The Railway Library, 1909 / A Collection of Noteworthy Chapters, Addresses, and Papers Relating to Railways, Mostly Published During the Year

by Unknown

It is the custom and privilege of men past middle age to be reminiscent and I ask your indulgence for a very brief history of the events that have led us to our present status. My railroad experience began about forty years ago and the railroad business was then much like any other business—it had its price list as did the merchant; but, like the merchant, it had its discounts for large shippers and for special conditions, and the discounts were irregular and various. The larger shippers demanded concessions as a right, and the principle was generally admitted. Naturally the result was favoritism, not because the railroads desired especially to favor one as against another, but because in the nature of things secret rates could not well be given to everybody.

Nobody regarded these secret rates as criminal or objectionable. But as time passed and these discriminations became more frequent and greater there arose a demand from the less favored portion of the shipping community for legislation forbidding the discrimination and providing for like opportunity for all. This was strenuously opposed by the favored shippers and by those railroad men who believed the railroad to be purely a private institution and not amenable to law as to its charges. It was common enough to hear it seriously argued that the larger shipper was entitled to the lower rate—this view was held by many shippers and, I believe, by most railroad managers. They argued that the business was like any other business—that each interest must look out for itself, and that competition between the roads would prevent rates from ever being too high.

For myself I may say that I realized from an early period that discrimination as to rates was unjust and at no time objected to laws forbidding it.

The interstate commerce law was passed in 1887. It was crude in its provisions and was the result of compromises between radicals and conservatives; it sought both to foster competition and to abolish it, and in that respect remains still contradictory and impossible.

Upon the passage of the law, that which had been looked upon as perfectly proper and as the working of natural competitive forces became illegal and criminal. The railroads generally accepted the law and made an honest effort to observe it—the mercantile community did not—indeed, they openly defied it, soliciting rebates unblushingly and threatening with the loss of their tonnage those roads who would not succumb. The Interstate Commission, new to its duties, contented itself with comparatively unimportant decisions and practically did nothing to help those railroads who desired honestly to carry out the provisions of the law; and, as a result, within a year of the passage of the law it was quite generally disregarded. A few railroad men were fined, a few shippers convicted—and almost immediately pardoned—and the law fell into disrepute, a condition disgraceful alike to the government, the shippers and the railroads and especially distasteful to the latter, but exactly what was to be expected.

The result was the passage of the so-called Elkins bill, and later the Hepburn bill, which, while amateurish and in many ways vicious, have effectually stopped the rebate system—a result for which we may all be thankful.

In all the controversies that have led up to this almost complete control of railroad earnings and railroad policies by governmental agencies, the railroads have, as a rule, acted in active opposition. They have not been unanimous—some of us were willing to accept it long before it became a fact, but the majority could see nothing in it but disaster—it is too early to say which was right—perhaps an earlier acceptance of control would have made the control more lenient; perhaps its earlier acceptance would, on the other hand, have bound the chains more tightly. But the fact remains that while the basic principle of absolute equality as to rates has been accepted by the railroads gladly and in all good faith, and they have also accepted the principle of government regulation, the scars of the conflict remain and a large section of the public still suspects and misjudges us. It is true, of course, that in the rapid development of our business and in the exigencies of a most exacting profession there have been abuses and lapses, but I am here to maintain that the standards of fair dealing and commercial honesty in our business have been as high as in any other, and I appeal to you who sit around this table to say if it be not so.

But whatever sins may be laid at our door, however much we may have once believed that ours was a private business to be controlled exclusively by its owners, however much we have resented or still resent the interference of the public as manifested in the various governing bodies, it is, after all, the public that is master and we must all recognize it. It is, however, still our privilege to exercise our right as citizens and members of the body politic to use our efforts to guide it. Acknowledging as we must that the public is all-powerful, the question is, How may we satisfy our masters and thus mitigate our woes and preserve our properties?

First. We must realize, as I think we all do (after a series of very hard knocks), that the railroads are not strictly private property, but subject to regulation by the public through its regularly constituted authorities—that the Government may reduce our earnings and increase our expenses has been sufficiently proved.