The Arena. Volume 4, No. 21, August, 1891. Various
enabling them to accomplish their ends, and to utterly ruin nearly every man having the hardihood to seek Mr. Dillon’s lauded legal redress, and when they have accomplished such nefarious object, the entire cost is charged back to the public, and collected in the form of tolls upon traffic. Laws are utterly powerless to restrain the corporations, and Mr. Dillon tells us how easy it is to evade them by pleading compliance, when there has been no compliance, and then having the expert servants of the corporation swear there has been.
With the government operating the railways, every citizen riding would pay fare adding immensely to the revenues. Few have any conception of the proportion who travel free, and half a century’s experience renders it doubtful if the pass evil—so much greater than ever was the franking privilege—can be eliminated otherwise than by national ownership. From the experience of the writer, as an auditor of railway accounts, and as an executive officer issuing passes, he is able to say that fully ten per cent. travel free, the result being that the great mass of railway users are yearly mulcted some $30,000,000 for the benefit of the favored minority; hence it is evident that if all were required to pay for railway services, as they are for mail services, the rates might be reduced ten per cent. or more, and the corporate revenues be no less, and the operating expenses no more. In no other country—unless it be under the same system in Canada—are nine tenths of the people taxed to pay the travelling expenses of the other tenth. By what right do the corporations tax the public that members of Congress, legislators, judges, and other court officials and their families may ride free? Why is it that when a legislature is in session passes are as plentiful as leaves in the forest in autumn?
The writer, as an executive officer of a railway company having authority to issue passes, has, during a session of the legislature, signed vast numbers of blank passes at the request of the legislative agents of such company, and under instructions of the president of the corporation to furnish such lobby agents with all the passes they should ask for. No reports of passes issued are made either to State or federal governments, or to confiding shareholders, and should such reports be asked for, by State or nation, in order to measure the extent of this evil, the Sidney Dillons would rush into print and tell us it was a piece of impertinence for any citizen (or the public) to inquire into the extent of or the manner in which the corporations dispensed their favors. The only way to kill this monster is to put the instruments of transportation under such control as only national ownership can give. Laws and agreements between the corporations have been proven, time and again, wholly ineffective even to lessen this great and corrupting evil.
In every conceivable way are the net revenues of the corporations depleted, and needless burthens imposed upon the public, but one of the worst is the system of paying commissions for the diversion of traffic to particular lines, often the least direct. The more common practice is to pay such commissions to agents of connecting lines where it is possible to send the traffic over any one of two or more routes, and the one which may, by the payment of such commission, secure the carrying of the passenger (or merchandise) may be the least desirable, and the one which would never have been taken but for the prevarications of an agent bribed by a commission to make false representations as to the desirableness of the route he selects for the confiding passenger.
This is but one of many phases of the commission evil, another being that these sums are ultimately paid, not by the corporations, but by the users of the railways, and but for the payment of such commissions the rates might be reduced in like amounts. Aside from commissions paid for diverting passenger traffic great sums are paid for “influencing” and “routing” freight traffic, and these sums, while paid to outsiders, or so-called brokers, are frequently divided with railway officials. When the writer was in charge of the transportation accounts of a railway running east from Chicago, it was a part of his duties to certify to the correctness of the vouchers on which commission payments were made, and he became aware of the fact that one Chicago brokerage firm was being paid a commission of from three to five cents per hundred pounds on nearly all the flour, grain, packing house, and distillery products being shipped out of Chicago over this railway, no matter where such shipments might originate, many of them, in fact, originating on and far west of the Mississippi River; and when he objected to certifying to shipments with which it was clear that the Chicago parties could have had nothing to do, he was told, by the manager, that his duties ended when he had ascertained and certified that such shipments had been made from Chicago station. From investigations instituted by the writer, he soon learned that some one connected with the management was deeply interested in the payment of the largest sums possible as commissions.
The corporations have ineffectually wrestled with the commission evil, and any number of agreements have been entered into to do away with it; but it is so thoroughly entrenched, and so many officials have an interest in its perpetuation, that they are utterly powerless in the presence of a system which imposes great and needless burthens upon their patrons, but which will die the day the government takes possession of the railways, as then there will be no corporations ready to pay for the diversion of traffic. National ownership alone can dispose of an administrative evil that, from such data as is obtainable, appears to cost the public from $20,000,000 to $25,000,000 per annum.
10Mr. Meany, in his Sun article, summarizes six causes for the diminution of railway dividends and remarks: “It is unnecessary to dwell at any great length upon the first five mentioned reasons, but too much could not be said on the sixth. It is now nearly seven years since James McHenry of London (and New York, Pennsylvania & Ohio Railway litigation fame) openly charged railway managers, in an interview published in the Sun, with criminal collusion in the matter of securing extraordinary privileges and unapproachable contracts with their several corporations for favored fast freight lines, express routes, bridge companies, etc., etc., in all the benefits of which such managers shared to a very great extent. On that occasion Mr. McHenry was promptly cried down. Would he be cried down to-day?”
As a rule, American railways pay the highest salaries in the world for those engaged in directing business operations, but such salaries are not paid because transcendant talents are necessary to conduct the ordinary operations of railway administration, but for the purpose of checkmating the chicanery of corporate competitors. In other words, these exceptionally high salaries are paid for the purpose, and because their recipients are believed to have the ability to hold up their end in unscrupulous corporate warfare where, as one railway president expressed it, “the greatest liar comes out ahead.” With the government operating the railways, there would be no conflicting interests necessitating the employment of such costly officials whose great diplomatic talents might well be dispensed with, while the running of trains, and the conduct of the real work of operating the roads, could be left to the same officials as at moderate salaries now perform such duties, and consolidation of all the conflicting interests in the hands of the government will enable the public to dispense with the services of the high priced managers now almost exclusively engaged in “keeping even with the other fellow,” as well as with the costly staffs assisting such managers in keeping even, and the savings resulting may be estimated at from $4,000,000 to $5,000,000 per year.
Government control will enable railway users to dispense with the services of such high priced umpires as Mr. Aldace F. Walker, as well as of all the other officials of sixty-eight traffic associations, fruitlessly laboring to prevent each of five hundred corporations from getting the start of its fellows, and trying to prevent each of the five hundred from absorbing an undue share of the traffic. It appears that each of these costly peace-making attachments has an average of seven corporations to watch.
Referring to traffic associations, and their vain endeavors to keep the corporations within sight of commercial ethics, the Interstate Commerce Commission says: “But the most important provisions of the law have not so often been directly violated as they have been nullified through devices, carefully framed with legal assistance,—here is one of the places where the high-priced lawyer gets in his work—with a view to this very end, and in the belief that when brought to legal test the device hit upon would not be held by the courts to be so distinctly opposed to the terms of the law as to be criminally punishable.” In this connection, it is well to remember what Mr. Dillon tells us of the ease with which the laws can be evaded.
With national ownership the expenditures involved in the maintenance of traffic associations
Mr. John P. Meany, editor of Poor’s Manual of Railroads, in the New York