, I 
 
 Transport. Gen. 
 
 Newspapers and Railroads 
 as Factors in Southern 
 Development 
 
 An address before the 
 South Carolina State Press Association 
 Chick Springs, South Carolina 
 July 7, 1914 
 
 By 
 
 FAIRFAX HARRISON 
 
 President, Southern Railway Company 
 
Digitized by the Internet Archive 
 in 2015 
 
 https://archive.org/details/newspapersrailroOOharr 
 
NEWSPAPERS AND RAILROADS AS FACTORS IN SOUTH- 
 ERN DEVELOPMENT. 
 
 The most noteworthy fact in the present-day economic history of 
 the United States is the progress of the South. This is demonstrated 
 by official statistics which show that, both in agriculture and in manu- 
 facturing, the South is going forward at a more rapid rate than any 
 other part of the country. 
 
 During the past twelve months there has been a general falling off 
 in the volume of business throughout the United States. This has 
 been felt less in the South than elsewhere, and such slacking up as we 
 have experienced has not resulted from internal Southern conditions, 
 but has been the reflex effect of conditions in other localities. In a 
 growing country like the United States a return to normal conditions 
 is inevitable sooner or later, and, as the situation in the South is funda- 
 mentally sound, we may reasonably expect that when this occurs the 
 South will benefit from it in full measure. 
 
 Iff we, as Southern people, are to make the most of the splendid 
 opportunities thus opening up before us it is essential that we shall 
 all get together and work in harmonious co-operation for Southern 
 progress, and I know of no agencies that can do more in this connection 
 than can the newspapers and the railroads. The interests of Southern 
 newspapers and Southern railroads in the development of our section 
 are very closely interwoven. Every increase in the population of a 
 community and every advance in community prosperity mean increased 
 circulation and advertising patronage for its newspapers and increased 
 traffic for its railroads. This identity of interest, therefore, affords a 
 sound business basis for co-operation between the newspapers and the 
 railroads for community development, and, as representing one of the 
 important railroad systems of the South, I am glad to have this oppor- 
 tunity to suggest some of the lines along which I believe that the 
 newspapers and the railroads may co-operate most effectively. 
 
 If our efforts are to be most successful, we must work along 
 three lines: .First, that of aiding those already living in the South 
 to make a larger and more profitable use of their opportunities ; second, 
 that of endeavoring to retain in the South those who may contemplate 
 
leaving in the hope of bettering their condition, and, third, that of at- 
 tracting to qacli community additional population of the character that 
 may be desired by the people already living there. From its organi- 
 zation Southern Railway Company has been a champion of the South. 
 Its management has believed that one of its highest functions was that 
 of co-operation with the people along its lines for the highest develop- 
 ment of the territory that it serves for the benefit of all alike. Southern 
 Railway Company was a pioneer in this co-operative work and I take 
 pride in claiming that it is doing more work of this kind and doing it 
 more effectively than any other railroad company in the United States. 
 We have gradually broadened the scope of our co-operative efforts 
 until we now have a strong auxiliary organization, co-ordinated with 
 but not part of our regular operating organization, and this active 
 and militant force is devoted exclusively to co-operating with the South- 
 ern people for mutual welfare. The largest unit of this organization 
 is that engaged in promoting the larger production in the South of 
 staple field crops, fruits and vegetables, and the building up of all 
 branches of the live stock industry through the raising of more and 
 better animals. As successful production depends largely upon profit- 
 able selling, we have market agents who devote their entire time to 
 bringing producers along our lines into touch with buyers and advising 
 as to the best methods of packing and shipping. We are endeavoring 
 to retain Southern people in the South by disseminating among them 
 better information as to Southern resources and opportunities, by seek- 
 ing out individuals who contemplate removing and presenting facts to 
 demonstrate that the opportunities which they have in the South are 
 
 equal to or superior to those which they may hope to find in the lo- 
 
 calities to which they contemplate going, and by declining the allure 
 of immediate revenue and the competitive temptation to participate 
 with connecting lines of railroads in reduced rates for home-seekers 
 leaving the South. We are endeavoring to attract additional popu- 
 lation and capital to the South by direct solicitation of industries and 
 
 farm settlers and by disseminating information as to the resources and 
 
 opportunities of the South throughout the United States, Canada, and 
 Europe. In this connection, I may mention that Southern Railway 
 Company is the only railroad company in the United States which has 
 an exhibit in the Anglo-American Exposition now in progress in London, 
 this exhibit being devoted entirely to showing the resources of the 
 territory which we serve. It is our purpose to continue our work along 
 
 
these lines and constantly to endeavor to make it more efficient, and 
 I know, from past experience, that one of the most effective ways of 
 doing this is through the co-operation of the press of the South. It 
 is our practice, from time to time, to send to the newspapers information 
 which we believe will be of interest to their readers and, at the same 
 time, may be helpful to the entire South or to particular localities. 
 That our view as to the interest and helpfulness of the information 
 thus sent out is shared by the editors is demonstrated by the general 
 publication which our bulletins have received. 
 
 In addition to promoting the development of the South through 
 publicity, the Southern press can aid materially in this work through 
 the influence of its editorial columns upon public opinion affecting 
 governmental policies. Every community in the South is inviting the 
 investment of new capital, and it is self-evident that one of the induce- 
 ments to invest money in any community will be a knowledge that the 
 public opinion of that community is such as to conserve the capital 
 already invested there and attract additional investments by something 
 more enduring than a personal welcome.” In urging the building up 
 of a public opinion that will support such governmental policies as 
 will encourage' investments, I have in mind, not merely investors in 
 other parts of the United States and in Europe, but also, and more 
 particularly, our own Southern people, for the time has now come 
 when, by reason of the accumulations of her recent prosperity, the 
 South is able, in a greater degree than ever before, to finance her own 
 enterprises. As an illustration of this, I may mention that Southern 
 Railway Company recently arranged for an issue of Atlanta & Charlotte 
 Air Line Railway bonds to the amount of $20,000,000 to be used in 
 completing the double-tracking of the line between Washington and 
 Atlanta. The first installment of these bonds, to the amount of 
 $5,500,000, were sold to a syndicate in accordance with the practice 
 in such matters, but, believing that Southern bankers would be glad to 
 participate in this financing and thus become more directly interested 
 in one of the great transportation systems of the South, as I would 
 like every responsible man in the South to be, I secured the consent 
 of the syndicate to reserve a limited amount of these bonds to be offered 
 to Southern Railway depository banks throughout the South. The 
 response to this offer far exceeded my expectations and was most grati- 
 fying, for it was a new departure in railroad financing. Subscriptions 
 were received footing up more than twice the amount of bonds originally 
 
 3 
 
set aside for the purpose and exceeding by more than $100,000 the 
 amount which I was finally able to obtain for Southern subscribers. 
 The success of this bond offering is eloquent testimony to the growing- 
 financial strength of the South. It is an indication that the South will 
 henceforward, in constantly increasing measure, finance Southern enter- 
 prises and keep at home money which would otherwise be sent to other 
 localities for the payment of interest and dividends. It should encourage 
 us to promote and to support by public opinion policies which will hasten 
 the conversion of the South into a section of investment as well as of 
 production. 
 
 In speaking of the attitude of the press toward invested capital I 
 should not he understood as opposing just criticism of any improper 
 policies or unjust acts on the part of corporation officials or others. 
 Speaking for Southern Railway Company, I court the widest publicity 
 for all of its corporate acts and policies and invite the freest discussion 
 of them, I acknowledge that my official conduct is frequently stimulated 
 and modified by the comment of the press. I do ask, however, that 
 criticism shall at all times have for its basis complete knowledge and 
 that, prior to accepting as the truth any report concerning our affairs 
 that may become current, enquiry as to it shall be directed to me or 
 to some other responsible officer of the Company. 
 
 Judged by the editorial comment in the Southern press as well as 
 by personal contact with Southern men, I believe that there is today 
 throughout the South a better and more general understanding of rail- 
 road policies and the difficulties encountered in railroad operation than 
 ever before. 1 find that there is a general disposition on the part of 
 the public to appreciate that the business practices of the railroads today 
 are founded, not upon an arbitrary system of exploitation, but upon the 
 necessity of securing and of conserving a revenue adequate at once to 
 carry the responsibilities of the past and to permit progressive growth 
 in the future — in other words, that a railroad, like every other living 
 thing, has to struggle for existence and make both ends meet. The 
 public view of the railroad question has undoubtedly been clouded by 
 revelations of the exploiting of certain railroads for the purely selfish 
 ends of those who controlled them, but, when the “shouting and the 
 tumult,” which has been stirred by these revelations, and the political 
 use made of them dies away, the sober second thought of our people 
 will, I am confident, differentiate in their criticism between the purely 
 dishonest acts of some individuals on the one hand and on the other 
 
 4 
 
hand the survival in the practice of other individuals of a conception of 
 the economic status of a railroad utterly and entirely different from 
 the conception which a changed view of public questions has established 
 as a rule of conduct today. It has been demonstrated to be impossible to 
 change in a year, or in a few years, habits of mind and habits of action 
 which were once fostered by government and applauded by public 
 opinion simply because there are new leaders of public opinion with 
 radically different views. I belong to the new school of opinion myself 
 and 1 suggest this point merely that intelligent men who are onlookers 
 may appreciate it as I have appreciated it in my experience in the heat 
 of the conflict of economic change. To illustrate: the State of South 
 Carolina has been one of the leaders in the movement now experienced - 
 in all parts of the United States for what is called “state wide’-’ control 
 of the sale and distribution of intoxicating liquor. There is an im- 
 portant body of public opinion in every State of the United States 
 which earnestly contends that the control of the liquor traffic is not 
 merely a policy of government revenue, not an economic measure, but 
 a moral issue ; and yet, for all the growth of this view, public opinion gen- 
 erally has not yet accepted as a truth that there is a moral degradation 
 to a gentleman who takes a drink in his own or a neighbor’s house. So 
 it is with the railroad question : there are still many respectable men 
 who believe in the policy of monopoly of public utilities as a doctrine 
 of efficiency and of economic strength, despite the clamors of the ad- 
 vocates of a strict enforcement of the doctrine of competition. 
 
 I find that the chief criticism of the administration of the railroads 
 in the South today is on the adjustment of rates. Many communities 
 in the South have told me that they do not care what the rates are, if 
 only they are so adjusted that there shall be no discrimination in favor 
 of one locality at the expense of another. To some earnest and intelligent 
 men it seems that it must be an easy matter for a railroad manager 
 who is so disposed to wipe out all the existing discriminations : and I 
 find some impatience at references to the history of rate-making in the 
 South in attempted explanation. 
 
 Most of those to whom I am now speaking know that railroad 
 freight rates in the South were built on the so-called “basing point" 
 system, a system which started with admitted discriminations but justi- 
 fied them by the competition, whether by water or by rail, which existed 
 at the favored points. There is little doubt that the growth of the basing 
 points, which this system stimulated, has been of advantage to the entire 
 
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South by creating important distributing towns in the interior of a 
 country where, when the railroads were built, there were few towns of 
 any size away from the seaboard. It is difficult also to believe that the 
 historical rate system in the South, whatever was its justification, has 
 been oppressive to the country, for we see Southern towns, still grow- 
 ing and prospering with a vigor which excites the astonishment of all 
 observers, which for their entire municipal existence have been in de- » 
 pendence for communication with the rest of the world upon these rates I 
 which are now condemned. In the demands for readjustment one must 
 recognize, therefore, an expectation of selfish advantage back of the 
 words “fair” and “just” which are so eloquently used against the rail- 
 roads, but I, for one, respect this selfishness as an expression of a 
 virile community ambition, and I recognize that the railroad is going 
 to share in the prosperity of a growing town and in the multiplication of 
 towns and, to the extent of its abilities, should do its part to promote i 
 that prosperity without preconceptions as to methods. Such being the 
 disposition, the problem of the railroad manager has practical limitations. 
 He has inherited a situation for which he is no more responsible than 
 for the shape of his nose, and it is as much part of the railroad as his 
 nose is of his face. The sudden application of a new rule of absolute 
 equality, the literal and immediate measure of the principle that the 
 rate for the short haul shall always be 1-ess than the rate for the long 
 haul, without other compensation, would necessarily bring a railroad 
 face to face with an important reduction of its total revenue. If the 
 railroad is to continue to live and to grow after such a surgical opera- 
 tion there must at the same time be a general readjustment of its rates 
 with advances in one direction compensating for reductions in another. 
 At a time when there has been an increase in all of the elements of its 
 operating costs, a railroad finds a serious economic difficulty in arbi- { 
 trarily reducing its revenue, especially when it depends upon the growth 
 of its income to justify the provision of new capital to enlarge and 
 improve its plant in compliance with public expectation. In this pos- 
 ture of the problem, I, for one, welcome the intervention of regulating 
 authority, if only regulating authority recognizes that the exercise of 
 power carries with it a correlative assumption of responsibility. I do not 
 say this from any lack of courage or from any lack of confidence in our 
 ability to work out the problem fairly on our own responsibility, but from 
 a realization of the practical position of the railroads in public opinion 
 today. I trust that it may prove easier for a government board so to 
 
 6 
 
adjust rates as to satisfy every one and at the same time produce a total 
 requirement of revenue, than it can be for a corporation subject to all the 
 limitations of a reputation for rapacity, which unfortunately the rail- 
 roads still have in the minds of many good people. 
 
 If the Interstate Commerce Commission would prescribe all our 
 rates, as they have the power to do, adjusting them on a basis to yield 
 [ us a revenue sufficient to carry on our operations, make improvements 
 and pay a just hire to capital, as well as to labor, I would rejoice in 
 their action in the consciousness that I was thus left free to devote 
 our energies to the improvement of our competitive service, with the 
 confidence that we could give such service as would win and hold for 
 us the respect and affection of all the Southern country. But, whether 
 this consummation ever can be attained, I rely upon our action in the 
 future, based as it will be upon a desire at all times to be fair, to illustrate 
 our motives, and to bring home to the public a realization that a rail- 
 road can claim all the respect due to integrity and patriotism. 
 
 I believe then that we may expect in the future a better under- 
 standing between the public and the railroads than ever before, that the 
 railroads will better appreciate the viewpoint of the public, and that the 
 public will better understand their interest in prosperous and efficient 
 railroads. I believe, too, that, in bringing this about, the press of the 
 South will be a most important factor and that the newspapers and the 
 railroads, working together, will become ever more efficient factors in 
 the promotion of Southern prosperity. 
 
 
 
 
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