The Chicago, Burlington, and Quincy (report of December, 1886) was operating 4036 miles of road. Its only eccentric development was the recent Burlington and Northern, up the Mississippi River to St. Paul. Its main stem from Chicago branches out over northern and western Illinois, runs down to St. Louis, from thence to Kansas City by way of Hannibal, has a trunk line to Omaha, criss-crosses northern Missouri and southern Iowa, skirts and pierces Kansas, and fairly occupies three-quarters of Nebraska with a network of tracks, sending out lines north of the Platte, and one to Cheyenne and one to Denver. The whole amount of stock and bonds, December, 1886, was reported at $155,920,000. The gross earnings for 1886 were over twenty-six millions (over nineteen of which was for freight and over five for passengers), operating expenses over fourteen millions, leaving over twelve millions net earnings. The system that year paid eight per cent, dividends (as it had done for a long series of years), leaving over fixed charges and dividends about a million and a half to be carried to surplus or construction outlays. The equipment for the year required 619 engines and over 24,000 cars. These figures do not give the exact present condition of the road, but only indicate the magnitude of its affairs.
Both these great systems have been well managed, and both have been, and continue to be, great agents in developing the West. Both have been profitable to investors. The comparatively small cost of building roads in the West and the profit hitherto have invited capital, and stimulated the construction of roads not absolutely needed. There are too many miles of road for capitalists. Are there too many for the accommodation of the public? What locality would be willing to surrender its road?
It is difficult to understand the attitude of the Western Granger and the Western Legislatures towards the railways, or it would be if we didn’t understand pretty well the nature of demagogues the world over. The people are everywhere crazy for roads, for more and more roads. The whole West we are considering is made by railways. Without them the larger part of it would be uninhabitable, the lands of small value, produce useless for want of a market. No railways, no civilization. Year by year settlements have increased in all regions touched by railways, land has risen in price, and freight charges have diminished. And yet no sooner do the people get the railways near them than they become hostile to the companies; hostility to railway corporations seems to be the dominant sentiment in the Western mind, and the one most naturally invoked by any political demagogue who wants to climb up higher in elective office. The roads are denounced as “monopolies”—a word getting to be applied to any private persons who are successful in business—and their consolidation is regarded as a standing menace to society.
Of course it goes without saying that great corporations with exceptional privileges are apt to be arrogant, unjust, and grasping, and especially when, as in the case of railways, they unite private interests and public functions, they need the restraint of law and careful limitations of powers. But the Western situation is nevertheless a very curious one. Naturally when capital takes great risks it is entitled to proportionate profits; but profits always encourage competition, and the great Western lines are already in a war for existence that does not need much unfriendly legislation to make fatal. In fact, the lowering of rates in railway wars has gone on so rapidly of late years that the most active Granger Legislature cannot frame hostile bills fast enough to keep pace with it. Consolidation is objected to. Yet this consideration must not be lost sight of: the West is cut up by local roads that could not be maintained; they would not pay running expenses if they had not been made parts of a great system. Whatever may be the danger of the consolidation system, the country has doubtless benefited by it.
The present tendency of legislation, pushed to its logical conclusion, is towards a practical confiscation of railway property; that is, its tendency is to so interfere with management, so restrict freedom of arrangement, so reduce rates, that the companies will with difficulty continue operations. The first effect of this will be, necessarily, poorer service and deteriorated equipments and tracks. Roads that do not prosper cannot keep up safe lines. Experienced travellers usually shun those that are in the hands of a receiver. The Western roads of which I speak have been noted for their excellent service and the liberality towards the public in accommodations, especially in fine cars and matters pertaining to the comfort of passengers. Some dining cars on the Omaha system were maintained last year at a cost to the company of ten thousand dollars over receipts. The Western Legislatures assume that because a railway which is thickly strung with cities can carry passengers for two cents a mile, a railway running over an almost unsettled plain can carry for the same price. They assume also that because railway companies in a foolish fight for business cut rates, the lowest rate they touch is a living one for them. The same logic that induces Legislatures to fix rates of transportation, directly or by means of a commission, would lead it to set a price on meat, wheat, and groceries. Legislative restriction is one thing; legislative destruction is another. There is a craze of prohibition and interference. Iowa has an attack of it. In Nebraska, not only the Legislature but the courts have been so hostile to railway enterprise that one hundred and fifty miles of new road graded last year, which was to receive its rails this spring, will not be railed, because it is not safe for the company to make further investments in that State. Between the Grangers on the one side and the labor unions on the other, the railways are in a tight place. Whatever restrictions great corporations may need, the sort of attack now made on them in the West is altogether irrational. Is it always made from public motives? The legislators of one Western State had been accustomed to receive from the various lines that centred at the capital trip passes, in addition to their personal annual passes. Trip passes are passes that the members can send to their relations, friends, and political allies who want to visit the capital. One year the several roads agreed that they would not issue trip passes. When the members asked the agent for them they were told that they were not ready. As days passed and no trip passes were ready, hostile and annoying bills began to be introduced into the Legislature. In six weeks there was a shower of them. The roads yielded, and began to give out the passes. After that, nothing more was heard of the bills.
What the public have a right to complain of is the manipulation of railways in Wall Street gambling. But this does not account for the hostility to the corporations which are developing the West by an extraordinary outlay of money, and cutting their own throats by a war of rates. The vast interests at stake, and the ignorance of the relation of legislation to the laws of business, make the railway problem to a spectator in Chicago one of absorbing interest.
In a thorough discussion of all interests it must be admitted that the railways have brought many of their troubles upon themselves by their greedy wars with each other, and perhaps in some cases by teaching Legislatures that have bettered their instructions, and that tyrannies in management and unjust discriminations (such as the Inter-State Commerce Law was meant to stop) have much to do in provoking hostility that survives many of its causes.
I cannot leave Chicago without a word concerning the town of Pullman, although it has already been fully studied in the pages of Harper’s Monthly. It is one of the most interesting experiments in the world. As it is only a little over seven years old, it would be idle to prophesy about it, and I can only say that thus far many of the predictions as to the effect of “paternalism” have not come true. If it shall turn out that its only valuable result is an “object lesson” in decent and orderly living, the experiment will not have been in vain. It is to be remembered that it is not a philanthropic scheme, but a purely business operation, conducted on the idea that comfort, cleanliness, and agreeable surroundings conduce more to the prosperity of labor and of capital than the opposites.
Pullman is the only city in existence built from the foundation on scientific and sanitary principles, and not more or less the result of accident and variety of purpose and incapacity. Before anything else was done on the flat prairie, perfect drainage, sewerage, and water supply were provided. The shops, the houses, the public buildings, the parks, the streets, the recreation grounds, then followed in intelligent creation. Its public buildings are fine, and the grouping of them about the open flower-planted spaces is very effective. It is a handsome city, with the single drawback of monotony in the well-built houses. Pullman is within the limits of the village of Hyde Park, but it is not included in the annexation of the latter to Chicago.
It is certainly a pleasing industrial city. The workshops are spacious, light, and well ventilated, perfectly systematized; for instance, timber goes into one end of the long car-shop and, without turning back, comes out a freight car at the other, the capacity of the shop being one freight car every fifteen minutes of the working hours. There are a variety of industries, which employ about 4500 workmen. Of these about 500 live outside the city, and there are about 1000 workmen who live in the city and work elsewhere. The company keeps in order the streets, parks, lawns, and shade trees, but nothing else except the schools is free. The schools are excellent, and there are over 1300 children enrolled in them. The company has a well-selected library of over 6000 volumes, containing many scientific and art books, which is open to all residents on payment of an annual subscription of three dollars. Its use increases yearly, and study classes are formed in connection with it. The company rents shops to dealers, but it carries on none of its own. Wages are paid to employés without deduction, except as to rent, and the women appreciate a provision that secures them a home beyond peradventure.