CHAPTER X.
RAILROAD LITERATURE.
The cause of the railroad manager has never been without time-servers. Not to speak of those newspaper editors who, for some consideration or another, defend every policy and every practice inaugurated or approved by railroad authorities, there has always been a school of literati who felt it their duty to enlighten, from a railroad standpoint, their fellow-men by book or pamphlet upon the transportation question, to correct what they supposed to be false impressions, and to round up with an apology or defense for the railroad manager, who is invariably represented by them as the most abused and at the same time most patriotic and most progressive man of the age.
The benefits derived from the railroad are great. It has been an important factor in the development of our country's resources and the advancement of our civilization. Its value is fully appreciated, but there is no reason why the men who have utilized the inventions of Stephenson and others, and have grown rich by doing so, should be eulogized any more than those who are ministering to the wants of the public by the use of the Hoe printing press, McCormick's reaper, Whitney's cotton gin, or any of the thousands of other modern inventions.
These authors doubtless are prompted by various motives. Some have been educated in the railroad school and are therefore blind to railroad evils. Others naturally worship plutocrats, because they hold the opinion that capital is entitled to a larger reward than brains and muscle, for the reason that the latter is more plentiful than the former.
But there is a third class of railroad authors, who, there is reason to believe, enter the literary arena in defense of railroad evils not solely for the love they bear the cause, but as the paid advocates of a class of men who feel that their cause is in need of a strong defense at the bar of public sentiment. It would be difficult to account in any other way for the extravagant statements and one-sided arguments made by this class of writers. Yet railroad literature has not confined itself to the retrospective field. Its scope has grown with the significance of its contributors. In more than one instance have men at the head of large railroad corporations, influenced by temporary interest, become the authors of documents containing assertions and prophecies highly pathetic at the time, but subsequently shown to be so replete with falsehoods and absurdities that few railroad managers would to-day be willing to father them. Thus Alexander Mitchell, the late president of the Chicago, Milwaukee and St. Paul Railroad Company, addressed on the 28th of April, 1874, shortly after the passage of the Wisconsin Granger Law, a letter to Governor Taylor, containing the following passages:
"That it [the Wisconsin law] has effectually destroyed all future railroad enterprises, no one who is acquainted with its effect in money centers will for a moment doubt.... The whole amount received on the investment [Chicago, Milwaukee and St. Paul Railroad] for interest and cash and stock dividends, amounts to only six per cent. per annum of the actual cost of the property. I submit to your Excellency, and through you to the people of the State, whether this is more than a fair and reasonable return for the capital invested in these improvements. Is it not far below such reasonable amount? The best and most careful economists admit that no less than ten per cent. per annum should be allowed on such investments.... The directors of this company have at all times had a due regard to the interests of the public, and a desire to furnish transportation at the lowest possible figures, and, although not receiving a fair and reasonable return on their investments, they have for the last four years prior to 1873 steadily reduced their rates of freight and passengers from year to year, as will be seen from the following tables, showing the charge for freight per mile, and the average per mile for passengers for each year, from 1868 to 1873 inclusive:
| Charges per ton per mile—cents. | Average passenger rate per mile—cents. | |||
| 1864 | .04 | |||
| 1868 | .03 | 40-100 | .03 | 86-100 |
| 1869 | .03 | 10-100 | .03 | 92-100 |
| 1870 | .02 | 82-109 | .03 | 85-100 |
| 1871 | .02 | 54-100 | .03 | 75-100 |
| 1872 | .02 | 43-100 | .03 | 54-100 |
| 1873 | .02 | 50-100 | .03 | 42-100 |
"The law in question proposes to reduce our passenger rates twenty-five per cent. and our freight rates about the same, thus deducting from our present tariff about twenty-five per cent. of our gross earnings.... This act, as we have seen, proposes to take from us twenty-five per cent. of our passenger and freight earnings, and the additional tax of one per cent. of our gross earnings, all of which is equivalent to taking from us twenty-six per cent. of our gross earnings. Therefore, deducting this amount, equal to twenty-six per cent. of our entire gross earnings, from thirty-three per cent., our average net earnings on business, would leave us only seven per cent. of our gross earnings as the entire net earnings of the road, out of which must be paid the interest on the bonds and the dividends to our stockholders. It is therefore manifest that this law will take from us over three-fourths of the net income received under our present tariff.... The board of directors have caused this act to be carefully examined and considered by their own counsel, and by some of the most eminent jurists in the land, and after such examination they are unanimous in their opinion that it is unconstitutional and void.... The board of directors are trustees of this property, and are bound faithfully to discharge their trust, and to the best of their ability to protect it from spoliation and ruin. They have sought the advice of able counsel, and, after mature consideration, believe it their duty to disregard so much of said law as attempts arbitrarily to fix rates of compensation for freight and passengers.... Being fully conscious that the enforcement of this law will ruin the property of the company, and feeling assured of the correctness of the opinions of the eminent counsel who have examined the question, the directors feel compelled to disregard the provisions of the law so far as it fixes a tariff of rates for the company, until the courts have finally passed upon the question of its validity."
The letter was at the time regarded by railroad men as a very strong document, and the railroad journals were filled with lengthy editorials in praise of the soundness of the doctrines and arguments which it contained. The disinterested of the enlightened portion of the community even then realized that the "eminent jurists" whom the company had consulted were hired attorneys and greatly biased in their views as to the constitutional rights of corporations, and that President Mitchell on his part had painted by far too dark a picture of the situation. It is now quite generally admitted that many of Mr. Mitchell's statements were as false as his counsel's interpretation of the Constitution and the law was erroneous. From the assertions made in this letter one is led to infer that the then stock-and bondholders of the Milwaukee road had paid in full every dollar of the capitalized value of the road, and that they derived from their investment an income of only about six per cent. on the money actually invested by them. The cost of the entire Chicago and Milwaukee system in Wisconsin was stated in the letter as being $38,000 per mile. It is not likely that this line of road ever cost to exceed $25,000 a mile, or that those who then owned the road paid much more than two-thirds of its actual cost for it. The road, as the letter itself admits, was bought at sheriff's sale, and no mercy whatever was shown to the farmers who had mortgaged their farms to aid the railroad company in raising funds for the construction of its line.