In the old days, railways competed fiercely against one another, and were virtually a law unto themselves. Tariffs were filed with Governments; but they were as often honoured in the breach as in the observance. The principle of the member of Parliament franking letters for himself, his family, and his friends, which has been a hoary accompaniment of the honesties of parliamentary government, was in full operation in the railway field. Because you were next a railway, you could get special privileges as naturally as you could get special privileges in the mails if you were of a Parliamentarian’s family. In politics you got a place with much pay and little work if you were closely related to a minister. In business you got better rates than your competitor if you were more happily related to the management than he.
It would be too devious a chase just now to ascertain exactly how the practice of scalping railway tickets came into vogue. At all events it was in vogue in Montreal and Toronto in the early eighties—as it was in the United States, its natural home. It was customary for railways to sell to scalpers quantities of tickets over their own systems at a reduced rate. There was always a bargain-counter for the scalper. The scalpers sold tickets to customers at a profit, which often depended on how the scalper sized up the customer when he came to buy.
The scalper also bought tickets from individuals—mostly the unused portions of return tickets. Return tickets were not as long-dated as they now are. You came to Toronto from Chicago with a return ticket; and found you could not go back within the time limit. You sold that half of the ticket to the scalper for, say, two or three dollars, and he took his chance of selling it, for, say, ten, to somebody who wanted a single.
Telling this to an astonished friend the other day, he at once asked how so singular a method of doing business affected the audit offices. Well, as I wasn’t in a very responsible position at the Grand Trunk, during the two and a half years I remained in Montreal; (whence I moved to New York, in the spring of 1885) I do not profess to speak of how things were straightened out in Montreal; but, from knowledge gained, it can be said that there was a practice in many railways on this continent of putting aside earnings reserves when business was good, and using them when business was not so good. In a way, it was as if a storekeeper neglected to count the accumulations in his till, and then reckoned his count for the day when it was made.
The scalping practice made this manner of reporting receipts inevitable. For example, a big block of tickets was sold outright to a scalper—it might be at fifty, sixty or seventy per cent. of the rate charged at the railway’s own counter. He paid for them. When they came back to head office there was nothing to differentiate the tickets sold to the scalpers and the tickets sold to the public. The conductor couldn’t tell when he lifted a ticket that had been bought from a scalper. He had to turn it in as part of his report.
Say there were a thousand tickets from Montreal to Chicago, and the regular rate was thirty dollars, a total of thirty thousand dollars. But the railway’s cash receipts were only twenty thousand dollars, because of the scalping. The proportion of scalped revenue, obviously, would vary from month to month. Adjustment was necessary; and in making adjustments it is equally obvious that it would be a convenience to even up from a reserve in hand, or to put part of an exceptionally good run of receipts into the reserve.
For the benefit of the juvenile generation it may be added that scalping became so large and pervasive an adjunct to transportation that its interests developed an organization of their own. If you wanted a through ticket to San Francisco, instead of taking chances of making a good bargain at a scalper’s, between trains at Chicago, the scalper in Toronto would do all the needful business for you. He regarded himself as a broker, and to some he was a very present help in time of trouble. That he was not necessary—assuming proper relations between the railways and the public—is proved by his elimination as soon as public control of railways arrived.
The anomaly of the fast freight line was another and more wonderful manifestation of the vicious principle which was behind the scalping. It also had its relation to two other transportation services which still exist, though they are not as liable to the same abuses that were inseparable from the fast freight lines—I mean the express service and the Pullman car. The express business to California was being done by ponies, for instance, before there was railway communication across the mountains. When railways were built the express companies brought their business to them, using cars, and paying the railways a percentage of receipts for the entire service.
The Pullman car service was entirely a product of the railways. When trains did not afford the luxury of sleeping between sheets, Mr. Pullman came along, offered to furnish cars, collect tolls, and pay the railways for hauling them. This method is just about as old as the Canadian Confederation. One of the most curious sidelights on the origin of what is regarded as an entirely American innovation is furnished by the story of the Prince of Wales’ tour in Canada in 1860. The first car to carry sleeping accommodation was built at Brantford for the Prince of Wales. From it Pullman got the ideas which he evolved into the Pullman system.
Pullman built his cars, charged the railways a rental for them, and himself took the special revenue earned by the sleeping accommodation. He obtained practically a monopoly on this continent, and the Grand Trunk remained like other roads, after the Canadian Pacific and the Canadian Northern owned and operated their own sleeping cars.