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wooden ships, and English iron-built ships. Iron ships, barring accidents, and if kept clean and properly cared for, are exceedingly durable. In fact, it is not practicable to fix their daration. Several large iron vessels are now being built for the timber trade, and if they can be made to pay, they will operate against the employment of wooden vessels, and make these of little value in that trade.

“ I am not aware of any effort being made by English ship-builders or ship-owners to have the Uuited States navigation laws changed, but in my opinion the sooner the United States make this change the better it will be for them if they wish to hold any position as a maritime nation. England is fast absorbing the trade of the world with her iron ships and steamers, and until the States are able to compete with this country in iron ship-building, I think their interests would be served by coming to this country for their vessels.

“I have no doubt tbat ship-owners in this country would like to sell their ships and steamers that are lying up, but I never heard of any influence being exerted on legislation in the United States to bring about any change which would enable them to du this.

“It makes no difference to ship-builders who they build for, and it matters not to the world at large by whom the carrying trade is done. Those who can do it the cheapest must be the successful ones. I am of the opinion that the United States navigation laws operate against them severely in fettering them in their competition with us in the carrying trade of the world.

“The advantages of iron vessels over wood are many. In the first place, they are more durable. An iron vessel of the same size and classification as a wooden one is stronger, a better carrier of dead weight, has larger capacity, and is less expensive in maintenance.

" The size of iron vessels has increased so rapidly, and in my opinion will continue to do so, tbat it will be almost impossible to construct large wooden vessels of equal strength and capacity without literally loading them with wood, so that in time a nation which sticks to wooden vessels must certainly be overmatched by those who have adopted ships constructed of iron or steel.

“Iron ships get a preference over wooden ships in most foreign ports, and I believe an invariably higher rate of freight, say 28. 6d. per ton.”

The above information comes from data furnished by several well-known shipbuilding firms on the Clyde and in Liverpool; also from a firm of marine engineers of high position in the latter city. The source, then, can be considered as absolutely trustworthy. My correspondent is a person of experience, well versed in commercial and shipping matters, a merchant in Liverpool in a house doing a business with this country, and is one who has a thorough understanding of the subject under discussion.

We see, then, as a result of our inquiries, that vessels constructed of wood must become obsolete within a short time, even if they are not now so, and that a country must build or buy iron vessels of the most recent and improved construction in order to obtain a share of the carrying-trade of the world.


They cost, in the present depressed times, without copper, some $50 a ton. Their classification is for nine years. Their carrying capacity is less than that of iron vessels. Iron ships can carry on an average at least 10 per cent. more than wooden ones. Their maintenance is more expensive, and a wooden ship is always in need of repairs, from which iron vessels are freed.


Their cost at present is, on the Clyde and in other ship-yards in Scotland and England built in a first-class manner, as shown in the letters quoted, £12 12 to £13 10, say $60 to $67.50 per ton.

Adrantages.--Greater durability; practically indestructible, in fact. A well-built iron ship should last one hundred years. The Great Britain, now nearly forty years old, is still running as a sailer, I believe. The classification of an iron ship is for twenty years, as against nine for a wooden one. Larger carrying capacity-at least 10 per cent. more, on an average; an enormous advantage. Less expense of maintenanceno repairs needed; no copper every three years, only cleaning and painting of bottom, a very inexpensive item. Carry cargoes better, and get thus a preference over wooden vessels in the markets of the world, and higher freights.

Steamers can only be built of iron, as the necessary strength cannot be given to wooden screws to make them safe. Wooden steamers must go out of existence.

Such being the advantages of iron over wooden vessels, and it being absolutely indispensable that this country must compete, if it compete at all, on equal or nearly equal terms with commercial nations, if it expects to obtain a share of the carrying-trade; and furthermore, Mr. Roach having acknowledged that iron ships cannot yet be built here as chearly as on the Clyde, the question arises : Are we to go without iron vessels, and thus lose all the carrying-trade, or shall we seek them where they can be procured on the same terms as they are obtained by our competitors ? Are the navigation laws to be perpetuated for the purpose of building up a sickly industry, which has never produced but one iron ship (the Iron Age,) and, in the mean time, are we to see the Englishman and Frenchman and German taking the place which our own citizens would, with equal facilities, occupy ? Such stupidity is unworthy of our legislators, as it is disastrous to the best interests of the country.

CHARLES H. MARSHALL. NEW YORK, October 23, 1878.

Vessels launched and in process of building, 1877.


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NEW YORK, August 26, 1878. Mr. ROBERT F. AUSTIN appeared before the committee at its invitation. The CHAIRMAN. Please state your business, Mr. Austin. Mr. AUSTIN. I am a wholesale grocer.

The CHAIRMAN. I understand that you have some views to present to the committee in regard to the bad effects produced by the connection of corporations with business ordinarily carried on by private individuals. Mr. AUSTIN. I have. The CHAIRMAN. Be good enough to state them.

Mr. AUSTIN. It is a well-known fact, I suppose, to the people of this country that within the last twenty years the functions of government have been very strongly moved in the direction of legislation in the interest of capital. When I speak of capital I do not speak of it in a hostile sense at all. I simply speak of capital as a thing necessary to move property and to give employment to labor, just as necessary as any other commodity that produces a desired result. But when legislation takes a form that gives capital an advantage over labor, a form inimical to the rights and interests of the individual as part and parcel of the community, then I hold that capital is trenching upon the rights of individuals, and that the State has no business to step in and give capital that vantage-ground as against individuals. For illustration, go back twenty-five years and you find that the manufacturing of railroadcars, locomotives, and almost everything connected with the railroad interest in this country was done at private shops, by copartners in business, or by individuals in their individual capacity; but a change has taken place, and I wish to lay down the proposition here, that when the governments of the States granted charters to railroad corporations to carry freight and passengers from one point to another, they did not thereby confer upon them the right to keep hotels, to enter into the manufacture of iron or wood, or in any way to trench upon the rights of individuals who, as part and parcel of the body politic, must live as well as the corporations. Railroacis no doubt come in for a large share of abuse which they do not deserve. I am no enemy

to railroads, no enemy to any corporation that keeps within the boundaries provided for it when it is organized; but when a corporation, having a concentration of capital with which individuals cannot hope to compete, undertakes to invade and overrun other industries, then I do protest with all my heart and soul. Further, I think that this expansion, beyond their legitimate sphere, has been injurious to the railroad companies themselves. I speak with diffidence, but, in a broad sense. I do not think it has done the railroads any good, and I am sure that it has injured the community. Go from New York to Chicago, and you cannot find a single railroad company that has not, within twenty years, spread out beyond its charter-powers and undertaken to manufacture everything that it needs. They have undertaken to manufacture their own brick, and their own cars and locomotives; they have undertaken to keep the hotels along their lines, and to-day you cannot buy a piece of pie or a cup of tea on any fast train without paying tribute to a railroad corporation. Now, have we any right to allow the State to organize a concentrated capitalist in the form of a corporation, and give it privileges which no individual can possess in his private capacity ?

For what is a railroad corporation organized ? To build a railroad between New York and Buffalo, or between Buffalo and Chicago, to carry freight and passengers. That is the object that is placed before the public, and the people seeing that such an artery of commerce would be very valuable to them, grant the privilege. When the corporation starts, it is content to go to Mr. Wasson, of Springfield, or to Eaton & Gilbert, of Troy (whose cars I used to see in old times on all the railroads, but I do not see them any more), to buy its rolling-stock; but as the corporation accumulates money all this changes; and now when you ride in one of their cars you see upon it an inscription stating that it is made in the car-shops of the railroad company. The result, of course, is that these private industries are dried up, and mechanical labor is being run in grooves under the control of a few men; so that if Mr. Vanderbilt should make up his mind to-morrow that he did not want to build any more locomotives between here and Chicago, he could shut up nearly all the locomotive works at once. This concentration of such control over the industries of the country in the hands of a few men is dangerous; and it is an intrenchment upon the interests and rights of the people which was never contemplated when the railroad companies were organized. We say that we have in this country a democratic government. If we have, we must take into account the right of the individual to live just as much as the right of a corporation to do a great work. It is no part of the business of a democratic government to ignore any individual who will make an effort for himself. I am as much opposed to the government's giving aid to a man who will make no effort for himself as anybody in the world can be; but I insist that capital must not go into our legislatures, and into the halls of Congress, and ask the people of the United States to give them millions of acres of the public land or to grant them charters conveying special privileges, and then, when the time comes, by concentrating an amount of capital which puts it beyond the power of individuals to compete with them, by speculation, by foolishness (for they are no wiser than other men), carry on speculations until they explode, as they did in 1873, and not only go down themselves but carry all the other industries of the country down with them. I am a friend to railroads, but I do not believe that it is the business of a railroad to make locomotives, to make cars, to mino coal, to keep a hotel. I think those are businesses that belong to the people of this country in their individual capacity, and I do not think the people have delegated any such powers or privileges to these corporations. It is a mere usurpation and abuse of the privileges conferred by the charters of these corporations. What we want is a fair division of labor. You had a man here who told you that he believed there was a mal-division or mal-distribution of labor. He was as near right as a man can be. The trouble is that our corporations have obtained great charters from the government, and then when the poor man comes along and says, “I think Uncle Sam ought to give me a farm, and $500 to start it with," a great outcry is raised, “0, we must not have a paternal government." I do not believe in a paternal government; but I don't want the government, while it refuses these favors to the poor man, to give it to a rich man or a number of rich men under the form of a corporation.

The CHAIRMAN. When a railroad company builds its own locomotives does it employ any less number of men than an individual would employ in building the same locomotives ?

Mr. AUSTIN. I don't know whether they do or not. I don't want to stop at this point.

The CHAIRMAN. I do not wish to interrupt you, but I want to find out the grievance of which you complain. You think there is a mal-distribution of labor; but if a railroad company in building its own locomotives employs as many men as the individual would employ, where is the grievance ?

Mr. AUSTIN. Mr. Chairman, every man in this country does not want to stand always in the position of a laborer. I do not want Mr. Vanderbilt or Mr. Scott to take my work out of my hands and reduce me to the position of a laborer. It may be that I would be as well off if I never aspired to anything higher, but that is not human na

ture; yet if you let this corporate encroachment upon the rights of the people go on unchecked, the mass of our people never can aspire higher.

The CHAIRMAN. How does it differ from the case of Mr. A. T. Stewart, who absorbed any number of middle-men into his business?

Mr. AUSTIN. I believe that Mr. A. T. Stewart was a representative merchant, with a great deal of brains in his head. You never saw Mr. Stewart go into any legislative hall in his life to ask for anything. There is no record that he ever went to Congress or a State legislature in his life. Now, when the Almighty puts into a man that organization of brain and capacity by which he can achieve great results, he is not to blame for using his talents.

The CHAIRMAN. Was Mr. Stewart a benefactor or an injury to society?
Mr. AUSTIN. He was a benefactor to society.

The CHAIRMAN. Then the concentration of business in a few hands is not an injury to society ?

Mr. AUSTIN. Mr. Stewart was simply a striking illustration of what a man by welldirected effort could attain without State aid. Mr. Stewart was the brightest example of a private individual business man that we have had in this country for one hundred years, for the reason that he amassed the whole of his fifty or sixty or one hundred millions, whatever it was, by his own unaided talent and industry, and he did it all and maintained the reputation of giving sixteen ounces to the pound and thirty-six inches to the yard. Mr. Stewart was a rich man, but I am willing to give him all that he is entitled to, as I am to every man. I want to answer your question a little more fully. Suppose it to be true that the railroad companies will pay a man who serves at their counters as much as any hotel-keeper in any other locality will pay, at the same time they concentrate the business of hotel-keeping in the hands of a few corporatons, and the man who serves at the counter must always continue in that position, whatever may be his capacity. It is this concentration of business in the hands of a few that the people will not stand. They will insist that when a corporation goes to the legislature and obtains a charter to do a certain thing, it shall be limited to the objects defined in the charter, and shall not use the advantage it derives from its special privileges to encroach upon the private industries of the people and take away their business.

Take the panic of 1873. Thoughtful men saw before that panic that this centralization of labor and employment in a few great channels must end in an explosion. And why must it end in an explosion! Ambition grows by what it feeds on. Take almost any man in the world and put him in a place where he wields great power, with new opportunities opening up before him all the time, and he must be a great deal above the average of men if he does not commit excesses. From 1863 and 1864 to 1873 we had capital, concentrated in a few great corporations, running to the legislatures and to Congress to obtain advantages which individuals did not ask and could not get, and what is the result? It is that we see a man in this country who abont twelve years ago started in the railroad business with a capital of only fifteen millions of dollars, and who, when he died a year or two ago, could sell his securities in the market for one hundred millions of dollars and more, I am told; and remember that during half of the period when this one man made such accumulations the general business of the country was on the down grade. The great mass of the people were growing poorer when this man with his twelve or fifteen millions to start upon grew rich so fast that he died worth one hundred millions. Now, if that man accumulated his money in the same manner that Mr. Stewart did, without getting aid from the government, and by treating the community fairly, he was entitled to it. But if he did it by perverting the powers of a great corporation and abusing the privileges granted by the people, in ways which were tyrannical and oppressive to the people, then the privileges should be taken away.

The CHAIRMAN. Did Mr. Vanderbilt.establish any locomotive factories ?
Mr. Austin. He has got locomotive factories and repair-shops.

The CHAIRMAN. He has repair-shops on his line to keep his locomotives in order, and when he has no repairing for them to do they have undoubtedly built somie locomotives, but those shops have not supplied the New York Central Railroad with locomotives generally. Again, has Mr. Vanderbilt gone into the business of mining coal! That is one of the grievances that you complain of, and yet this particular corporation, where this great amount of money was made, is free from the very objections which you have urged; in other words, state in what particular Mr. Vanderbilt has gone outside of his charter.

Mr. AUSTIN. I read on his cars "Manufactured at the car-shops of the New York Central Railroad at Schenectady,” “Manufactured at the car-shops of the New York Central Railroad Company at Albany." I do not single out that road offensively. I simply say that wherever any of these corporations goes outside of its regular business to usurp the place and the function of the private manufacturer, it ought to be prevented. I believe that one of the principal reasons why the charters were granted so freely to these corporations was the general belief of the people that, while rail

roads were the most scientific and effective mode of moving property and passengers from point to point, the companies at the same time would be great patrons of the general industries of the country; and I say that when the companies use the capital they have accumulated by the favor of the people to manufacture the very things that those people want to sell them, it is wrong. If they have a right to do that I want to know why they might not after awhile come into this street and drive out all the merchants.

The CHAIRMAN. Was it wrong for Mr. Stewart to engage, late in life, in manufacturing the goods that he sold ? Mr. AUSTIN. No, sir; it was not.

The CHAIRMAN. He originally confined himself to buying and selling, but later he went to manufacturing the goods that he sold. Mr. Austin. That was all right.

The CHAIRMAN. Where is the difference between him and a railroad company in that respect?

Mr. AUSTIN. The difference is this: Mr. Stewart, when he wanted to go into the manufacture of any line of goods, did not go to Albany and obtain a special privilege which other individuals could not obtain.

The CHAIRMAN. Neither did Mr. Vanderbilt. He simply bought stock of the New York Central and Hudson River Railroad, which was in existence long before he had anything to do with it. Mr. AUSTIN. How did he use it?

The CHAIRMAN. In what respect has he violated his franchise! If you will point that out, the attorney-general of the State of New York is bound by his oath of office to go into court and try to vacate the charter.

Mr. AUSTIN. That is what ought to be done.

The CHAIRMAN. Then your remedy is not in this committee-room. Go straight to the office of the attorney-general and point out where Mr. Vanderbilt is violating the law, and it will be the duty of the attorney-general to begin proceedings against him at once.

Mr. AUSTIN. You asked me if it was wrong for Mr. Stewart to manufacture the goods that he sold. I say no, becanse he was a private individual, seeking by legitimate means, which were open to every other individual, opportunities to make gain. Every man has a right to do that. But when you give charters to capital concentrated in the form of a corporation, you give powers and advantages that no individual can possibly possess, and the only safety is to accompany those powers with wholesome restrictions, which will protect the individual against the encroachments of capital.

The CHAIRMAN. Could not Mr. Vanderbilt set up a hotel if he wanted to?

Mr. AUSTIN. I do not speak of Mr. Vanderbilt, but of the New York Central and Hudson River Railroad Company, a great corporation.

The CHAIRMAN. Suppose that Mr. Vanderbilt owned the whole of that railroad, would it be any more wrong for him pay to have the company set up a hotel than for him to set one up himself?

Mr. Austin. The New York Central Railroad Company is the creature of the State of New York, created by the State to carry freight and passengers, and it should be limited to that function.

The CHAIRMAN. The action of that corporation is either according to law or against law. If it is against the law of New York, we cannot remedy it in Washington. Your recourse is to the attorney-general of the State.

Mr. Austin. You speak from a Congressional standpoint, and if you desire I will keep to that.

The CHAIRMAN. We must keep to that. We cannot do anything else. Mr. AUSTIN. Well, then, so far as the remedy for our present evils are concerned, it is to call the attention of the men who sit in our public places to the fact that for twenty years capital has been besieging not only the State legislatures but the Congress of the United States and asking for privileges for which the people have not asked, and which they could not receive in their individual capacity if they did ask. I do not think it is worth while for me to enlarge upon this. I do not want to take up your time unnecessarily.

The CHAIRMAN. No.' We had an appointment with a witness at twelve o'clock, and he is here. It is not necessary for you to proceed unless yon have some pertinent facts to present upon which we can act. You must see that these views of yours are better fitted for publication in the newspapers than for this committee.

Mr. AUSTIN. Would you like to ask me as a business man what my view of the depression is?

The CHAIRMAN. I did not ask you to come here for that. You stated that you could point ont some difficulties caused by violations of law by railroad companies and other corporations. Mr. Austin. You asked me a question in regard to the relations of food and labor. The CHAIRMAX. Yes. We will hear you on that.

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