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you think the time has arrived when Federal supervision over railroads might be very cautionsly begun?
Mr. ADAMS. Yes; I think it would result in great good.
The CHAIRMAN. And you think that the publicity secured and the right of representation on the part of aggrieved citizens would in the end correct the abuses ?
Mr. ADAMS. I think that through an intelligent discussion of the railroad question, and with the legislation which would be sure to follow it, the abuses would be corrected, so far as they can be corrected.
The CHAIRMAN. Do you see any danger to the people in the consolidation of these railroad properties under the control of a few persons ?
Mr. ADAMS. I do not.
The CHAIRMAN. You think that the political power which they might exercise would be neutralized by their jealousy of each other?
Mr. Adams. Yes, I think that with consolidation comes the weight of respor sibility. And in this country particularly the power of directing public feeling against large corporations more than neutralizes any power that can come from consolidation. In saying that I wish to say also that such has been the experience of other countries. It is only seven or eight years since Sir Henry Tyler, in one of his reports in England, expressed the idea that the time is rapidly coning when the government would own the railroads or the railroads would run the government; yet the commission of the Marquis of Salisbury, to which I before referred, very drily remarked, in reference to that apothegm, that consolidation of railroads had not been found to bring with it the political dangers which had been anticipated. The fact is that thy bave entirely abandoned that idea in England, and there the railroads are allowed to develop in their own way and to consolidate just as fast as they please. With consolidation comes snch an increased responsibility, such an increased power of baving public opinion bronght to bear, that it is found that they are more amenable to control in the gross than they are in detail.
The CHAIRMAN. Do you think that the power of the railroad magnates over legislation has been diminished or increased in this country within the last few years?
Mr. Adams. We are in a very cbaotic state in regard to this whole subject. We are in a state of change. I should, however, incline to the opinion that if any change bas taken place within the last few years, it has been in the direction of a dimination of that power. I think you had some experience of it in Congress recently. I think that the Representative's fear of his constituents in regard to railroad corporations has very much reduced that power from what it was in the days when the Credit Mobilier was in operation.
The CHAIRMAN. I may say there that the railroad magnates seemed in the last Congress to be entirely powerless both in the Senate and in the House; for whatever they desired they did not get, and a great many things that they did not want were done, and yet they were rotoriously active.
Mr. ADAMS. And their operations were reported as baving been directed by men who had no scruples about employing any means in their power to influence results.
The CHAIRMAN. I was on the Pacific Railroad Committee last session, and so was Mr. Rice; and I was shown a letter in which the wriier said that one of the gentlemen interested in a railway which had an application pending before Congress had been heard to say that he could control my position, as I had an interest along the line of his road which he could make worthless. That letter was brought and shown to me. I only mention it to show that the influences that you speak of were at work. Do you think that this committee should report that it would be advantageous to the general business of the country that the government should begin by the establishing of a commission at least to supervise and to report upon, and to investigate, and to act as a kind of board of arbitration in regard to inter-State railways ?
Mr. ADAMS. I am not prepared to do so. As I understand, this is a committee to pass upon the question as to what relief should be given to labor. I am not prepared to say that that action would produce any inimerliate relief to labor. It is one of the good things geverally, I think, that will come about in its own time; but whether it would produce any immediate effect on the prevailing depression of business I cannot say. I do not see any reason to believe tbat it would.
The CHAIRMAN. But, if it relieved business in the end from discriminations that are now injurions to it, it would be a beneficial thing in the long run!
Mr. ADAMs. Yes, in the long run ; that is all that I meant to suggest.
The CHAIRMAN. Can the general government do anything that will probibit these railway companies from making special contracts with private individuals, and giving them advantages wbich are not given to the public at large?
Mr. Adams. Yes; it can do something. But in order to do something effectually, it must proceed as a result of investigation into those evils and their canses; the legislation must follow, not precede, investigation. The first thing that we have got to do in this matter of inter-State commerce of railroads is to make a thorough and ample investigation of the trouble, and to find out where the root of it is. The difficulty with all our legislation is that of endeavoring to deal with a disease before baring studied its causes. That subject is one which has not been studied.
The CHAIRMAN. You prefer the English system of careful investigation by commissions ?
Mr. ADAMs. Yes; by commissions. The literature of the Parliamentary committees in England on the subject of railroads is measured by tbe ton; and I do not think that they ever did any good to any ope until this last commission came, a few years ago, which swept the whole old system aside, left theories alone and came down to concrete cases and to the practical investigation of concrete cases. There is where we have got to look. The wbole theory of Granger registration (of a committee framing a bill to settle the matter) bas got to be abandoned.
The CHAIRMAN. You want to apply the inductive metbod to railroads.
Mr. Rice. If Congress should undertake to enact a law that freights between intermediate and terminal points on a railroad should not exceed freights between the terminal points, or that one mile of railroad should not charge a greater amount of freight than any other inile, what do you think would be the effect?
Mr. ADAMS. It would be impracticable. That has been tried in all civilized countries,
Mr. Rice. Are such provisions as that among those that you say have been abandoned in England?
Mr. ADAMS. Yes; they have been entirely abandoned. They have been discussed by board after board to the point of wearidess.
Mr. Rice. I am asking a question which Mr. Thompson would bave asked you if he were bere. The people of Western Pennsylvania complain that, between points on the railroads leading to Philadelphia and New York they have to pay higher freights tban lave to be paid to Pbiladelphia and New York from points farther west; and they desire, therefore, that Congress shall enact a law with some such provision as that which I have suggested. You do not see that that would be practicalile.
Mr. Adams. I can ovly give our own experience in Massachusetts, wbich you are familiar with. That system was treid by the railroad companies in Massachusetts and has been abandoned by them in the face of public opinion, and owing to a better understanding of their own interests. One of my first experiences on the board of railway commissioners was this: I had a complaint from the western portion of the State, and I went up to the locality with that complaint in niy band, and saw the superintendent of the road. The road ran north and south. Goods coming from Chicago entered the road on its northern point, and went through to its southern point. Ten miles from the northern point the superintendent was called upon to deliver produce from Chicago. Under the system of through billing that produce was to go through to the southern end of the road, passing by the door of the factory where it had to be delivered. The manager of that factory said to tbe superintendent: “Deliver the goods to me here and save yourself the trouble of dragging them pearly ninety miles farther." The superintendent said : “Yes; but if I take the car off here, I shall have to charge you $25 more for not bauling it the whole length of the live. Or, I will haul it down to the point to which it is billed, and I will bring it back for you at local rates." I suggested to the superintendent the absurdity of such a course. I said: “ The result of it will be, that you will drive every body off the line of your road to the terminal points, and local business cannot live on your line.” The man was utterly unable to take in the proposition. He said: “Of course, I am not going to allow every one on the line of my road the benefit of competing points; I am not a fool.” I simply told bim that he was a fool if he did not, because ultimately he would have no one on the line of his road except at competing points. I mention that merely to illustrate the state of things that then existed. Alì that I can say is that pow, in Massachusetts, the practice you refer to does not exist; and it has ceased, not from any force of law against it (although we have had such a law passed, and endeavored to put it in operation with very ill success), but because the subject has been thoroughly and publicly discussed and the principle abandoned.
Mr. Rice. But, suppose that it bad not been abandoned !
Mr. ADAMS. Then we should have kept on framing laws against it until we succeeded in framing one which met the case.
Mr. Rice. But you say that in nine cases out of ten publicity does the work !
Mr. Adams. By examination by experts. These questions are very complicated, and require lovg study and careful observation in order to understand theni. The difficulty is that our legislative committees, as a rule, cannot believe that the whole thing cannot be solved in five minutes, and the result is that laws are passed intending to solve the difficulty, wbich laws cannot hold water.
Mr. Rice. Are there pot some cases where the rule does not hold good ; that shorter distances shall not pay more than longer distances ?
Mr. ADAMs. Certainly.
Mr. RICE. Are there not some cases of freight being carried from competitive points to competitive points at rates at which the road could not afford to carry freight generally?
Mr. ADAMS. Certainly. The gnestion may be asked what does it cost a railroad company to carry a ton of freight a mile! You might as well ask a farmer how much it costs him to raise a potato. He will tell you that it depends upon how many potatoes he raises; that, to raise a bushel of potatoes would be a very expensive affair, but that a thousand bushels can be raised at a comparatively small cost per bushel
Mr. RICE. Take the heavy freight from San Francisco to New York, which can be brought by water as well as by rail. Must not a railroad carry that freight (rather tlan lose it) at a less rate per ton than it can afford to carry all freight for
Mr. Adams. Undoubtedly it must; but now we are approaching a question which requires a great deal of discussion and much investigation.
Dr. Rice. Something has been said before this committee as to the government purchasing the railroads, or possessing them in some way. I understood you to say something about it in the course of your statement. Do you think that it would be practicable and profitable for the government to buy, or in any way to become possessed of the railroads and to operate them ?
Mr. ADAMS. No, sir; I do not. The question of State ownership of railroads is one that has been tried, and has been discussed ; and it is a perfectly feasible thing. In certain countries wbı re they bave what you may call bureaucratic government, and where the political temper runs in that direction, it is a possible and feasible thing In Bavaria, for instance, the government owus every mile of railroad, and the railroads are well managed, Prussia commenced the thing, but bas rather withdrawn from it. Belgium owns the railroads in that country, and they are well managed. But these are countries where the teniper and the political genius of the people lead them in that direction. In America, however, the tendency of our people is to individual enterprise and not towards doing things by the government; and, therefore, I have concluded (for I, myself, was a good deal bitten at one time with the idea of State ownership) as i he best and most matured result of my mind that such proposition is opposed to what is so vaguely called the political genius of our people. They do not run to doing things through executive machinery, and what they do through that machinery is apt not to be very well done. The CHAIRMAN. What do you think about the management of the post-office ?
Mr. ADAMS. I never have been a commissioner iu post-office matters, and I would rather not venture an opinion.
The CHAIRMAN. If the government shonld undertake the operation of railroads, of course there would be a large increase of government officials; and I suppose your attention has been directed to the fact that government officials are too often used for political purposes; and you would not consider it desirable to have a rapid increase in their number.
Mr. Avams. I will limit myself to the answer which I have already given, that I do not think the proposition is in accordance with the political genius of our people.
Mr. Rice. A good deal has been said also in regard to the pooling arrangement between railroads. That arrangement is a fact, I suppose.
Mr. ADAMS. Yes, sir; a common-purse arrangement. They pool through rates. Mr. RICE. Supposing there are several roads between competing points, it is a popular idea that the public gain by the competition, and that if the managers of those roails get together and, instead of competing with each other, pool the proceeds of their business, by some agreement between themselves, the public would suffer by such an arrangement. What is the result of your observation on that point ?
Mr. ADAMS. That is one of those cases that exactly come under what I said before ; nanjely, that I am not at all clear how it is going to come out. “Pooling," as it is called, seems to be a form of growth and part of the process of development. It is merely a pbase of consolidation. Now, the result of consolidation, as hitherto carried on, has been that the community has been better served, and cheaper served, and inore conveniently served than it had been served by disconnected lines. I am watching the operation with a great deal of interest, but I do not feel called upon, at present, to form any opinion about it. I want to see wbat that phase of growth is going to develop into.
Mr. Rice. You think that there is ground for the argument, then, that the public is served better and more cheaply by such an arrangement, under proper government supervision, than it is by fluctuating competition ?
Mr. Adams. Undoubtedly. My mind tends strongly in that direction. It is a mere question between the evils that are incident to competition (such as violent fluctuatiou, &c.) and the dangers incident to a too great concentration of power. It would require some one much shrewder than I am to be able to express an absolute opinion one way or the other at this time; but the tendency of my mind is strongly in the direction I have indicated. I would allow this consolidation to go freely on, subject always to the public supervision and to all the publicity which can be thrown on it.
Mr. Rice. The business gain in the transportation of freight on the New York Central Railroad has been immense, and it has been suggested that that business was there to be done at all events; that so much wheat was to be moved from the West to New York, and that that business would have necessitated the improvements that have been made, and which, you say, were made because Mr. Vanderbilt desired to get additional dividends from them. It is said, on the other hand, however, that the business was there and wonld have necessitateil those improvements at all events, and that, therefore, the public is really entitled to the additional income resulting from the business rather than the owners of the road. Did the business develop the road, or did the road develop the business?
Mr. ADAMS. That I am not prepared to answer. The business would have found other chanvels, either by the Erie Canal, the Erie Railroad, or otherwise. Mr. Vanderbilt has cut under canal rates and has taken away the business from that and other channels. I do not doubt that Mr. Vanderbilt's roail has been an extremely profitable property. But he might have said, “On the whole this through business is not worth doing; I will live on mıy local business. The Erie Railroad may ruin itself by doing the through business if it likes, but I will not." There have been roads tbat have acted on that principle; I have known some of them in Missachusetts. I do not know that Mr. Vanderbilt might not have said, “I am not called upon to ruin myself for the sake of the city of New York. I have a sure, sound, local business that will always support my road, and enable me to pay all the dividends that the law allows me to pay, and I do not propose to run the risk of ruining myself if I cannot make anything by it." I am glad to have you recur to this question of stock-watering, for it is a difficult question, and I do not want to appear as defending it or as having anything to say about moral, legal, or other objections to it. I merely say that it was tbrough the process known as “stock-watering” that the great incentive of private gain found its way to the development of the New York Central Railroad, and it is scarcely an open question in my mind whether, without that incentive, the development wonld ever have taken place. I do not think that the question about stock-watering is by any means so clear as it is commonly supposed to be, in the discussions which take place about it in the newspapers.
Mr. Rice. If the capital of the road had been limited to $40,000,000, and if he could get 8 per cent. on the local business of the road, you do not think it likely that Mr. Vauderbilt would have developed the road as be bas done!
Mr. ADAMS. I think it far more likely that he would have said, “I will take any dividend of 8 per cent, and do only what is necessary to earn it. The Erie Railroad may do the through business. It is not worth my while doing it when I have all the local business that I want at good paying rates.” I am inclined to think that the community would have found that tbe line of reasoning which the owners of the New York Central would have followed.
STATEMENT OF MR. CHARLES FREDERICK ADAMS. Mr. Charles Frederick Adams appeared before the committee. He stated in answer to the chairman that he was a lawyer by profession; that he had been an enthusiastic student on the subject of the relations of capital and labor, and of the causes of the present depression in business; and that one remedy which he proposed to the com. mittee was the establishment of a general system of Tontine associations. He stated to the committee his views on that subject in detail; and subsequently promised to reduce them to writing and furnish them to the committee.
STATEMENT OF MR. CHARLES F. WINGATE. Mr. Charles F. Wingate appeared before the committee. He stated that he is engaged in the editorial business in New York ; that for the last twelve years he has been connected with the press; and that, during that time, he has given special attention to the subject of the condition of the workingmen, and was now specially engaged in the matters relating to the condition of workingmen's homes. He was perfectly satisfied, from inquiry which he bad made into the subject, that the statements as to the amount of destitution in this city and elsewhere were grossly exaggerated and were simply fabulous. He said that about May and December every year the newspapers sent reporters to the different charitable institutions, and that the result always was tremendous statements as to the awful amount of destitution. He had freqnently seen the statement that this winter there were 100,000 people out of employment; but he thought it safe to say that there never had been more than 25,000 persons relieved in New York in any one year. The exaggeration arose from the fact that the same individual receiving assistance from various associations was counted by each of them, 60 that the number of really destitute was multiplied over and over again.
Mr. RICE. Do you mean to say that you do not think that there are 25,000 individuals in the city of New York who are at present in need of relief!
Mr. WixGATE. I mean to say that at certain periods (in the worst season, there may be as many as 50,000 people receiving help in this city, but the amount of help received by each is very small. It does not amount to two weeks each.
The Chairman. That is not my own personal experience. I am literally beset every day by persons out of employment.
Mr. WINGATE. How do you know that they are not impostors ?
The CHAIRMAN, I know some of them not to be impostors. Some of them are very deserving cases indeed. I thought that you had got some figures to furnish the committee by wbich you coulıl give us soine definite information on this point. Conjectures do not amount to anything.
Mr. Wingate, The shortness of the time at my disposal prevented my preparing a tabulated stateinent, which I will prepare and submit in writing. There is another fact which I desire to mention, namely, that a number of persons who are applicants for relief are frauds. A prominent gentleman has said that he has been overrun with applications for relief, and that, having taken the precantion to have the cases investigated, he found that seven out of ten of them were frauds.
The CHAIRMAN. That concurs somewhat with my own experience. I acted in the bureau of charity for a long time where visitors were employed, and, while they did not find the proportion of frauds that you state, they did find a very large number of them.
Mr. WINGATE. As to the question of the cause of the present destitution, I have some specific information. I think that sickness is the main cause of destitution. The English authorities are agreed that 70 per cent. of the panperism there is due to siekness. I am satisfied that the sickness in this city is very largely due to the unsanitary, condition of the dwellings of the poor; and one of the practical remedies that I would* suggest is an enforced better arrangement of the dwellings of the poor.
The CHAIRMAN. But that is a matter for State legislation, and not for Federal legislation. It would be considered a great outrage if the Federal government should send officers to the city of New York to show people how to live.
Mr. WINGATE. But the Federal Government might instruct its citizens. The CHAIRMAN. Is it your idea that the Federal Government should undertake to give sanitary instructions ?
Mr. WINGATE. I do not see why the Federal Government might not have a Department of Hygiene just as it has a Department of Education or a Department of Agricult
The CHAIRMAN. But it is not generally believed that the Department of Agriculture is of any great valne.
Mr. WINGATE. It might be possible, through the Smithsonian Institution, to diffuse sound information on the subject.
The CHAIRMAN. Certainly; but the Smithsonian Institution has now an endowmentfund managed by very intelligent men to do what they think best for the diffusion of knowledge.
Mr. WINGATE. But the information is not published in a popular forin. The CHAIRMAN. Throngh the universal newspaper press every subject is discussed in a popular form. I am astonished at the wonderful aniount of learning shown by the newspapers about those minute things. There is no form of knowledge that does not appear in the ordinary newspapers of the day. It is simply surprising, and there is no way of reaching the people equal to the newspapers. I know that when the newspapers abuse me, every man in town seems to know it.
Mr. WINGATE. Another point which has not been touched upon, and which is one great cause of the present condition of the workingwen, is the want of technical traiuing. That is a crying evil. It is the complaint of every man who has anything to do with workmen that they cannot get competent workmen. I heard a man say last summer that out of four hundred workingmen whom he had employed he could not find one capable of taking the foremanship. I think that in that field of technical training much good might be done.
The CHAIRMAN. You are aware that the general government devoted large amounts of public lands to colleges for agricultural and mechanical training, and that they have been niore or less successful. You know, also, that we have in this State the Cornell University, and that there is a technical school in Boston. I agree with you that it is most desirable to extend that sort of education; but the general results (strange to say) of those endowments by the government for that purpose have not been satisfactory: Cornell University is an admirable institution. It was designed to give technical instruction to mechanics and farniers; but now it is a great university, like Harvard and Yale and other institutions. So it is all over the country. You find that institutions endowed for tbat purpose bave not accomplished the object for which they were designed. It seems almost impossible for the Federal Government ever to accomplish the purpose at which it aims. I tbink that this must be left to the States, and towns, and villages. The Cooper Institute bas tried it in the city of New York. That mode of work is so much more effectively done by private insti.