You want to know the value of the shrewd and perceptive legal mind to a big railroad? Here is a case that proves his worth:
A certain transportation company in the East had a legal vice-president who many people supposed was a political heritage to the road, a man for whom it was supposed a berth had been made by the owner of the property, who was something of a politician himself. A quick turning of the wheel of fortune had thrown one political party out of business at the capital, and another in. The man was given a place in the railroad offices, and a little later was made a vice-president. It so happened that the vice-president knew more than supposers might even imagine; but he was a quiet man, and sometimes some of his own clerks wondered why he drew his big salary. After he had been at his desk a dozen years they found the reason.
In gathering up a number of railroad properties to make the parent company—after the fashion of modern railroad practice—one of the most important of these old-time units was found to be in woefully shabby physical form. It was a valuable road in the consolidation. The new parent was willing to guarantee an annual rental of 10 per cent on its stock; but as a railroad it fairly shook at the knees. It stood in dire need of reconstruction, and the men who were offering it a high rental made that a provision of the deal. The old road finally agreed to spend $12,000,000 in revising its line and in buying new locomotives, cars, and bridges. With much ado it accomplished its revision, and brought itself up closer to modern standards of railroading.
A decade later when the governmental supervision of the railroads had come into the full flush of its authority, the quiet vice-president had an armful of State commission reports and vouchers brought to his desk. He locked himself in his room, and in a week he had made from them a 20,000-word abstract in long hand. Then he took his report in to the president of the road.
The acute mind of that general counsel—you see that he was vice-president in this particular case—searching here and there and everywhere, had discovered a mouse-hole. The old-time road had not fulfilled its part of the contract. It had found that it could revise its lines at a cost of a little less than $9,000,000 and had quietly pocketed the change. The big rent-paying consolidation went into the courts, after its cool, impassive way. The case went to a referee and the referee took four years to hear the case and decide it. There were 5,000 exhibits offered in evidence and 8,000 closely written pages of evidence, making a case nearly equal to that of the receivership of the Metropolitan Street Railway Company of New York City, which fills twenty pudgy volumes of some 800 pages each.
The referee decided in favor of the parent company, and rendered a verdict close to $6,000,000, principal and interest. The case was appealed, and sustained. That vice-president had proved his worth. The president of the defendant road came to him.
“We simply can’t pay,” he pleaded. “We’ve no reserve fund.”
“Then we will take it out of your rental,” was the emotionless reply of the quiet vice-president.
That type of man stands forth as a possibility to every one of the dozens and dozens of young men who make the main staff of the railroad’s legal department. Those fellows come to the railroad fresh from the law schools. Their salaries are small but their experience and their opportunities are enormous. It is a far better career at the beginning than a briefless existence in one’s own office, even though one’s own name is emblazoned in brilliant gilt letters upon the door. A young man coming into the legal department of a large railroad has a diversity of work offered him. He draws up the simplest of papers at first, acts as assistant to a trial lawyer, then finally comes to the time when he will alone fight the railroad’s case in some minor cause in a small court. After that the causes get bigger, the courts more important, he begins to delve into law libraries and to write briefs. Gradually he emerges into a full-fledged lawyer. He may eventually become general attorney or general counsel, and he may find himself welcome to the partnership of some really important law firm. He has knowledge that may be of value in fighting the railroad; whether he will use that knowledge in afterwards fighting his employer is a matter for his own conscience to determine.
There are special departments under the main heading of the law department. Counsel, the ablest of counsel, is retained at each important point reached by the railroad, and these counsel must act in conjunction and coöperation with headquarters. Special tax counsel have an important office by themselves, for the railroad sometimes finds itself in a difficult position. In its pride it may announce to the world, through the newspapers, that the new Bingtown depot has cost $400,000, but when the Bingtown appraisers come around, possessing in their bosoms no inherent love for the railroad, those newspaper clippings in their hands, the tax counsel begins to earn his salary.