, and
has no right to take the benefit of Hie railroad com-
I>an;* into consideration. The State requires the
railroad corporation to pay to the individual whose
property has been taken its full value. And here
let me say that the legitimacy of the investment of
the means of the individual incorporutors, and its
character, are stamped by the State when it de
clares that that investment is of so great a public
benefit that it is justified in exercising tin- right of
eminent domain to enable the investors to carry out
the objects specified in the articles of incorporation.
If, then, this is the economic character stamped
upon the investment by the State, why in the next
breath discourage that investment by limiting the
possible profits and hampering the investors in the
control of the property that they, and they alone,
placed in the corporation ? Why discourage them
from putting in their individual property to aid an
enterprise of such great public advantage '.' When
the State exercises the right of eminent domain in
taking the property of the individual and allowing
the railroad company to use it upon full payment of
its value, it is upon the theory, and only upon tlio
theory, that the use of that property would inure so
largely to the benefit of the public. Now, what por
tion of the people is benefited ? Why, that portion,
and that portion only, whom you by an arbitrary
reduction of rates would further benefit. Now, why
exercise the right of eminent domain and require
the railroad company to pay the individual for the
use of hi) property and not do the same thing again
when you take the property of incorporatore, and
the use of this idcii.ieal property taken by the right
of eminent domain, and give it to the same public ?
And here I might say, in passing, that when the life
of the corporation ceases the right of way expires
with it, and the uncontrolled use of the property
reverta to the owner in fee.
Your second question is, "Railroad managers
Justify the practice of giving low rates to some ship
pers and refusing them to others on the ground of
development of business in certain localities.
* *,'■>.* * Is it consistent *ith the public
welfare and the rights of citizens to allow railroad
managers to decide what persons and places ihaU be
thus developed ? " I shall not say anything to justify
discrimination against individuals and communities,
but content myself on th!s head by simply stating
that such has never been practiced by the railroad
companies with which 1 am connected. So far as they
are concerned they practice the same general bus
ness principles that govern and regulate individuals
in the management of their affairs.
The Primary Consideration wish Dailrond
The primary consideration with railroad man
agers, under the observance of the golden rule, is
their treasury. With this idea in view, and to meet
competition, they often carry freight at less rates
for a longer than for a shorter distance, and they
accept the less rate because they cannot do better,
and because a small profit is better than none. 1 his
is only in accordance with the principles of ind.ustry,
of thrift and of economy, which should ever be en
couraged. To deny the companies the privilege of
working for a small profit, would be on a par with
saying to an individual, " Better be idle than take
small earnings when larger cannot be had."
You have been pleased to forward to me mi ex
tract from " GathV letters re'e:ring to this ques
tion, and relating directly to the Central Pacific
Railroad Company. The principle there stated 1
projwse to justify, although the facts, as he states
them, are largely magnified. It is Ihe policy of the
Central Pacific, and, I believe, of the rail
road companies of the United States gen
erally, to accept a small profit where a
larger cannot be obtained, as it is also its
policy to encourage the development of the resources
of the country. Id doing so it practices no unjust
discrimination. It charges nobody else more he
cause of the low rate it in compiled to accept from
others, but it puts into practice a common and econ
omic principle which I think will be recognized as
just by a tlmple illustration. Four individuals
have different articles which they desire to transport
in hulk t" a market, the general conditions of trans
porting being about equal, but the good 3 varying
in value as one, two, three and four. It is a ques
tion of constructing a road— we will call it a railroa i
— to move the four different commodities of these
four different persons to the same market. We will
further suppose that without the c instruction of the
road it wulil be impossible for either of these par
ties ton) jvc their property, and that the property
once moved to market the road would be of no fur
ther use. Is it not clear that the proportion of the
the expense to be contr.buted by each should lie de
termined by the value of the different commodities
to be moved? Articles 1 and 2 would not justify
the averse expense consequent upon the building
of the road ; hence, if articles S and 4 did not pay a
larger share, 1 and 'J could not be moved, an.l par
haps without the aid of 1 and 2, 3 and 4 could not
alone :tff ir.i the construction of the road. Hence all
four commodities might remain in the hands of the
owners, unable to leach a market.
The Question or " D:.-crinilnat!ou."
Another illustration In point is found in the COM
of the warehouseman who has his building two
thirds full at regular rates. To till the other third
he often will accept a less rate for cheaper com
modities that mnnot afford to pay the higher rate,
because it U bptter for him. to take thia small addi
tion to the aggregate receipts than t > have any por
tion of his building idle. If he had nothing ortvn d,
however, hut the cheaper chss he could not affo d
to continue business. The same principle is recog
nized by the owner of the quartz mill, say of fifteen
stamp;. If of high grade rock he can obtain suffi
cient to keep ten stamps employed, he can run the
other five on the poorer article, because, while the
mill must be run to work the good ore, the low
i;ra ! e can be crushed and the metals saved at little
cost beyond the wear and tear of the battery. Any
thing, however small, earned over fixed expenses is
better than nothing, and the warehouseman, the
millman and the railroad company '.'ladly accept a
low rate (which helps pay expenses that muit be in
curred), when the articles offered cannot afford to
pay a higher. If, however, they had uothi g which
paid the higher rates, all would fail. Every ship ply
ing the ocean practices this principle of business.
It is on this principle that we justify the carrying
of low-grade ores at a rate that possibly barely
cov-rs the exj>ense consequent upon its movement,
while we charge for those of higher grade a rate
that will enable ua to operate the road and pay a
fair rate for the services rendered. This principle
of charging according to values is entirely in harmony
with the rule of taxation levied for the support of
the Go\ernoicnt.
In fixing the charge for service by railroad com
panies there are various thing! that may enter into
the determination of the rates, prominently an mg
them the quality of the article carried, and the
quantity, the distance moved, the climatic and other
difficulties to be overcome in the trans]>ortation, tho
volume of hu&incss, whether the movement in either
direction is about equal, and the question of com
petition. It 18 to meet competition that freight is
carried from New York to San Francisco for a less
rate than from New York to Salt Lake City. The
rate Ut Salt Lake is the sum of the regular rates
charged by the various railroad companies between
those two points. The merchant at Salt Lake pajs
as freight on his goods from New York to Chicago
the same rate, and only the same, as the Chicago
merchant pay?, and from Chicago to Council Bluffs
the same, and only the same, as the shipper at
Council Bluffs pajs. But when freight moves from
New York to San Francisco the railroad companies
meet competition by water, and they are cooipelled
to work for a very low rate, or else accept compara
tive idleness. The only rates that are absolute' y
fixed by the railroad companies are those on that
small portion of the business paying the maximum.
All others are fixed and influenced by Ihe various
circumstances before mentioned and beyond the
control of the companies.
The Influences that Determine Rain.
Your committee is undoubtedly aware that a very
large portion of the coarse, unmanufactured pro
ducts of the country is moved below the average
rate of the cost of transportation, 3"et, in doing so,
nobody is harmed. The railroad tvmpanies find the
smallest profit better than none, and a rate barely
sufficient to pay the expense of movement is better
than idleness. Under thia rule the country obtains
a development, homes for the people are jHieeible at
remote distances from markets, and every industry
finds encouragement. Under this system the whole
cmlized world has become, for the interchange of
commodities, one great neighborhood, and the pro
duct of the bees at San Diego, 500 miles south of
San Francisco, comes to the latter place, ia trans
ported across the continent and across the oc?an,
ar.d competes with the product of the same busy
little fellows in Europe. In consequence of the
cheap transpoitation of food products, the artisan
in Europe and America prosecutes his calling in the
Hi' it remote corners as easily as though living in
the center of the food-producing districts. I
shall not, however, attempt to enumerate the
benefits and the general prosperity that have
grown up in our country under a system of railroad
management, which has been heretofore substun
illy untrammeled, and the control of which has
been in the hands of those who have created the
property*. But one thing is certain : wherever tin
railroad company has made for itself a dollar, it has
created many for others, and its property is at last
as much a part of the commonwealth as that of the
farmer, towards the increase of whose wealth it has
so largely contributed. Its property is taxed for
the benefit of government the Eame as other private
property is taxed ; and it would seem to mo perti
nent for Judge Black, when he asserts that there is
no proprietary interest in the stockholders it* this
species of property, to intimate that it should no
more be taxed than the state-houses, canals and
other things belonging to the estate. Under
the substantially unlimited control of their own af
fairs which the railroad companies have enjoyed,
rates of transportation have steadily been reduced,
until, at present, their general rates are far below
what even your committee would ten years ago have
defined possible. Under this management, the
coarse, unmanufactured products of the country
move at a low rate. The burden of transportation
of this class of property usually falls upon individu
als. Thus, with the farmer in lowa, the difference
of a mill per ton per mile may determine the ques
tion of his ability to produce corn, but oftentimes
this product is moved at rates below the average
cost of transportation, and the railroad company is
only able to do this because it is carrying
something else more costly that can easily
afford :o pay above the average. The higher
the maximum rate, the lower is the possible mini
mum. Given a certain amount to be earned, and
a reduction of the maximum necessarily increases.
the minimum. These minimum rates largely affect
individuals, and the question of the production and
the general development of the country. The maxi
mum charge being upon manufactured and costly
articles is not felt by the producer or by the con
sumer, and a reduction of this rate, of great con
sequence to the carrier and to the producers of cheap
unmanufactured materials, and without which a
very lame portion of the latur commodities could
not be produced or moved, would go substantially
to the benefit of the middlemen without making
these articles any cheaper to the consumer. It is of
a great deal cf consequence that the artisan in Mas
sachusetts should have cheap food, but the product
of his manufacture would probably not be sold to
the consumer at any? less cost, even though trans
ported by the carrier for nothing. A pair
of shoes weighing a pound might pay a cent
to the c irrier for transportation from Massachusetts
to the grain fields west of the Mississippi, but the
merchant or the manufacturer only would be the
gainer. The workman who made the shoe 3or the
man who will wear them would gain nothing. In
other words, the great efforts male to reduce rates
would not, if successful, be of any advantage to Ihe
laboring man who makes or the laboring man who
consumes. Reductions are sought by those en
gaged in business, and, if made, would inure almost
solely to their benefit ; and for this reason they are
seeking to exercise a control over the property of
True BusinrsH FriuciplCH Those which
Actuate Kailroad Manager**.
There is not a principle of business exercised
by the railroad companies In the management
of their business that is not deemed honorable and
which is not in constant practice by the merchant,
the manufacturer, the lawyer, the doctor and the
farmer. When, in consequence of a shoitcropin
Europe, the European buyer enters our market in
competition with the home buyer for the purchase
of the wheat or other product of the farm,
the farmer avails himself of this competition
and takes two prices as cheerfully as he took one
when there was no competition, and the consumer
has to pay accordingly. The merchant sells his
goods at different percentages of profit. The lawyer
discriminates between his clients according to their
ability to pay, often, because he Ins the time, taking
a case at a small rate sooner than to be idle, and
charging a larger fee when he can obtain it. The
benevolent doctor practices bis profession on similar
principles and often administers his medicines with
out charge. The manufacturer of steel for the rail
roads is glad at one time to sell to them for forty
dollars per ton, while at another time he charges,
because he can get it, eighty dollars, the cost of pro
duction being about the same in either case, and
that he may enjoy thU large profit there is levied, in
the wav of a tariff, twenty dollars per ton as
tribute from every consumer of his material.
Contemplate, gentlemen, if you please, the appli
cation to your own business and that of others of
the principles contended for by those who
would regulate the railroad companies and see
what the result would be. It seems to me that
instead of having a Gov. rnm;n', merely to secure
persona in their liberty, their property and in the
pursuit of happiness, wa should have one-half of the
people guardians of the other half, to see that the
latter managed their business to the satisfaction of
the guardian portion of the community, for are we
not all interested in the good management of the
time and property of each ? Your interrogatory
whether the guardianship exercised over banks and
insurance companies is beneficial or not 1 do not now
propose to discuss. In these cases the liability and
ability of the Commissioners to do harm are limited,
and the worst feature about them is a system of
Control of the Properly of Others— Pool-
Ins— The Interest* of (he Patron and
Carrier Common.
As to the idea suggested by question five, that a
Court, whether under the mime of Railroad Commis
sioners or otherwise, be established to determine,
upon full inquiry, the questions of justice between
the carrier and it pitron, that U one matter; but
so far as the establishment of a Board of Commis
sioners to exercise control over the property of
oth;rs is concerned, that is another matter and
which, after what I have said of the principles of
government, I cannot be expected to approve.
As to question six, 1 am not informed that com
petition is mainly supplanted by pooling arrange
ments. 1 believe that this pooling reaches only to
the through business of a few roads. But if the
Government is to equitably regulate railroads, the
earnings of all will have to be pooled or the ma .Is
Question seven I have answered already, wherein
I stated the principles which may influence
charges for railroad services. lam not aware that
railroad companies have announced the theory of
charging "a.l tho traffic will bear." It certainly is
not one upon which the Central Pacific Railroad
acts, although if such were the theory it would be
only that which you, gentlemen, as individuals, pos
sibly apply to the management of your own busi
ness. A railroad company, however, cannot con
sistently adopt such a theory. Its interests are
so intimately connected with the general prosperity
of its patrons that it is compelled to study the inter
ests of the latter ; and there are no people so earn
est in their efforts to fix a rate so low as to encour
age the general industries of the country as railroad
manager.* themselves. It is in pursuance of tl.is
wisely -directed policy, and not in the exercise of
the theory which you indicate, that in the most re
mote corners of the civilize world exchanges are
possible for almost every <-ommodity.
Question eight ia local in its application, and I
therefore pass it by.
The QuCHtlon of, the Limitation or Ball
road larnln^s '■> Law.
Your ninth question is: "The railroad liwa of
some of the States limit railroad earnings to ten per
cent, upon the actual cost of the construction. Do
you think this a just provision, and if so should not
means be taken to prevent evasions of this
law by erecting a fictitious basis of cost, through
construction companies and othei forma of stock
watering?" This question involves a principle, and
I might answer it by asking a question in return.
Do yon think it right to discourage the exercise of a
wise sagacity, thrift, industry and economic enter
prise by denying to them their just reward? And
if you are to limit the possible profits in the prose
cut ion of a business, are you not attacking all the
economies of life that ought to be encouraged, or at
least permitted full exercisa? Perhaps, as an en
couragement to doubtful enterprises it might be
well, if you apply a limit of a certain percentage to
be earned, that you should guarantee the amount
which you seem to think proper to be obtained by
the investor.
The Evidence of Title and Us KelMlon to
the Public, and to Earning Capacity.
Questions ten and eleven embrace subjects that,
lam aware, have engaged some general attention,
and for which reason only 1 suppose they arc asked
by such intelligent gentlemen as yourselves. I do
not sup|»ose that yon for one moment think that the
certificates of stock Issued by the company, which
are but the mere title-papers representing an undi
vided ownership in property, have anything to do
with the rates actually charged or obtainable for the
service performed. | As to issuing an increased num
ber of shares of stock in a corporation, that is a
matter, I suppose, that affects only the individual
owners. The value of the property or its earning
capacity is not affected. . How the public, or any
one doing business with the corporation, can be in
jured by the manner m which title to property is
evidenced, whether by one sham of stock or one
thousand, I cannot pcrceiv«. And if the railroad
companies should pay dividends on stack issued to
represent surplus turning over diwJeuli), that -Iso
ii a nutter, I conceive, pertaiuinjj purely t-> *he
stockholders themselves, end does not affect
the aggregate amount to ■■<• divided. I sup
pose that stockholders 1> i»e an good a
right to enjoy the rroSts of their bulkiest)
and to reinvest in the mom business, ag ti:.; —in
who loan-: his momy si interest ban to enjoy that
interest Mid to loan ii again ; or as the merchant or
other business person who makes profit his a .. .-.
to enjoy that profit and use it to cxtcn J and increase
his business. 1 might further Illustrate this point
by taking the cases of two prominent newspapers
of New York City— the Herald and the Trihtme.
The former is owned al Host wholly by one man, and
the title may be said to be represented by one
share of stock. The latter in owned by a corpora
tion. Would it make any diiYerenc in the earning
capacity or valueof these properties, whether owner
ship were evidenced by i*ac share of stock or ten
thousand ? Could they charge any more, or could
they be compelled to accept any less on account, of
any increase In the amount of stock ! Uit any
body's business but their own whether they choose'
to have their title represented by a few shares or
many ?
The Ka'lroiid-. In Politic*— ThePoirer or
:iu Owner Over 111* Property.
As to question twelve, " What do you think of the
practice of the railroad companies or railroad mana
gen contributing large sums to control electioi.3, or
to in&uencc legislation, or fur political campaign
funds?" I answer that I think of that as 1 loot
individuals doing the same thing ; it Is i.. 1 'her
better nor wor-c in the one case than in the other.
I know, however, that if the railroad compan .do
these things, it la invariably when they are
compelled to do so to resist aggression and often
times threatened confiscation of their property
under the plea of regulation.
You hive furnished me with an extract from the
report of the United States Senate Committee un
Transportation Routes, in which It speaks -iT tho
railroad companies exercising ".a power tbat Con
gress would not dare i > exercise." The railroad
companies* in this case, do not exercise a greater
power over their own 'property than i-> exercised by
individual owners of property. What analogy the
exercise of a power by Congress in the legitimate
discharge of its functions bears to that exercised
over hid property by the Individual I cannot per
ceive. The farmer mines the question whether
he will plant corn or potatoes in a particular pii.ee
of ground, or whether he trill do neither ; a&d that
is an exercise of power in relation 1 1 that particular
piece of property which Congress would hardly
rind within the scope of its power. The railroad
companies and the fanner exercise property righ'a—
nothing more.
I repeat, the corporation property is contributed
by individuals. The State contributes nothing;. It
is this private property, whether it he labor put into
the construction of the road, the material compos
ing it, the rails, the ties, the spike*, the chairs, the
rolling stock, the sagacity and intelligence and the
general se vices of individual] in operating and
maintaining it, over which it is proposed to exerelse
■-----•• ■■-- ■■ •■■■:'■-•■'■- ■ -••-■■ ■■- ' •:■- ■■■» v
KcKu'ali.u — <'onitiiunlmu -Th<- Inn: ■•
Ism of Capital and Labor.
•Question thirteen reads : " Do you think the tin
controlled power of large railroad corporations and
their subsequent violations of public rights, as -i.'
veloped in late railroad investigations, is responsi
ble in apv degree for the growing spirit of cintn'.m
ism and the antagonism of capital and labor in this
country?" Leave the railroad industry uncrippled.
Leave the control of railroad property as you ieave
that of other property, and you will never have oc
casion to ask such a question. It seems to me that
communism does not come from the > people who
seek to control only their own property, hut rather
from those who wish not only to control and regu
late properties in the creation of which they had no
part or ownership, but also the labor of others bo
stowed in their management.
What you propose in regard to railroad property
is, to my mind, on a par with the principles con
tended for by the communists ; and. the agitator,
Kearney, advocated no doctrine in regard to prop
eity more atrocious than ttij prmeipSeg embodied
in the." Granger cases" and the laws which .:.••>■
You seem to think it a nutter of right and an
easy thing to regulate the property of others, ami
it is only a question in j our minds, as to railroad
property, whether its regulation i ball be arbitrarily
by the legislation of the States or of the
United States, and that the questions of differ
between a railroad company and its patrons are not
judicial maters to be determined like differences
between other individuals, but arc to be settled ar
bitrarily by some Legislature. Let us sec, now
ever, how legislation would regulate th'sc railroad?,
and whether it ii practical. In any schemu of Con
gressional legislation the mileage would ban to be
taken into consideration in order to ba just, allow
ing to one company the same rates as allowed an
other fjr the sains service. It would take into'
consideration the diilicultiusof operation, the differ
ent grades, the various climatic influences, the differ
ent cost prices of labor ami supplies, the question of
the movement of freight In different directions, the
volume of business, local and through, an I tho dis
tance each moved, and sit on. Under such a system it
would be found thai the advantage! offered
for transportation by the different companies
would be unequal. The road ii ring tho leust
number of miles, were ■■' mileage :ate
adopted, would move freight* between two given
points at a less rate than the other roads, and upon
this ba9iß it would command the e:i Ire business.
Regulation IlluklriUrd.
If in distance the various roads were equal, the one
having the easiest grades would have the advan
tage; and so on through all toe various circum
stances tha*. probably would be taken Into consider
ation by a legislative bod] in making up rates. It
would be found that things that are unequal in
themselves cinn-it be made eq'ia' by any mere
declaration of equality. The topography and the
geography of the country are controlling factors in
the regulation of rates, anil they will remain un
changed. Business would seek the route offering
the cheapest and beat service between two points.
To give a fair distribution of business, BO th.it the
different roads might live, would require a minimum
as wel as a maximum price to be established.
Here you would have an arbitrary system of regula
tion that would nee mirily deny the privilege of
competition and disregard all those economic prin
ciples which should govern and regulate baSIiICSS.
To further illustrate sonic of the difficulties in the
way of arbitrary legislation, take Chicago as a start
ing point and the place of destination is the place of
•onsumption. A large portion of the freight that
moves from Chicago. Eastward, Is moving to the
European market. There are various water routes
and railroad rout . sot different lengths, with unequal
grades, with different rates for labor and supplies, with
different volumes of business, and with unequal ter
minal facilities. They are in competition with oach
other. The shipper has offered to him these various
routed to the seaboard: The Lakes and the hr •
canal, the Lakes, and the Hand canal, and the
St. Lawrence— mostly through (foreign territory—
the canals and Mississippi river to the Cult of Mex
ico, together with the rail routes. If it were possi
ble by legislative enactment to equalize these routes
so that etch miirht have a fair percentage of busi
ness, there would still be a failure of rump etc regu
lation, because the shipper himself ia net regulated,
and he would make his choiae, being governed by
questions of terminal facilities, of the time required
for transportation to market and other influence?.
The legislative attempt to regulate upon principle!
of justice would therefore be utterly frustrated, and
it would at last be recognized that the only way to
regulate at all would be by adopting a syat em of poo!
--in/ the earnings of all the competing lines, or by a
general consolidation. The local business would be
influenced by the untramtm-I'.'d water routes and
by artificial ones under the control of the different.
A Broa.lrr field In which to Tlrn Hie
Attempt at Itegulnlloii.
But there is still a broader Held in which to
view this attempt at regulation. Commerce moves
half wav around the civilized world, and the man in "
China looks East and West to see how he shall
reach, at least cost, a desirable place in Europe or
America. If he wants to reach Europe, there are the
Pacific ocean, the overland railroad and the Atlantic
ocean. He can send by the litbmug of Panama, or
by Cape Horn, or by the Cape of Good Hope, or by the
Suez Canal ; and yet you would have the Legislature
attempt to regulate this businesßbyregulatlsgasmgle
linn in one route, and makin.- the price per mile for
this class of freight moviiur N lii this link from San
Francisco to Nsw York the same as if moved from
some interior point. 'Utterly impracticable
all this, ai.d the whole . dUfleolty comes be
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