ADDRESS
SENATOR JOSEPH E, BROWN,-
President Western & Atlantic Railroad Company, and President
of the Sonthern Railway and Steamship Association. ^
before the
JOINT COMMITTEE OF THE GEORGIA LEGISLATURE
Internal Improvements and Railroads,
delivered in the senate chamber
AUGUST 13, 1881.
Hon. W. B. BUTT, Chairman, Presiding
HE
1881.
CONSTITUTION PUBLISHING COMPANY.
atlanta, oa.
ADDRESS
SENATOR JOSEPH E. BROWN,
President Western & Atlantic Eailroad Company, and President
of tlie Soutliern Eaihvay and Steamship Association.
BEFORE THE
JOINT COMMUTEE OF THE GEORGIA LEGISLATURE
ON
Internal Improvements and Railroads,
DELR^ERED IX THE SENATE CHAMBER
AUGUST 13, 1881.
Hon. ay. B. BUTT, Chair:man, Presiding
1881.
œJYSTITUTION PUBLISHING COAIPANY.
ATLANTA, GA.
I had hoped, Mr. Chairman, to have seen my friend
Governor Smith and my friend Major Wallace, both of
the Railroad Commission, present this afternoon. That
pleasure is denied me, however. Doubtless they have
good reason for being elsewhere.
THE BEGINNING OP EAILROADS, AND THEIR EFFECT ON
COMMERCE.
My friend Major Wallace does not look like a
very old man, but he was twenty-three years of age and
transacting business when the first railroad train of en¬
gine and cars ran upon the face of this earth. The first
road that was completed, and made an excursion trip,
was the road between Manchester and Liverpool, in
England ; and that trial trip was made in September,
1830. Mr. Adams, in his book, says there is some reason
for saying that South Carolina was the first State in the
world that commenced to put into operation a portion
of a railroad to be run exclusively by steam or by engine
power. He disclaims the honor for the Quincy road of
Massachusetts, as is generally claimed there, as it seems
it was but little more than a tramway.
Probably next to South Carolina comes the State of
New York. So that England, South Carolina, and New
York, may be said to be the first three States on earth
that ran trains of cars propelled or carried by engines
with steam power, and that as late as the year 1829
when the first experiments were made, and 1830, when
the first grand trial excursion was run. To warn men of
the danger of railroading, an accident occurred during
that excursion between Liverpool and Manchester, by
which a man was killed. The Duke of Wellington, then
premier of England, attended and gave his sanction,
on the occasion of the trial trip.
What has been the result of those experiments?
Wonderful to think of. Within half a century the
t
4
whole world has been revolutionized ; its cities, its
transportation, its commerce. Formerly the cities were
built only at the mouths of rivers, which penetrated the
country. Now they are built whei'e the greatest con¬
centration of railroad power happens to be. Take our
own country, and what has been the result ?T h ere are
now in round numbers about ninety thousand miles of
railroad in the United States in operation. Count that
as having cost $25,000 per mile ; and counting the
equipment and all, it has cost more than that, no doubt
largely more, and we have as the result. Two Thousand
Two Hundred and Fifty Millions of Dollars invested
in railroads in the United States. That investment has
doubled, and in many cases trebled the value of real
estate and other propert3'-, and especially the real es¬
tate through the sections traversed by the roads. Right
here, where we sit, is an illustration. I have been in¬
formed that since the year 1830, since the first railroad
train ran on earth, a lot of 202^ acres in the very center
of Atlanta, sold for a horse, saddle and bridle. Rail¬
roads have made Atlanta what she is, and I refer to
it because it is a matter before our eyes, and we can
all look upon it. Here now are probably twenty or
thirty millions of dollars worth of property. I have
not noticed this year what the assessments are, as I
have been otherwise busy. But had it not been for the
railroads there would probably have been none of this
property here ; and that lot of 202^ acres would still
have sold for a few hundred dollars. This is no isola¬
ted case. There are numerous cases like it all over the
country. Railroads then, I say, ha.ve revolutionized
the country, built cities, great commercial centers,
where formerly none existed, nor could exist, under
the old system, vastly added to the value of real estate
and property of every character, and given new life and
new energy to everything, not only upon this continent,
but upon all the continents of the world, for they now
have roads in Europe, Asia and Africa.
5
That is not all. The invention of the telegraph
seems to have been either directed by Providence or
to have happened just when it was needed in connec¬
tion with the railroads. And while the trains now
sweep over the face of the earth with a velocity of from
•20 to 50 miles an h oui', men converse with each other
from one side of the continent to the other, and flash
their thoughts across the ocean instantaneously. A
wonderful age this we live in. The system that has
produced this great result is wortlnr of human consid¬
eration. It is worthy of the consideration of the ablest
statesman as well as the profoundest political econo¬
mist. It is a gigantic system, however, and while it
has made this country what it never could have been
without it, I do not think it should be left entirely un¬
bridled, without regulation. But I do say that
those who seek to control it should not seek to do
gross injustice to a system that does so much for our
whole people.
A few years ago they burnt corn in the West for
fuel. AVhy ? The lands were exceedingly fertile, and
the people made vast quantities of corn. They had
no means of transportation. They could use only
what they fed to their stock and their families, and
the rest was left as the cheapest fuel they had. Before
railroads penetrated the great West, ten cents a bushel
was high for corn ; many times it would not command
that. In that day your exchanges were conducted
mainly upon your cotton crop. What has happened
since the days of railroads? These long steel-rail
lines that so much has been said against have pene¬
trated the great West, and by thousands of miles go
upon the plains and prairies ; and by combining and
placing long lines under one management have been
able to carry productions rapidly to the Eastern cities ;
and then, by the aid of steamships, speedily to land
them on the other side of the ocean, to fill any vacuum
there, so as to make the teeming productions of
6
the W est a great auxiliary to those of the South in
conducting commerce and the exchanges of the gov¬
ernment.
Look at the statistics, and you will see that the meat
and the flour and other productions of the West figure
very largely now in the account.
We have hail commercial depression and periods
of inflation, and we shall continue to have them.
Whether at as regular intervals as in the past I can¬
not say, but we shall have them. How has it been,
however, for the last few years ? The balance of trade
has run in our favor as high as $260,000,000 in round
numbers in one year. In other words, in trading with
foreign powers, we have shipped to them of our pro¬
ductions and manufactures $260,000,000 a year more
than we have received of their productions in return,
and they have had to pay us that large balance in gold
and silver. This has poured into the lap of our coun¬
try an immense amount of the precious metals, cre¬
ating what is called "the great business boom."
Would it have been but for these railroad facilities ?
Clearly not. Wh}', we have even pressed England to
the point where, I see, they are holding meetings now
and demanding a protective tariff" to keep the produc¬
tions of the United States at such low prices out of
their markets, as the English farmer cannot compete
with us on the free trade basis.
Well, now, I say any great interest or development
that men have put their money into, that has pro¬
duced such a result as this, is entitled to the consid¬
eration of statesmen everywhere. I know how easy it
is to excite popular prejudice against corporations
and monopolies, as thej^ are called. It is an eas}^ task
with the people, as it would be easy to influence many
of them by the doctrines of agrarianism, and make
them believe it would be better every ten years to di¬
vide out the property equally among everybody.
Many of them would shout and throw up their caps at
7
such a doctrine ; and it is easy enough to have follow¬
ers when you sa}^ : "Let other people build railroads
and let us lake charge of them and run them for our
own benefit without its having cost us anything."
But is it just? I address cool-headed men, grave sen¬
ators and members of the House who were sent here
to represent the people. I ask for no privileges for the
railroads that are unreasonable. I do not ask that
you take them from under government regulation,
but I do ask that you do something like justice by
them, and deal with them upon principles of fair play.
EAILROAD PROBLEM—THE COMPETI ITVE SYSTEM.
So much for the history of railroads, and the results
that have been produced by them. But this new
state of things ; this great revolutionizing element that
has come into existence, that has revolutionized com¬
merce and changed the basis of your exchanges and
the balance of trade, has brought about a grave prob¬
lem for the economist and the statesman. How are
these great interests to be managed so us to do jus¬
tice to the people, and at the same time do no injus¬
tice to those who have invested their means in construct¬
ing them, thereby building up society and commerce ?
That is a problem that every civilized nation has had
more or less to do with. It has been found a very
difficult one to deal with. The great law of tiade is,
"encourage competition—the more competition, the
better for the people." And yet the experience of the
world has already shown, most conclusively, that that
system applied to railroads, ends inevitabljmn consol¬
idation, and does the greatest injustice while it is
working out that result. The competitive system has
been virtually abandoned in England. It was never
tolerated to any great extent in Prance. In Bel¬
gium, the government owns interest enough in the rail¬
roads to keep, as Mr. Adams says, the thumb upon
the regulator all the time and regulate the competí-
8
tion. In Germany the government is taking hold of
it, so as to control the competition.
It is worth while to inquire into the system England has
adopted. There was the first successful railroad on earth,
and there are statesmen there competent to deal with the
problem. Indeed, Imayjustly say that the statesmanship
of England towers like a vast pyramid upon the plain of
time. This question, has there been agitated more, I
think, than anywhere else ; it has received a fuller investi¬
gation, and they have finally reached a solution. And
that solution is that in railroading consolidation is the rule,
and not competition. And in the regulation of railroads
they have adopted a judicial tribunal, and not a tribunal
possessing legislative, executive and judicial powers all at
once, like our railroad commission. They tried various
experiments, but have finally settled down upon a
railroad commission of three members, as we have
here, whose powers are mainly judicial, and in most
cases their decision is final and conclusive. This commis¬
sion is one of the high courts of the realm, possessing great
ability and great dignity. In the above statement the re¬
port of our railroad commission concurs, and doubtless
Col. Barnett has compiled it correctly. That commission
has the right to submit legal questions to the law courts of
England ; and it is said that they have so regulated mat¬
ters by the commission taking judicial cognizance, that
there is now but little trouble in working the railroad sys¬
tem of England. Now the commissioners here if I un¬
derstand it, object to being limited to the simple judicial
powers possessed by this high court of England, and they
say the people would not look to their rights in that case,
THE PEOPLE KNOW THEIR RIGHTS.
My friend. Col. Barnett, went so far (for I took down
his language) the other day, as to say that the people did
not understand their rights on this question. There I
take issue with him. If he had managed a railroad as
long as I have, he would have found that they do under-
9
■stand their rights very thoroughly. Even scrub cattle un¬
derstand their rights. The only thing that has no rights
is a fine-blooded cow. They never do understand that it
is their right to keep off the track, and when one is turned
loose, the first thing she does, is to make for the track of
a railroad, for our settlements show we never kill scrub
stock, never. [Laughter.] None of it ever gets on a rail¬
road. I have never known an instance where even as
small a thing as a calf or a pig was killed, that the com¬
pany was not called on to pay for it ; and if it does not do
it, a law-suit follows very soon. Why, the people go fur¬
ther than that. In one instance, one of our trains unfor¬
tunately happened to get entangled in a flock of geese and
killed four of them ; and it happened, as usual, that they
were the four blooded geese of the flock, and in a few days
here came a claim for one dollar apiece, because of the
blood of the geese. I had seen some priced in the mar¬
ket a few days before at thirty cents, but I compromised
and paid 75 cents apiece, on account oí the blood of the
geese. [Laughter.] I knew I would be sued if I did
not. No ; my friend is greatly ¡n error when he says that
the people of Georgia do not understand their rights. The
great body of them understand their rights much better
than he does, and are more tenacious in maintaining them.
On this point they do not need his guardianship.
THE RAILRt)AD COMMISSION SHOULD B.^i .lUDICIAL.
If you will make our Railroad Commission a judi
cial tribunal you will do a wise thing. In England the
railroad commission ranks iiigh, among the high courts.
So ours should do here. I would give it all the dignity
its members could ask, and I would give them a better
salary. Gov. Smith disclaimed yesterday that they de¬
sired it. I say they are entitled to it ; they ought to
have it ; and their Secretary ought to have the $2,000
of salary they ask you for. I would make them a dig¬
nified court, paying them a competent salary. I would
then let railroad men, like other men, regulate their
10
own affairs as long as they keep within legal rules.
The Constitution of my State says what shall be ille¬
gal in a railroad company. It has no right to charge
nnjust or unreasonable rates. It has no right to pay
rebates. Make the law strong as you will on that sub¬
ject, and make us liable when we violate it, and make
the commissioners' court thejudges of the violation, and
let them, without any regular term time, summon us be¬
fore them when the humblest citizen has complained.
If, as president of a railroad company, I keep with¬
in the law, why shorrld a commission be called in
to make my rates and manage my business for me ? If
I violate the law you can give the judges the power un¬
der the general rules you lay down, to adjudicate the
case, and hold my company responsible for it. That I
think is the true remedy. There is in that case no room
for complaint about the unconstitutionality of the act.
I think I showed to a demonstration here the other
day that the present commission has legislative powers,
judicial powers, and executive powers.
And it has not enough power to satisfy it yet ! It is
now asking you to give broader scope to its jurisdic¬
tion, and it does not matter what decisions it makes
against railroads, I suppose popular sentiment would
sustain them. I have not complained. I have pre¬
ferred to submit to wrong. Gov. Smith, the other day,
turned some periods upon the fact that I had not com¬
plained. That is no reason why I was willing to sub¬
mit to arbitraiy power. But I say that the railroad
property of Georgia, if the present law is sustained, is
to-day as absolutely under the control of those three
gentlemen as the subjects of Russia are under the con¬
trol of the autocrat.
NO TKIBUNAL SHOULD BE TESTED WITH TOO MUCH
POWER.
Their power is complete, only that it does not embrace
through freights, and "joint freights," as they call
them. I am not complaining of their abuses of power.
11
I told you the other day I came here to make no as¬
saults upon these gentlemen. Personally, I esteem
them all very highly. Writers on government tell us
that a monarchy is the best government on earth for
various reasons, if Amu could always have a wise, and a
just, and a good monarch. But as jmu cannot, it is
never best to risk such a government. While there
may be no danger in giving absolute autocratic power
to good Commissioners over the railroads of Georgia,
yet the present Commissioners may die or resign, and
then we may not fall into hands so just as they claim
to be. I say it is unsafe to entrust to any one the amount
of power they ask over the railroad property of Geor¬
gia.
They appeared contented when they made their reg¬
ular report. I will read a clause from page 137 of
that report :
"We think that our whole action shows no disposi¬
tion on the part of the commission to grasp at power,
though the contrary has been alleged without proper
consideration. Had this disposition existed in fact,
the strong language of the first report had never been
used, and in the present report, we should be asking
for more powers instead of suggesting ready means of
appeal from those already possessed. It were easy
enough to show grounds for increased powers in cer¬
tain particulars, were we anxious for their extension."
Why, we would have supposed from that report
report that the}^ are satisfied with their present
powers, and we railroad men thought they ought to
be, yet when your committee or some other members
of the legislature asked them whether anything more
ought to be done, they in reply tell us that it is very
important that their powers should be enlarged, and
enlarged so as to embrace all through freights, and
also the "joint business." And in order to show us
that there is no danger in that, they again set forth
in very beautiful form, how much the system would
12
be improved by enlarging their powers, i read from
page 4, of the supplementary report on "Railroad
L/egislation "The commission can as safely be en¬
trusted with these as with their present duties. It
could have no reason for any arbitrary or capricious
exercise of the powers." Again they say on the same
subject (page 4): "The extent of the action of the com¬
mission on joint rates would be controlled by just con¬
siderations of loading and unloading, billing, etc., car
load or less than car load quantities, and all the
proper elements of computation. There would be no
loose or wanton action."
These are very pretty promises. They say they
would do only what is proper, fair and right, if you
would only confer these powers. Now, I think it is
not best to put too much responsibility even on good
men. You may go further than it is reasonable to go.
I have no doubt the Commissioners believe that they
are entirely impartial, and that they would not abuse
the arbitrary and despotic powers they ask you to
confer. And still they place themselves before you in
a position that, under the well known rules of law,
would disqualify them from acting as judge or jury.
Suppose an entire stranger to our sj^stem had been
present and heard this discussion, and seen two of the
Commissioners addressing you in opposition to the
railroads, setting forth everything that an adroit attor¬
ney employed against the railroads would use to prej¬
udice the mind of a court or jury in behalf of his
client and against his opponent ; and suppose the
by-stand er in all their remarks had not heard a word
in commendation of the course of the railroad man¬
agement or anything set down to its credit for good,
and had heard nothing but that the railroads were
monopolies, and were grasping, and were making too
large incomes, and could not be safely trusted with
the management of their own affairs, what think you
•would be the conclusion of such a Spectator 1 Would
13
he not have been astonished if some one had said to
him, "These two gentlemen are judges ; they have to
decide all questions between the railroads and the
people, in reference to the general transaction of their
business ?" And would not the astonishment that the
spectator would have felt in such case have been very
natural? Suppose a juror should get up before a
court and make a speech setting forth in substance
that one of the parties litigant was, in his opinion, an
extortioner and oppressor of the unfortunate ; that he
was ready to override the best interests of the com¬
munity to foster and promote his own interest, and that
he was a very unsafe man to trust with the manage¬
ment of affairs—in a word, that he was an oppressor
of the people ; and if this juror should say not a
word against the other party ; think you the court
would pronounce him a competent juror to decide the
matter in dispute between the two parties ?
Suppose again that the same spectator were to look at
their report and see what is said about the case of Tilley
vs. the Savannah, Florida & Western Railroad Company.
He would naturally expect to see that both sides had a
perfectly fair showing in the report as it is made by our
Judges, and would naturally expect that whatever tended
to elucidate the points on each side would be given with
equal fairness. But let him look at the facts a moment,
and how does he find them? The very able brief of
Chisholm & Erwin in that case is condensed in the Commis¬
sioners' report to but little over a page, that of Mr. Falli-
gant omitted entirely, while the able and lengthy brief of
Mynatt & Howell, the attorneys for the Railroad Commis¬
sion, the brief of Attorney-General Anderson, and the
decision of Judge Woods, which was unfavorable to
the railroads, are set forth in extenso verbatim et lite7-atim ;
no abridgment, no curtailment ; the entire thing on
that side is given to the public, embracing some twenty
pages of their report. Why give the briefs in full of the
counsel on one side, covering some ten pages, and abridge
14
the briefs of counsel on the other side to a single page
Doubtless there was no improper intention here, but any
one who reads the report can see that there has not been
perfectly fair play. If a case, commenced and prosecuted
in the courts by a railroad company to try to get what they
considered justice, was to be set forth in extenso in the re¬
port of the commissioners, and published at the expense of
the State, why not give the full report? Why give ten
pages of brief on one side and only one on the other, to
say nothing of the decision of the Judge which was against
the railroad company, which is also spread out at ful
length in the report? I simply mention these things to
show that the most honest and upright and able men of
the State may become partakers in the public feeling of
the State against railroads to an extent that while they are
acting in an official capacity and intending to do the fullest
justice to both sides, they have suffered themselves to be
biased and failed to give each side before the public the
same fair and impartial hearing. How dangerous it is to
entrust men with too much power I The best of our race
have often abused it. Our able commissioners would be
as little likely to abuse it as any other three gentlemen.
But it is not safe to give even to them absolute powers, or
a combination of the powers of the three departments
of government. The very possession of absolute powe
tends, with mankind generally, to lessen the sense of respon¬
sibility, causes intellectual indolence, and tends to lull the
conscience into a state of inactivity and false security.
But the Commissioners may say that they were in¬
vited here to discuss these questions. That is true.
The representatives of the railroad interests, who feel
that they are now the subjects of the absolute power
of the Railroad Commission, invited them here under
the belief that they seek to make themselves impar¬
tial officers, doing exact justice between the railroads
and the people, ready to commend what is right in
our management, as well as to condemn what is wrong,
and that they would be willing to such modification of
15
their powers as would do justice alike to the railroads
and to the community. We certainly did not expect
the Commissioners would, in speeches consuming four'
hours' time, arraign the railroad interests, as they
have done here, and set down naught to the credit or
justice of their management. This exhibition before
jmu, gentlemen, seems to me to admonish us of the
great impropriety of enlarging the powers of the Com¬
mission. Not that it is their intention to do wrong ;
not that I believe they would in any instance do
wrong, wilfully or knowingly ; but their report and
their speeches show very clearly that they have un-
thoughtedly and unintentionally fallen in with the
strong side ; that they have fallen in with the popular
clamor which seeks to subordinate railroad interests
to popular control at popular caprice.
On reflection, I have no doubt they will see this er¬
ror, and, if they should at any future time appear bel
fore you, that they would be more like Mr. Adams,
who is one of the oldest and ablest railroad commis¬
sioners in America, not only ready to do justice to
both sides, but able to find the merits and demerits
connected with both.
THE COMMISSION GRASPING POR MORE POWER—JOINT
EREIGHTS—THROUGH FREIGHTS.
Having shown how hard it is for the best men to
exercise power impartially, let us now consider the
enlarged powers the Commission seek. They want
you to give them jurisdiction over the "jointfreights,"
as the}'call it. What do they mean by "joint freights?"
As I understand them, they mean freight shipped from
a station in this State on one road to a station in this
State on another road. They say it is excessive to
permit the two roads each to charge its local on such
freight. But how is this? It is only another means
they are seeking of reducing our rates. They consider
it excessive to permit us to charge our locals on short
16
distances. As an illustration, we load a car with corn
at Marietta, and it is shipped to Decatur. That goes
20 miles on the W. & A. and six miles on the Ga. ß.
ß. They want power to call that a "joint freight."
We charge a little local from Marietta to Atlanta, and
the Georgia charges a little local from Atlanta to De¬
catur. Here we each have to handle it, and each road
carries it but a few miles. The Railroad Commission,
not content with their present powers, want authority
to make a joint or through rate between Marietta and
Decatur, and to say that the two roads shall only
charge a through rate on that business. That I under¬
stand to be the "joint freight freight taken from a
local point to a local point on a connecting road. I
see Col. Barnett nods assent to that. That, then, is
the power they want to exercise.
They make the rates at present. They say what
local rate each company shall charge to every station.
Why is it, when that is done, that they want to cut
down our incomes still further, when it goes from one
road f'o another ? They cannot diminish the expense
of loading and unloading and handling, for short dis¬
tances, by calling it a "joint business."
THE OOMMISSIOX SHOULD NOT HAVE POWER OVER
THROUGH FREIGHTS.
But that is not all. They also want control over the
entire matter of through rates, and that is a grave
question. By this they mean that they want jurisdic¬
tion over all freights that come from another State into
Georgia and stop there ; or that come from another
State_ and pass through the territory of Georgia into
another State. The proviso in the fifth section of
the act, expressly excludes them from that jurisdic¬
tion. Ought they to have it? I want to discuss that
question.
If you intend to permit railroads to make any profit
or any dividends upon their investment, they must
17
make it on freights or fare paid by somebody. What
they do not make on through freights; they must
make on local freights. It would seem that the pur¬
pose of the commission now is to compel the canying
of through freights over our roads in Georgia at the
same rate charged on our home or local rates ; and
this I infer from an expression used by the commission.
Freights brought from abroad is carried further for
less rates than that made at home." {lb. page—.)
Well, that is true, and it must be so, or you exclude
the foreign freight entirely and then the roads have to
fall back upon your home productions and make
their money entirely out of local freights. Let me il¬
lustrate that. I presume no member of this committee
would complain if he wanted to remove ten tons of
corn from Marietta to Atlanta, and asked us to take
it, and with our trucks and emplojms, roll it into the
car and load it in Marietta, then haul it to Atlanta,
twenty miles, and unload it, and deliver it, and take
the responsibility, that v e had charged him too much
if we were to ask $10 for transporting the ten tons of
corn. That is less, probably, than is justly charged
on many locals. What would that amount to ? Five
cents a ton a mile on the freight. That is not unrea¬
sonable for that distance, taking loading and unload¬
ing into the account. ISTow let us apply that in our
own State ; instead of bringing it twenty miles, sup¬
pose we bring it a hundred miles, from Dalton to At¬
lanta. The same rate charged, five cents a ton a
mile, would be $50 for the car load of corn. That is
17J cents a bushel, or 30 odd cents a hundred pounds.
The citizens of Dalton and the farmers around cannot
bear that, and they are not required to pay us any
such price, They get a lower rate on a longer dis¬
tance. Therefore, the rule will not do as applied right
at home in our own State. It is reasonable, just and
fair to charge the $10 for loading, hauling and unload¬
ing and delivering ten tons of corn for twenty miles.
2
18
Bat charge the same rate tor carrying it 100 miles in
Georgia, and it runs up in round numbers to 17^ cents
a bushel, which is unreasonable, and more than the
producer can bear.
IMPOSSIBILITY OF UNIFOEM BATES.
Let us examine a little further and see what effect
this enlargement of power asked for by the Commis¬
sioners would have upon through freights from other
States. Suppose the the same car-load starts from St.
Louis, or at a point distant eight hundred miles, to
come to Atlanta. "ISiow," say the Commissioners,
"it is not rigiit that 3mu shall charge less on that Mis¬
souri corn per mile than jmu charge on Georgia corn."
Well, suppose you charge the same —-
Col. Barnett—Excuse me for interrupting you. You
have appealed to me once or twice when you were stat¬
ing 111}' positions, in which I concurred in j'our view.
But if that is your view of the proposed action of the
Commission ou misunderstand it. We have never put
the rule of prorating per mile into operation in the
State, nor would we propose to do it out of the State.
Mr. Brown—I shall be very glad should we unfortu¬
nately get into Col. Barnetl's hands, if he will take
that line. But the language used by the Commission¬
ers is that "Freight brought from aboard is carried
farther for less rates than that made at home." hTow,
if I can understand language, it is a complaint that we
bring it from abroad for less than we carry it at home.
Mr. Barnett—That is not for less per mile, but for ac¬
tually less. That is, there are many freights which are
brought into the Stateand carried for 400 or 500 miles, not
only at less per mile, but the aggregate is less. That
is to say, where a charge would be $10 for carrying this
through freight 500 miles, the charge for carrying the
same amount of home freight for the same or a less dis¬
tance. That is what I mean.
Mr. Brown—Then why did you not say so in your
19
report? It would be very difBcult for the Colonel to
find his instance in practice. But, carrying out the
line of argument I was upon, it has been a favorite habit
in Georgia with partisans and demagogues for a long
time, to cry out that we ought to carry everything at
the same rate per mile. Then one car-load of corn from
a point in the West FOO miles off would cost S400 to
bring it here at the rate charged on it from Marietta to
Atlanta. You planters would not stand that very well.
Mr. Barnett—I would ask this: have we, in the ju¬
risdiction we have exercised over local rates, pursued
the method you refer to of prorating per mile?
Mr. Brown—I do not think you have in all cases. I
believe you have in some probably. I am not positive
about that. You are more familiar with your own pro¬
ceedings.
Mr. Barnett—I say we have not.
Mr. Brown.—So much the better. I hope yon will
not do it in future.
Mr. Barnett—Your argument is based upon that.
You evidently have misconstrued and interpolated by
that misconstruction the word "per mile" from what
you read. On page 4
Mr. Brown—I have no objections to interruptions^
but when it comes to making a speech
Mr. Barnett—I only wish to say that the way in
which we expressed that does not indicate at all that
there is more charged per mile, but that within the
State for fifty miles it is a greater absolute charge, and
not a greater relative charge ; that is, that more is some¬
times charged for fifty miles in the State than for five
hundred miles without the State. And I will illustrate
it by this statement that
The Chairman asks if Mr. Brown yields.
Mr. Barnett—It is only one sentence.
Mr. Brown—I would be glad to hear it.
Mr. Barnett—It was that such instances as this
have been brought to the attention of the commission.
20
that freight was carried from New York via Savannah
and through Georgia to Louisville, Ky., at 35 cents a
hundred, when the same freight, if stopped in Atlanta,
paid 60. That is the character of the transaction that
I am complaining of. It is not per mile, but absolute
increase.
Mr. Brown—I am much obliged Co Col. Barnett for
that statement. There is a good cause for it. And the
instance he cites, if as Commissioner he would forbid
it, proves he should not be entrusted with the power he
asks, as such interference would be unwise in itself,
and unjust both to the roads and to the people of
Georgia. It shows that he does not comprehend the
situation.
We are trying to build up in favor of our Southern
roads, a competition with the Northern roads for the
Western business. For a long time the Northern roads
have had a monopoly of it. They run four great
trunk lines, as you are aware, from the Eastern cities
into the great West—the Baltimore and Ohio, the Erie,
the Pennsylvania, and the New York Central. These
are the four great trunk lines that penetrate the West
in every direction, going to Chicago, St. Louis, and the
other central points of that section, and they do that
business. And they are now carrying freights at al¬
most nominal prices through to New York, and thence
by steamer to Charleston and Savannah. Then they
load their ¡-teamers with cotton and other production
back to New York, and load their cars in New York
with Western bound freights. Now, that freight land¬
ed, as I have said, in Charleston and Savannah by the
steamers from New York, we can take and carry to
Louisville at a very low rate, and make money on it.
Why ? Because they are in a war of rates between the
trunk lines in the North. There is no consolidation
there. There is competition there in the broadest sense
of the term between the trunk lines. That competition
is ruining the business. And in that war of rates they
21
bring freight so low to New York that they still have
a margin on which they can afford to bring it further
and land it right in our rear, and lay it down in our
coast cities cheaper than we can do, and make any¬
thing ? Now, what are we to do? Give up Savannah
and Charleston to them entirely ?
But if we surrender our outposts, to use a military
phrase, they will then invade the next interior point,
and so on. We are, therefore, obliged to make a
stand at these points, no matter whether we make
anything on the freight or not. Consequently our
roads have to go into the Western markets and take
produce to send into Charleston and Savannah and
other coast cities as low as the trunk lines carry it there.
Taking the usual rule of prorating distances by land and
by water, and it is about as near from Louisville, by Savan¬
nah or Charleston over the water to New York, as it is
from Louisville to New York over land by the trunk lines.
Now if we sit still and permit the trunk lines at the present
ruinously low rates, to carry the Western freights through
New York and down the coast by steamer to Charleston
and Savannah, thereby ruining our business between Louis¬
ville and those cities, and we do nothing in retalia¬
tion, we had as well give up the fight. More than seven-
tenths of all the cars that pass over the W. & A. R. R.
loaded, coming South return empty. And I believe
the same is true as to the other links on the line generallyj
If the northern trunk lines go into Louisville, and take
Western productions for Charleston and Savannah through
New York and carry them at lower rates than we can af¬
ford, and make money, why may we not go into the New
York market and take goods for Louisville at as low arate
as they charge from New York to Louisville? And if we
even make rates lower so that they can realize no profit
on them, we will, the sooner, bring them to terms. But
why, let me ask, should the Southern roads, by a dog-in-
the-manger policy on the part of any railroad commis-
22
sion, be driven out of competition with the Northern roads
for business that they can legitimately compete for ? Why,
if Northern roads carry Western freights from Western cities
through New York to Southern cities, may we not be
permitted to carry New York goods, destined for the West,
by the Southern route through Georgia ? It would cer¬
tainly be a very short-sighted policy that would turn them
loose (and they are all loose) and bind us fast in fate by
the decrees of the commission, and not permit us to carry
it. It is true, we wonld have, during this fight, to carry
the freights at a lower rate than we could carry freights all
along the line prorated, and make any money, especially
if you count the freights coming from the West to the East,
where our cars are all loaded. But as seven-tenths of our
cars go back empty, we can carry New York goods intend¬
ed for Louisville at an exceedingly low rate, and still make
money. For instance, a W. & A. R. R. car is going
from Atlanta to Chattanooga empty, now, if I can get on a
car-load of freight where I have no loading or unloading to
do, as it comes in a through car, only ^5 between the two
points, it is that much made clear. And the same would
be true of each road forming a link in the line. Now, if
the railroad commission means anything when it speaks of
letting the roads make seven per cent, on their invest¬
ments, certainly that §5 made on that car, that would oth¬
erwise have gone back empty, would be that much clear
profit towards the seven per cent, and consequently that
much saved to the people of the State. If the commission
gets control of the through freights and forbids that, then
they must permit the amount that would be realized as
clear profit on that business when shipped on cars that
would be otherwise empty, to be added to their local rates
and paid by the people of Georgia. What reason or good
sense would there be in any such policy ? What justice to
either, the railroads or the people of Georgia ? I think
you must all answer, it would be neither wise policy nor
just, to permit any such interference. And if the object
23
of the commission is to interfere in such cases, then it is
too apparent for controversy that they are asking for a
power that they do not understand how to use, and that
ought not to be delegated to them.
These freights, between New York and Louisville,
will go over some line. What injury does it do any
man, woman or child in Georgia for it to pass on a
W. & A. Green Line car, loaded in Charleston, across
the soil of the State to Louisville, which car would
otherwise go back empty? None that I can perceive.
If it does not go in a car that would otherwise go
empty over the line between Charleston and Louis¬
ville, it will go on a car that runs between New York
and Louisville over one of the trunk lines. If it
goes in a car over our Southern line, that would other¬
wise go back empty, and we make $5 for each com-
panj' on it, it is that much profit to the people of
Georgia. If the commission had the power, and they
should execute it, it wilt still go over the Western
trunk lines and the people of Georgia have lost that
much money. The proposition for exclusion, seems to
meto be too absurd to rec[uire further argument. I
thank Col. Barnett, one of the commissioners, for having
developed to you this policy in the event j'ou confer
upon him the arbitrary and imperial power for which
he asks. From what he has already stated, it is evi¬
dent that if he posesssed the power, he would exclude
this business now transacted between Charleston and
Louisville, and would drive it around toLmisville,
rather than let it pass over the territory of Geoi-gia
and pay tribute on cars that would otherwise go
empty. It seems to me that every case made by Col.
Barnett as a reason for conferring the power upon
him, is conclusive against the wisdom of conferring
it; and the conclusion at which he has arrived in
advance of the possession of the power, shows how
dangerous it would be to entrust him with it.
If the commission intend to permit us to make seven
24
per cent, or any other fixed per cent, every dollar we
wonld make on this freight, is a dollar saved to the
people of Georgia that they wonld otherwise have to
pay by an increase of local rates. And even if we
could get the consent of the commission, in each case,
after laying the facts before them, to take the freight,
while we would be procuring consent, the opportunity
would generally have passed.
We have sometimes but a moment to decide whether
we will take a load of freight or not. There is compe¬
tition, say in New York, to carry a cargo to Louisville.
They are having the different railroad agents to com¬
pete for it. Fifteen minutes would lose that cargo,
on which we might make $500 and save that amount
to the people of Georgia. Is it best to wait to consult
the Commission before we can bid ? Is it best for the
people of Georgia to enlarge the powers of the Com¬
mission to that extent ? I had a letter day before yes¬
terday from Gen. Alexander, the Vice-President of the
L. & N., calling my attention to the fact that, on ac¬
count of the cut of rates North, they are now pour¬
ing the productions of the West into Charleston and
Savannah at a rate on which we are losing money. My
general freight agent had refused to pro rate on a lower
rate than tlie one he had already fixed. Gen. Alex¬
ander said we would lose the business. "It goes
around us if you will not pro rate." I replied, "Pro
rate. Send it through. We cannot give up the busi¬
ness in that way, and I will take my part of the rate."
No time here to wait for an appeal to Commissioners
and a publication of rates by them. Prompt action is
necessary. Whenever you undertake to manage these
through freights passing over the territory of the State,
you are meddling with what you do not understand,
and you will act unwisely. When you get the watch
taken apart, you will find you have as many again
wheels as you can put together again.
Let it alone ! It will regulate itself. There is no
25
danger of the people's paying too high on it, because
it is always done in competition, where it has to be
carried at a very low rate. I do not know whether
the Commission would say we shall not carry low¬
er than their rates if we desire todo so. "We must
meet the competition according to the exigencies of
the case and the currents of trade, and whenever you
put it oirt of our power to do this you doom the rail¬
road system of Georgia to ruin and bankruptcy.
M.4XT ROUTES IN" COMPETITION.
For, bear you in mind, that there is no one line that
freight is bound to go now. Western freights starting
from Chicago can come down the Illinois Central and
on towards Xew Orleans till you strike the Memphis
& Charleston, and then upon that; or they can come
down to the Mobile & Ohio and take that direction;
or they can come down upon the Louisville & Nash¬
ville to Montgomery and thence by Eufaula into Geor¬
gia; or from Montgomeiy by West Point into this
State; or by the Selma, Rome & Laiton; or by the
Alabama & Great Southern; or by the Nashville &
Chattanooga; or b}' the Cincinnati Southern as a great
deal is doing now from the West; or it may go by the
Richmond & Danville and come into Atlanta by the
Air Line; or bt' the trunk lines into Baltimore, Phila¬
delphia, or New York and down the coast. Your ju¬
risdiction is not sufEcient to reach outside of the State
and control roads there. Are you going to circum¬
scribe our powers in the matter of through freights and
put us where we have to stop all the time and consult
the commission at every move ? If so, you are going to
ruin us. Do the people owe the roads that much ill-
will ? Are the interests of the people that way ? Has it
reached the point where it is the interest of the people
to destroy the roads ? I think not.
THE QUESTION OE POOLING—THE SOUTHERN RAILWAY
AND STEAMSHIP ASSOCIATION.
But my friend Gov. Smith made, as he conceived, a
26
very strong point upon our pooling arrangement, and
it seems to me that comes up for consideration in this
connection. He did me the honor to xise some kind
and flattering expressions in reference to myself and
my course ; but wound it all up by giving me, in a
good humored way, a back stab, calling me the presi¬
dent of that pooling arrangement. He thought prob¬
ably' I was too good natured to put a collar upon the
people of Georgia, but I had the power to do it, be¬
cause I was president of the Southern Railway and
Steamship Association. Gov. Smith in his address,
however, stated that I had disclaimed complaint against
the action of the Commission in reference to the W. &
A., and, as that was my interest in the railroads, that
I simply appeared here as a citizen in behalf of pub¬
lic liberty. My friend Barnett, in his opening speech,
did not take that line, but paraded my connection with
the W. & A. and with the Southern Railway and
Steamship Association.
I have had the honor to be the president of the South¬
ern Railway and Steamship Association ever since it
was organized. I helped to organize it. Ithinklknow
something about its objects and uses, the necessity for
it and the good it has done to the people and to the
laili oads, and I intend to try to show some of those
benefits before I conclude this address. I have an in¬
terest, then, as president of that association, if I have
no complaint on the part of the W. & A., which makes
it appropriate that I should appear here to represent
the railroad interests. I have some interest as a citi¬
zen of Georgia, and I trust I can afford to deal fairly
in representing the people's interest. I believe they
have not generally complained of my unfaithfulness
whenever I have been their representative. But to the
point.
THE SOUTHEEX EAILWAT AND STEAMSHIP ASSOCIATION.
The Southern Railway and Steamship Association,
27
gentlemen, is a voluntary association of the roads and
steamships that do most of the common carrying of
the Southern States all over Georgia and Alabama up
to Maryland, and then embracing through the steam¬
ships the business with the Eastern cities. The object
of that association, I tell you frankly, was to prevent
as far as possible ruinous competition. And right in
this connection let me show you how it works. Here
we have two large, honorable business houses in At¬
lanta. They are rivals. They are large wholesale
houses—the Messrs. Moore & Marsh and the Messrs.
Kiser & Co. Frequently there is a dispute among
their friends as to which firm sells the most. The}^ are
all honorable, high-toned gentlemen. They trade
largely. You may dissolve the Southern Eailway and
Steamship Association, and say the railroads shall
keep up an unrestricted competition with one another
as long as they are able to fight. While you have the
power to put penalties on us and prevent pooling, you
have not the power to prevent us from meeting and
saying each to the other, we will not charge more than
a certain amount ; we will not charge, say, on first-
class goods, from New York to Atlanta, less than one
dollar a hundred pounds. The Messrs. Kiser go to
New York during that time, and buy very largely,
laying in a heavy stock of goods. They then go around
and see the different railroad agents in New York, and
say:
''What will you carry these goods to Atlanta for ?"
"A dollar a hundred, sir."
And as the roads are all maintaining rates, and that
you cannot prevent, the Messrs. Kiser cannot ship for
less than $1 per 100 lbs, and accordinly they pay that.
Two weeks later the railroads disagree; some one
has not acted fairly; a war of rates breaks out and cut¬
ting begins. An agent of the Messrs. Moore & Marsh
goes on and buys a large stock for that house. He
28
asks a railroad agent, "What will you carry them to
to Atlanta for
"Well, we are cutting rates now; we will carry them
at 75c per 100jibs."
He then goes back to the first agent and he cutS'
down to sixty. The other agent then cuts down to 50c
on the 100 pounds and the Messrs. Moore & Marsh get
their goods brought to Atlanta at 50c on the 100 lbs.
Now the Risers have paid on a large stock from New
York to Atlanta just double what the Messrs. Moore
& Marsh paid under the cutting system. That is not
just to the Messrs. Risers. It is not a desirable state of
things when they are selling at a close profit. Bat it
is a state of things you cannot prevent as long as the
competition system exists, any more than you can pre¬
vent the Mess. Moore & Marsh from selling calico at
ten cents a yard. You cannot make it penal for us to
carry goods for less than a certain amount. This sys¬
tem works great injustice both to the merchant and
the purchaser. What the merchant wants is a uniform
system where every man will be charged a reasonable
price and no more; where every body is charged alike;
and that is right. But as matters stand now you can
get that only under the pooling system. There is no
other way to reach it.
But what is the pooling system 1 We meet and agree
that the Georgia and South Carolina railroads, in con¬
nection with the steamships at Charleston, shall have
say 25 per cent, of the business between Atlanta and
New York; the Central Railroad shall have 25 per
cent., and we divide the other out among the other
roads. Then we agree that we shall each carry as
nearly as possible our proportion of freights, and
should more freight be offered me than my proportion,
I will raise my rates so high that they will carry to
the other roads their proportion of the business. If
either carries more than his share, he gets only the cost
29
of carrying, and, dividing the freights, each company
gets its proportion as agreed on by the association.
I will further state in this connection that I was at
the first meeting of this association elected president,
and have been, I believe, at all of them since, and I
think I may safely say that to-day our rates are a third
lower than they were under the competitive system.
The improvement of the roads, the active competition
by outside lines,and]a hundred other things compel us
to go down, down, all the time. There is no purpose
and no disposition to make our rates unreasonable,
and there never has been. It has always been the
simple purpose to make a reasonable dividend to
stockholders, and serve the public at just and reason¬
able rates.
WHAT CHAKLES FRANCIS ADAMS SAYS ABOUT THE SOUTH¬
ERN RAILWAY STEAMSHIP ASSOCIATION.
Governor Smith criticises our association pretty
severely. I want to read you here what a very wise
and very able man says on that subject; a gentleman
who spent many years of his life in studying the rail¬
road problem ; a gentleman who is one of the oldest
railroad commissioners in America ; a man of high
character and distinguished ability, as well as of a
distinguished family. I refer to Mr. Charles Francis
Adams, of Massachusetts, who, in his book, has
something to say about this very association. He dis¬
cusses the railroad problem ably, looks into the whole
question, reviews the French system, the English sys¬
tem, the Belgian system and the German system, and
then the American system. Then he refers to the
many devices that have existed in the Horth to pre-
Tentthe cutting of rates ; by those in the West also, and
everywhere in the United States, in fact, and he sums
it all up by saying, in substance, that the Southern
Railway and Steamship Association has come nearer
solving the railroad problem than any other device on
30
earth. That is the opinion of Charles Francis Adams,
a man who has certainly been much longer a railroad
commissioner than either of these gentlemen has
been ; a man of equal ability certainly with either of
them, and a man with very ripe experience in every
department of railroad management. I will read what
he says. After discussing the Vanderbilt power, the
Jay Gould power, and the different powers and systems
that have been devised to solve the railroad problem,
he says : (Page 19/—Railroads—their origin and prob¬
lems.) "But, however this maybe, it is a question of
the future, and certainly has no immediate bearing on
the existing combinations. Of these, the only one
that seems entitled to any thoughtful consideration, is
the Southern Railroad and Steamship Association.
So far as the pxrblic is concerned, everything essential
as a safeguard against abuse, seems in the case of that
association to be provided. It is a complete, but not
a secret combination. It exists in the full light of
publicity. The purposes for which it was organized
are openly avowed, and its every transaction is, or
may easily be made, matter of general observation.
To secure this result, it would only be necessary to
give it legal recognition. By its originator, it is confi¬
dently claimed that if properly developed and recog
nized by legislation, it would afford a complete and
practical solution of the American railroad problem.
Whether it would or no, it is certainly a great advance
on any other form of solution which has yet been sug¬
gested. It is at once far more philosophical, more
practical, and more in consonance with American po¬
litical usages and modes of thought. Indeed it is not
easy to point out any respect in which it might not
fairly be accepted as the natural outgrowth of Ameri¬
can railroad development, as it has gone on up to this
time. The difficulty with all of the many other so¬
lutions which have from time to time been suggested,
has been that they disregarded what had gone before ;
31
they were, none of them, in the nature of a logical
sequence, or natural outgrowth."
Thus, Mr. Chairman, you see that Mr. Adams gives his
sanction to our association as the very best that has been
devised and pronounces it as entitled to more favor than
all the rest of the combinations or associations he has dis¬
cussed ; and says it is confidently claimed that it only needs
legal recognition to solve the problem. In other words,
we meet and agree that we will not cut rates ; that we will
carry freights at a reasonable price and that one merchant
buying in New York shall have his goods delivered in At¬
lanta as cheaply as another. There is no legal sanction
for that contract. What he means by legal sanction, is
that the law shoud come in and say when we make this
agreement among ourselves we shall carry it out.
Our own Railroad Commissioners censure us for having
devised this solution of the railroad problem, while the
Massachusetts Railroad Commissioner, probably the ablest
and most distinguished in America, gives us the credit of
having devised the wisest solution on earth, needing only
legal sanction to make it as nearly perfect as it is possible for
it to be.
But, Mr. Adams goes further and discusses the ques¬
tions of combination and competition, with a great deal of
force. He says: \Ib. p. 199.]
"Irresponsible and secret combinations among railroads
always have existed, and so long as the railroad system
continues as it now is, they unquestionably always will exist.
No law can make two corporations, any more than two
individuals, actively undersell each other in any market, if
they do not wish to do so. But they can only cease doing
so, by agreeing in public or in private, on a price below
which neither will sell. If they cannot do this publicly,
they assuredly do it secretly. This is what, with alterna¬
tions of conflict, the railroad companies always have done
in one way or another ; and this is what they are now do¬
ing and must always continue to do, until a complete
32
change of conditions is brought about. Against this prac¬
tice, the moment it begins to assume any character of re¬
sponsibility or permanence, statutes innumerable have been
aimed, and clauses strictly interdicting it have of late been
incorporated into several State constitutions. The expe¬
rience of the last few years, if it has proved nothing else,
has conclusively demonstrated how utterly impotent and
futile such enactments and provisions necessarily are.
Starting, then, from this point—accepting what is and
what must continue to be—the fundamental idea of the
Southern Steamship and Railroad Association is to legalize
a practice which the law cannot prevent, and by so doing,
to enable the railroads to confederate themselves in a
manner which shall be at once both public and responsi¬
ble. This is the railroad side of the question. The other
side of the question—that of the public—admits of a state¬
ment equally clear. Its essential point, however, is that
through this process, and this process only, can the rail¬
road system, as an organized whole, be brought face to face
with any public and controlling force, whether of law or
public opinion. Once let railroad companies confederate
in accordance with law, and the process through which
this all-important confronting result would be brought
about, is apparent. The confederation would be a respon¬
sible one, with power to enforce its own decisions upon
its own members. The principles upon which it could act,
as a creature of the law, would be formulated in the law.
It could compel obedience, but obedience only to legal de¬
crees, and the question in each case would be whether the
decree was legal. At exactly this point the machinery for
State supervision would come into play in the form of a
special tribunal ; like those which have already been pro¬
vided in England and Prance, or that now being matured
in the Prussian parliament. The field of discussion before
this tribunal would be commensurate with the whole sub¬
ject of transportation by rail, including questions not only
of law, but of economy. Then at last, the correct princi-
33
pies governing railroad traffic would be in course of rapid
development. The essential features of what constitutes
discrimination and extortion, would gradually be formu¬
lated into rules, and the moment that is accomplished,
competition will work equitably."
COMPETITIOtI ENDS IN CONSOLIDATION OK POOLINa.
As I had occasion to say in the earlier part of this
argument, this question has undergone a great deal of
investigation in England. There is a road there
called the hTorth-Eastern. The competition was very
strong between that and other roads that traversed the
same territory.
That competition produced the usual results that
follow unbridled competition. What are they?
Suppose you provide by law that nothing shall inter¬
fere, that it shall go on unbridled. What is the result ?
Tiiat state of things cannot last long till the weakest
road will become insolvent and go into bankruptcy
and be sold under the marshal's hammer and the
strongest road buys it. The strong road is then still
stronger,for it has absorbed that competitor and turns
it into a feeder. That gun is spiked. The competi¬
tion goes on and the next weaker one goes under, and
and so on and so on till all the weaker ones have gone
under. The last trial of strength has to be between
the two strongest, and when one of these goes under
the other is left supreme. Then where is your com¬
petition ? On that subject Mr. Adams say. [iô. p.
207.]
"The North-Eastern Railway is composed of 37
lines, several of which formerly competed with each
othep. Before their amalgamation they had,generally
speaking,high rates and fares and low dividends. The
system is now the most complete monopoly in the
United Kingdom; from Tyne to the Humber, with one
local exception, it has the country to itself, and it has
the lowest fares and highest dividends of any large
8
34
English railway. It has had little or no litigation
with other companies. While complaints have been
heard from Lancashire and Yorkshire, where there
aie so-called competing lines, no witness has appear¬
ed to complain of the North-Eastern; and the general
feeling in the district it serves appears favorable to its
management."
Again Mr. Adams says : {lb. page 208.) "There is
scarcely a section of the United States which could
not tell of an experience verj' like the English
one just referred to. Massachusetts, for instance,
could supply a well known case in point. Of two
sections of that State, lying North and South of the
city of Boston—the one known as the Cape Ann and
the other as the Cape Cod district—the first has from
the beginning been served by two rival lines whose
while history has been one long trial of strength, re¬
sulting at last in the absolute ruin of one, and in the
severe cripling of the other. How many millions of
dollars were recklessly squandered in the long course
of the struggle, it is impossible to compute. While
the Cape Ann district has thus enjo^md the benefits of
the railroad competition, the Southern, or Cape Cod
district has, on the other hand, been served by a sin¬
gle consolidated corporation, the cardinal principle
with which has been monopoly. It appropriated to
itself a certain district, and that district it undertook
to furnish with all reasonable railroad facilities ; but
within the limits of its own territory, it did not pro¬
pose to tolerate any rival. The result in these two
cases, whether in accordance with theory or not, is
confirmatory of experience."
Again he says: {lb. page 210.) "The reliance on
competition seems to give throughout a false direc¬
tion to public opinion as respects railroads. They are
looked upon as something alien, if not hostile. The
public welfare is associated in the popular mind with
their misfortunes. On the other hand, the intelligent
35
and peaceful operation of a consolidated company is
generally followed by a sense of responsibility on the
one side, and of ultimate Iriendliness on the other."
Again, he saj^s, on page 214, "Owing to the ex¬
tremely complicated character of the American rail¬
road sj'stem, rendering anything like a territorial di¬
vision among corporations impossible, results here
work their way out slowl}'. When they do work
their way out, however, it is apt to be on a large scale
and in a way not easily susceptible of change. So
far as any progress has yet been made, it is obviously
in the direction indicated—the development of govern¬
ment supervision on the one side, and the concentra¬
tion of railroads to escape competition on the other.
The manner, indeed, in which, starting from different
stand-points of interest and opposite sections of the
country, the Massachusetts Commission and the South¬
ern Railway and Steamship Association have uncon¬
sciously worked towards a common ground, is notice¬
able. On the one hand, the whole effort of the Com¬
mission has been to develop a tribunal which, in all
questions affecting the relations of the railroad system
to the community, should secure publicity and that
correct understanding of the principles upon which
only legislation of any permanent value can be based,
and which is reached through intelligent public inves¬
tigation. That secured, all else might safely be left to
take its own course. A sufficient responsibility would
be secured to aftord a guarantee against abuse. On
the other hand, the fundamental idea of the associa¬
tion, without the realization of which it remaius in¬
complete, is to so confederate the railroad system that
the members of it should be amenable to control, and
that responsibility should attach to it. Could the two
results be brought about, the machinery would be
complete. The confederated railroad system would
confront the government tribunal, and be directly re¬
sponsible to public opinion. This is almost precisely
36
the result arrived at in France and in Great Britain,
and is that contemplated in Germany."
This, then, is the Southern Railway and Steamship
Association of which I am arraigned for being presi¬
dent, and these aie the comments made by one of the
ablest nien in the United States, who has been longer
a Railroad Commissioner, probably, than any other
man connected with the system. And I must say,
with all due deference to my friends of the Commis¬
sion here, that Mr. Adams' remarks and their speeches
here are very unlike each other. He shows that un¬
bridled competition leads to the bankruptcy of all the
weaker companies and to ultimate consolidation, and
that the Southern Railway and Steamship Association
would be, with legal sanction, the very best solution
of the railroad problem. I have no question that my
friends here intend to do what is right for both the
railroads and the people ; but, as Gov. Smith said yes¬
terday, it is unsafe to entrust men with too much
power, as they might unconsciously abuse it, and I
leave you to make the application. I think it unwise
to enlarge the already almost limitless powers of our
Railroad Commission.
DIRECT TRADE WITH EUROPE.
But there is another great evil that might grow out of
gratifying the wish of the commissioners by an increase of
their powers so as to embrace through rates. The South
has been agitating the question for almost half a century,
of "direct trade with Europe." A great many efforts have
been made to secure it, and have failed. The only way
it is likely ever to be made successful is for some large
company to form in the South and West and put their own
ships upon the ocean ; and for the railroad companies, con¬
necting the Western cities with the Atlantic coast, to agree
at all times to carry Western freights to Charleston or Sa¬
vannah, or Brunswick, or Port Royal, as low as the same
freight is carried at the time from the Western shipping
37
points to the city of New York. This would give a line,
intending to carry on such foreign business, something
definite to rely upon. They could then issue through
bills of lading in St. Louis, or Louisville, or Chicago, or
other Western city direct for Europe, send the Western
products rapidly to Savannah, for instance, then load them
upon their ships and send them across, and bring back
upon the ships irrmigrants and goods for the South and
West. To do this, we would be obhged to carry the West¬
ern freight intended for that trade at a lower rate over roads
crossing the territory of our State, than we could possibly
carry all our freights at, and live. To succeed we must
be left to act upon the state of things existing at the mo¬
ment and take the freight from the West at the same price
charged to New York, whenever offered. If our commis¬
sioners had the power they ask, they could at any time
place such restrictions upon this business as to cripple it or
destroy it absolutely. Is it wise to gratify them, by an
extension of their power, so as to embrace this class of
business? However just, however wise, and hovvever able
they may be, it is a very dangerous power to place in their
hands, and it certainly should not be done. The very fact
that they ask it, seems to me to be a strong reason why it
should not be granted to them, as it is a power fraught
with such dangerous consequences that it would seem no
one would desire it who could avoid the responsibility of
its exercise. The picture I have drawn is no fancy sketch.
Only four or five years ago a very serious effort was made
to get up such a company as I have described, looking,
however, at that time to Europe to supply the ships. At
present, negotiations are pending between a Western com¬
pany and the Railroad Companies of this very line
which may or may not prove successful. The provision in
the charter of the Western & Atlantic Railroad Company,
which forbids all discrimination, is one of the serious hin¬
drances in the way, as we would be obliged to carry
that class of freights lower than other freights are carried,
38
in order to compete with the New York lines, or it would
all go that way. We could well afford to carry it lower
than other freights that would be consumed in the United
States, because of the return freights and immigrants we
might expect on the line of steamers. Thus, you see, gen¬
tlemen, that a provision which is wise and statesmanlike in
itself, as the one in our charter forbidding discrimination
may in certain contingencies, in the business of transpor¬
tation and commerce, become a serious hindrance to the
accomplishment of a purpose that would result in great
good, and advance in a very high degree the public wel¬
fare.
I know it is said it is wrong to permit this freight to
go over our territory, pajdng much lower rates than
other freights, as we cannot, as already stated, carry
all our freights at a rate as low as we must carry this
to get it. It is a choice between cariying it at
a lower rate, or not getting it at all. If we do not
carry it as low to the Southern ports as it is carried to
New Y'ork, it simply goes on in the old channel over
the territory of other States that permit it to go there,
and goes around Georgia because she re'hises to per¬
mit it to go over hei territory as low as Pennsjdvania
and New Y^ork permit it to go over theirs. The re¬
sult is, those States get the benetit of all tlie foreign
trade and of the immigration, which is also thrown
back upon the same lines over their territory greatly
to their beneht. Is it statesmanship, is it common
sense, that we should exclude it, or that we should
put it into the hands of any three men, or any set of
men, to exclude it at their capiice, or as the result of
their mature judgment ? I think not.
THE DECISION OF JUDGE WOODS.
Thej' have been rather severe on me for complain¬
ing of the decision of Judge Woods. I do not intend
to take up that complaint or review the position that
I discussed the other day, because my friend Judge
39
CMsoltn's argument was so complete and perfect on
that subject, I could add nothing to it. Indeed, I saw
nothing in Gov. Smith's reply that at all shook his
conclusions. We are simply met there by saying
Judge Woods has thus decided. And Gov. Smith
turned periods upon the fact, that I, as Senator, sup¬
ported him for associate justice of the Supreme Court.
The rules of the United States Senate forbid me to say
here whether I voted for him or not. I have the hiirli-
est possible regard for Judge Woods. He is an able
lawyer, and a good man, but I do not think he is
infallible, and I do think he committed an error in
that decision.
All that we heard about his going up to Washing¬
ton and consulting the other judges betöre he made his
decision, is the merest fancy. Those who know any¬
thing of the venerable judges of the Supreme Court,
know they do not cross streams before they come to
them. Only when that question comes before them
for adjudication, will their opinion be known—not till
then.
It seems to be a matter of complaint by the Commis¬
sioners that the Tilley case was brought up in the
courts, as I infer from the fact that thej? so often tell
us how fairly they intend to do everything. I am not
questioning their intentions, but it is cited here as
one of the causes of the complaint that there was an
appeal to a jury in that case. Probably there ought
to be no appeal from this Commission, though they do
say they are willing to have certain appeals. L^t us
see what is said on this subject, page 4, of their sup¬
plemental report : "To charge the sum of local rates,
indeed, is often against the interest of the road—pro¬
hibitory. Why act against interest ? it is asked. For
various reasons already shown—resentment, desire to
render the law and Commission odious, and so escape
regulation, power on the part of officials to indulge in
pique, the stockholders paying the costs. Shown in
40
other ways, also, as in the Tilley case, in the appeal
to a jnry, ?inà to unbending legislation, with the hope
of escaping all." Now, if the law was nnconstitu-
tional, was an effort to have it so declared amatterto
be criticised by my friend. Col. Barnett, for I think he
wrote this report ? If the counsel of the company be¬
lieved that the law was nnconstitutional, and that you
had no right to put upon them such a reduction of
rates as was required by the Commissioners, should
it be complained of by the Commissioners that the
company prosecuted their cause by an appeal to a
jury or to any other tribunal having jurisdiction of
the case?
THE OOMHISSIONERS CENSURE THE COURTS.
The Judge has decided it, they say, and he is a man
of great ability'; and they have very wonderful respect
for the decisions of the court. But, when the decisions
of our State courts do not coincide with their views, I
do not ftnd that tliey have such reverential respect for
the courts. On page 133 of their third semi-annual
report, they say : " The subject of taxation is too large,
perhaps, to enter upon just now. The decisions on
this head are even more surprising to the common
mind than on the subject of legal regulation of rail¬
roads, and in tiie justice of some of these decisions we
probabl}' would nut concur. They are merely efforts
to escape former legislation ultra vires, by harsh and
strained legal decisions now."
Now these are tax decisions made by the Supreme
Court of Georgia ; and I believe some of them have
gone to the Supreme Court of the United States and
been confirmed. But they are not so sacred as Judge
Woods' decision. They were in conflict with the
views of the Commission, and therefore a vein of cen¬
sure happens to get into the report of the Commis¬
sioners when they are referred to. Indeed, it is a pretty
strong vein of censure. "They are merely efforts to
41
escape former legislation, ultra vires, by harsh and
strained legal decisions now." Now, while I accord
to Judge Woods all the honor and integrity and abil¬
ity, legal and otherwise, that he can ask, yet I do
claim that Judge Jackson, and Judge Crawford, and
Judge Speer, and their predecessors on the bench, are
very able Judges, and they are certainly his peers in
purity of purpose. Why should it suit the purpose
of the Commissioners, while lauding Judge Woods'
decision, unfavorable to railroads, severely to censure
our own Supreme Court for decisions equally honest,
which conflict with their views? Some of which, too,
when they have gone up, have been atflrmed by the
Supreme Court of the United States. They do not
blush to censure our Courts in this way when they do
not decide in accordance with their views, but if the
decision is on the line that suits them, though made
by a Judge from whom there is an appeal, it is almost
unpardonable for us to call in question the correctness
of that high authority.
Now, if they had said : " We do not believe that the
Supreme Court of Georgia decided the law correctly in
reference to railroad taxation," and had stopped there,
it would have been in accordance with what we had a
right to expect. But it is a little severe for the Com¬
missioners when speaking of the decisions of our own
Supreme Court to characterize them as mere efforts to
escape former legislation, ultra vires, by harsh and
strained legal decisions now." If this language means
anything, it would seem to call in question even the
motives of the court. Those who can comment in that
strain upon the decisions of the Supreme Court of the
U. S., and of their own State, and upon the purity of
their Judges, ought to allow a little indulgence to those
of us who may, with great deference, differ in opinion
with a United States Circuit Judge.
TAXATION OF ROADS BV COIjNTIES.
While I am on this subject, a word upon the matter
42
of taxation. Col. Barnett, in hi« speech, dwelt exten¬
sively upon it. The purport of his remarks was that
the railroads desired to make incomes or dividends on
a certain amount of stocks and bonds, that they claimed
represented the road, and they ought to give it in as
high or for as large an amount as that on which they
wanted dividends.
I have not been to the Comptroller-General's office
to see how they have all given in ; but I lay down this
proposition, that if this Commission is to restrict them
from making dividends, and as in the case of the Sa¬
vannah, Florida and Western, not permit them to make
more than one-quarter of one per cent, net profit, then
their profits amount to nothing, and they ought to give
in their property at nothing, if this Commission re¬
fuses to let them receive any incomes on it, they ought
not to be taxed upon it. If jmu allow them to make
seven per cent, on their stock, then they ought to give
it in at every dollar you let them make dividends on ;
and if they do not, they should be dealt with as the law
directs. That is the just principle. But to say we
shall not make dividends, and shall still pay taxes on
railroad droperty is a monstrous idea ; and the censure
that is undertaken to be heaped on railroad companies
for protesting in that case, is unjust, wanton and cruel.
VALÜK OF líAILROAD PROPERTY IN GEORGIA.
Again, my friend Col. Barnett tells you it is esti¬
mated that the railroad property of Georgia cost about
sixty millions of dollars. Then he shows that there is
about $12,000,000 exempt from taxation, that pays on
the one-half of one per cent, on net incomes ; and that
there is probably some $35,000,000 of it that does not
pay at all.
That is right ; the railroads of Georgia, now built did
cost a little over $6o,OoO,ooo, and if those who invested
their money in them had not lost the stock and were now
allowed to make dividends upon it, they ought to pay taxes
43
upon every dollar of the $60,000,000. But what are the
facts? Go to the Northern part of the State ; there is the
road lormerly known as the Alabama & Chattanooga,
which runs through Dade county. The State endorsed
some of the bonds and repudiated the endorsement. The
stock that was paid in, in Dade county, was every dollar
of it lost, and the road went into bankruptcy and has been
sold a time or two since. Next is theSelma, Rome & Dalton,
from Dalton down to the Alabama line, and indeed clear
til rough to Selma. The Georgia part of that was sold un¬
der a decree of the Superior Court of Floyd county, and
purchased by a company, and the stockholders lost every
dollar of it. It did not pay all the bonds. Ought the
stockholders to pay tax on that ? Next, we come to the
Cherokee Road, as it is now called, running from Carters-
ville to Cedartown. That, too, has gone into bankruptcy
and been sold, and the stock lost to the original stock¬
holders. We do not stop there. Come here and take this
great Air-Line, that cost probably some $13,000,000, but
sold, I believe, for a little over $3,000,000. The city of
Atlanta put 8300,000 into it and lost every dollar of it
when it went into bankruptcy. Take next the road from
Griffin out to Carrollton. I believe it has had the same
fate. Then go further down and take the road known as
the Macon & Augusta. That, too, has gone through bank¬
ruptcy and the stockholders lost all—the proceeds not pay¬
ing the bonds. Then go to Columbus and there you will
find the North & South Road. That, too, has been sold
and the stockholders lost all. Go next to the Macon &
Brunswick. That, too, has been sold and every dollar of
the stock lost. It did not bring enough to pay the State's
endorsement. Still further down, lies the Brunswick &
Albany. That also has passed under the hammer and not
a dollar of the stock saved. Again, we have the Savannah,
Albany & Gulf Road,now known as the Savannah, Flor¬
ida & Western. It has gone through the same mill, and
the stockholders lost all.
44
Is not here, then, a good reason why these stock¬
holders do not give in this property at what it cost?
True it cost $60,000,000. but competition and public
clamor and reduced rates have driven it into bank¬
ruptcy and sacrificed it, and it has been lost—forever
lost to those who have invested their money in it—
and the public and not the stockholders are getting
the benefit of it. And even those who have purchased
it and stocked it at lower figures, are not in the case
of several of the roads, permitted by the railroad com¬
missioners to make and pay reasonable dividends on
the present stock, especially the road last mentioned.
Col. Burnett's argument would require them to pay
tax on the original investment, whether they make
anything on it or not. Where is the justice of such
a requirement ? Where is the statesmanship in it ?
Is there a Senator or a Repesentative here, no matter
what is the feeling about it at home, who is willing to
sanction such a position ? I apprehend not. I do not
think any one of you would sanction it—not one.
B.4.NKRlTPrCT UXDER THE COMPETITIYE SYSTEM.
You should either permit them to pay dividends, or
you should release them from taxation. Let any one
come and propose to put money into a railroad, and
you all encourage it. Yon will get up barbecues, and
the women will waive their handkerchiefs, and the men
make speeches to people to put in your capital ; it is a
splendid thing to do ; and it goes on very well until
you put trains upon the road, and then the people
want to confiscate it. In other words, it must be worked
exactly as the public sajq whether the owners get divi¬
dends or not ; and this policy soon leads to bankrupt¬
cy. Several of the weaker roads, not mentioned above,
would also have gone there had it not been for the Cen¬
tral Railroad, which leased, or purchased, and took
care of them. In a contest between the Central and Greor-
gia, the last one would have gone. I believe every one has
45
gone tha t one of these great corporations has not taken
charge of. That was the result of the competitive sys¬
tem in Georgia, and jmt they must pay tax on the origi¬
nal 860,000,000. That is gravely claimed by the Com¬
missioners in their report, and urged by Col. Barnett
in his speech. Indeed, they are arraigned by him for
not paying tax on the $60,000,000. And bear in mind
that he is our j udge, with legislative, executive and j udi-
cial powers, and that he asks for additional powers, and
promises to exercise them justly and fairly if jmu will
give them to him. Is this tax argument of his a speci¬
men of the justice and fair play we may expect, under
the enlargement of his powers %
INJUSTICE OF COUNTY TAXATION.
Not having enough to do, the Commission proposes
to take charge of the county taxation. They do ihat,
they say, because there are 137 Tax-receivers and Col¬
lectors that need training. Well, of course, they do
not suppose that the Comptroller-General is competent
to discharge that duty. Be is at the head of that de¬
partment, but he is nothing like as competent to dis¬
charge his own duties as is our Railroad Commission,
and they want to take charge of them. How natural
it is for those who have power to grasp for more, and
still more !
Col. Barnett says (page 5), it is "a step in the right
direction," this attempt to impose a county tax on rail¬
roads. Let us look at that a moment. I believe a bill
imposing a county tax on railroads has passed the
House, and is pending before the Senate. I intend to
make no unkind comment. I simply express the views
of a citizen. I say it is unjust, unreasonable and un¬
wise. Whatever you may say about my interest in the
Western and Atlantic, I am not interested in this
question. The Supreme Court has twice decided that
we can only be taxed one-half of one per cent, on our
net incomes. Therefore you cannot tax us under the
46
proposed act. I have no pecnniaT-y interest in the ques¬
tion. But is it right ? There is a provision in the Con¬
stitution of Georgia that taxes shall be ad valorem and
uniform. Let us see whether you can make it so. The
Georgia Railroad cannot be taxed by a county ; the
Central cannot be compelled to pay a county tax, be¬
cause they only pay one-half of one per cent, upon
their net incomes. The "Western and Atlantic is not sub¬
ject. Row how can you make the railroad tax ad
■valorem and uniform in Georgia, an l compel all the
railroads to pay county taxes except those three 1
But suppose the tax is imposed, then when the rail¬
roads are making the seven per cent, per annum on
their investment, as the commission propose, if ymu
add a county tax to their expenses, you deduct the
amount of such tax from the seven per cent. You do
not propose to do this.
Then you must permit them to raise their freights-
enough to pay the county tax ; otherwise, how are
they to payAheir county tax and still earn the seven
per cent for dividends ? They must then raise their
rates of freight and passage enough to pay^ these taxes.
Let us see how just that is as between difterent coun¬
ties. Take the Southwestern Railroad, for instance,
and say it is liable to pay county taxes. Well, it
adds the amount of the county tax to its freights, the
commission permitting it to do that if it makes seven
per cent. It does not carry simply for the counties
it runs through, it carries for all the counties on both
sides of it. While the counties it runs through get
eveiy dollar of the tax, the adjoining counties who
get their freight on the road pay as much freight as
they do, and do not get a dollar of the tax. In other
words, you tax the whole people of Georgia who get
freights over the roads, and then pay it all to the
counties the railroads run through. Is that right?
Col. Barnett says it is a step in the right direction. I
say it is a step in the wrong direction. If you have to
47
tax railroads beyond what the State taxes them, then
the only just way of doing it, would be to raise the
State tax higher so that the counties would get the
benefit of it alike. But when you give it simply to
the counties that the railroad passes through and
make the others pay their full share of it, that I say
is unreasonable and unjust. And here again the com¬
missioners are wrong in grasping for power. Of
course legislators have differed on that subject ; but I
give the reasons that seem to me to show that no
such measure ought to pass.
THE UNINTENTIONAL INJUSTICE PERPETRATED BT THE
COMMISSION UPON THE SAVANNAH, ELORIDxV AND
WESTERN.
A word in reference to the Savannah, Florida and
Western Railway. Col. Barnett, the other day, held
up a chart he had made, which he said represented
the schedule of rates. He could not get it exactly
into his head until he got a diagram which he said
showed that that road jumped up faster and higher
than any of the other roads. Therefore, it ought to
be cut down. There is a good reason why that road
should charge higher than the most of the roads, even
if it does what his chart says it does. I understand
there is 150 miles of that road, from Savannah out to
Southwest Georgia, that runs through a country that
produces very little freight ; then it goes into a fine
cotton country, and until lately there has been no
Western connection. They now have a road up to
Albany which can compete for the small business of
that place. There is a long line of road to keep up,
and most of the way very little freight. It is just
simply impossible to keep it up and pay the bonded
debt, and pay any dividend, at the rates fixed by the
Commissioners.
IMPOSSIBILITY CP LIKE RATES ON ALL ROADS.
There is what the railroad men call a fixed expense
48
that everywhere applies. For instance, you build a
bridge of wood ; it does not matter whether you run a
hundred trains a day, or only a train a week, or one a
month, over it, that bridge will rot down in the same
length of time. You lay down your cross-ties the
whole length of the road ; no matter how many trains
or how few you run, the cross-ties will rot in about a
given time. There are other fixed expenses : the sal¬
aries of officers, the maintenance of depots, necessary
repairs on engines and cars, and a good deal of other
expenses of that sort, that you cannot cut down,
whether you do mirch or little business. "Whenever a
road is run in a section that has little business to do,
the people of that section must expect to pay a higher
freight than those who live along a line where there is
much to do, or where there are long through connec¬
tions which serve as feeders. Let me illustrate : There
is a vast quantity of timber between Savannah and
Montgomeiy county, in this State, that is worth for¬
tunes if there wei-e any way of getting it to market.
The people are too poor to bnild a railroad. Suppose
a company of capitalists were to say, "We propose
to build you a road from Savannah into Montgomery
countjq and stop there, and give jmu an outlet for
your timber." What would be the increased value of
that countiy 1 Would not the property be worth four
times as much as it is now? A tract covered with large
pine timber would be worth a large sum, that is now
not worth prob^blj^ a half a dollar an acre. It would
be simply absurd for the people of that section to turn
around and say, "You must charge as low a rate as the
Central per mile." Rather than do without the road,
they can well aflford to pay four times as much. No
company of capitalists, with the Railroad Commission
over them, ready to take charge every time a little
dividend was made, would build such a road without
some guarantee that the freights shall be kept con¬
stantly up, so as to make the capital invested pay div-
49
idends. What man of sense would put Ms money into
a road between Savannah and Montgomery county, for
the benefit of the people there, without such a guar¬
anty %
And that is very nearly the condition of the Savannah,
Florida & Western. It runs into a better county than the
one supposed, but it is absolutely necessary to put the
freight high enough to pay something to capital, or cap¬
ital cannot afford to keep it up and run it. Bridges will
rot, or be unsafe whenever there is no income from the in¬
vestment to keep up repairs. The road will soon be in
condition for a run-off, because the road-bed cannot be re¬
paired, nor the worn rails renewed. You must permit
them to make enough to keep the roads in running order
and pay something to those who run it or that section can¬
not be served by railroad. Hence, I say injustice has been
done to that railroad. 1 have no interest in that road,
but I am glad to hear Gov. Smith say they intend to cor¬
rect this error of the commission. I think the sooner, the
better.
SALARIES OF RAILROAD AND STATE OFFICIALS.
There was an inquiry made about the salaries paid on
that road ; and an allusion was made to my salary as Pres¬
ident of the W. & A. R. R. Col. Barnett stated that I
got about as much as the three commissioners get. Well,
I do, I suppose, get nearly as much as that. I am sorry
they do not get more. I get §7,000 a year. I consider I
am worth that to my company and I do not intend to take
less. Whenever they wish to get rid of me they can easily
do so by reducing my salary one dollar. I can put the
same amount of time into other business and make more
money than the salary they pay me. Railroads generally
select men who are competent and worth the money. In
this, they have been wiser than the State has been. The
State does not pay its officers adequate salaries. When I
was in the Executive office I recommended a bill to raise
salaries and vetoed a bill to lower them. I say the State
4
ßo
would be better off if it would pay competent salaries to
competent men to manage the public interest. True, you
find men always willing to fill these offices. But take your
supreme bench, you do not get men who are willing to
stay there long. They take the position for the honor and
hold it for a time; but they do not stay there all their
lives as they should, to make themselves as competent as
they could be. You may make all you will out of my sal¬
aries and the salaries of the officers of the other companies.
I have managed the road as well as I could. For several
years we made no dividends. After some years we issued
a batch of income bonds which we are paying out of our
present incomes. I do not know how we shall succeed to¬
ward the end of the lease. Thus lar we have put the most
we have made into improvements.
THE RAILROAD COMMISSION ENRICHING THE STATE AND THE
REST OF THE WORLD.
In the next place, while asking for more power, my
friend Barnett, who is so honest as to believe it all
right, goes a little further and advances his theory as
to the great good the commission has done to the State
of Georgia. His theory is that the railroad commis
sion is enriching the State. I once heard of a professor
who had a theory he thought a great deal of, and on
advancing it one day, he was told that it looked very
fair, but unfortunately the facts were in the teeth of
the theory. "Then so much worse for the facts !" was
his prompt r»ply. [Laughter.] My friends Har¬
nett's theory is that the railroad commission is enrich¬
ing Georgia. All you have to do is to give more pow¬
er to the commission, and we'll all get rich. But in
practice, the facts do not agree with his theory,
though I suppose with him, it is only so much the
worse for the facts. [Laughter. ]
Another point. It is claimed that the railroads have
been doing better under the commission than ever be¬
fore. And Col. Barnett went on to boast of this, and
ßl
pointed out in what their prosperity consisted. I
asked him if some of it was not due to the general con¬
dition of the county. He hesitated a moment and
said : "A little." Well, I think a little of it was due
to the present condition of the country.
Mr. Barnett—You misunderstood me.
Mr. Brown—No, I took the language down when
you uttered it, and Gov. Smith hinted strongly at
the same thing. If the commission has done all this,
then their modesty is entirely too great, and they have
not stated the half of what they have done. Why,
the stock of the Texas & Pacific a few years ago was
worth only five cents in the dollar. It sold lately at
seventy. Of course the appointment of the Georgia
commission raised it. The stock of the Memphis &
Charleston went at 8 or 9 cents before the commission
was appointed. It has since been nearly up to par.
The stock of the Central had been down to 35 ; since
the commission has been appointed it has been selling as
high as 170. Doubtless it was the commission that did
it. The stock of the Georgia had been very low audit
could not pay dividends, but now they are paying div¬
idends and the road has been leased for a long period
at ten per cent. The work of the commission again.
I might name numerous other instances all over the
country, where stocks have gone up wonderfully since
the commission was appointed. The boom of pros¬
perity has struck all the companies and their stocks
have run right up. Prior to the appointment of the
commission, there were bad crops in Europe ; since
the good news has reached there, the wheat crop of
Russia is said to be the finest this year that was ever
produced. It is a great pity you did not appoint the
commission in 1873 ; what a wonderful relief it would
then have been to the railroads and the people.
If all that Col. Barnett claims as to the good the
commission has done, be correct, then he was right
while in his speech quoting scripture he said that " a
53
State, with such a railroad commission, that can
neither be intimidated nor bribed, is like the man
with a good wife, it has a good thing from the Lord."
[Laughter.] If, indeed, our present commission is a
guod thing sent us from, the Lord, as is claimed by
Commissioner Barnett, then I hope they will obey the
precepts of the Lord, and do equal and exact justice
alike to all ; oppress no one, nor violate the legal
rights of any, but administer the law faithfully.
What a glorious thing the commission is for the State,
and how unfortunate that it had not been appointed many
years ago. And we were appealed to yesterday by the
able member and advocate of the commission, never to take
a step backwards, when such splendid results were fol¬
lowing. Gov. Smith, pointing out the very beneficial results
of the action of the commission, referred to the fact that
the Central Railroad had declared a dividend of 4 per cent
for six months, and 40 per cent stock or bond dividend
out of its accumulated profits. I understand that is not
true. Only three or four years ago they could not pay
any dividend. Both the Central and the Georgia had fre¬
quently to pass their dividends unpaid. If Gov. Smith
were right and the dividends were paid out of accumulated
profits, they would not have been paid in scrip, but
in cash. I do not know who made money out of stocks
by this transaction. I can very readily see, though, when
it comes to paying dividends or interest on the additional
stock or bonds, in time of depression, that the lambs, as
they call them in New York, will have to bear the bur¬
den, not the bulls or the bears. If the bulls combined
with a view to make a dividend on stock, it was a splendid
opportunity to put it up and then let it slide.
WATERINS STOCK.
Then again the fact was spoken of that the Atlanta &
West Point Road had declared a dividend of 4 per cent-,
and also a stock dividend of 100 per cent, on its capital.
They have been unwise enough to do that, but it is
58
nothing on earth but watering the stock. As long
as this boom lasts, they may pay a dividend upon it ; but
when it passes away and we come down to the depression
again, they cannot pay it. They will fall back then to
where they were before the commission was appointed,
or where they cannot pay at all upon their stock.
Mr. Barnett—We agree upon that point.
Mr. Brown—I am glad we do ; and I hope we shall
agree upon another point, which I will now state.
THE QUESTION OF SEVEN PEE CEKT. DIVIDENDS.
There was a time when neither the Georgia nor the
Central paid dividends, afterthe Jay Cook failure. Now,
since the commission was appointed, they have been
enabled to pay fair dividends. But during the boom
they ought to be permitted to make enough to pay the
dividends they passed during the time of depression.
What sort of justice is it to say to capital : "We will
permit you to pay seven or eight per cent when on
top of a boom, but when we get to the bottom we will
allow you to pay nothing." If you confine them to
8 per cent now, and they can pay nothing then, do
you do justice to capital? I know it is easy to make
political capital out of this question, and say :
"Things are going swimmingly; dividends are made,
and foolishly made; 8 per cent, is made in cash, and
probably 10 can be. Isn't that enough ?" Yes, if it will
last. It is more than enough if made uniform. But bear
in mind you have not passed a period of commercial de¬
pression since the appointment of the commission.
The S260,000,000 a year balance of trade is in our
favor, and that much gold flows into the United States
in settlements with foreign nations. The United States
pays $100,000,000 per annum upon her public debt, and
$50,000,000 to pensioners. But the time will come
at no distant period when some large financial man
will die or some Jay Cook failure take place, and
public confidence be shaken, and contraction will be-
54
gin and we will soon go to the bottom ; and then we
have to climb up again. These periods have come on
at almost stated times since the organization of the
government, and you must provide for them. No
legislature or commission does justice to railroads
that curbs them down to 8 per ceno or 10 per cent in
time of prosperity, if they cannot make a dollar du¬
ring the depression. If you only permit them to make
that now, will you guarantee them that amount when
the time of trial comes ? No, the commission would then
be mum ; they would not say much about the benefits
of the commission at that time ; capitalist^ would feel
the burden—every body would feel it—and those who
own infiated stocks will then reap a harvest of mis¬
fortune.
I have, I believe, about gone through with the points I
desired to make. My friend, Gov. Smith, yesterday re¬
ferred to the fact that I had made my speech in the interest
of constitutional liberty. We do live in a government of
constitutional liberty and laws ; not the same sort of lib¬
erty we once enjoyed, probably, but with all its faults, still
in the best government that exists; andido plead for con¬
stitutional liberty, and I plead fora constitutional and legal
guarantee of the rights of property of every character. And
I do deny in this presence that it is right for the Legislature
of Georgia or any other legislature in this Republican gov¬
ernment and under this Republican system of ours, to in¬
vest any commission or any authority, with the absolute
powers that are given to these three good men. I care
not how good they may be, how pure their purposes may
be, how lofty their aims, how patriotic their instincts, it
is not safe to trust them with absolute power over any class
of rights or property. Now they have power to make the
law, for that is what it means. To prescribe rules is the
language of the statute. Law is a rule of action pre¬
scribed by the supreme power in a State, commanding
what is right, and prohibiting what is wrong. They lay
55
down rules that are supreme law to us and which we are
bound to obey under heavy penalties. The State does
not inflict a penalty, but it requires obedience to the man¬
dates of the commission or the rules and regulations made
by the commission. For a violation of their rules, or the
laws made by them, not by the Legislature, we are liable
to a penalty of one to five thousand dollars, to be recov¬
ered in an action instituted by the commission, through the
Attorney or Solicitor-General.
They make the laws for us, and we must conform to
them on pain of these penalties ; and they are made
the judges of most of the important facts, and may
even go so far as to compel the agents and officers of
the corporation to testify whether we have kept the
statntes made by them, or whether we have violated
them. I say, take it all together, it is the very essence
of absolute and supreme power which is delegated by
the Legislature to the Commission. As we mnst live un¬
der absolute power, it is most fortunate that it has been
delegated to men of the ability and good sense, mod¬
eration and good character, of our present Commis¬
sion. I wish to do them no injustice, I wish to reflect
upon them in no way, but I do say they are laboring
under a S3'stem that is dangerous to the liberties of
this country. If you carry it out, and extend it to
railroads, you will extend it ultimately to other classes
of property, and you will undermine the very princi¬
ples of constitutional liberty and the very foundations
of the State. I say, then, it is dangerous—nay, it is
ominous—in this state of the case for them to come to
you and ask for enlarged powers. They say the rail¬
roads have cost §60,000,000 ; and we say if the railroad
act is constitutional, they are as absolute over that as
is the autocrat of Russia over his subjects. They are
backed by popular sentiment. Popular sentiment is
with them because they hold out all the time to the
public that they are greatly benefiting them. They
say, in substance, ¡we reduce the price of fare and of
56
freights ; we help you very much, and still the roads are
doing well. Therefore, we are doing wonders for the
State. • This is plausible enough, and upon this they
earnestly appeal to you to give them more power. How
is it the railroads have been so successful under their
control ? It is because the country is on a flood-tide of
prosperity, and we can, in spite of reductions, make div¬
idends. But they do not provide for the time of de¬
pression. When that comes, all will seethe injustice
of this system, and the ruin wrought by it.