FOOTNOTE:
[27] Explanation. Each connecting road at each junction station is assigned a number, and when a car is received from a connection the record is shown by entering the road number in the upper space of the block under the proper date, followed by the character × if loaded; or, if empty, together with the time, as for example: Car 29421 is shown as received, Dec. 2d, from the Amherst & Lincoln Ry. at Port Chester (10), loaded (×), at 21 o'clock, or 9 P.M. A similar entry in the lower space of the block indicates a delivery to connecting line. The middle space of the block is used for the car movement, the first number or letter showing the station from which the car moved. The character × as a prefix to a station number indicates that the car is being loaded at that station. The —, when used as a prefix, shows that the car is being unloaded; as an affix it indicates a movement empty, or on hand empty. When the — is used under a station number it indicates a change date record, that is, leaving a station on one date and arriving at another on the following date. Station numbers or letters without other characters show that the car is loaded.
The sign (B) is used when a car is left at a station for repairs, while in transit. The sign (T) denotes that the lading was transferred to another car, a transfer record being kept showing to what car transferred; the sign (R), when a car is on hand at a station or yard for repairs. Shops are assigned numbers with an O prefix; the upper and lower spaces being used to show delivery to, or receipt from the shop, similar to the interchange record.
For convenience the twenty-four hour system is used for recording time, and is shown in quarter-hours; thus, 10, 121, 182, 213, representing 10 A.M., 12.15 P.M., 6.30 P.M., and 9.45 P.M. This, used in the movement record, shows the running time on each division, or detention at train terminals.
The "transfer" column shows the station at which the car was reported on the last day of the previous month, and the arriving date; also from what road received, with date.
[HOW TO FEED A RAILWAY.]
By BENJAMIN NORTON.
The Many Necessities of a Modern Railway—The Purchasing and Supply Departments—Comparison with the Commissary Department of an Army—Financial Importance—Immense Expenditures—The General Storehouse—Duties of the Purchasing Agent—The Best Material the Cheapest—Profits from the Scrap-heap—Old Rails Worked over into New Implements—Yearly Contracts for Staple Articles—Economy in Fuel—Tests by the Best Engineers and Firemen—The Stationery Supply—Aggregate Annual Cost of Envelopes, Tickets, and Time-tables—The Average Life of Rails—Durability of Cross-ties—What it Costs per Mile to Run an Engine—The Paymaster's Duties—Scenes during the Trip of a Pay-car.
The commissary or supply department of a railroad is not unlike that of a large army. Like a vast army, its necessities are many, and the various departments which make up the whole system must be provided with their necessary requirements in order to accomplish the end for which it is operated.
If, again, we regard a railroad as a huge animal, the quantity of supplies needed to fill its capacious maw is something overwhelming. It is always hungry, and the daily bill of fare (which includes pretty much everything known to trade) is gone through with an appetite as vigorous and healthy at the end as it exhibits in the beginning. Yet how few there are who realize the important part this one feature plays in the operation of the thousands of miles of railroad throughout the world! Upon the proper conduct of this department depends very largely the success of any road, so far as its relation to the stockholders is concerned; for while, as has been the case in the past, combinations and pools have aided in maintaining rates, and have served to increase the income, and attention has been paid to securing additional business in every possible way, the "out-goes" have often been overlooked, to the detriment of dividends and the general welfare of the property.
The supplies must be furnished in any event, in order that the various departments may perform their allotted duties—coal for the engines, stationery for the clerks, ties and rails for the tracks, oils for the lubrication of the thousands of axles daily turning, passage-tickets for the travellers, and a thousand and one things which are absolutely necessary for the safe and efficient conduct of every railroad in active operation. Each item serves its purpose, and, properly assimilated, keeps alive all the functions of one vast and complicated system. It is easy to see, then, the importance, first, of proper economy in buying, and then a correct and systematic distribution of all supplies. On the Philadelphia & Reading Railroad, for instance, the annual supply bills aggregate more than $3,000,000, covering such supplies as those just mentioned, and, in fact, everything which is purchased and used in the operation of the road; so that on a large system like that, the commissary department requires no end of detail, both in the purchase and the distribution of all material.
The expenditure for lubricating oils, waste, and greases alone amounts to more than $150,000 per annum, while the outlay for fuel represents about $1,200,000, and this is comparatively a small sum, since that road is a coal road, so called, and the cost for fuel, as a matter of course, is reduced to a minimum. There the store-room system, which has now been pretty generally adopted by many of the larger roads, is fully exemplified. With a General Store-keeper in charge, all supplies purchased are accounted for through him, and distributions are made daily among the sub-store rooms, which are located at convenient points; and they in turn distribute among the various departments, for consumption, all accounting daily to the General Store-keeper at Reading.
To give an idea as to the quantity of material required in the service on such a road, it may be stated that from twelve to fifteen car-loads of supplies per day are shipped to various points. When we consider that an ordinary car will carry from fifteen to twenty tons of freight, we find that the annual requirements will average about four thousand car-loads, or, say, about fifty thousand tons, and if all the cars were made up into one solid train they would occupy fully twenty-five miles of track, and consume an hour and a half passing a given point running at the ordinary speed of freight-trains.
To account carefully for all this requires necessarily a large army of clerks and other assistants, though, with the fundamental principles correct, it is no more difficult to account for large quantities than for small. The supplies are purchased in the first instance, delivered at the General Storehouse, are there weighed or measured and receipted for, are then distributed on requisition, and finally delivered to the several departments when needed; are charged out to the various accounts, after consumption, and all returns and records are finally kept on the books of the General Store-keeper.
It would be a large army indeed which would require so much for its maintenance; and, remembering the hundreds of roads, small and large, throughout the country, the measure of one's comprehension is nearly reached in estimating the amount of money and the thousands of tons of material represented.
If the buyer of railroad stocks for investment, besides looking into the returns of freight and passenger business for his decision, would investigate carefully the method adopted for the purchase and distribution of supplies on any road in which he may be interested, he might get information enough to satisfy himself that a large portion of the earnings were dribbling out through this department, and that, as a result, his stock might eventually cease to be a dividend payer.
In the matter of buying, the result depends entirely upon the purchasing agent, and this position must necessarily be occupied by a man of honor and integrity, coupled with a reasonable amount of shrewdness and aptitude for such business. As this department covers to a greater or less degree pretty much all the known branches of trade, the buyer cannot, under ordinary circumstances, thoroughly master the whole field as an expert; but he can nevertheless inform himself in the most important articles of manufacture to the extent of preventing deception or fraud. The field is extensive, and the sooner railroad companies realize that the purchasing agent is not a mere order clerk, the sooner they will discover that their disbursements for supplies are very much less, and that the chief part of the leakage has found its source in this very department.
Exactly the same principles are involved in this matter as in the case of a thrifty proprietor of a country-store, whose profits each year depend materially upon the closeness and care with which his stock in trade is purchased from the wholesale dealers in a large city. A purchasing agent's experience is varied in the extreme, dealing as he does with all classes of salesmen and business houses. There is no end to the operations which skilful salesmen go through in offering their stock; but after some experience a sharp buyer will be able to fortify himself against the best of them—even against the clever vender of varnishes who disposed of one hundred barrels of his wares in small lots to different buyers, on a sample of maple-sirup. On the other hand, a salesman who, when a buyer asked him if his oil gummed, replied that "it gummed beautifully," lost the chance of ever selling any goods in that quarter.
As has been said, the ordinary or general supplies consumed in the operation of the average railroad include almost everything known to trade. Tobacco, for the gratification of the taste of a gang of men out on the road with the snow-plough, is not outside the list; and even pianos, for some trains (since the days of absolute comfort and possible extravagance have begun) for the benefit of passengers setting out on long journeys; nor do we lose sight of books, bath-tubs, and barbers. The practical feature involved, however, calls for an endless variety of expensive as well as inexpensive materials.
It is a safe rule to follow that anything which goes into the construction either of track, equipment, or buildings, should be the best. Care should always be exercised against the use of any material the failure of which might be the cause of loss of life, and consequently result in heavy damages to the company. Iron alone enters so extensively into railroad construction and operation that it is safe to say three-fourths of all manufactured in this country is consumed directly or indirectly in this way; and besides its use in rails and fastenings (the latter including spikes, fish-plates, and bolts and nuts), and in the many thousand tons of car-wheels and axles annually required, there must be reckoned the almost unlimited number of castings daily required in the way of brake-shoes, pedestals, draw-heads, grate-bars, etc. The lumber and timber for buildings, bridges, platforms, and crossings, and the large quantity of glass which is necessary, are among other large items of expenditure.
Lubricating and illuminating oils, paints and varnishes, soaps, chalk, bunting, hardware, lamps, cotton and woollen waste, clocks, brooms, and such metals as copper, pig tin, and antimony are only a few of the many articles of diet which a railroad requires to keep body and soul together, and give it strength to perform the great duty it owes to commerce and the public. After they have all served their purposes, such as cannot be worked over again in the shops, and are not entirely consumed, are consigned to the scrap-heap under the head of "old material"—an all-important consideration in the economical management of any road. On many roads very little attention is paid to the sale of scrap. As a general rule, the purchasing agent has charge of it, and if he shows any shrewdness in buying, he will exercise more or less ingenuity in selling. Most railroad scrap has a fixed value in the market. Quotations for old rails, car-wheels, and wrought iron are found in all the trade journals; but as in buying one can usually buy of someone at prices less than market price, so in selling he can often find a buyer who is willing to pay more than the regular quotation. As it is found not wise in the long run to purchase ahead on some prospective rise, so in selling it is equally true that holding scrap over upon the possibility of a rise in prices is not always for the best advantage.
There has always been a demand for old iron rails, and recently use for old steel rails has been found. They are worked over at the rolling mills into crowbars and shovels, spikes, fish-plates, bolts, and other necessary things to be employed in construction and maintenance. Not long since an experiment with old steel rails was successfully performed, whereby they were melted and poured into moulds for use as brake-shoes. The result showed a casting of unusual hardness which would outwear three ordinary cast-iron shoes. This opens up an entirely new field in railroad economy, for with ordinary foundry appliances accumulations of old steel rails can be worked over and cast into all sorts of shapes and patterns to better advantage than selling them at a nominal price to outside buyers. While worn-out car-wheels will generally bring more money from wheel manufacturers than they command in the open market, it has not always been found the best policy to compel the mill from which the new wheels are purchased to take too many of them. It is apt to encourage the use of too much old material in the manufacture of the new; and while the company may consider that it is realizing much more money on sales of the old wheels than the market price, it does not take into account the inferior stock it is getting back, or the fact that possibly when the mileage is reckoned the wheels have signally failed to run as long as they ought. In the aggregate about ten per cent. of the original cost of all supplies purchased is realized out of the sales of old material. From cast-iron wheels and old rails, however, the percentage is much larger, for while at present new passenger car-wheels of this class, weighing about five hundred and fifty pounds, are worth about ten dollars each, they will bring in the market, when worn out after running say fifty thousand miles, about twenty dollars per ton. Four wheels go to the ton, which represents five dollars per wheel, or fifty per cent. of the original cost. With old rails the percentage is even higher, in the present condition of the rail market. Old iron rails are worth within four or five dollars of the price of new steel, and the old steel about seventy per cent. of the price of the new. These high percentages assist in making up for the materials which are entirely consumed in the service, and which never form a part of the ordinary scrap-heap, such as oils, waste, and paints.
While the majority of general supplies just mentioned briefly may be arranged for as required and purchased from month to month upon regular requisitions, there are certain staple articles which are provided for in advance by contract. Among them principally are the engine-coal, rails and ties, stationery, passage-tickets, and time-tables. More money is expended for such supplies than for any others, and contracts with responsible business houses, for their delivery at fixed prices for the limit of at least a year, are generally made to insure, in the first place, the lowest market rates and, again, to make the delivery certain.
Locomotive fuel is the largest single item of expense in the operation of any road, the consumption of it running up as high as a million tons per annum on some large roads; and while there are a few exceptional cases where wood is used as fuel, coal is the necessary element in nearly every case in America to-day.
Of the two general varieties—bituminous or soft, and anthracite or hard—it is safe to say that bituminous coal is the more economical, assuming that the grade employed is the best, this economy lying both in the original cost and the fact that the bulk of it goes to serve its purpose, there being comparatively little waste in the way of ashes; while the anthracite produces many ashes and clinkers, requires much more care and attention on the part of the stoker or fireman, and costs, as a general rule, about thirty per cent. more. Economy, however, should not be carried too far in any branch of the service, and if the passenger traffic be heavy the use of soft coal may be a great detriment. To a traveller there can be nothing more disagreeable than the smoke and cinders emanating from it; and if, besides this, the road be an especially dusty one, the combination of dust, smoke, and cinders will be quite sufficient to turn the tide of travel in some other direction and over another route.
For freight service bituminous coal is decidedly the best, and perhaps might not be out of place on short local passenger trains; but the company that provides hard-coal-burning engines for passenger trains, and soft-coal burners for freight, does about the right thing, and economizes as far as practicable in this particular. In making contracts for this important commodity the necessity of careful tests in advance is very apparent, and such trials are generally left with the best engineers and firemen; otherwise it might be difficult to get at all the qualifications. On some roads inducements offered to firemen have brought the consumption of fuel down to the most economical point, and it is surprising how much depends upon their good judgment in this matter.
Now that heating cars direct from the engines is coming into general use, and State legislatures have given the subject their consideration, the consumption of the domestic sizes of coal as fuel in cars is growing less; but this, too, is still a very important matter.
Stationery is not only a very significant item, but also an expensive one. This includes all the forms and blanks used in the conduct of the freight and passenger business, and there is an endless variety of them—the inks, pens, pencils, mucilage, sealing-wax, and envelopes, besides many other odds and ends. Perhaps the envelopes represent one of the largest single items of expense in this line. The hundreds of thousands of them used in the course of a year, even at low prices, mean an outlay of many thousands of dollars. Agents must send in daily reports, there must be covers for all the correspondence passing between the different departments, while the daily average amount of outside correspondence is very considerable. It is surprising how many dollars might be saved in this direction, not only by a judicious contract, but by a careful use of the supply.
When a railroad company takes up the question of time-tables, it has a matter of importance to handle which on many roads receives very little consideration. When the passenger traffic is heavy, the number of travellers during the year running into the millions, the demand for time-tables is very large. This refers directly to the time-table sheets or folders, which every company must keep on hand at its stations, and in other public places and hotels, for the convenience of the traveller, in addition to the printed schedules which are framed and hung up conspicuously on the walls of its waiting-rooms. A neat and attractive folder for general circulation is very desirable, particularly if competition is very strong. There is more virtue in a neatly made up schedule of trains than one would suppose. One in doubt is apt to reason that the road is kept up in a corresponding condition, and that the trains are made up on the same plan, and consequently would prefer to go by that route rather than by one whose trains were advertised on cheap leaflets.
Fifteen thousand to twenty thousand dollars per annum for envelopes alone is spent on some roads, and twice as much more perhaps for time-tables.
Passage-tickets, including all varieties of regular and special tickets, such as mileage books or coupons, family trip-books, and school-tickets are also an item of large expense, the annual consumption covering many tons, which once used are of no value save as waste paper; yet they are absolutely indispensable in the operation of the road. Yearly contracts for these are made, and while the actual cost of a single ticket may not exceed one mill, the aggregate on a road carrying fifteen millions to twenty millions or more passengers per annum is considerable.
To induce the public to travel, and encourage shippers to send their freight to market over any road, attention must first be paid to the condition of the track and rolling stock.
It is not economy to allow anything to be out of repair, on the supposition that it is less expensive than it would be to spend comparatively little from day to day to keep it up. The day of reckoning will come in the end, and the sacrifice will be considerable. As the track is the fundamental feature, the cross-ties or sleepers and rails should be the best. Iron rails are practically out of date, and it is fair to assume that the time is approaching when wooden ties will be things of the past. Where the traffic is light, heavy steel rails may not be necessary; but it has been generally found economical to put in use rails which do not weigh less than sixty-seven or seventy pounds to the yard; an even greater weight than this is not ill-advised—they require fewer cross-ties to the mile, and in consequence the force of men required to keep the track in condition is less. Light rails are soon worn and battered out on a road over which heavy engines are run and large trains are hauled. The powerful locomotives now built require a well-kept track and a solid and substantial road-bed. Heavier and faster trains have tended to reduce the average life of rails, even though the weight of the rails has also been steadily increasing. Circumstances vary on the different roads, but it is safe to say that eight to ten per cent. of all rails in the track must be renewed every year. This brings the average life of the steel rails down to about twelve years, under ordinary conditions. On some divisions, however, where the traffic is frequent, and in yards where a good deal of switching is done, and the rails are under pressure constantly, the average is, of course, very much less—even as low as two or three years.
Aside from the durability of the timber employed, plenty of face for the rail bearings, and uniform thickness and length, are very important requirements in contracts for ties. While white oak is generally considered the most durable for this purpose, the growth of this timber is limited except in certain sections of the country, so that cedar, cypress, chestnut, and yellow pine are more commonly used than any other class. The millions of them used for renewals and new roads each year are gradually reducing our forests; and, like some of the European roads, we shall some day fall back upon metal, which (while its life may not be measured) will make so rigid a track that the traveller over long distances will be worn out with his journey, and the rolling stock will require frequent repairs and overhauling. The practice of creosoting cross-ties is growing rapidly, and this tends to increase their durability three or four times. While the first cost of such ties may be double that for the unprepared timbers, the result in the end is economical, for the labor alone required to take out an old tie and put in a new one costs at least twelve cents.
The general store-room is properly the intermediate stage, so far as supplies are concerned, between the different departments of the road and the Auditor, who charges up all material used to the different accounts into which his system is divided. Properly, everything in the nature of material, however small, directly or indirectly passes through the Store-keeper's books. An account is kept with each locomotive, station agent, switchman, and flagman, so that to a penny everything consumed in the operation of a road is accurately known. To accomplish this the Store-keeper, of course, must be a good accountant, and at the same time be more or less of an expert in railroad material. Under an economical administration of his affairs he is able to save a great deal of money for his company. By his system, with the aid of data from the mechanical department, he can tell the average number of miles run during the year to a pint of oil or a ton of coal; the number of pounds of coal consumed per mile run, as well as the number of pints of oil for the same distance. He can give in detail the cost in cents per mile run for all the oil, tallow, and waste, fuel, and other supplies consumed, and can account to a nicety for all the lanterns, brooms, hardware, and other material which he has received and distributed.
The following statement of averages represents fairly what it costs to run a locomotive under ordinary conditions:
Averages.
| Number of miles run to pint of oil | 15.32 |
| Number of miles run to ton of coal | 46.17 |
| Number of pounds of coal per mile run | 48.62 |
| Number of pints of oil per mile run | 0.06 |
Cost in Cents per Mile Run.
| Cents. | |
| For oil, tallow, and waste | 0.32 |
| For fuel | 7.42 |
| For engineers | 3.60 |
| For firemen | 1.79 |
| For wipers and watchmen | 1.25 |
| For water supply | 0.49 |
| For supplies (miscellaneous) | 0.10 |
| For repairs | 2.40 |
| ——– | |
| Total | 17.37 |
He will find that some engineers and firemen are more extravagant than others, and that some station agents and flagmen do not perform their respective duties with near so much regard for economy as others do under exactly similar circumstances. In such cases a report is made and a reminder from the Superintendent follows, calling attention to such carelessness. The result is apparent at the next monthly comparison.
Prompt payment of all supply bills helps to insure economy, and any company unable to make its payments promptly and regularly, suffers to a greater or less extent always; for a firm not able to know whether its accounts are to be settled in thirty or ninety days cannot afford to allow all the discounts which it otherwise might, and this may mean an extra expense every year of many thousands of dollars.
So far as the employees are concerned, it is for the best interests of the company to have a fixed time for the pay-day. They need their money and should get it regularly. Any road on which the men are paid at uncertain times may be subject to incalculable losses. It is apt to provoke dishonesty and carelessness. The road which is bankrupt and forced to pass its pay-day to some indefinite time is always hampered by some of the most inferior class of servants in the market. Except in some instances where special laws have been passed requiring railroad companies to meet their pay-rolls oftener, once each month is generally recognized as pay-time, and on large roads it would be simply out of the question for the pay-rolls to be made up correctly and the men paid off sooner. The paymaster is the wage-distributing medium, and by virtue of his generosity will command as much respect as the President of the road. No officer's face is more familiar than his, and surely no one connected with the institution is looked for with more eagerness by the hard-working employees. It is no easy task he has to perform, and the responsibility for the millions of dollars paid out in this way annually is very great. This responsibility, however, has been very much reduced on some roads, where wages are paid by checks entirely. Under some circumstances this system will not work satisfactorily, especially on a road running through a sparsely settled country. The employees may have to stand a good round discount to some store-keeper or tradesman in order to secure their money. The best and most satisfactory return for services can be nothing less than solid cash; it encourages better attention to business and relieves the men from possible annoyance and inconvenience. The Paymaster's car, which is virtually a moving bank or cashier's office, and arranged conveniently for the payment of money to the men as they pass through, is generally run "special," upon notice in advance to all foremen or heads of departments, either by telegraph or, as on some roads, by the display of special signal flags, which are carried on the front end of the locomotive of some regular train the day before the car is run over any division. In this way all men employed along the line of the road, whether at or between stations, are notified of the Paymaster's coming, and it does not usually require any other inducement than this to bring them all out. There is nothing that will prompt them to jump higher and run faster than the whistle of the pay-train as it comes around the curve to the station. Men have been known to forget their names, and do other foolish things under the excitement of drawing their month's pay. The fellow who said he could not write all his name when requested by the Paymaster to sign the pay-roll, but offered to write as much of it as he could, after some deliberation made a cross on the sheet with all the care and nicety he could muster. Others who could not write have been very slow to admit it, and have pleaded haste as an excuse for not doing so. So far as Italians are concerned (and what railroad service is now complete without its gang of Italian laborers?), they are usually designated by numbers, and in some cases their foremen have thought it well to name them after prominent statesmen or other public men, or possibly some of the head officials of the company. To run across twenty-five or thirty Daniel Websters on the same road is not surprising, and the President of the company himself is liable to have a half-dozen namesakes throughout the different divisions of his road. A cage of jabbering monkeys is not a more amusing spectacle than some gangs of Italian laborers receiving their month's pay.
The pay-department can be made very systematic, and to promote economy and accuracy it is absolutely necessary that it should be. The Paymaster is not simply a medium through whom wages are distributed. He may be one of the most important officers of his company, and ferret out frauds and dishonesty which otherwise might never be discovered. He knows all the men, and they, of course, know him. In fact, he is the only one connected with the road whose recognition among all the employees is absolutely certain.
Some idea of the enormous amount of money earned annually by the railroad men in this country may be formed from the statement that it requires about $1,000,000 per month to pay twenty thousand men, and there are a good many roads on which the average monthly pay-roll embraces from fifteen thousand to twenty thousand names; in some cases even more.
When the pay-rolls are all turned over to the Paymaster, properly approved by each head of department, he notifies the Superintendent or Trainmaster of his proposed trip, mapping out in detail the route, which is usually the same each month. The signals or telegrams are sent ahead to the various foremen, and the car is ordered ready for the journey. The funds are arranged in denominations to suit the circumstances, with plenty of small change, and enough money for a day or two only at a time is provided. The pay for the flagmen at crossings, and switchmen on the road, as well as for the agents at small stations, is generally done up in envelopes, and, as the train speeds by, the packages are handed or thrown out at the proper places; and sometimes, to warrant a safe delivery, a forked stick is used, into which the envelope is put, thus giving it plenty of weight and saving it from being tumbled about promiscuously on the ground. Much time is saved in this way, and the pay-train is able to keep well out of the way of any regular train which may be following. So the pay-car flies along, only stopping at some large station where the number of employees engaged is sufficient to warrant it. These are quickly paid off, however, and the journey is continued. Perhaps at some junction a freight crew is met; and as these fellows have to get their money when they can, a stop is made on the road to give them a chance to do it. At some stations are found two or three gangs of section or track men, a watchman, an agent and his assistant, a pumper, and possibly a mail-carrier. Perhaps a discharged trainman will turn up also, who may have part of a month's pay coming to him.
Later in the day it may be a shop gang of five hundred or one thousand men, consisting of carpenters, painters, machinists, and boiler-makers, and these are paid in order, each set of men by itself. There is no noise or disturbance, everything goes like clock-work, as all pass through in regular order, each gang or class preceded by its foreman, and the men arranged in line in the order in which their names appear on the pay-rolls. When night comes, and two or three hundred miles of road have been covered, the balance of the funds is carefully locked up in the safe on board, the car run in upon some convenient siding, and the engine housed for a wiping and a thorough preparation for the next day's run. The car is generally provided with comfortable beds for the Paymaster and his clerks, and during the paying-off time they practically live in the car. This insures early starts in the morning, and on large roads the necessity for haste is very apparent, where possibly two or three weeks are consumed each month in paying off the rolls.
The average traveller, spinning across the country at forty miles an hour, is not apt to think of the countless details involved in the make-up of the train in which he rides or the track over which he is wheeled; but when he considers how safely the millions of passengers are annually carried over the one hundred and fifty thousand miles or more of railroad in this country alone, he may be brought to realize that quite as much depends upon the quality of the material entering into the construction of the train and tracks as upon the efficiency of the engineer in the cab, or the conductor, brakeman, switchmen, and train-despatcher who perform their respective responsible duties in connection therewith. Feeding a railroad, then, means a great deal more than the majority of mankind supposes.
[THE RAILWAY MAIL SERVICE.]
By THOMAS L. JAMES.
An Object Lesson in Postal Progress—Nearness of the Department to the People—The First Travelling Post-Office in the United States—Organization of the Department in 1789—Early Mail Contracts—All Railroads made Post-routes—Compartments for Mail Clerks in Baggage-cars—Origin of the Present System in 1862—Important Work of Colonel George S. Bangs—The "Fast Mail" between New York and Chicago—Why it was Suspended—Resumption in 1877—Present Condition of the Service—Statistics—A Ride on the "Fast Mail"—Busy Scenes at the Grand Central Depot—Special Uses of the Five Cars—Duties of the Clerks—How the Work is Performed—Annual Appropriation for Special Mail Facilities—Dangers Threatening the Railway Mail Clerk's Life—An Insurance Fund Proposed—Needs of the Service—A Plea for Radical Civil Service Reform.
At the Centennial Exposition at Philadelphia, in the Post-Office exhibit, was a double picture showing the postal service at the beginning of the century and as it is to-day. On one side was a postman—perhaps Franklin—on horseback, jogging over a corduroy road, "through the forest primeval," making a mile or two an hour; and on the other a representation of the fast mail train, the "catcher" taking a pouch from the "crane" as it passes at the rate of fifty miles an hour! Standing in the foreground is the pretty daughter of the village postmaster with the mail pouch just thrown from the car in her hand, a group of rustics, with ill-concealed admiration in their eyes, watching her as the swiftly passing train goes on its journey. This picture is not, perhaps, a work of art, but it is an "object lesson," giving at a glance the progress that our country has made in a hundred years.
Postal Progress, 1776–1876.
(Facsimile of a print in the Post-Office Department.)
Of all the executive departments of the Government, the Post-Office is the one nearest the people, and the one with which they are the most familiar. In addition to its work of collecting, transporting, and delivering legitimate mail matter, viz., letters, newspapers, and magazines, it is the greatest express company of the continent, since it has an office at almost every cross-roads, even carrying merchandise cheaper (considering the distance) than its rivals. Its registration system affords a means of forwarding valuable packages, at a slight additional cost, with almost absolute security. It is the greatest banking institution on this side of the Atlantic. The transactions of its money-order system, not only in our own country, but with almost every nation in the civilized world (Russia and Spain excepted), run up to wellnigh fabulous sums. Its drafts are easily obtained and cheap. Its notes are "gilt edged," and have never been repudiated. With the creation of the Postal Savings Bank system, the working people's department in its organization will approach perfection.
The first mention of a travelling post-office occurs in a memorial addressed to Congress in November, 1776, by Ebenezer Hazard, Postmaster-General under the Continental Congress, in which he states that, owing to the frequent removals of the Continental Army, he was subjected to extraordinary expense, difficulties, and fatigues, "having paid an exorbitant price for every necessary of life, and having been obliged, for want of a horse—which could not be procured—to follow the army on foot."
Directly after the inauguration of General Washington, in April, 1789, the organization of the Post-Office Department followed, and Samuel Osgood, of Massachusetts, was appointed Postmaster-General. That the people might derive the greatest possible advantage from an institution peculiarly their own, this gigantic monopoly—for it is nothing else—was created, and all competition forbidden. The Postmaster-General had then but one clerk, and there were but 75 post-offices and 1,875 miles of post-roads in the United States; the cost of mail transportation being $22,081, the total revenue, $37,935, the total expenditures, $32,140; leaving a surplus of $5,795. From this time until 1836 the contracts made for the transportation of the mails do not mention any kind of service on post-roads except stages, sulkies, four-horse post-coaches, horseback, packets, and steam-boats.
The Pony Express—The Relay.
The growth of the Railway Mail Service has been coincident with that of the railway itself, and the importance of both cannot be underestimated in considering the future development of the country. Almost as soon as a railroad is fully organized it becomes a mail contractor with the Department.
The Act of Congress constituting every railroad in the United States a post-route was approved July 7, 1838. Postmaster-General Barry, in his annual report for 1836, speaks of the multiplication of railroads in many parts of the country, and suggests it as a subject worthy of inquiry, whether measures may not be taken to secure the transportation of the mail on them, and adds: "Already have the railroads between Frenchtown, in Maryland, and Newcastle, in Delaware, and between Camden and South Amboy, in New Jersey, afforded great and important facilities to the transmission of the great eastern mail." At this time a railroad between Washington and New York was in process of construction, and Postmaster-General Barry dwelt in his report on the importance of the facilities that would be afforded for speedy service between the two cities, predicting that the run between them would probably be made in sixteen hours. The service is now performed in about five hours.
The Overland Mail Coach—A Star Route.
At first the facilities for mail services were very limited. Postmaster-General Kendall, in 1835, suggested that the Baltimore & Ohio Railroad Company might be asked to close in some portion of their baggage-cars, a strong lock being placed on the apartment, to which only the postmasters at Washington and Baltimore should have keys. In the same report he adds: "If wheels can be constructed which can be used alike upon the railroads and the streets of the cities respectively, the Department will furnish an entire car containing the mail to be delivered at one depot, and received at the other, asking nothing of the company but to haul it." It was even proposed at this time that the Government should have its own locomotives, everything else on the road giving the right of way to the mail train. This proposition was not adopted. The fear was expressed, however, that if the Department did not have absolute control over the road, the people would have to depend on stage or other horse transportation for mail service. All these early troubles in time passed away, and, through concessions on both sides, the railways soon became the most important agent of the Post-Office Department.
Mail Carrying in the Country.
This, of course, was not accomplished without many trials and tribulations. It seems strange, in the light of the present, to read in an official report a remonstrance from route agents that nearly every night dead bodies were placed in the mail crates between Philadelphia and New York, and the mails packed around the coffins. This breach of good order disappeared after that time, and with it came to an end the freight methods and the old stage-coach ideas of dealing with the mails.
A separate compartment in a baggage-car, fitted up with few conveniences necessary for the distribution of local way-mail, was the beginning of the system which has developed into the luxurious postal cars of the present time. As a matter of history, however, it is only fair to say that the system which we then adopted had been in use for some time by our northern neighbors of Canada, who had taken it from the mother country.
The credit of suggesting the first step toward the present system has generally been given to Colonel G. B. Armstrong, who in 1864 was Assistant Postmaster at Chicago. This is incorrect; Mr. W. A. Davis, a clerk of the St. Joseph, Mo., Post-Office, where the overland mail was made up, conceived the idea, in 1862, that if the letters and papers could be assorted on the cars between Quincy and St. Joseph, the overland mail could start promptly on time. He was given permission to carry out this idea, and there are vouchers on file in the Department at Washington showing that he was paid for that specific work. In 1864 Colonel Armstrong was authorized and encouraged by the Hon. Montgomery Blair, then Postmaster-General, to undertake the difficult task of arranging and introducing the service. On August 31, 1864, he wrote: "To-day I commenced the new distribution." Subsequently, Colonel Armstrong became the first General Railway Mail Superintendent, and held this office until ill-health compelled him to resign, in 1871. To Colonel George S. Bangs, of Illinois, and his successors, Theodore N. Vail, William B. Thompson, and John Jameson, is due the excellence of the present system. Colonel Bangs was a thoroughly equipped post-office man, energetic, courageous, and progressive. Brimful of ideas, he was ever on the lookout for improvement. Never satisfied with old ways, he was constantly striving to simplify and better the service. He forgot himself in his work, and died a martyr to his duty, leaving the Travelling Post-Office of to-day a monument to his memory. While to Colonel Armstrong is due the credit for the skeleton of the system, it was the genius of Colonel Bangs that clothed the bones with flesh, developed the sinew, put the blood in circulation, and breathed into its body the breath of life. Colonel Bangs found, in 1871, that everything was disjointed, disconnected, and sluggish. There was no attempt at "certainty, security, or celerity." It was a "go-as-you-please" condition of affairs. He grappled at once with it and brought order out of chaos. He introduced a system of emulation among the employees, rewarding those who displayed proficiency by promotion over the sluggish, and thus, in fact, was probably the father of what is now known as Civil Service Reform. In 1874 he discussed the propriety of establishing a fast and exclusive mail train between New York and Chicago, "this train" (quoting his report to the Postmaster-General) "to be under the control of the Department, so far as it is necessary for the purposes designed, and to run the distance in about twenty-four hours. It is conceded by railway officials that this can be done. The importance of a line like this cannot be overestimated. It would reduce the actual time of mail between the east and west from twelve to twenty-four hours. As it would necessarily be established upon one or more of the trunk lines, having an extended system of connections, its benefit would be in no case confined, but extended through all parts of the country alike."
This report met with the approval of Postmaster-General Jewell, who ordered Bangs to negotiate with the New York Central & Hudson River Railroad and the Lake Shore Railroad for a fast mail train, leaving New York at four o'clock in the morning, and arriving at Chicago in about twenty-four hours. It was the old story of making bricks without straw. The Post-Office Department had no appropriation to pay for such facilities, hence it had to depend at first on the public spirit of the railroad authorities. Commodore Vanderbilt, the president of the companies whose lines were to be used, had had dealings with the Department, and was perhaps not altogether sanguine as to the practical issue of the experiment, or in respect to the countenance it would receive from Congress; but Mr. William H. Vanderbilt, the vice-president, lent a willing ear to Mr. Bangs's proposition, and did his utmost to aid him in putting it into effect. There being no special appropriation available for the purpose in hand, "the devil was whipped around the stump" by Colonel Bangs stipulating that if Mr. Vanderbilt would have twenty cars built and the service performed, all matter originating at or coming into the New York Post-Office, which could reach its destination at the same time by this line, should be sent by this train, and that the railway companies could have the right to demand a weighing of the mail matter at will, all railroads being paid according to weight. When the details of the plan were communicated to Commodore Vanderbilt, he is reported to have said to his son: "If you want to do this, go ahead, but I know the Post-Office Department, and you will, too, within a year." Mr. Vanderbilt did "go ahead." He constructed and equipped the finest mail train ever seen on the planet, ran it for ten months, never missed a connection at Chicago, and was always on time at New York. He did not have to wait a year, however, for a realization of the sagacious old commodore's prophecy. Within three weeks, despite the indignant protest of Colonel Bangs, the mails of three States were ordered to be taken from this and given to another route. A grosser and more wanton breach of plighted faith it would be hard to find, and its results were far-reaching and disastrous.
This train was a marvel of completeness and efficiency. It was manned by picked men, and the only complaint ever made against it was that it ran so fast that the clerks had not time to sort the mails for the post-offices between New York and Poughkeepsie. To obviate this, Colonel Bangs requested the postmaster at New York to have two hundred mail-bags dyed red, which should contain the mail for those offices nearest together, so that the crew in the train could distribute them first. There was no complaint after that. But when the dyer's bill was sent by the postmaster to the Department, it was disallowed by a clerk of the Second Assistant Postmaster-General, who, in a letter announcing the fact, said that there was no necessity for the outlay if the postal clerks did their duty. Bangs, who had just arrived at the post-office from a day and night's ride on his favorite train, was lying on a sofa half asleep in the postmaster's private office, as that official was opening his mail. When he came to that letter he handed it to Bangs. He was wide-awake in an instant. "Mr. Postmaster," said he, "do you know the man who signed this letter? He is a wheezy priest, a fool, and a Baptist, at that. Give me the letter." The bill was allowed as soon as Bangs reached the Department. He was wrong, however, in crediting the subordinate to the Baptist faith. He was an ornament of another persuasion.
So carefully had the project been considered and adapted that the service on the Central, from the start, moved with the precision of clock-work, and was an immediate success. It is proper to say that word of what was going on between the Department and the Vanderbilt system reached the Hon. Thomas A. Scott, President of the Pennsylvania Railroad, and he at once made up his mind that the corporation under his management could not afford to be behind its great rival. One Saturday morning he telegraphed to J. D. Layng (now General Manager of the West Shore and President of the C. C. C. & I.), then General Manager of the Pennsylvania lines west of Pittsburg, to know if by the following Monday week, the date on which the train was to start, four postal cars could be built and the first one be in Chicago ready to start on its eastern trip. The answer came back, "Yes." The order was given to the Allegheny shops on Saturday afternoon, and on the following Saturday the first of the cars, complete and equipped for mail service, started for Chicago, and began its east-bound trip on Monday morning. The second and third cars were finished on Monday night, and the fourth—thus fully equipping the line—on Tuesday.
Thus had been established two splendid fast trains, and the outlook was bright for the future, when Congress, in spite of the efforts of the Post-Office Department, passed an Act reducing the already inadequate compensation to the trunk lines, for the carrying of the mails. This action brought official notice from Messrs. Vanderbilt and Scott of the discontinuance of the fast mail trains between New York City and Chicago, and that service ended.
At a Way-station—The Postmaster's Assistant.
Colonel Bangs was greatly mortified at this result, but he stood his ground and remained at his post until the close of the year. Then, worn out with never-ending toil, and disheartened by the action of Congress, he tendered his resignation and insisted on its acceptance. Parted from the Post-Office, President Grant, knowing his worth and wishing to recognize his services, appointed him Assistant Treasurer of the United States at Chicago. He lived to perform the duties of this office only a few months, as death overtook him suddenly, while on a visit to Washington on official business, December, 1876. His work, however, was not permitted to drop. He had left in the service three assistants, Theodore N. Vail, William B. Thompson—afterward Second Assistant Postmaster-General—and John Jameson, who were fully imbued with the ideas of their late chief and were fully loyal to them. They, in the order named, became his successors, and never permitted opportunities to escape wherein there was a possible benefit to the service to be secured. Although the fast mail service was suspended for lack of support from Congress, its usefulness and practicability had been so thoroughly demonstrated that an appropriation of $150,000 was made in March, 1877, for its resumption on the trunk lines. This victory was not reached without untiring efforts on the part of Mr. Vail, and by generous support in both houses of Congress; in the Senate by the Hon. Hannibal Hamlin and James G. Blaine, of Maine, and in the House of Representatives by such broad and liberal statesmen as Mr. Waddell, of North Carolina, Mr. Randall, of Pennsylvania, and Mr. Cox, of New York.
Since then, Messrs. Thompson and Jameson have watched the progress of the work with jealous eyes, and have succeeded in extending it practically to the whole country. The present service is due not alone to the liberality of Congress, because the appropriations have been parsimonious, but to the generosity of the railways, which have performed a valuable work for a price which in many cases does not pay the expense of the necessary additional labor involved.
The Railway Mail Service at the close of the fiscal year ending June 30, 1888, gave employment to 5,094 clerks. Matter was distributed on 126,310 miles of railway, and on 17,402 miles additional closed pouches were carried. There were also operated 41 inland steam-boat lines on which postal clerks were employed. The postal clerks travelled (in crews) 122,031,104 miles by railway, and 1,767,649 miles by steam-boats. They distributed 6,528,772,060 pieces of ordinary mail matter, and handled 16,001,059 registered packages and cases, and 1,103,083 through registered pouches and inner registered sacks. The service is in charge of one General Superintendent, who has his headquarters at Washington, and it is divided into eleven divisions with a superintendent in charge of each.
The majority of people who travel on railways (and how many Americans are there who do not?) have paid passing attention to the railway mail cars as they have stood at the station preparatory to the starting of the train, and have glanced through the open doors with more or less curiosity at the scene of energy and bustle witnessed within. At such a moment, no matter how great the curiosity, it is not feasible to investigate closely, for the workers must not be hampered by the prying public, however praiseworthy the motive. To supply this pardonable desire to know how it is done, I invite my readers to accompany me in spirit on a visit to the Grand Central Station, to witness the preparations for the departure of train No. 11, known in railway parlance as "the New York and Chicago Fast Mail," which leaves New York every night at nine o'clock.
Loading for the Fast Mail, at the General Post-Office, New York.
It must not be supposed that everything has been left until the last moment, and that the mail matter has been tumbled into the cars on the eve of departure, to be handled as best it may in the short run to Albany; for under such conditions the task would be an impossibility even to an army of trained hands. Work has been in progress since four o'clock in the afternoon, and it has been steady, hard labor every minute of the time. The five cars have been backed down to the tracks opposite Forty-fifth Street, and have been so placed that they are convenient of access to the big lumbering mail wagons which are familiar sights in the streets of the metropolis. The crew of nineteen men, skilled in the handling of mail matter, and thorough experts in the geography of the country, reported to the chief clerk and took up their stations in the various cars at the hour named. At the same time the wagons began arriving from the General Post-Office with their tons of matter which had "originated" in New York, and were soon transferring their loads to the cars, where agile hands were in waiting to receive them. Since the removal of the deadly stoves from the railway trains the occupants of the postal cars have suffered to no small extent owing to the lack of heat. These cars are provided with steam-heating apparatus which is worked from the engine, but they are occupied for five hours before the engine comes near them, and in cold weather the hands of the men employed in distributing letters become numb with cold. This is a matter which should receive prompt attention.
At the Last Moment.
Before we deal with the mail matter, let us look at the cars and the men who occupy them. The train, as it leaves New York, is made up of five cars which are placed immediately behind the engine, and are followed by express and baggage cars and one passenger coach. The car next to the engine is devoted entirely to letter mail, and the four following it to papers and packages. The letter car is fifty feet in length, while those for the newspaper mail are ten feet longer. All are uniform in width, nine feet eight inches, and are six feet nine inches high in the clear. When newly built, before long and hard service had told on their appearance, their outsides were white in color, with cream-tinted borderings and gilt ornamentations, and were highly varnished. Midway on the outside, and below; the windows of each car, is a large oval gilt-finished frame within which is painted the name of the car, with the words, "United States Post Office" above and below. The cars used by the New York Central are named for the Governors of the State and the members of President Garfield's cabinet. Along the upper edge and centre are painted in large gilt letters the words, "The Fast Mail Train," while on a line with these letters at the other end, in a square, are the words, in like lettering, "New York Central" and "Lake Shore." The frieze and minute trimmings around the windows are of gilt finish. The body of the car also contains other ornamentation, including the coat-of-arms of the United States. The running gear is of the most approved pattern. The platforms are enclosed by swinging doors which, when opened, afford a protected passage between the cars. This arrangement no doubt suggested the modern improvement now known as the vestibuled train. The letter car is provided with a "mail catcher," which is placed at a small door through which mail pouches are snatched from conveniently placed posts at wayside stations where stops are not made. Each car is divided into three sections, all fitted up alike with conveniences for the service to be performed. The letter car, however, is somewhat differently arranged from the others, to meet the requirements of that particular branch of the work.
Transfer of Mail at the Grand Central Station, New York.
Pouching the Mail in the Postal Car.
In the first section of the letter car are received the pouches from the General Post-Office, which when opened are found to contain letters done up in packages of about a hundred, marked for Michigan, Indiana, New York, Ohio, Western Pennsylvania, Montana, Dakota, and California. When this mass of matter has been emptied out of the pouches and, in the vernacular of the service, "dumped up" preparatory to distribution, the section is clear for the registered mail which is worked in it. Before this is accomplished, however, much work is done; in fact, a sort of rough distribution is made. All packages which are directed to one office are distributed into pouches, which are afterward stored away until the towns are reached. The other packages are carried into the letter department for distribution, where a rack, similar to those seen in almost every post-office, although space is thoroughly economized, is used for the purpose. To give a slight idea of the work done in this section, it may be mentioned that the distribution for New York State alone requires 325 boxes. Still there is plenty of space, otherwise the third section of the car would not be used, as it is, for the distribution of Montana and Dakota newspapers. How closely everything is packed, and all available space utilized, may be imagined when it is stated that for this newspaper mail ninety-five pouches are hung in the section, and that there is still sufficient room for the storage of pouches locked up and ready for delivery, and also for the sealed registered mail. A separation of the California mail is also made in this car, so that when it reaches Chicago the pouches into which the matter is placed are transferred without delay, thus saving twenty-four hours on the time to the Pacific Coast, not by any means an unimportant accomplishment.
There have been received in this car before it moves out of the Grand Central Station between 1,000 and 1,500 packages of letters and, in addition, forty or fifty sacks of Dakota and Montana papers. To handle this mass of correspondence there are six men in addition to the chief clerk, or superintendent. This official is not assigned to any particular duty, but he supervises the general work and lends aid where it is most required. The second clerk handles letters for Ohio, Dakota, and Montana; the third clerk takes charge of those for New York State; the fourth, Illinois; the fifth opens all pouches labelled, "New York and Chicago Railway Post-Office," distributes their contents, and afterward works on Dakota and Montana papers; the sixth, Michigan State letters, and the seventh, California letter mail. The salaries of these men, intrusted with so much responsibility and of whom so much is expected, range from $900 per annum for the lowest grade to $1,300 per annum for the superintendent.
The second, or "Illinois Car," is devoted, as are the others which follow it, to the newspaper and periodical mail. In it are handled papers for Ohio, Indiana, Illinois, New York, Oregon, and Wyoming. Two clerks and two assistants man this car. The first assistant, who "faces up" papers ready to be distributed, draws mails from stalls to case, and removes boxes as fast as they are filled, has gained the sobriquet of the "Illinois derrick," owing to the heavy nature of his duties. The second, who lends what aid he can in the heavy work on the run between New York and Albany, has become known on the train as "the short stop." The third section of the car is used for storing the bags of assorted matter.
A Very Difficult Address—known as a "sticker."
The third car is used for storing through mail for San Francisco, Omaha, and points west of Chicago. In it are also carried stamped envelopes from the manufacturer at Hartford, Conn., to postmasters in the West. This car is frequently fully loaded with matter from the New York office when the journey is begun, and it is then found necessary to add a similar car to the train on its arrival at Albany for the accommodation of matter taken on by the way and bound for the same destination.
Distributing the Mail by States and Routes.
Sorting Letters in Car No. 1—The Fast Mail.
The Michigan paper car is the fourth. In it are handled papers for Michigan, Iowa, and the mixed Western States. In the first section are piled the Iowa pouches and those for points out of Utica, which have been distributed in the centre section, and in the third section the distribution for Michigan, Nebraska, and Minnesota, as well as for points reached from Buffalo, is made. Two men perform the work of the car, one of whom has already handled the registered mail and Indiana letters in the first car.
Pouching Newspapers for California—in Car No. 5.
The fifth, or California paper car, is the last mail coach on the train, as it is made up when leaving the Grand Central Station. Besides the papers for the Golden State the car carries through registered pouches to Chicago and the West, which have been made up in the New York office, and, as a usual thing, a large lot of stamped envelopes for postmasters in the West. The California letter man from the first car looks after the papers for the same State, and has an eye to the safety of the car. On reaching Albany another car is added to the train, making six in all from that point. This last addition comes from Boston, brings the morning mail from Bangor, Me., and is manned by four men.
The run to Chicago for post-office purposes is divided into three divisions: from New York to Syracuse, from Syracuse to Cleveland, and from Cleveland to Chicago. Each division has its own crew, so that the men leaving New York are relieved at Syracuse by others, and these in turn at Cleveland. The New York crew go to work, as has been said, at 4 P.M., and if the train is on time at Syracuse, as it usually is, they arrive there at 5.35 A.M., after thirteen and a half hours of as hard work as men are called upon to do. The same evening at 8.40 they relieve the east-bound crew, and are in New York again at six o'clock on the following morning. Half an hour later they are to be found on the top floor of the General Post-Office building, comfortably ensconced in bunks and in a large and airy room, provided as a dormitory for their use by the postmaster of New York at the time of the inauguration of the fast mail service. Each crew makes three round trips and is then laid off for six days, but its members are all this time subject to extra duty, which they are called upon to perform with unpleasant frequency, particularly in holiday times.
After leaving New York, the first stop the train makes is at Poughkeepsie, but no mail is taken on there. At Albany the second halt is made, and there twenty minutes are spent in taking on the mail from New England and northeastern New York. At Palatine Bridge there is a brief stop, and after that comes Utica, where the Delaware, Lackawanna & Western, the Ontario & Western, and the Rome, Watertown & Ogdensburg roads exchange mail matter. At Syracuse more mails come, this time from the Oswego, Binghamton & Syracuse, and the Auburn & Rochester branch of the New York Central. Here also comes welcome relief for the crew which left New York. Those who follow have much to keep them busy, but the heaviest part of the work has been already performed.
From Syracuse to Cleveland there are several distributing points where mail matter is also received on the train, and the routine is continued much as already described until the crew is relieved at Cleveland. There the men of the Western Division take charge and continue the work until Elkhart, Ind., is reached. There a special force from Chicago meets the train, takes possession of a portion of the letter car, and makes the distribution for the main office and stations of the city of Chicago, thus saving much time. When the train arrives in Chicago, it makes connection with a fast mail train on the Chicago, Burlington & Quincy, as also on a like train on the Chicago, Milwaukee & St. Paul. The former train arrives at Council Bluffs about 7 P.M., and there overtakes the train which left Chicago on the previous evening. The Pacific Coast mail is thus expedited just twenty-four hours. A similar train on the St. Paul road also saves twenty-four hours' time on the trip to the northwestern portion of the Pacific Coast.
The appropriation for special facilities for the year ending June 30, 1889, was $295,987.53. The uses to which the appropriation referred to is put are explained in the following table.
| Termini. | Railroad Company. | Miles. | Pay. |
| New York to Springfield | New York, New Haven & Hartford | 136 | $17,647.06 |
| 4.35 A.M. train | New York Central & Hudson River | 144 | 25,000.00 |
| Philadelphia to Bay View | Philadelphia, Wilmington & Baltimore | 91.80 | 20,000.00 |
| Bay View to Quantico | Baltimore & Potomac | 79.80 | 21,900.00 |
| Quantico to Richmond | Richmond, Fredericksburg & Potomac | 81.50 | 17,419.26 |
| Richmond to Petersburg | Richmond & Petersburg | 23.39 | 4,268.67 |
| Petersburg to Weldon | Petersburg | 64 | 11,680.00 |
| Weldon to Wilmington | Wilmington & Weldon | 162.07 | 29,541.27 |
| Wilmington to Florence | Wilmington, Columbia & Augusta | 110 | 20,075.00 |
| Florence to Charleston Junction | Northeastern | 95 | 17,337.50 |
| Charleston Junction to Savannah | Charleston & Savannah | 108 | 19,710.00 |
| Savannah to Jacksonville | Savannah, Florida & Western | 171.50 | 31,309.70 |
| Baltimore to Hagerstown | Western Maryland | 86.60 | 15,804.50 |
| Jacksonville to Tampa | Jacksonville, Tampa & Key West & South Florida | 242.57 | 43,962.42 |
| Total | $295,655.38 | ||
A careful perusal of this table develops the fact that the greater portion of this money is expended south of Philadelphia, the railroad companies in that section not having sufficient weight of mails to warrant fast trains without some additional compensation. It will also be noted that with the exception of the sum of $25,000 for a special train to Poughkeepsie, which leaves New York City at 4.35 in the morning, the New York Central receives no compensation except that earned by them as common carriers of so many pounds of freight-mail matter carried, being paid for in accordance with its weight. It will also be observed that the Pennsylvania Railroad, on its trunk line, is not even so fortunate as its great rival.
There may be more dangerous pursuits in life than that of the railway post-office clerk, but there are not many so, and there are few in which the risk to life and limb is so constant. The everyday citizen who is called upon occasionally to make a railroad journey of a few hundred miles feels it to be incumbent upon himself on such occasions to make special provision for those dependent on him in case injury or death should come while riding in the thoroughly appointed and luxurious coach placed in a portion of the train least likely to suffer from accident. But too little thought is devoted to the safety of those poorly paid but efficient servants of the State, in the forward cars, without whose services the business of the country, as conducted to-day, would come to a stand-still. To show that the importance of this service is not here exaggerated, it is only necessary to recall the condition of affairs in New York City, and other cities as well, in March, 1888, when the great blizzard fell upon the land. There were then no mails for several days, and the prostration which came upon the community is too well remembered to need comment. The danger to those within the postal cars, however, is recognized by the railway people, and efforts have been made in the way of providing safety appliances, but it is, of course, impossible to lessen the danger to any great extent. All that American ingenuity suggests in the way of construction, both inside and outside of the cars, is provided. The body of the car is most substantially built, the platforms and couplings are of the most approved patterns, the trucks are similar to those used under the best passenger coaches, and the air-brakes and other safety apparatus are all brought into requisition. Within the cars are saws, axes, hammers, and crowbars conveniently placed in case of wreck, and safety-bars extend the length of the cars overhead to which the clerks may cling when the cars leave the track and roll down embankments, as they often do. In the year ending June, 1888, there were 248 accidents to trains upon which postal clerks were employed. In these wrecks four clerks were killed; sixty-three were seriously, several of the number permanently, and forty-five slightly injured. The official report of the accidents shows that the majority of them resulted from collisions, while others were due to the spreading of the rails, the failure of air-brakes to work at critical moments, and obstructions on the track.
In every case where cars were wrecked the postal car was among the number.
In many instances the cars were telescoped, and on such occasions the clerks were found buried in the wreckage or pinned under the engine or its tender. And many times true heroism was shown by the injured men. Over and over again the General Superintendent reports that, notwithstanding severe injuries received by the clerks, the scattered mail matter was collected by them and transferred either to another train or to the nearest post-office. Several times trains in the West were held up by robbers, who, after sacking the express car, visited the postal car, introducing themselves with pistol-shots. One clerk was seriously wounded in the shoulder. An instance of self-possession is reported in Arkansas, where the robbers, before visiting the postal car, had secured $10,000 from the express safe. When they came to clerk R. P. Johnson he suggested that they had secured booty enough, and that under the circumstances they might let the mail matter alone. The masked men agreed with him, and did not molest the mails.
Catching the Pouch from the Crane.
In view of the dangers to which employees of the Railway Mail Service are exposed, it may be permitted to quote from the last annual report of General Superintendent Bancroft on the subject of insurance. No action, he points out, has ever been taken by Congress toward providing for the care of clerks permanently injured in the service, or those dependent upon them in case of death, notwithstanding frequent recommendations by the Department. He attributes this to insurmountable objections on the part of the people's representatives to the creation of anything of the nature of a civil pension-roll. He therefore suggests that there shall be deducted from the pay of each and every railway postal clerk ten cents per month, to be paid into "The Railway Postal Clerks' Insurance Fund," the custodian of which is to be the United States Treasury. In case of death from injuries while on duty, $1,000 is to be paid to the clerk's heirs. While this proposition is in the right direction, it hardly goes far enough. Provision should be made for the disabled, and to do so, the clerks doubtless would not object to an assessment of double the amount suggested. That they should be compelled to resort to such a mode of relief, however, is a reflection upon the Government of the United States.
The first great need of the Railway Mail Service is an adequate appropriation by Congress to extend its usefulness, and to keep it up to the demands and the needs of the public. Where speed is required to make connections, the Department should have the cash on hand to buy what is necessary. The railways are business institutions, managed as such, and when the Department desires extra facilities it should be prepared to pay in coin and not in talk. In this connection it is a pleasant duty for the writer of this very imperfect sketch to say that during his term of service in the post-office at New York, and at the Department, he always found Mr. William H. Vanderbilt, Mr. Cornelius Vanderbilt, Mr. J. H. Rutter, of the New York Central; Mr. John Newell, of the Lake Shore; Mr. George B. Roberts, Mr. A. J. Cassatt, and Mr. Frank Thomson, of the Pennsylvania system; Mr. R. R. Bridgers and Mr. H. B. Plant, of the Atlantic Coast Line, ready to grant any reasonable request for the improvement and extension of the service. Time after time Mr. Roberts has run a special train with the Australian transcontinental mail from Pittsburg to New York, that it might catch an outgoing steamer; and he and Mr. Vanderbilt practically re-established the fast mail, by taking letters on their limited trains. Mr. Roberts gave, in addition, an extra mail train from Philadelphia west at four o'clock in the morning, and Mr. Vanderbilt placed a postal car on the 4 P.M. train from New York, receiving in return—what they had a right to demand—an extra weighing of the mails, and, what was not a matter of surprise to them, unmeasured abuse on the floor of Congress for giving these additional facilities to the people of the country.
The last and greatest need of the postal service is the total and complete elimination of partisan considerations as affecting appointments and removals in the working force. The spoils method invariably brings into the service a lot of do-nothings or a race of experimenters, whose performances never fail to breed disaster and to crush out substantial progress.
There is no position in the Government more exacting than that of a postal clerk, and none that has so many requirements. He must not only be sound "in wind and limb," but possessed of more than ordinary intelligence, and a retentive memory. His work is constant, and his only recreation, study. He must not only be proficient in his own immediate work, but he must have a general knowledge of the entire country, so that the correspondence he handles shall reach its destination at the earliest possible moment. He must know no night and no day. He must be impervious to heat or cold. Rushing along at a rate of forty or fifty miles an hour, in charge of that which is sacred—the correspondence of the people—catching his meals as he may; at home only semi-occasionally, the wonder is that men competent to discharge the duties of so high a calling can be found for so small a compensation, and for so uncertain a tenure of official life. They have not only to take the extra-hazardous risks of their toilsome duties, but they are at the mercy of the practical politicians who believe that "to the victor belong the spoils." There are no public offices which are so emphatically "public trusts" as those whose duties comprise that of handling the correspondence of the people, because upon the proper and skilful performance of that duty depend—to a far greater degree than in the care of any other function accomplished through government agency—the business and social welfare of the entire community. The effects of ignorance, carelessness, and dishonesty in any other branch of the public service, although to be deplored, are not to be compared to those which follow the existence of such evils in the Post-Office. Can there be a more flagrant abuse of a "public trust" than the perversion of a branch of the public service into an agency for furthering the ambitious ends of local politicians and their partisans by allowing them to distribute its "patronage" as rewards for party services among those who, by reason of inexperience—if for no graver cause—are incompetent to replace the skilled workman who must be routed out in order to give them room? This evil should be corrected at once. The Railway Mail Service must no longer be left at the mercy of the local partisans. The reform is not only a present necessity, but it was one in the past and will be in the future, until the force of public sentiment shall compel acquiescence in the reasonable demand that what was so eminently meant for mankind shall not be given up to party; that the non-political business of letter-carrying, which the Government has monopolized, shall be conducted by it solely with a view to prompt and expeditious carrying of mail matter, and not with the object of bolstering up local "statesmen" or carrying elections.
At the coming in of Mr. Cleveland's administration, William B. Thompson was Second Assistant Postmaster-General—in charge of the contract office—and John Jameson was General Railway Mail Superintendent. Both of these gentlemen had worked their way from the ranks by sheer merit. In private business the value of their services would have been so highly appreciated that, no matter who became senior partner of the firm, under no circumstances would they have been permitted to retire. The case of these gentlemen is mentioned now simply to illustrate an idea and not to found a complaint. On the incoming of the new administration, General Thompson, in accordance with precedent, promptly tendered his resignation, and it was as promptly accepted; while General Superintendent Jameson struggled along doing his work until, to relieve his chief from embarrassment, he, too, tendered his resignation. The country was thus deprived of the services of two men who were experts in their profession, simply to give place to others, of high character, no doubt, but with no knowledge and special aptitude for the great trust that was committed to them. And now, in the first year of another administration, the experience that many valuable officials have gained has counted for nothing, and they have been rotated out. In no other civilized country would such an atrocity be possible. An attempt to remove, for similar reasons, such postal authorities as Messrs. Rich, of Liverpool, Johnston, of Manchester, or Hubson, of Glasgow, all of whom, under a sound, logical, just, and economical business system, have reached their present positions by merit and efficiency from more or less inferior places, would hurl an administration in Great Britain from power, and justly too. The possession of the immense patronage of the Government did not save the Republican party from defeat in 1884, or keep the Democratic party in power in 1888. Ideas are stronger than "soap," and principles more potent than spoils. It is due to President Cleveland to state that toward the close of his administration he recognized the importance of permanency in the Railway Mail Service, and that he made a long step in advance by approving a series of rules submitted by the Civil Service Commission having for its object the removal of the service from the influences of politicians. It needs more than this, however; it needs the sanctity of the statute law, declaring that the clerks should not only keep their offices during good behavior, but that after twenty years of faithful and efficient service, or before that time, if injured in the discharge of their duty, they should retire on half-pay. In case of death from accident while on duty, proper provision should be made for the family of the official. Whenever justice is done by Congress in these particulars, the United States will have the best and most efficient Railway Mail Service in the world.
[THE RAILWAY IN ITS BUSINESS RELATIONS.]
By ARTHUR T. HADLEY.
Amount of Capital Invested in Railways—Important Place in the Modern Industrial System—The Duke of Bridgewater's Foresight—The Growth of Half a Century—Early Methods of Business Management—The Tendency toward Consolidation—How the War Developed a National Idea—Its Effect on Railroad Building—Thomson and Scott as Organizers—Vanderbilt's Capacity for Financial Management—Garrett's Development of the Baltimore & Ohio—The Concentration of Immense Power in a Few Men—Making Money out of the Investors—Difficult Positions of Stockholders and Bondholders—How the Finances are Manipulated by the Board of Directors—Temptations to the Misuse of Power—Relations of Railroads to the Public who Use Them—Inequalities in Freight Rates—Undue Advantages for Large Trade Centres—Proposed Remedies—Objections to Government Control—Failure of Grangerism—The Origin of Pools—Their Advantages—Albert Fink's Great Work—Charles Francis Adams and the Massachusetts Commission—Adoption of the Interstate Commerce Law—Important Influence of the Commission—Its Future Functions—Ill-judged State Legislation.
The railroads of the world are to-day worth from twenty-five to thirty thousand million dollars. This probably represents one-tenth of the total wealth of civilized nations, and one-quarter, if not one-third, of their invested capital. It is doubtful whether the aggregate plant used in all manufacturing industries can equal it in value. The capital engaged in banking is but a trifle beside it. The world's whole stock of money of every kind—gold, silver, and paper—would purchase only a third of its railroads.
Yet these facts by no means measure the whole importance of the railroad in the modern industrial system. The business methods of to-day are in one sense the direct result of improved means of transportation. The railroad enables the large establishment to reach the markets of the world with its products; it enables the large city to receive its food-supplies, if necessary, from a distance of hundreds or thousands of miles. And while it thus favors the concentration of capital, it is in itself an extreme type of this concentration. Almost every distinctive feature of modern business, whether good or bad, finds in railroad history at once its chief cause and its fullest development.
George Stephenson.
As befits a nineteenth century institution, the railroad dates from 1801. In that year Benjamin Outram built in the suburbs of London a short line of horse railroad—or tramroad, as it was named in honor of the inventor. Other works of the same kind followed in almost every succeeding year. They were recognized as a decided convenience, but nothing more. It was hard to imagine that a revolution in the world's transportation methods could grow out of this beginning. Least of all could such a result be foreseen in England, whose admirable canal system seemed likely to defy competition for centuries to come. And yet, curiously enough, it was a man wholly identified with canal business who first foresaw the future importance of the railroad. The Duke of Bridgewater had built canals when they were regarded as a hazardous speculation; but they proved a success, and in the early years of the century he was reaping a rich reward for his foresight. One of his fellow-shareholders took occasion to congratulate the Duke on the fact that their property was now the surest monopoly in the land, and was startled by the reply, "I see mischief in these—tramroads." The prophecy is all the more striking as coming from an enemy. Like Balaam, the Duke of Bridgewater had a pecuniary interest in cursing, but was so good a prophet that he had to tell the truth in spite of himself, even though his curse was thereby turned into a blessing.
It is hardly necessary to tell in detail how this prediction was realized. Thanks to the skill and perseverance of George Stephenson, the difficulties in the use of steam as a mode of propulsion were rapidly overcome. What was a doubtful experiment as late as 1815 had become an accomplished fact in 1830. The successful working of the Liverpool & Manchester Railway gave an impulse to similar enterprises all over the world. In 1835 there were 1,600 miles of railroad in operation—more than half of it in the United States. In 1845 the length of the world's railroads had increased to more than 10,000 miles; in 1855 it was 41,000 miles; in 1865, 90,000; in 1875, 185,000; in 1885, over 300,000.
There were perhaps a few men who foresaw this growth; there were almost none who foresaw the changes in organization and business methods with which it was attended. People at first thought of the railroad as merely an improved highway, which should charge tolls like a turnpike or canal, and on which the public should run cars of its own, independent of the railroad company itself. In many cases, especially in England, long sheets of tolls were published, based on the model of canal charters, and naming rates under which the use of the road-bed should be free to all. This plan soon proved impracticable. If independent owners tried to run trains over the same line, it involved a danger of collision and a loss of economy. The former evil could perhaps be avoided; the latter could not. The advantages of unity of management were so great that a road running its own trains could do a much larger business at lower rates than if ownership and carriage were kept separate. The old plan was as impracticable as it would be for a manufacturing company to own the buildings and engines, while each workman owned the particular piece of machinery which he handled. Almost all the technical advantages of the new methods would be lost for lack of system. The railroad company, to serve the public well, could not remain in the position of a turnpike or canal company, but must itself do the work of carriage.
This was not all. The same economy which resulted from the union of road and rolling-stock under one management was still further subserved by the consolidation of connecting lines. This change did not come about so suddenly as the other. Half a century had elapsed before it was fully carried out. At first there was no need of it. The early railroads were chiefly built for local traffic, and especially for the carriage of local passengers. They were like the horse railroads of the present day in the simplicity of their organization and the shortness of their lines. England in 1847 had chartered 700 companies, with an average authorized length of hardly fifteen miles each. The line from Albany to Buffalo and Niagara Falls was in the hands of a dozen independent concerns. These were but types of what existed all over the world. As through traffic, and especially through freight traffic, grew in importance, this state of things became intolerable. Frequent transshipment was at once an expense to the railroad and a burden to the public. Even when this could be avoided, there was a multiplication of offices and a loss of responsibility. The system of ownership and management had to adapt itself to the technical necessities of the business. The change was not the result of legislation; nor was it, except in a limited sense, the work of men like Vanderbilt or Scott. It occurred in all parts of the world at about the same time. It was the result of business necessity, strong enough to shape legislation, and to find administrative leaders who could meet its demands.
From the very first there were some men who felt the importance of the railroads as national lines of communication. The idea was present in the minds of the projectors of the Baltimore & Ohio, of the Erie, and of the Boston & Albany. But it was not until 1850 that it became a controlling one; nor was it universally accepted even then. As late as 1858 we find that there was a violent popular agitation in the State of New York to prohibit the New York Central from carrying freight in competition with the Erie Canal. It was gravely urged that the railroad had no business to compete with the canal; that the latter had a natural right to the through traffic from the West, with which the railroads must not interfere. It is less than thirty years since a convention at Syracuse, representing no small part of the public sentiment of New York, formally recommended "the passage of a law by the next Legislature which shall confine the railroads of this State to the business for which they were originally created."
But matters had gone too far for effective action of this kind. Besides the New York Central, the Erie and the Pennsylvania were in condition to handle the through traffic which Western connections were furnishing. These connections themselves were rapidly growing in importance. Prior to 1850 there were very few railroads west of the Alleghanies. In 1857 there were thousands of miles. The policy of land-grants acted as an artificial stimulus to the building of such roads; and a land-grant road, when once built, was almost necessarily dependent on through traffic for its support. It could not be operated locally; it was forced into close traffic arrangements which paved the way for actual consolidation.
The war brought this development to a stand-still for the time being; but it was afterward resumed with renewed vigor. It is probable that the final effect of the war was to hasten rather than to retard the growth of large systems. In the first place, it familiarized men's minds with national ideas instead of those limited to their own State. It is hard for us to realize that our business ideas were ever thus confined by artificial boundaries; but if we wish proof, we have only to look at the original location of the Erie Railway from Piermont to Dunkirk. Both were unnatural and undesirable terminal points; but people were willing to submit to inconvenience and to actual loss in order that the railroad might run as far as the New York State limits would allow, and not one whit farther. Similar instances can be found in other States. Hard as it is to understand, there seems to have been a positive jealousy of interstate traffic. The war did much to remove this by making the different sections of the country feel their common interest and their mutual dependence. It also had more direct effects. It produced special legislation for the Pacific railroads as a measure of military necessity; and this was but the beginning of a renewal of the land-grant policy, no longer through the medium of the States, but in the Territories and by the direct action of Congress. All the results in the way of extension or consolidation which had been noted in the first land-grant period were more intensely felt in the second. Never was there a time when business foresight and administrative power were more needed or more richly rewarded than in railroad management during the third quarter of the century.
J. Edgar Thomson.
In 1847 J. Edgar Thomson, an engineer of experience, entered the service of the Pennsylvania Railroad, of which he afterward became president. Three years later, a young man without experience in railroad business applied to him for a position as clerk in the station at Duncansville, and was, with some hesitation, accepted. Not long after—so runs the story—an influential shipper entered the station, and demanded that some transfers should be made in a manner contrary to the rules of the company. This the clerk refused to do; and when the influential shipper tried to attend to the matter himself, he was forcibly ejected from the premises. Indignant at this, he complained to the authorities, demanding that the obnoxious employee be removed from his position. He was—and was promoted to a much higher one. This is said to have been the beginning of the railroad career of Thomas Alexander Scott. Edgar Thomson was a sufficiently able man to appreciate Scott's talent at its full worth, and took every opportunity to make it useful in the service of the company. Both before and after the war the system was extended in every direction; and the man who in 1850 had need of all his nerve to defy a single influential shipper was a quarter of a century later at the head of 7,000 miles of the most valuable railroad in the country.
Thomas A. Scott.
As an enterprising and active railroad organizer, Scott was probably unrivalled—especially when aided by the soberer judgment of Thomson; nor has the operating department of any other railroad in the country reached the standard established on the Pennsylvania by Scott and Thomson and the men trained up under their eyes. But in business sagacity and those qualities which pertain to the financial management of property, Scott was surpassed by Vanderbilt. The work of the two men was so totally different in character that it is hard to compare them. Vanderbilt was not so distinctively a railroad man as Scott. He had already made his mark as a ship-owner before he went into railroads. But he was a man who was bound to take the lead in the business world; and he saw that the day for doing it with steamships was passing away, and that the day of railroads was come. He therefore presented his best steamship to the United States Government in a time when it was sorely needed, disposed of the others in whatever way he could, and turned his undivided attention to railroads.
In 1863 Vanderbilt began purchasing Harlem stock on a large scale. The road was unprofitable, but he at once improved its management and made it pay. Speculators on the other side of the market had not foreseen the possibility of this course of action, and were badly deceived in their calculations. Vanderbilt had begun buying at as low a figure as 3; within little more than a year he had forced some of its opponents to buy it of him at 285. He soon extended his operations to Hudson River, and somewhat later to New York Central. Defeated in an attempt to gain control of Erie, he turned his attention farther west; and was soon in virtual possession of a system which, in his hands at any rate, was fully a match for all competitors.
These systems did not long remain without rivals. The Baltimore & Ohio, whose development had been interrupted by the war, soon resumed, under the leadership of John W. Garrett, its old commanding position in the railroad world. Farther west, in the years succeeding, systems were developed and consolidated which surpassed their eastern connections in aggregate mileage. The combined Wabash and Missouri Pacific system in its best days included about 10,000 miles of line under what was virtually a single management. The Southern Pacific, the Atchison, the Northwestern, and the St. Paul systems control each of them in one way or another decidedly over 5,000 miles; and a half-dozen others might be named, scarcely inferior either in magnitude or in commercial power.
The result of all this was to place an enormous and almost irresponsible power in the hands of a few men. The directors of such a system stand for thousands of investors, tens of thousands of employees, and hundreds of thousands of shippers. They have the interests of all these parties in their hands for good or ill. If they are fit men for their places, they will work for the advantage of all. A man like Vanderbilt gave higher profits, larger employment, and lower rate as the result of his railroad work. But if the head of such a system is unfit for his trust intellectually or morally, the harm which he can do is almost boundless.
Cornelius Vanderbilt.
Of intellectual unfitness the chance is perhaps not great. The intense competition of the modern business world makes sure that any man, to maintain his position, must have at least some of the qualities of mind which it exacts. But of moral unfitness the danger is all the greater, because some of the present conditions of business competition directly tend to foster it. A German economist has said that the so-called survival of the fittest in modern industry is really a double survival, side by side, of the most talented on the one hand and the most unscrupulous on the other. The truth of this is already apparent in railroad business. A Vanderbilt on the Central meets a Fisk on the Erie. In spite of his superior power and resources he is virtually beaten in the contest—beaten, as was said at the time, because he could not afford to go so close to the door of State's prison as his rival.
The manager of a large railroad system has under his control a great deal of property besides his own—the property of railroad investors which has been placed in his charge. Two lines of action are open to him. He may make money for the investors, and thereby secure the respect of the community; or he may make money out of the investors, and thereby get rich enough to defy public opinion. The former course has the advantage of honesty, the latter of rapidity. It is a disgrace to the community that the latter way is made so easy, and so readily condoned. A man has only to give to charitable objects a little of the money obtained by violations of trust, and a large part of the world will extol him as a public benefactor. Nay, more; it seems as if some of our financial operators really mistook the vox populi for the vox Dei, and believed that a hundred thousand dollars given to a theological seminary meant absolution for the past and plenary indulgence for the future. It is charged that one financier, when he undertook any large transaction which was more than usually questionable, made a covenant that if the Lord prospered him in his undertaking he would divide the proceeds on favorable terms. But—as Wamba said of the outlaws and "the fashion of their trade with Heaven"—"when they have struck an even balance, Heaven help them with whom they next open the account!"
A word or two as to the methods by which such operations are carried on, and the system which makes them possible. From the very first, railroads have been built and operated by corporations. A number of investors, too large to attend personally to the management of the enterprise, took shares of stock and elected officers to represent them. These officers had almost absolute power; but while matters were in this simple stage, there was no great opportunity for its abuse. The losses of investors were due to bona fide errors of judgment rather than to misuse of power. But soon the corporations found it convenient to borrow money by mortgaging their property. We then had two classes of investors—stockholders and bondholders, the former taking the risks and having the full control of the property, the latter receiving a relatively sure though perhaps smaller return, but having no control over the management as long as their interest was regularly paid.
Of course there is always some danger when the men who furnish the money do not have much control of the enterprise; but as long as the relations of stock and bonds were in practice what they pretended to be in theory, the resulting evils were not very great. Matters soon reached another stage. The amount of money furnished by the bondholders increased out of all proportion to that furnished by the stockholders. Sometimes the nominal amount of stock was unduly small; more commonly only a very small part of the nominal value was ever paid in.[28] The stock was nearly all water, simply issued by the directors as a means of keeping control of the property. After the crisis of 1857, people had become shy of buying railroad stock; but they bought railroad bonds because they thought they were safe. This was the case only when there was an actual investment of stockholders behind them; without this assurance, bonds were more unsafe than stock had been, because the bondholders had still less immediate control over the directors and officials. If there was money to be made at the time, the directors made it; if there was loss in the end, it fell upon the bondholders.
Let us take a specific case. An inside ring issues stock certificates to the value of a million dollars, on which perhaps a hundred thousand is paid in. They then publish their prospectus and place on the market two million of bonds with which the road is to be built. They sell the bonds at 80, reimburse themselves for the $100,000 advanced by charging the moderate commission of 5 per cent. for services in placing the loan, and have at their disposal $1,500,000 cash. These same directors now appear as a construction company, and award themselves a contract to pay $1,500,000 for work which is worth $1,200,000 only. The road is finished, and probably does not pay interest on its bonds. It passes into the hands of a receiver. Possibly the old management may have an influence in his appointment. At the worst, they have got back all the money they put in, plus the profits of the construction company; in the case supposed, 300 per cent. The bondholders, on the other hand, have paid $1,600,000 for a $1,200,000 road.
John W. Garrett.
But the troubles of the bondholders and the advantages of the old directors by no means end here. When the receiver takes possession he discovers that valuable terminals, necessary for the successful working of the road, are not the property of the company, but of the old directors. He finds that the road owns a very inadequate supply of rolling-stock, and that the deficiency has been made up by a car-trust—also under the control of the old directors. Each of these things, and perhaps others, must be made the subject of a fight or of a compromise. The latter is often the only practicable alternative, and almost always the cheaper one; by its terms the ring perhaps secures hundreds of thousands more, at the expense of the actual investors.
These are but a few of the many ways in which a few years' control of property may be made profitable to the officials at the expense of legitimate interests. In a case like this, all depends upon the possibility of selling bonds. It is usually impossible to place the whole loan before construction; and if the market-price falls below the cost of the work undertaken, as was the case with the West Shore, the loss falls upon the construction company. Such accidents were for a long time rare. It took the public nearly twenty years to learn the true character of imperfectly secured railroad bonds. Within the past five years it seems to have become a trifle wiser. The crisis of 1873 was insufficient to teach the lesson; but that of 1885 has been at least partially successful in this respect.
In cases like the one just described the bondholders are largely to blame for their own folly. But sometimes the loss falls on those who are in no way responsible for it. A railroad may be built as a blackmailing job. If a company is sound and prosperous, speculators may be tempted to build a parallel road, not with the idea of making it pay, but because they can so damage the business of the old road as to force it to buy them out. They build the road to sell.
It is but fair to say that operations as bad as those just described are the exception rather than the rule. But the fact that they can exist at all is by no means creditable to our financial methods. The whole system by which directors can use their positions of trust to make contracts in which they are personally interested puts a premium on dishonesty. Such contracts are forbidden in England. It may be true, as is urged by many railroad officials of undoubted honesty, that it would be inconvenient to apply the same law here; but on the whole, the gain would far outweigh the loss.
At the very best, a railroad president is subject to temptations to misuse his financial powers, all the more dangerous because it is impossible to draw the line between right and wrong. He knows the probable value of his railroad and of the property affected by its action a great deal better than any outsider possibly can. The published figures of earnings of the road are the result of estimates by himself and his subordinates. Out of the current earnings he pays current expenses, and probably charges permanent expenditures to capital account. But what expenditures are current and what are permanent? This division is itself the result of an estimate, and a very doubtful one at that. There are some well-established general principles, but none which will apply themselves automatically. With the best will in the world he cannot make his annual reports give a thoroughly clear idea of what has been done. Is he to be forbidden to buy stock when it seems too low, or sell it when it is high? Shall we refuse him the right to invest in other property which he sees will advance in value? Apparently not; and yet, if we allow this, we open the door for some of the worst abuses of power which have occurred in railroad history. The line between good faith and bad faith in these matters is a narrow one, and the average conscience cannot be trusted to locate it with accuracy.
But the relations to the investors cover but a small part either of the work or of the responsibility of the railroad authorities. They are managing not merely a piece of property, but a vast and complicated organization of men, and an instrument of public service. In all these capacities their cares are equally great. The operating and the traffic departments are not less important than the financial department. The relations of the railroad to its employees, and to the business community at large, are even more perplexing than its relations to the investors.
Of the questions arising between the railroad and its employees we are just beginning to realize the full importance. They are not matters to be settled by private agreement or private war. If they involve a serious interruption of the business of the community they concern public interests most vitally. The community cannot afford to have its business interrupted by railroad strikes. On the other hand, it cannot allow the men to make this public duty of the railroads a means of enforcing their own will on every occasion, to the detriment of all discipline and responsibility, or in disregard of investors' rights. How to compromise between these two conflicting requirements is one of the most serious problems of the immediate future.[29] Little progress in this direction has as yet been made, or even systematically attempted.
The questions arising from the relations of the railroads to those who use them are wider and older. From the very outset attempts were made to regulate railroad charges by law in various ways. The fear at that time was that they might be made unreasonably high. This fear proved groundless. From the outset the rates were rather lower than had been expected, and much lower than by many of the means of transportation which railroads superseded. These low rates caused a great development in business; and this, in turn, gave a chance for such economy in handling it that rates went still lower. Each new invention rendered it easier to do a large business at cheap rates. The substitution of steel rails for iron, which began shortly after the close of the war, had an enormous influence in this respect. This was not merely due to the direct saving in repairs, which, though appreciable, was moderate in amount. It was due still more to improvements in transportation which followed. It was found that steel rails would bear heavier rolling-stock. Instead of building ten-ton cars to carry ten tons of cargo, companies built twelve-ton cars to carry twenty tons of cargo, or fourteen-ton cars to carry thirty tons; and they made the locomotives heavy enough to handle correspondingly larger trains. A given amount of fuel was made to haul more weight; and of the weight thus hauled, the freight formed a constantly increasing proportion as compared with the rolling-stock itself. The system of rates was adopted to meet the new requirements. Charges were made incredibly low in order to fill cars that would otherwise go empty, or to use the road as nearly as possible to its full capacity. In the twenty years following the introduction of steel rails the traffic of the New York Central increased from less than 400,000,000 ton-miles to decidedly over 2,000,000,000; while the average rates fell from 3.09 cents per ton per mile in 1866 to 0.76 cent in 1886. This is but a single instance of a process which has gone on all over the country. The average freight charge on all railroads of the country to-day is a little over one cent per ton a mile: less than half what would have been deemed possible on any railroad a few years ago.
The progress of railroad consolidation contributed greatly to this economy. It saved multiplication of offices; it saved re-handling of freight; it enabled long-distance business to be done systematically. So great were its advantages that co-operation between connecting lines was carried far beyond the limits of actual consolidation. Through traffic was handled without transshipment, sometimes by regularly incorporated express companies or freight companies on the same plan, but more commonly by what are known as fast-freight lines.[30] These are little more than combinations for keeping account of through business; they are by no means ideal in their working, but they have the advantage of few expenses and no income, so that the temptation to steal, which is the bane of such organizations, is here reduced to a minimum.
But all these things, while they increased the efficiency of the service, also increased the power of the railroad authorities and rendered the shipper more helpless. The very cheapness of rates only made a recourse to other means of transportation more difficult. If A was charged 30 cents while his competitor B was paying only 20 cents for the same service, he was worse off than when they were both paying a dollar; and the fact that no other means of conveyance could be found to do the work for less than a dollar simply put A all the more completely at the mercy of the railroad freight-agent. In other words, the fact that rates were so low made any inequality in rates all the more dangerous. The lower the rate and the wider the monopoly, the less was the chance of relief.
Such inequalities existed on a large scale: and they were all the more difficult to deal with because there was a certain reason for some of them arising from the nature of railroad business. The expenses of a railroad are of two kinds. Some, like train and station service, locomotive fuel, or repairs of rolling-stock, are pretty directly chargeable to the different parts of the traffic. It costs a certain amount in wages and in materials to run a particular train; if that train is taken off, that part of the expense is saved. But there is another class of items, known as fixed charges, that do not vary with the amount of business done. Interest on bonds must be paid, whether the volume of traffic be large or small. The services of track-watchmen must be paid for, whether there be a hundred trains daily or only a dozen. In short, most of the expenses for interest and maintenance of way are chargeable to the business as a whole, but not to particular pieces of work done. The practical inference from this is obvious. In order that the railroad as a whole may be profitable, the fixed charges must be paid somehow. The railroad manager will try to get them as he can from different parts of his traffic. But if, for any reason, a particular piece of business cannot or will not pay its share of the fixed charges, it is better to secure it at any price above the bare expense of loading and hauling, without regard to the fixed charges. For if the business is lost, these charges will run on just the same, without any added means of meeting them.
The consequence is that there is no natural standard of rates; or, rather, that there are two standards, so far apart that the difference between the two is quite sufficient to build up one establishment or one locality and ruin another, in case of an arbitrary exercise of power on the part of the freight-agent. In the use of such a power it was inevitable that there should be a great many mistakes, and some things which were worse than mistakes. Colbert once cynically defined taxation as "the art of so plucking the goose as to secure the largest amount of feathers with the least amount of squealing." Some of our freight-agents have taken Colbert's tax theories as a standard, and have applied them only too literally. It is this short-sighted policy which has made the system of charging "what the traffic will bear" a synonyme for extortion. Interpreted rightly, this phrase represents a sound principle of railroad policy—putting the burden of the fixed charges on the shipments that can afford to pay them. But practically—in the popular mind at least—it has come to mean almost exactly the opposite.
The points which got the benefit of the lowest rates were the large trade centres, which had the benefit of competing lines of railroad, and often of water competition also. The threat to ship goods by a rival route was the surest way of making a freight-agent give low rates. The result was that the growth of such places was specially stimulated. In addition to their natural advantages they had an artificial one due to the policy of competing lines of railroad. It may well be the case, as is argued by railroad men, that sound railroad economy demands that goods in large masses should be carried much more cheaply than those which are furnished in smaller quantities. But it is certain the practice went far beyond the limits of any such justification. There was a time when cattle were carried from Chicago to New York at a dollar a car-load; and many other instances, scarcely less marked, could be cited from the history of trunk-line competition. The fact was, that in an active railroad war freight-agents would generally accede to a demand for reduced rates at a competing point, whether well founded or not, and would almost always turn a deaf ear to similar demands from local shippers, however strongly supported by considerations of far-sighted business policy.
But this was not the worst. Inequalities between different places might after some hardship correct themselves; differences of treatment between individuals could not be thus adjusted. And the system of making rates by special bargain almost always led to differences between individuals, where favors were too often given to those who needed or deserved them least. The fluctuation of rates was first taken advantage of by the unscrupulous speculator. Often, if he controlled large sources of shipment, he might receive the benefit of a secret agreement by which he could obtain lower rates than his rivals under all circumstances. A more effective means for destroying straightforwardness in business dealings than the old system of special rates was never devised. Sometimes, where one competitor was overwhelmingly strong, the pretence of secrecy was thrown aside, and the railroad companies so far forgot their public duties as almost openly to assist one concern in crushing its rivals. The state of things in this respect twelve or fifteen years ago was so bad that it is painful to dwell upon; but the reformation to-day is not so complete that we can wash our hands of past sins.
Less was said or felt of similar evils in passenger traffic, because the passenger business of the country generally is of much less importance than its freight business, either to the railroad investors or to the producers themselves. But there was the same fluctuation in passenger rates; and there was an outrageous form of discrimination in the development of the free-pass system; a practice which would have fully deserved the name of systematic bribery, had it not become so universal that most men hardly recognized any personal obligation connected with the acceptance of a pass. Officials and other citizens of influence had come to regard it as a right; it was not so much bribery on the part of the companies as blackmail levied against them.
The remedies proposed for all these evils have been various. From the very beginning until now there have been some who held that such abuses could be avoided only by State railroad ownership. Such experiments in the United States have not gone far enough to furnish conclusive evidence either way; but the experience of other countries indicates that State railroads, as such, do not avoid these evils. Where they have been worked in competition with other lines, they have been as deeply involved in these abuses as their private competitors—perhaps more so. Where the government has obtained control of all the railroads of the country, and made such arrangements with the water-routes as to render competition impossible, the abuses have vanished, because there was no longer any conceivable motive to continue them. But this was the result of the monopoly, not of the State ownership; and the advantage was purchased by a sacrifice of all the stimulus of competition toward the development of new facilities.
Many people assume that, because the government represents the nation as a whole, therefore government officials will not be under the same temptations to act unjustly which are felt by the representatives of a private corporation. This is a mistake. It is not as representatives of the investor that railroad agents do much injustice; this motive has practically nothing to do with it. Most of the abuses complained of are positively injurious to the investor in the long run. When officials really represent the interests of the property with wise foresight, they, as a rule, give the public no ground to complain. The question reduces itself to this: Will the State choose better representatives and agents than a private corporation? Will it secure a higher grade of officials, more competent, more honest, and more enterprising? The difference between state and private railroads is not so much on matters of policy as on methods of administration. The success of government administration varies with different countries. In Prussia, where it is seen at its best, the results are in some respects remarkably good; yet even here the roads are not managed on anything like the American standard of efficiency, either in amount of train service, in speed, or in rapidity of development. And what is barely successful in Prussia, with its trained civil service on the one hand and its less intense industrial demands on the other, can hardly be considered possible or desirable in America. No one who has watched the workings of a government contract can desire to have the whole trade of the country put to the expense of supporting such methods in its transportation business.
A more easy method of trying to regulate railroad charges has been by forced reductions in rates. This was tried on the largest scale in the Granger movement fifteen years ago. A fall in the price of wheat had rendered it difficult for the farmers to make money. The Patrons of Husbandry, in investigating the causes, saw that the larger trade centres, where there was competition, were getting lower rates than the local producer. They reasoned that if all the farmers could get such low rates, they could make money; and that, if the roads could afford to make these low rates for any points, they could afford to do it for all. The railroad agents, instead of foreseeing the storm and trying to prevent it, assumed a defiant attitude. The result was that legislatures of the States in the upper Mississippi Valley passed laws of more or less rigidity, scaling down all rates to the general level of competitive ones. After a period of some doubt, the right of the States to do this was admitted by the courts. But before the legal possibility had been decided, the practical impossibility of such a course had been shown. If all rates were reduced to the level of competitive ones, it left nothing to pay fixed charges. On such terms, foreign capital would not come into the State; nor could it be enticed by such a clumsy effort as that of one of the States, which provided "that no road hereafter constructed shall be subject to the provisions of this act." The goose which laid the golden eggs was not such a goose as to be deceived by this. The untimely death of several of her species meant more than any promises of immunity to those who should follow in her footsteps. In those States which had passed the most severe laws capital would not invest; railroads could not pay interest, their development stopped, and the growth of the community was seriously checked thereby. The most obnoxious laws were either repealed or allowed to remain in abeyance. Where the movement was strongest in 1873 it had practically spent its force in 1876. There have been many similar attempts in all parts of the country since that time; just now they are peculiarly active; but nothing which approaches in recklessness some of the legislation of 1873 and 1874. The lesson was at least partly learned.
We had hardly passed the crisis of the effort to level down, when some of the more intelligent railroad men made an effort to level up. Recognizing that discriminations and fluctuating rates were an evil, they sought to avoid it by common action with regard to the business at competing points. A mere agreement as to rates to be charged was not enough to secure this end. Such an agreement was sure to be violated. Even if the leading authorities meant to observe it, their agents could always evade its requirements to some extent. Such evasion was favored by loose arrangements between connecting roads, and by the somewhat irresponsible system of fast freight lines. Wherever it existed, it gave rise to mutual suspicion. A believed that his road did it because he could not help it, but that B and C were allowing their roads to do it maliciously; while B and C had the same consciousness of individual rectitude and the same unkind suspicions with regard to A. It was at best a rather hollow truce, which did not really accomplish its purpose, and which might change to open war on very slight provocation.
To avoid this difficulty a pool, or division of traffic, was arranged. It is a fact that, whatever wars of rates there may be, the percentage of traffic carried by the different lines varies but little. If an arbitrator can examine the books and decide what these percentages have been in the past, he can make an award for the future, under which the competitive traffic of the different roads may be fairly divided. The arrangements for doing this are various. Sometimes the roads carry such traffic as may happen to be offered, and settle the differences with one another by money balances; sometimes they actually divert traffic from one line to another. But the advantage of either of these arrangements over a mere agreement to maintain rates is that they cannot be violated without direct action on the part of the leading authorities of the roads concerned—either in open withdrawal, or in actual bad faith. The ordinary irregularities of agents do not, under a pooling system, give rise to much suspicion, because they do not benefit the road in whose behalf they are undertaken. Its percentage being fixed there is no motive for rate-cutting. So great is this advantage that pooling is accepted in almost all other countries as a natural means of maintaining equality of rates; the state railroads of Central Europe entering into such contracts with competing private lines and even with water-routes. In America itself, pools have had a longer and wider history than is generally supposed. In New England they arose and continued to exist on a moderate scale without attracting much attention. In the Mississippi Valley, the Chicago-Omaha pool was arranged as early as 1870, and formed the model for a whole system of such arrangements extending as far as the Pacific Coast. But, as involving wider questions of public policy, the activity of the Southern and the Trunk Line Associations has attracted chief attention.
The man whose name is most prominently identified with both these systems is Albert Fink. A German by birth and education, his long experience as a practical railroad engineer did not deprive him of a taste for studying traffic problems on their theoretical side. As Vice-President of the Louisville & Nashville, he had given special attention to the economic conditions affecting the Southern roads; and when, in the years 1873–75, a traffic association was formed by a number of these roads to secure harmony of action on matters of common interest, he became the recognized leader. His success in arrangements for through traffic was so conspicuous that when, in 1877, the trunk lines were exhausted with an unusually destructive war of rates, they looked to him as the only man who could deliver them from their trouble. In some lines, division of traffic had already been resorted to; but it was in the hands of outside parties, like the Standard Oil Company or the cattle eveners, and was made a means of oppression against shippers not in the combination itself.
Albert Fink.
The conditions were not favorable; the result of Fink's efforts to bring order out of chaos was slow and by no means uninterrupted. Yet on the whole, as was admitted even by opponents of the pooling system, it contributed to steadiness and equality of rates. The arrangement of these agreements was hampered by their want of legal status. While the law did not at that time actually prohibit them, it refused to enforce them. Existing thus on sufferance, they depended on the good will of the contracting parties. None but a man of Fink's unimpeached integrity and high intellectual power could have kept matters running at all; and even he could not prevent the adoption of a policy of making hay while the sun shines, more or less regardless of the future. The results of the trunk-line pool were unsatisfactory—most of all to those who believed in pools as a system; but it is fair to attribute a large part of this failure to the absence of legal recognition, which in a manner compelled the agreements to be arranged to meet the demands of the day rather than of the future.
Meantime an equally important contribution to the solution of the railroad question was being worked out in another quarter. In the year 1869 the Massachusetts Railroad Commission was established. Its powers were so slight that it was not regarded as likely to be an influential public agency. Fortunately it numbered among its members Charles Francis Adams, Jr.; a man whose efficiency more than made up for any want of nominal powers. In his hands the mere power to report became the most effective of all weapons. Representing at once enlightened public judgment and far-sighted railroad policy, he did much to bring the two into harmony and protect the legitimate interests on both sides from short-sighted misuse for the benefit of either party. The detail of his work is matter of past history; perhaps its most prominent result was to introduce to State legislation the idea of a railroad commission as an administrative body. Those States which had no stringent laws appointed commissions to take their place; those which had overstringent ones appointed commissions to use discretion in applying them. In either case, the existence of a body of men representing the State, but possessing the technical knowledge to see what the exigencies of railroad business demanded, was a protection to all parties concerned.
Charles Francis Adams.
But matters were rapidly passing beyond the sphere of State legislation. Each new consolidation of systems, each additional development of through traffic, made it more impossible to control railroad policy by the action of individual States. It could only be done by a development of the law in the United States courts or by Congressional legislation. The former result was necessarily slow; each year showed an increased demand for special action on the part of Congress. But such action was hindered by divergence of opinion in that body itself. One set of men wished a moderate law, prohibiting the most serious abuses of railroad power, and enforced under the discretionary care of a commission. These men were for the most part not unwilling to see pools legalized if their members could thereby be held to a fuller measure of responsibility. On the other hand, the extremists wished to prescribe a system of equal mileage rates; they would hear of no such thing as a commission, and hated pools as an invention of the adversary. Between the two lay a large body of members who had no convictions on the matter, but were desirous to please everybody and offend nobody—a hard task in this particular case. It was nearly nine years from the time Mr. Reagan introduced his first bill when a compromise was finally effected—largely by the influence of Senator Cullom. As compromises go, it was a tolerably fair one. The extremists sacrificed their opposition to a commission, but secured the prohibition of pools; the disputed points with regard to rates were left in such a shape that no man knew what the law meant, and each was, for the time being, able to interpret it to suit the wishes of his Congressional district.
The immediate effects of the law were extremely good. There were certain sections of it, like those which secured publicity of rates and equal treatment for different persons in the same circumstances, whose wisdom was universally admitted. Indeed it was rather a disgrace, both to the railroad agents and to the courts, that we had to wait for an act of Congress to secure these ends; and most of the railroads made up for past remissness in this respect by quite a spasm of virtue. In some instances it was even thought that they "stood up so straight as to lean over backward." But this was not the only part of the law which proved efficient. The very vagueness of the clause concerning the relative rates for through and local traffic, which under other circumstances might have proved fatal, put a most salutary power into the hands of the Interstate Commerce Commission, and one which they were not slow to use.
Thomas M. Cooley.
The President was fortunate in his selection of commissioners; above all in the chairman, Judge T. M. Cooley, of Michigan, a man whose character, knowledge of public law, and technical familiarity with railroad business made him singularly well fitted for the place. The work of the Interstate Commission, like that of its Massachusetts prototype, shows how much more important is personal power than mere technical authority. It was supposed at first that the commission would be a purely administrative body, with discretion to suspend the law. Instead of this, they have enforced and interpreted it; and in the process of interpretation have virtually created a body of additional law, which is read and quoted as authority. With but little ground for expecting it from the letter of the act, they have become a judicial body of the highest importance. Their existence seems to furnish a possibility for an elastic development of transportation law, neither so weak as to be ineffective nor so strong as to break by its own rigidity.
But the final test of their success is yet to come. They have laid down a few principles as to the cases when competition justifies through rates lower than those at intermediate points. But the application of these principles is as yet far from settled; and it is rendered doubly hard by the clause against pools, which does much to hamper the roads in any attempt to secure common action on the matter of through rates. Each ill-judged piece of State legislation, and each reckless attempt to attack railroad profits, increases the difficulty. There was a time when the powers of railroad managers were developed without corresponding responsibility. In many parts of the country we are now going to the other extreme—increasing the responsibility of railroad authorities toward shipper and employees, State law and national commission, and at the same time striving to restrict their powers to the utmost. Such a policy cannot be continued indefinitely without a disastrous effect upon railroad service, and, indirectly, upon the business of the country as a whole.