NOT GOVERNMENT OWNERSHIP, BUT POPULAR OWN¬
ERSHIP OF RAILROADS WILL SOLVE THE
RAILROAD PROBLEM.
THE COMMON CARRIER AND
HIS CARES.
AN ADDRESS
BY R. C. DUFF, PRESIDENT OF THE BEAUMONT, SOUR
LAKE & WESTERN RAILWAY COMPANY.
DELIVERED BEFORE A JOINT MEETING OF THE COMMERCIAL SEC¬
RETARIES OF TEXAS AND LOUISIANA, AT BEAUMONT,
TEXAS, JUNE 13, 1907.
Mr. Chairman and Gentlemen :
Once more the march of Time has brought America
and its great people at grips with a problem, upon the
right solution of which, as in other crises heretofore, the
progress and prosperity, if not the safety, of the nation
depend.
Transportation, the mere matter of moving people
and their property from point to point upon the earth,
in a few brief modern decades has evolved a gigantic
scientific system popularly esteemed complex, mysterious
and powerful, which, in fact, so far affects the good weal
of the people that, disguise the matter as we may, it
constitutes, even in politics, the overshadowing question
of the times in the several States and likewise in the
nation.
From time to time heretofore great questions arose
which, like this, in their general aspect seemed suited
for solution only by the deep consideration of trained
political economists, on which issues were joined in party
platforms, and perfervid orators declaimed from an uni¬
versal hustings infallible solutions, pro or con, of matters
which for all time had vexed the profoundest philoso¬
phers.
But it is characteristic of the American people to
settle all large questions for themselves, and whether
those questions were Taxation without Eepresentation
in 1776, Search and Seizure in 1812, Slavery in 1861, the
2
Protective Tariff in the 80s, or the Quantitative Theory
of Money in the last decade of the century lately gone,
while there were among the people, between the several
sections of the country, and between the declarations
of great party platforms, sharply defined differences of
opinion, which only found surcease when time and again
the voice of the majority at elections had spoken, or
when the stern arbitrament of arms determined the vic¬
tors the superior logicians, yet who today can doubt that
the American people have correctly decided every vital
question yet occurring affecting their happiness?
And so, as heretofore in regard to other momentous
matters, the American people will themselves solve the
railroad problem.
Its attitude, however, is unlike any question hereto¬
fore arising. No section of the country, nor political
party, champions the railroads' cause; and if party or
personal differences occur from time to time, they, in the
main, have reference to the constitutional validity rather
than to the principle of any proposed legislation against
the railroads.
The question is one of cold, unsentimental and un¬
emotional business.
So be it. The American people are essentially a
business people, and beyond that, they love justice and
abhor tyranny whatever foim it take, and these are the
factors which guarantee a just conclusion to the present
contest.
No sf)ecial interest in America, singly or in combina¬
tion, is strong enough to wage successful economic war
against the American people; and it is now the part of
3
men concerned in transportation to brush away the mists
and mysteries heretofore enveloping their trade, and, by
thoughtful, patient and persistent explanation, to make
clear to the world at large the nature, difficulties, neces-.
sities and results of their work. In brief, Americans
must be taught to read tables of statistics with eyes that
can discern, through columns of percentages, conditions
obtaining on a railroad from heavy grades to bad
weather, and if, finally, pupils in the public schools can
prattle wisely of the ton-mile along with the rule of
three, so much the sooner may the railroads confidently
appeal to that enlightened sense of American justice
which alone at last remains the shield and buckler of
the public service interest, which fundamentally is syn¬
onymous with the public interest of which it is my pur¬
pose now to speak.
THE PUBLIC INTEREST.
In the consideration of transportation, alike, with all
other questions, Americans must place foremost and
paramount the welfare of the general country and its
people. And though we be frequently reminded the corpo¬
ration has no soul, nevertheless, it remains the humble
privilege of stockholders to love their country; no class
of men included in its citizenship owns a more vital in¬
terest in its security and progress or in the perpetuity
of its institutions, and if today occasion presents no op¬
portunity to them, upon the tented field where are assem¬
bled under arms the embattled hosts of a nation's de¬
fenders, to demonstrate the absence of any distinction
in regard of patriotism, between them and other classes
of their fellow-citizens, history does not record them
wanting in the past, and if in other days such men found
4
it sweet to die for love of country, so today we need not
fear but they will make such lesser sacrifices as are re¬
quired for the good of the country, as well as of them¬
selves, to settle upon a permanent basis, just and fair to
all, the administration of their properties.
But if this consummation, so devoutly to be wished,
is to be attained at an early date, then must their fellow-
citizens, upon their part, learn not to crowd too far their
new-found power of control. The right existing in one
class, however numerous, to dictate terms of service to
another, wisely and conservatively exercised, may be
salutary regulation, making for the good of all; but the
power itself is anomalous and radical, it characterizes
slavery; and power which, when reasonably exercised,
is just restraint, when arbitrarily exerted to serve the
selfish aims of one or many, deserves no name but
tyranny.
What the circulation is to the body, that the trans¬
portation system is to this country, and while reasonable
medicament is good for fevered blood, beware of the false
physician who prescribes strangulation to cure the dis¬
temper, or who, by innumerable lancings, destroys its
power to perform its necessary functions.
GOVEBNMENT CONTEOL OF PUBLIC UTILITIES.
The doctrine of governmental control of public utili¬
ties had its genesis before the power of steam, as applied
to transportation, was thought of. The English Parlia¬
ment asserted its supervisory powers in behalf of the
English people against ship-owners and their ships and
carriers and their carts, when all ships moved by sail
and all vehicles after animals; and at common law the
5
doctrine of the reasonable rate flourished before our gov¬
ernments were born. And when the latter, National and
State, were established, it doubtless appeared to their
founders wise to leave common carriers, including rail¬
roads, when they came on, to be controlled by the terms
of that common law which the colonists had brought from
England and which sufficed to order all the affairs and
establish the general rights and remedies of all men at
large. Hence, other than to provide by law that common
carriers, in respect of the business they did, should not
by contract restrict their liability, but should endure the
same as it existed at common law, they were content, in
the main, to leave the carrier to enjoy the same liberty
and freedom granted to all men beside.
But at all times, even if it slumbered and was but
little understood, subject only to some restraints in re¬
spect to rights so fundamental as to have been declared
in English Magna Charta, written six hundred years be¬
fore railroads were designed, there has existed the power
in government to lay its hand upon the common carrier,
to limit his charges and to order his affairs.
Such was the attitude of the common carrier before
the law, when the era of railroad construction began.
What then was the condition of our country?
Inhabited by a few millions of people, settled in the
main along the shores of the Atlantic and counted daring
because they looked to conquer the vast and unknown wil¬
derness which stretched beyond the Appalachian range,
even the mighty prescience of Webster could only foresee
danger in the annexation of Texas, so distant its territo¬
ries seemed by existing means of travel and transporta-
,6
tion ; in population, wealth, products and consequence
America ranked only among the third rate powers of the
earth, and there slumbered in its bosom all the mighty
potentialities of coal and steel which, vitalized, were
destined to revolutionize the world.
And then followed fifty years (a mere moment in a
nation's life) of railroad construction. Driving the sav¬
age from his path, and penetrating unknown wilds which
foot of civilized man never before had trod, looking to
future times alone to compensate the costly ventures, the
common carriers laid twin bands of steel two hundred
and eighteen thousand miles to link ocean to ocean, lakes
to gulf, and every corner of the land to its heart and to
each other, and lo ! because men and their commodities
have been and are moved in such volume and with such
celerity and safety as never dazzled the dreams of Web¬
ster, thousands of populous cities have arisen where the
wilderness alone then met the eye; the earth renders
from its bosom incalculable stores required to feed and
clothe the nations; mines honeycomb the hillsides and
from them pours a golden tide vast beyond the dreams
of avarice; the smoking furnaces of untold factories
darken the firmament, and their fabrics move to every
corner of the globe ; because by the close of the fiscal year
which ended June 30, 1905, the common carriers were
able to transport that year 739,000,000 passengers 24,-
000,000,000 miles, and 1,400,000,000 tons of freight 186,-
463,000,000 miles, affording for American products,
which, without transportation, would have rotted or
wasted on the ground where produced, markets, not
merely in every portion of our own land, but so largely
abroad that Americans exported and sold in other lands
in 1906, $2,000,000,000 worth of their products; there-
7
fore, today we stand substantial owners of our continent,
not second to any among nations, our wealth estimated
at $88,500,000,000, eighty millions of prosperous, happy
and—highly discontented people.
So much for the attitude of the country.
If you deny the railroads credit for these conditions,
I answer, show me a section of the country which has not
felt the influence of a railroad, and I will show you a sec¬
tion which remains where it stood in 1850.
But what of the common carrier? That future to
which he looked for his reward has come; what, then, is
his attitude? Back to the wall he stands, assailed from
every side, supplicating that same American people for
his very existence, and there are men high in honor who
would deny him even that.
And whereas, mainly these works were done when
the common law seemed to suffice to prescribe his rights
and duties, and the law concerned itself only to say he
should not restrict such common law obligations, today
the people are told that that common law which still ob¬
tains for all citizens except him, is too good for him, and
as to him its rigors must be supplemented by a multi¬
tude of statutory fetters, restraints and penalties.
When we thus look to the record of the carrier's
achievements in behalf of the country, in approximately
the first half century of his existence, and recall that
these things were done under laws which, in general, left
to him the same latitude in respect of contracting and
ordering his affairs which all other citizens enjoyed, are
we not authorized to wonder what were the grievous
sins he did that now devolve on him almost universally
8
throiif>'lioiit America, opprobrium; doubtless he bas
sinned at times and on occasions ; who among his fellow
citizens has not? But does not his great work yet re¬
main, and if it be true that it was his back which, in the
last fifty years, bore his country to a progress such as no
nation in all history has ever known before, should we
not ponder long and deeply, ere we, for sins, which have
not even slightly diminished the grandeur of his work,
link fetters on those limbs the freedom of which has been
proven essential to the progress of the nation? Be as¬
sured, if the carrier halt, the nation must mark time.
Never before, so far as my historical reading ex¬
tends, was such an ocean of legislation poured out against
a single class of citizens.
The right of the carrier, so fundamental, and so jeal¬
ously guarded to all men otherwise, to set prices on his
own services, and where not paid to decline the service,
the existence or absence of which right among men con¬
stitutes the distinction between slavery and freedom, is
now abridged, and in many States utterly destroyed.
There remains but one barrier, beyond which, theoret¬
ically, the carrier may not be driven in the reduction of
his charges, the first section of the fourteenth amendment
to the Constitution of the United States.
THE FOURTEENTH AMENDMENT.
After the civil war and the abolition of slavery, and
especially for the protection of those persons so lately
out of bondage as to seem to require a guarantee against
their return to that same condition, the Federal constitu¬
tion was amended so as to prohibit the several States
from making or enforcing any law which should abridge
9
the privileges or immunities of citizens of the United
States ; nor should any State deprive any person of life,
liberty or property, without due process of law, nor deny
to any person within its jurisdiction the equal protection
of the laws. The carrier is, before the law, a citizen; and
so, from time to time when his fellow citizens in certain
of our States, by legislation passed by them, sought to
impose on him the obligation to serve them for pay
which would not compensate the carrier, he has appealed
to the courts of the Federal government, and the rates
so sought to be imposed upon him were restrained, be¬
cause violative of a law which had been made for the pro¬
tection of slaves.
But it has been counted by some of his fellow-citizens
a grievous sin for the carrier thus to take to sanctuary,
which time and again, and repeatedly here in Texas, he
has been forced to do, and in Texas, never yet that the
justice of his plea was not to some extent finally con¬
ceded.
Yet, jt seems to me, except that in human nature it
is ever hard to forgive one whom we have wronged, if
bitterness exists on this account, it should fairly he with
the carrier, who was pursued to his lawful refuge, not
with those who pursued him.
Well I know that here in Texas, if periodically legis¬
latures or commissions holding delegated legislative
power, passed laws against the general citizenship tend¬
ing to deprive them of their property without due pro¬
cess of law and denying them the equal protection of
the laws, armed hosts would rise like stubble in a wheat
field, and not troubling to take fröm Federal courts in-
10
junctions, would force such acts to be repealed, or not
one stone would stand upon another in the capitel.
But the revolutionary spirit, with the right of revo¬
lution, pertains only to the people; the carrier has
neither; his it is only to pursue the remedies his fellow
citizens in erecting government allowed him, and to in¬
sist that when he is oppressed he take no prejudice by
asking the people's government to save him from that
oppression.
TWO THEOEIES OE EATE-MAKING.
Fundamentally, men of profound thought yet ques¬
tion the beneficence of governmental rate-making,
although it may be conceded that the primary purpose
of government in exercising this function is to reduce
the rates.
Eate-making, before the era of governmental con¬
trol, admitted of two influences more powerful even than
government, viz : First, competition ; second, the necessi¬
ties of trade, according to which, if, as often has been
said, it were the rule "to charge all the traffic would
stand," it was also the rule "to fix the rate low enough
to insure the traffic moving," under the operation of
which rules thousands of untried but meritorious indus¬
tries in remote sections of the country, by rates which
fostered their undertakings, came to success, and yet no
other man could say that thereby the carrier had wronged
him.
Government-made rates, like the dew from heaven,
in theory fall without discrimination alike upon the de¬
serving and undeserving, and, except that the short-line
mileage makes the rate for all, every article in a class
11
and every item of each commodity, wheresoever pro¬
duced, regardless of the quantity, whatever route it take,
must move upon the same graduated rate, and competi¬
tion, which in all other business is deemed the life of
trade, between carriers is destroyed.
The governmental tendency, while maintaining a
dead level in rates, is constantly toward a general reduc¬
tion of all rates, and the carrier, therefore, is inevitably
forced to constant opposition against the reduction of
any rate. That the carrier may, and does even yet fre¬
quently, apply to governmental rate-making bodies for
authority to institute exceptions to government tariffs
lower than the same, evidencing the continuance of the
carrier's solicitude for the development of industries in
his territory and for the commodities of his territory to
move to market on terms which enable them there to meet
competition from elsewhere, is the remarkable survivor
of the spirit of which 1 have spoken. The practice, how¬
ever, is frequently caustically commented upon as a con¬
fession by the carrier that the government-made rates are
over-liberal to the carrier.
REGULATION OE ABUSES.
Not the least of the carrier's concerns, however will¬
ing may be his disposition, is to determine what will con¬
stitute compliance with the many laws and orders, na¬
tional and State, directed to him for his observance.
So numerous are these enactments and orders, hav¬
ing to do with every phase and feature of his business,
including his relations with his employes, that the human
ingenuity is taxed to conceive an act or omission on his
part not governed by some law or order for the non-
12
observance of which penalties, frequently amounting to
civil death, the forfeiture of his charter, and if not that,
then heavy fines, are imposed, not only upon him, but on
his individual employes, who dread to perform their ac¬
customed duties without the advice of coimsel.
Conscience, that inward monitor which among men
sounds the alarm whenever in the mind an evil deed
is meditated, is no longer a criterion, since most of
the multitude of things prohibited or directed are crimes
not because they are wicked in their nature, but merely
because denounced at law; and what is lawful and even
meritorious in one State, is a crime in another; and an
employe here at Üeaumont handling the carrier's busi¬
ness may perform an act which, if the same have refer¬
ence only to Texas, will be proper; whereas, if it refer to
interstate traffic, the same act will send him to the peni¬
tentiary, and vice versa. None but lawyers, and good
ones at that, today can feel entirely comfortable in trans¬
acting the carrier's business.
In my judgment, governmental rate-making and reg¬
ulating bodies as now constituted will not endure.
Nothing in these remarks is intended to discredit the in¬
tentions of the men selected to discharge the duties of
Kailroad Commissioners. In the main, they reflect the
sentiment which has established them, and it is no back¬
handed compliment to them to say that it is their general
purpose to serve their constituents by reducing the car¬
rier 's rates.
My meaning is that the laws constituting and orders
emanating from the rate-making and regulating bodies
established by the Federal government, and those of the
several States, are in constant conflict, and the day must
13
come when one will supplant the other or utter demorali¬
zation will ensne.
In such cases heretofore the Federal power has pre¬
vailed, and if the general people still insist Upon the gov¬
ernment rate-making and regulating theory, they must
look forward to the day when, once more, the once cher¬
ished doctrine of State's rights is shorn of another great
attribute, and the power of the Federal government
mightily expanded.
When that day comes an interstate commerce com¬
mission, to be composed of individuals equal to and one
selected from each State in the Union, associated with
representatives of the carriers themselves, and divided
into groups analogous to existing traffic committees, pro¬
mulgating rates and classifications, and correcting abuses
in assigned territories, may he found the ultimate and
satisfactory organization, fair to both carriers and peo¬
ple.
' ' X OBLESSB OBLIGE. ' '
I want to take this opportunity, however, to say that,
in my judgment, in some form, governmental regulation
of common carriers and their rates has become a fixture
in the jurisprudence of this country. State and National.
Such regulation and control must necessarily be exerted
by the people through governmental bodies possessing
delegated legislative powers, expressly selected and in
session at all times, to deal with and against the carriers.
Railroading in all its branches has become a science, the
mastery of any department of which, more particularly
the mastery of all departments of which, re(iuires years
of study and observation, if not training and experience.
Therefore, in the nature of things, commissions, the very
14
existence of which arises out of public apprehension in
reference to the carriers ' practices and rates, must he-ex¬
pected in the early years of their creation to be influ¬
enced perhaps over much against the carriers by two fac¬
tors: (1) the inexperience of the gentlemen composing
these commissions, drawn, not from that class theretofore
engaged in handling transportation problems, but from
other walks of life, usually from the legal profession; and
(2) by a natural incredulity in regard to the complaints
and statements of the carriers, whose interests presuma¬
bly lie in opposition to all measures which such governing
bodies may undertake to promulgate and enforce.
In my opinion the joint interests of the public and of
the common carriers require the correction of this condi¬
tion of "rawness" naturally inherent to the establishment
of any new department of the government possessing such
plenary powers and intrusted with such grave responsi¬
bilities and having such little precedent in the history of
jixrisprudence for their guidance. These remarks, of
course, have less reference to Texas and l ouisiana, where
the commissions have long been established and where the
commissioners have shown remarkable facility for their
work, than to other jurisdictions, hut must constantly re¬
cur even in Texas and Louisiana, to a greater or less ex¬
tent, whenever experienced commissioners are superseded
by new men unfamiliar with the intricate tasks imposed
upon such bodies ; and the interests of the public and car¬
riers alike suggest the retention in office indefinitely of
men holding positions on these bodies who have demon¬
strated the possession of those characteristics of fitness
and fairness which qualify them for the work.
It is the particular concern of the common carriers,
and of their managing officers, by their conduct towards
15
the public, and by frank and honest dealings with these
governing bodies to allay the general distrust, and partic¬
ularly to gain the confidence and fair co-operation of the
governing bodies.
On the other hand, in my opinion, a correlative obli¬
gation rests lipon the governing bodies to attain the
closest possible acquaintance with all of the problems and
cares which beset the common carriers, to the end that
they may not only appreciate the same, but may assist the
carrier while rendering the most efficient service to the
niiblic, at the same time to conserve its own interests and
the interests of that large portion of the public holding
the securities of transportation comnanies, the destruc¬
tion of whose confidence in railroad securities as an in¬
vestment will necessarily imnly the curtailment of future
railroad construction, than which there is nothing more
imperative to the future progress and prosperity of this
country.
Such, in my judgment, are the interdependent obliga¬
tions of the carriers upon the one part and the commission
representatives of the people on the other, which reduce
both to the basis of "noblesse oblige."
CORPORATE GREED.
We hear much said about "corporate greed," and
the carrier is usually incorporated.
If what I have said before be true, never in all this
world did such a woi'k receive such slender compensation.
The humblest citizen in this land lays out his money in in¬
vestments, and Jurisprudence, like a sympathetic friend,
stands by and smiles though he reap returns of a thou¬
sand per cent per annum ; but the stern voice of the high-
16
est court in this country has declared that the common
carrier's iucome may be lawfully reduced by the people
to a small rate of interest, say 5 per cent per annum, not
on his outlay, nor on his stocks and bonds, but on the
value of his property.
Nor is the last word said at this. For since the peo¬
ple have been fully instructed that they who use the car¬
rier need not bargain with the carrier for the terms of his
service, but may erect commissions through which them¬
selves to fix the rates that they themselves are satisfied to
pay, and likewise may prescribe what facilities he shall
provide in connection with the service, may we not fairly
suspect such opportunities may breed a greed other than
corporate, and wonder whether it be entirely in accord
with the eternal fitness of things for the shipping public,
through their own and devoted public servants, to fix the
shippiug charges.
But there are irrefutable evidences against the not
uncommon charge of insatiable corporate greed. I won¬
der how many of those who hear me have any idea of the
cost of transportation prior to the advent of railroads. I
have seen calculations placing the cost of moving freight
by teams under ordinary circumstances on dirt roads, as
low as 25 cents per ton per mile. It was cheap at that
figure.
For the fiscal year which ended June 30, 1905, every
ton of freight which moved by rail in the United States
was moved on an average rate of less than 8 mills per ton
per mile; in Texas the average rate was substantially 1
cent per ton per mile for the same year ; for the United
States the average rate per mile paid by each passenger
was 1.962 cents; in Texas, 2.239 cents.
17
So much for the rates. What of the service? The
freight was moved under a guarantee as to safety,
amounting almost to insurance at an average rate of
probably fifty miles per day.
The passenger, the carrier's dearest concern and fre¬
quent source of loss, moved amidst elegance, luxury and
comfort unknown to princes fifty years ago, and the limit
of safety has been reached in an effort to annihilate time
in his transportation.
HOW IT IS NEVER WISE TO SAW OFE THE LIMB ON WHICH
ONE SITS.
The late unprecedented industrial development of the
country and the enormous volume of products offered the
carrier for transportation, a condition which ought only
to have brought joy to the carrier's soul, have merely
multiplied his woe. A long period during which car and
locomotive manufacturing plants have worked to maxi¬
mum capacity did not put the carriers in condition, as to
equipment, to supply the demand for cars during the last
harvesting season, and reciprocal demurrage laws freely
proposed and sometimes enacted could not assist the car¬
riers' dilemma, which did not consist of any disinclina¬
tion, but of a downright incapacity to obtain cars or the
motive power to propel them. The carrier's interest, of
course, lay in moving the freight ere it perished, other¬
wise he earned nothing on that account. What was needed
was more cars, not more law. But the people could make
laws, and did so. The cars, which take more time and cost
more money, are to follow. However, these conditions
created two vociferous uproars; one on the part of the
country against the carriers; the other (shortly later
18
when the popular feeling began to manifest itself through
the several legislatures ) on the part of the carriers, now
engaged in stupendous efforts to finance additional con¬
struction and equipment required to relieve the situation
and to prevent the recurrence of like conditions, and
whose efforts in that behalf at home and abroad at once
became hampered by the mass of legislation proposed
against them ; great tmanciers, upon the success of whose
eriorts the relief the people clamored for depended,
found themselves beset by a difficult dilemma suitably to
characterize and oppose radical acts of legislation or reg¬
ulation proposed by legislatures and commissioners, and
at one and the same time to re-assure the local and for¬
eign (particularly the foreign) investor in railroad se¬
curities that after all the situation was not so bad and
that, notwithstanding the universal clamor throughout
the country, there remained glittering prospects in rail¬
road construction inviting the investment of huge sums
of money.
Notwithstanding the great potentiality and high
standing of these great men, that they could not with
entire success grimace with one corner of the mouth and
at the same time smile with the other, sufficiently appears
from the financial records of that period and now, con¬
stantly recording the market for railroad bonds as dead,
the issuance of short-time notes at unusual rates of in¬
terest as common, and the cancellation of plans for the
construction of thousands of miles of railroad where ab¬
solute commitments did not already exist.
A BED ON WHICH THE MAKERS DECLINE TO SLEEP.
Is it denied that the construction of additional rail¬
road mileage is a desirable thing? To the contrary, it is
19
universally admitted that, although Texas, for instance,
has 12,000 miles of railroad, its territory is so vast that
50,000 miles are required to place the State on a parity
with such States as Illinois, which, with one-fifth the area
of Texas, has 11,636 miles of steam railroads.
In Louisiana conditions are different, and except in
so far as railroad construction is deterred by the general
conditions I have before referred to, it is my belief that
the near future holds for that State rapid development.
Louisiana is not without its laws and institutions
similar to those of Texas, whereby the protection of the
public against discrimination, rebates and other economic
crimes which no man defends, is assured. But the general
policy of the law is liberal, and if new railroad construc¬
tion be a criterion, the near future is bright with promise
for that State.
Since the establishment of its railroad commission
eight years ago, the railroad mileage of that State in¬
creased 1602.42 miles, or 70.8 per cent, and the increase
for the year 1906 was greater than any previous year in
its history except 1904, the mileage of increase for 1906
being 261.41 miles and the percentage of increase for
that year being 7.3 per cent, the average per cent of in¬
crease for each year being 8.85 per cent.
Texas, with an area six times as large is that of
Louisiana, constructed between June 30, 1898, and June
30, 1906, being approximately the same period, only
2518.11 miles, the percentage of increase for the entire
period only approximating 26.5 per cent, the average per
cent of increase for each year being only 3.31 per cent.
Texas, to have railroad mileage in proportion as great
20
to its area, as the railroad mileage of Louisiana is to the
area of that State, would require 21,569 miles of railroad,
or 80 per cent in excess of the present mileage, and in or¬
der to keep apace with Louisiana's rate of increase, must
build 1067 miles per annum.
Are the conditions in Texas such as to invite the in¬
vestment of the additional capital required to construct
the additional 38,000 miles (on a basis of $20,000 per
mile, requiring $760,000,000) 1 Speaking now here at
home, a Texan addressing Texans, one who admits to no
man a deeper love for his native State, I answer out of my
own experience that the conditions existing here are pro¬
hibitive upon any considerable railroad construction, ex¬
cepting only to a few giant men of St. Louis, Chicago and
New York, so strong and already so heavily interested in
railroads in this section that their resources admit and
their necessities require the construction of additional
mileage. Thus, strange to say, in a State where monop¬
oly is abhorred, a substantial monopoly in transporta¬
tion, the greatest of all human undertakings, is conferred
on a few men, and they non-residents of the State, by
laws which are so stringent that no man, native or for¬
eigner, can engage in the business and meet the conditions
imposed on him unless he has the backing of a large sys¬
tem of railroad operating without the State.
Will you prove this? There are in the banks of the
State of Texas, capital surplus and deposits, $350,000,000
in cash, enough money to reconstruct every mile of rail¬
road in existence in Texas, and leave many mil¬
lions. Our cotton crop last year, 4,000,000 hales,
was worth two hundred millions of dollars, so that our
farmers, only a single class of our citizens made enough
. 21
money in one year to reconstruct every mile of railroad
in the State, according to the figures of the Railroad
Commission.
Now, why does not the citizenship of Texas construct,
own and operate their own railroads! They have the
money and it is a great and fascinating business.
And why is it that when, here and there, from time to
time, local citizen do undertake some railroad venture of
greater or less importance, they have not proceeded far
ere they are rejoiced to sell out to an existing system, al¬
most invariably pocketing heavy losses ?
Why is it today, in a State which holds bankers as
bold in their enterprises as any in the world, men who
will finance any enterprise, from a wildcat oil well to saw
mills in the prairie country, that one can not obtain to be
underwritten here at home a single railroad enterprise,
no matter how promising!
Is the answer not perfectly plain! Is it not because
the very conditions that we ourselves have created de¬
prive the business of every attraction from a financial
standpoint! Texans who can readily realize 10 per cent
on safe investments in other lines of business will not
invest their money in a business over which three lynx-
eyed Railroad Commissioners, armed with absolute pow¬
ers, sit on guard all day every day and half of every night,
to see to it that he earns no more than 6 per cent per an¬
num, if that, on an investment where every act he is
called on to perform in the line of his business must be
done in accordance with multitudes of laws, complex in
their nature, frequently of dubious construction, infinite
in detail and fearful in their punishment.
22
This, I insist, sensibly or insensibly, are the reasons
why Texans do not build, own and operate their own rail-
reads.
Is not this a mistaken policy? Should Texans shut
in the faces of themselves the door of opportunity to em¬
bark in the greatest of business enterprises? Must
Texans wait for others to build the additional 38,000
miles requisite to the full development of Texas? It will
require 121 years, according to the progress made the
last fiscal year.
I say, no; let us at least play our part in this great
work. Not government ownership, hut popular owner¬
ship of railroads will solve the railroad problem. Let us
come to understand the railroad situation, and deal with
it, not as one who finds a viper in his path, hut in the spirit
of justice and fair play; let us so mold our laws and estab¬
lish our institutions that two decades hence Texas citizens
will own more mileage in Texas than now exists in Texas.
True, we can not make one set of laws to govern our rail¬
roads and a diflFerent set for those owned abroad; but be
sure, laws which we are not able to endure ourselves are
wrong if applied to others. And when we have so far
corrected conditions in resnect of railroads that we our¬
selves are willing to embark our money in them, condi¬
tions will exist which will attract the money of the world :
Texas lines of transportation will incréase by leaps and
bounds; industry, by the immutable laws of transporta¬
tion, will follow the track, and wealth will follow industry.
I would not conclude these remarks, however, leav¬
ing the impression that, in my view, nothing of all the
sentiment against the common carrier has been created by
23
his faults, or that nothing remains for him to do to better
the service he is rendering to the public.
To the contrary, I am impressed with the belief that
in the process of working out his great problems, working
with incredible celerity and employing such material of
men and things only as nature fitted to his hand, there
have been and are many rough angles in his general struc¬
ture, upon the sharp edges of which the public has suf¬
fered many bruises, and it is today his principal concern,
even if to do so for a time he must delay the further in¬
crease of its bulk, to mold and modify his previous work
in such wise that the general public gain the utmost good
and suffer the least possible harm from his operations.
At the same time, it is my plea that since by his work
he has proven his wonderful fitness for it, he, better than
legislatures, commissions or Congress, is best fitted to
perfect it, and while it is not to be denied that his funda¬
mental obligations to the public should be defined at law,
yet over and beyond the requirements of statutes are the
immutable laws of competition, trade and commerce, sup¬
ply and demand and barter and sale, which more than
artificial rules will regulate the carrier, and which, if
enjoyed by him only to that degree enjoyed by other citi¬
zens, will enable him to work out a destiny not independ¬
ent of that pertaining to his country, but linked with it,
and in respect of which on that day not now so distant
but that bright rays of light betokening its dawn already
gleam on the horizon, when his country shall stand first
among all nations in power, progress and prosperity, it
will be his proudest boast that, common servant as he was,
in this he played the greatest part.
24