“‘In 1915 in order to secure funds required for needed improvements and betterments, we were compelled to issue bonds drawing five per cent, and for improvements on our Chicago division we were unable to find purchasers for its bonds, and were compelled to issue notes due in three years, bearing interest at five per cent for that purpose.’
“Another letter which has been received is from the president of one of the greatest railroad systems, not only of the eastern part of the United States, but of the world, a system which has been managed with notable conservatism and ability, and which has regularly paid substantial dividends. The president of this railroad says:
“‘Replying to your letter regarding cases where railroads had found it impracticable to do any new construction work because of their inability to get the public to invest in their securities, much depends upon how this question is put. Railroads cannot issue bonds and stock and throw them on the market to discover whether the public will take them or not. I know of no instance where any company with sound credit and good earnings had any difficulty in selling its securities to the public, provided the rate was satisfactory, compared with others, but there have been very many cases where the railroads have discovered, through consultation with investors and bankers, that there was no market for railroad securities, except on terms too onerous for the railroads to accept, and, further, because many railroads, including our own, suffered such a reduction in earnings that they were not warranted in offering securities to the public or proceeding with large items of construction work or large orders for equipment.
“‘For instance, in the case (of an important subsidiary property), I know that for a long period we had to defer selling bonds on more than one occasion, although the construction work was proceeding, because market conditions were not favorable. Its mortgage bonds would be guaranteed by (its owners), but in lieu of selling them, we temporarily authorized short-term borrowing at lower interest rates. For the period 1908 to 1915 the general experience of most of the railroads was that they had not sufficient business, or earnings, to furnish a credit basis to make proper additions to their property and equipment, nor was there sufficient prospect of any increased traffic to justify proceeding with any great expenditure program. During this period, short-term financing had to be resorted to because of the impossibility of selling capital stock on any basis, or mortgage bonds, except on onerous conditions.’”—Railway Age Gazette.
[6] “The bitter fight now raging as to the content and enforcement of the Adamson Act should not make us lose sight of certain things which are more fundamental in railroading than either wages or hours. The transportation service of this country has been the best in the world, partly because it gave us a free field for able and ambitious men. Rising from the commonest sort of day labor, these executives command the respect and obedience of the rank and file, but sometimes forget to cooperate. That is the root cause of the present-day troubles. It is natural that a corporation president should stand for the interests of the company, but if the men are to be bound up heart and soul in loyalty to the work, then their interests are, and must be, part of the interests of the company. A railroad cannot be run exclusively by presidents, superintendents, and managers; there must be engineers and firemen of training and long experience. As a practical matter, this means that these occupations must hold many capable men during their entire working lives. In a country of free institutions this situation cannot be held down by autocratic rule. If the men have no say in the company, they will try to get one in the union. The great mistake of American railroad presidents during the last thirty years has been to force this growth of factionalism, to make it plain that the union was the means by which the men could get ahead. The railroad brotherhoods secured one concession after another in hours, wages, and operating rules, concessions which the nonunion men could not get. The limits of this method have about been reached. Cannot railroad executives save the future by definitely abandoning this policy of quarrel and drift, by making themselves the true leaders of all their men? We think they can. They have had too much of a caste point of view and have been too much absorbed in other things. It is time to change. The general alternatives have been well stated by Edward A. Filene, a leader of the new mercantile New England, in these words:
“‘If American employers are farsighted they will begin to put as much hard thinking into the problem of men as they have put into the problem of machinery, for, finally, that contentment of labor which is based upon a welfare that springs from justice and frank dealing is the only soil from which permanently prosperous business can spring.
“‘All of the initiative in solving the labor problem must not in the future come from the employees. If the employers of America do not solve the labor problems by business statesmanship, the employees of America will determine the outcome by force; and what labor cannot get in the future by the physical force of strikes, it may be able to get through the legal force of legislation and the income-taxing power.’
“If our railroad employers, among others, will learn and apply the wisdom expressed in this excerpt, all will yet be well.”—Collier’s Weekly.
[7] Already it has been followed by several other railroad and express systems—conspicuous among these, the Southern Pacific, the Union Pacific, the Erie, Wells Fargo & Co. Express, and the American Express Company. The Union Pacific’s plan, embracing an expenditure of approximately $2,500,000 in bonus payments, differs from those of the other railroads, except the Erie, in that it does not make a distinction between the men who belong to the brotherhoods or other forms of union labor, and those who are not “contract labor.” The Union Pacific’s plan also embraces a scheme of group insurance, in the benefits of which its employes participate without cost to themselves. Insurance plans, of one sort or another, have recently become popular, and are being recognized as a logical outgrowth of the pension systems which have long since become part of the fiber and structure of the older and more conservative of our railroad and express companies.
[8] The filing of further plans for the development of its main passenger terminal in Chicago would indicate decidedly that the Illinois Central had not overlooked the possibility of the electric development of its great suburban territory there. For the plans now not only include the new terminal, itself, but the complete electrification of the suburban service on the main line, as well as the South Chicago, Blue Island, Kensington and Eastern branches—all told, some forty miles of line—and involving for electric equipment alone the expenditure of about $25,000,000. The railroad is to give up a large portion of the ground occupied by the existing station to permit of the widening and extension of the Lake Front Park, and its approaches. An interesting part of the whole terminal scheme is that which provides that the entire portion of the Illinois Central tracks between the present main passenger terminal at Twelfth street, which, in a general way, will become the site of the new one, and Randolph street—reaching the entire eastern edge of the Loop District—will become an elongated suburban station. From the several platforms of this station subways will pass under Michigan avenue, and so enable commuters to avoid the heavy automobile traffic of that great thoroughfare.