The Arena. Volume 4, No. 21, August, 1891. Various
amount to between four and five million dollars.
Of the six hundred corporations operating railways, probably five hundred maintain costly general offices, where president, treasurer, and secretary pass the time surrounded by an expensive staff. The majority of such offices are off the lines of the respective corporations, in the larger cities, where high rents are paid, and great expenses entailed, that proper attention may be given to the bolstering or depressing the price of the corporation’s shares, as the management may be long or short of the market. So far as the utility of the railways is concerned as instruments of anything but speculation, such offices and officers might as well be located in the moon, and their cost saved to the public. The average yearly cost of such offices (and officers) is more than $50,000, and the transfer of the railways to the nation would, in this matter alone, effect an annual saving of more than $25,000,000, as both offices and officials could be dispensed with, and the service be no less efficient.
Moreover, with the nation owning the railways, the indirect but no less onerous tax levied upon the industries of the country, by the thousands of speculators who make day hideous on the stock exchanges, would be abrogated, as then there would be neither railway share nor bond for these harpies to make shuttlecocks of, and this would be another economy due to such ownership.
Railways spend enormous sums in advertising, the most of which national ownership would save, as it would be no more necessary to advertise the advantages of any particular line than it is to advertise the advantages of any given mail route. From reports made by railway corporations to some of the Western States, it appears that something over one per cent. of operating expenses are absorbed in advertising, aggregating something like $7,000,000 per year, of which we may assume that but $5,000,000 would be saved, as it would still be desirable to advertise train departures and arrivals.
A still greater expense is involved in the maintenance of freight and passenger offices off the respective lines, for the purpose of securing a portion of the competitive traffic. In this way vast sums are expended in the payment of rents, and the salaries of hordes of agents, solicitors, clerks, etc., etc. Taking the known expenditures, for this purpose, of a given mileage, it is estimated that the aggregate is not less than $15,000,000 yearly, all of which is a tax upon the public, that would be saved did the government operate the railways.
Under government control, discriminations against localities would cease, whereas now localities are discriminated against because managers are interested in real estate elsewhere, or are interested in diverting traffic in certain directions; again, under corporate management, it is for the interest of the company to haul a commodity as far as possible over its own lines (with the government owning all the lines this motive will lose its force), and thus traffic is forced into unnatural channels. For instance: much of the grain from Kansas should find its way to foreign markets via the short route to the Gulf, the distance to tide water by this route being less than half what it is to the Atlantic, yet so opposed to this natural route are the interests of the majority of the corporations controlling the traffic associations, which now dictate to the people what routes their traffic shall take, that the rates to the Gulf are kept so high as to force the traffic to the Lakes and to the Atlantic; and as all the railways leading to the Gulf have lines running eastward, the much lauded corporate competition fails to help out the citizens of Kansas, who are subjected to the domination of the new tyrant denominated a “traffic association.” With the nation operating the railways, all this would be changed, and localities favorably located would be able to reap the benefits which such location should give, and should such a condition ever obtain, the farmers of western Iowa will not then ship corn to the drouth-stricken portion of Kansas for fifteen cents per one hundred pounds, while the Kansas corn grower, living within seventy-five miles of the same market, is charged ten cents per one hundred pounds for a haul one eighth as long. By such rates the railways force the hauling of corn from Iowa to western Kansas, and then force the corn grower of central Kansas to send his corn eastward, the result being two long hauls, where one short one would suffice; but then the corporations would have absorbed less of the substance of the people.
Another, and an incalculable benefit, which would result from national ownership, would be the relief of State and national legislation from the pressure and corrupting practices of railway corporations which constitute one of the greatest dangers to which Republicaninstitutions can be subjected. This alone renders the nationalization of the railways most desirable, and at the same time such nationalization would have the effect of emancipating a large part of the press from a galling thraldom to the corporations.
With the nation operating the railways, we may have some hope that rates will be reduced by some system resembling the Hungarian zone which has had the effect of diminishing local passenger rates about forty per cent., resulting in such an increase of traffic as to greatly increase the revenues of the roads; the average of rates by ordinary third-class trains being about three fourths of a cent per mile, and one and a half cents per mile for first-class express trains.
In Victoria, the parcel or express business is done by the government railways, and the rates are not one half what they are with us when farmed out to a second lot of corporations. Space does not permit the discussion or even the statement of the many salutary phases of government control, as developed in the various countries of Europe, and it is not necessary, as there are abundant reasons to be found in conditions existing at home, for making the proposed change. By far the most menacing feature of continued corporate ownership is the power over the money markets which it places in the hands of unscrupulous men, any half dozen of whom can, at such a time as that following the failure of the Barings, destroy the welfare of millions, and plunge the country into all the horrors of a money panic. Whether it be true or not, there are many who believe that a small coterie, who had information before the public of the condition of Baring Brothers and that a block of many millions of American railway securities held by that house were being (or soon would be) pressed upon the market, entered into a conspiracy for the purpose of locking up money and thereby depressing prices in order to secure, at low cost, the control of certain coveted railways. The railways were secured, and there is not much doubt that they had been lying in wait for such a critical condition of the money markets to accomplish this purpose, which still further enhances their power for evil. With the railways nationalized, not only would there be no temptation for such nefarious operations, but the power of such men over values would be greatly lessened, if not wholly destroyed, as there would be no railway shares for them to play fast and loose with, and as money, instead of being tied up in loans on chromos representing little but water, would seek investment in bona fide enterprises, their operations would have little influence, and would certainly have no such baleful power over the industries of the country, as their ability to affect the value of railway shares—on which such immense sums are now loaned on call—gives them, they being able by locking up a few millions when the money market is in the condition, which obtained at the time of the Baring collapse, to force the calling of loans and the slaughtering of vast numbers of the shares, carrying the control of the railways they covet. If only for the purpose of divesting “The dangerous wealthy classes” of this frightful power, national ownership would be worth many times its cost, and without such ownership a score of manipulators are soon likely to be complete masters of the republic and all its industrial interests; hence, the question reverts to the form stated in the opening of this paper: Shall the nation accept as a master a political party that may be dislodged by the use of the ballot, or shall the republic be dominated by a master in the form of a score of unscrupulous Goulds, Vanderbilts, and Huntingtons, who cannot be dislodged, and who never die?
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