! Iliii ii I Hi ! ifffl 111 H fcj i l QUESTIONS OF THE DAY. (The numbers omitted represent Monographs no longer in print.) LIBRARY OF THE UNIVERSITY OF CALIFORNIA. Accession MOM Clots 35 Unwise Laws. By LEWIS H. BLAIR. Octavo, cloth . i oo 36 Railway Practice. By E. PORTER ALEXANDER. Octavo, cloth . 75 37 American State Constitutions : A Study of their Growth. By HENRY HITCHCOCK, LL.D. Octavo, cloth . . 75 39 Federal Taxation and State Expenses; or, An Analysis of a County Tax-List. By W. H. JONES. Octavo, cloth . i oo 40 The Margin of Profits. By EDWARD ATKINSON. Together with the Reply of E. M. CHAMBERLAIN, Representing the Labor Union, and Mr. Atkinson's Rejoinder. Cloth, 75 cents; paper ......... 40 43 Slav or Saxon: A Study of the Growth and Tendencies of Rus- sian Civilization. By WM. D. FOULKE, A.M. New revised edition. Octavo, cloth . . . . . .100 47 The Tariff History of the United States. By P. W. TAUSSIG. Revised, and with additional material. Octavo . i 25 QUESTIONS OF THE DAY. 54 Relation of the Tariff to Wages. By DAVID A. WELLS. Oc- tavo, paper ........ 20 58 Politics as a Duty and as a Career. By MOORFIELD STOREY. Octavo, paper ... .... 25 59 Monopolies and the People. By CHAS. W. BAKER. Octavo, cloth. Third edition, revised and enlarged. . . i 50 62 American Farms: Their Condition and Future. By J. R ELLIOTT. Octavo . . . . . . . i 25 63 Want and Wealth. By E. J. SHRIVER. Paper . 25 64 The Question of Ships. By WELLS and CODMAN. Paper, 25 Mercantile Marine; Its Cause and its Cure. By DAVID A. WELLS; and Shipping Subsidies and Bounties. By JOHN CODMAN. 65 A Tariff Primer. The Effects of Protection upon the Farmer and Laborer. By Hon. PORTER SHERMAN. Paper . 25 66 The Death Penalty. A Consideration of the Objections to Capital Punishment. By ANDREW J. PALM. New edition in preparation. 68 Parties and Patronage. By LYON G. TYLER, President William and Mary College . . . . . . . i oo 70 The Question of Silver. Revised edition. By Louis R. EHRICH. Paper, 40 cents; cloth 75 71 Who Pays Your Taxes ? By DAVID A. WELLS, THOMAS G. SHEARMAN and others. Edited by BOLTON HALL . 125 73 The Economy of High Wages. By J. SCHOENHOF, author of "The Industrial Situation, "etc. Octavo, cloth . i 50 74 The Silver Situation in the United States. By Prof. F. W. TAUSSIG. Revised edition. Octavo . . 75 75 A Brief History of Panics, and their Periodical Occurrence in the United States. By CLEMENT JUGLAR. Translated by DE COURCEY W. THOM. Octavo . i oo A GENERAL FREIGHT AND PASSENGER POST A PRACTICAL SOLUTION OF THE RAILROAD PROBLEM BY JAMES LEWIS COWLES Member of the Connecticut Bar. Author of " Distance Not a Factor in Railway Traffic," The Engineering Magazine, Sept., '93 ; li Equality of Opportunity, The Arena, Dec., '95, etc. THIRD EDITION, REVISED AND ENLARGED G. P. PUTNAM'S SONS NEW YORK LONDON 27 WEST TWENTY-THIRD STREET 24 BEDFORD STREET, STRAND Ube Knickerbocker press 1902 COPYRIGHT, 1896 BY G. P. PUTNAM'S SONS Entered at Stationers' Hall, London GENERAL ttbe fmfcfeerbocfeer prese, flew I DEDICATE THIS VOLUME TO THE MEMORY OF MY SAINTED WIFE " LIGHT, STRENGTH, SWEETNESS " 96034 PREFACE. THE conclusions presented in this monograph, which treats of the circulation of persons and of property through the arteries and veins of the body politic, rest upon the following fundamental prin- ciples. First. Railways are post-roads and are, there- fore, subject, both as to state and interstate com- merce, to the eighth section of the first article of the Constitution of the United States. Second. Railway trains are post-wagons and the Post-office can only fulfil the object of its being when these post-wagons are entirely subject to its jurisdiction. Third. The transportation of persons and prop- erty is as legitimate a function of the Post-office as is the transportation of letters. (The first Act passed by the English Parliament for the establishment of a Postal Department, in the American Colonies, the Ninth of Queen Anne, Chapter Ten, made it the duty of American post- masters to provide horses and guides for travellers, and each traveller was allowed to carry merchan- dise up to eighty pounds in weight on the guide's horse free. For a hundred and fifty years the Post- VI PREFACE. office Packet Service of England was the only regular vehicle for over-sea travel, and this service was only turned over to private hands in 1830.) Fourth. Railway rates should be determined by the cost and not by the value of the service ren- dered. Any rate that will pay the cost of the shortest haul of a person or of a piece of property, within a railway system, will pay the cost of the average haul, and is therefore the cost of service rate. Fifth. The whole business of public transpor- tation should be pooled under the control of the Post-office, and the rate charged for the shortest distance for any particular service (the cost of ser- vice rate) should be adopted as the uniform stand- ard rate for that class of service for all distances, within the limits of the Postal system. This is simply the " Penny Post " scheme of Sir Rowland Hill, extended to cover the general busi- ness of transportation, and it presents, I believe, a practical solution of the transportation problem. Mr. Hill published his " Penny Post " pamphlet in the spring of 1837. In January, 1840, his scheme was English law and was in course of application. What took three years in the era 1837-1840, ought to be accomplished now in as many months. It is surely within the limits of possibility that when the twentieth century opens, the scheme set forth in this book may be American law and may be in full operation within the limits of the United States. PREFACE. vii " Of all inventions, the alphabet and printing- press excepted, those which abridge distance have done most for the civilization of our species. Every improvement in the means of locomotion benefits mankind morally and intellectually as well as materially, and not only facilitates the inter- change of the various productions of nature and of art, but tends to remove national and provincial antipathies and to bind together all members of the human family." ; ' To the consumer, the ideally perfect condition of things would be a tariff for the conveyance of merchandise based on the same principle as the ' Penny Post.' Commodities would be conveyed at a low price, and producers, over an immense area, would be able to send them to market. To the consumer it would be in every way desirable that all disadvantages of distance or * geographical disadvantages ' should disappear." 3 " As a question of purely public policy that is to say if the interests of the (railway) corporation were, in all respects, identical with the interests of the community as a whole the effect of distance on operating expenses would be the only one which there would be need to consider, and its effect on revenue (the making of rates) should not be con- sidered at all. For, since the real service rendered 1 Macaulay. 2 J. Grierson, General Manager, Great Western Railway of England. VI 11 PREFACE. and paid for is the transportation of persons and property from one terminus to another, the precise length of track should have no more effect upon the price paid than the precise amount of curva- ture or rise and fall, and much less than the ruling grades. All should be considered or none should be." ' The railways serving New York City have had a uniform rate on milk for the last forty years. In 1887, when this grouped rate covered a zone of 220 miles, certain Orange County farmers complained to the Interstate Commerce Commission that this system deprived them of their natural geographical advantages and demanded an adjustment of rates according to distance. The Commission, however, decided in favor of the existing custom, saying : " It has served the people well. It tends to pro- mote consumption and to stimulate production. It is not apparent how any other system could be de- vised that would present results equally useful or more just." " It (the Commission) is moreover impressed with the belief that the present system is, upon the whole, the best system that could be devised for the general good of all engaged in the traffic." Eight years later this zone of uniform milk rate covered distances up to 330 miles, and Commis- sioner George R. Blanchard, of the Joint-Traffic Association, testified, before the Interstate Com- 1 Arthur M. Wellington, Economic Theory of Railway Location. PREFACE. IX merce Commission, in December, 1895, tnat tnere was no reason why it should not be extended to a thousand miles. But Messrs. Rogers, Locke, & Milburn, Coun- sel of the Delaware, Lackawanna, and Western Railroad, go even further than Mr. Blanchard, for they say : " The distance (within which this rate should be uniform) need only be limited by the length of time required to make it with the train and meet the wants of the New York market, with milk not affected by its transportation." In other words, if milk can be brought from San Francisco to New York in good condition, then the milk rate should be the same for all distances between San Francisco and New York, and for this reason, "because of the fact that the expense inci- dent to the mere length of haul is so small in compari- son with the other necessary charges when taken in connection with the special service" " The cost of train operation is not appreciably more whether there be 200 cans in a car, or 160 cans in a car, or ten cans in a car. The same crew, the same messengers and organization, and the same terminal service would have to be main- tained whether the can be carried from Bingham- ton or not, or from Sussex County or not, and the cost of the delivery of the can at the Hoboken terminal is in no real sense dependent upon the length of its haul!' See Defendants' Brief, page eleven, in the case, X PREFACE. " The Milk Producers' Association versus the D. L. and W. R. R. and others." " When rates are based upon the value of ser- vices rendered, we necessarily have discrimina- tion," and yet, " It is the universal custom among railroads, the world over, to base their charges upon the value of the service rendered and not upon the cost although the latter would seem to be the safer plan, if they could only put it in force." 1 The cost of the service is the only safe basis for the determination of transportation taxes, and the cost of service rate, levied, collected, and distribu- ted by officers of the General Government, would necessarily put an end to discriminations, and would furnish an ample revenue for the support of our entire transportation system. The freight cars owned and leased by the rail- roads of the United States (private cars are left out of the calculation), making but two paying hauls a week, at $7.00 a car, per haul, would earn over $877,000,000 a year, as against less than $700,- 000,000 received from the entire freight traffic in 1894, and less than $830,000,000 earned in 1893. An average car-load of fourteen tons, at fifty cents a ton, would bring in a revenue of $7.00 a car per haul, and a twelve-ton load, at sixty cents a ton, would yield $7.20 a car trip. 1 The same freight locomotives that now haul 1 E. Porter Alexander, Railway Practice. 2 Number of freight cars in use in 1894, 1,205,169. /. C. C. Report, 1895. PREFACE. XI average train loads of 175 tons could haul 700 tons, and the same passenger locomotives that run hither and thither with average loads of 44 passen- gers, could haul from 500 to 700 passengers, and the difference in the cost of the business would hardly be appreciable. Our great passenger locomotives are able to haul ten-car trains on a time schedule of forty miles an hour. Such a train would furnish seats for 640 persons. The average trip of the American rail- way traveller is less than twenty-seven miles, but if the average trip on a transcontinental ten-car express were 200 miles, the train would empty itself sixteen times in a journey from New York to San Francisco, and would thus afford seats for 10,000 persons, each taking an average trip of 200 miles. Even if the train were but half filled, its earnings at one dollar a trip would be over $5000, over $1.50 a train-mile, or more than the earnings of the average train of the New York, New Haven, and Hartford Railroad in 1894.' Is it not altogether reasonable to estimate that with the transportation business pooled under the control of the Post-office with a demur- rage limit of eight hours, the demurrage limit of Holland and Belgium, and with trains sent from the starting-point to destination over the shortest and most level routes a uniform prepaid rate of $1.00 a ton on box-car freight and forty cents a ton on products carried in open cars, would furnish an ample revenue from freight 1 Distance from New York to San Francisco, about 3300 miles. Xli PREFACE. traffic ? And is it not also reasonable to believe that $1.00 would pay the full cost of the service for the average trip, by ordinary cars on the fast- est express, and that five cents a trip would meet the cost, by way trains ? The possibilities of the railroad are beyond imagination. The continuance of the present system, under which private railway managers de- termine the movements of persons and property according to the value of the service rendered, will certainly secure to these officials the entire control both of the business of the country and of the Government and will result in an absolute despotism. On the other hand, the pooling of the business, under the control of the Post-office, will just as surely lead to the ever-increasing freedom and the ever-increasing prosperity of the whole people. The widening of the zone of a uniform milk rate, noted on page viii, continued until it covered dis- tances up to 417 miles, and on the West Shore Road extended from the New Jersey Terminal nearly to Buffalo. This movement, in the line of the equal- ization of commercial opportunities, was suddenly checked, however, by the Interstate Commerce Commission, who, on the i3th of March, 1897, reversed their decision in the Howell Milk Case of September 24, 1888, on the ground, not that dis- tance made any difference in the cost of the service rendered by the railroads in the transportation of a can or case of milk, but that the system of a PREFACE. xiii uniform rate deprived the near-by producer of his NATURAL RIGHT (?) to the monopoly of the home market; deprived him of the power, which he pos- sessed before the invention of the railroad, to regulate the amount of milk and the cost of milk consumed by his neighbors. Under the leadership of Judge Cooley, the Com- mission looked upon the Royal-Railed Highway as a matter of public convenience, of public security, and of public prosperity; it had some regard for the consumer and the far-away producer as well as for the near-by producer; its chief concern, in short, was the Common Welfare, and, having in view the Common Welfare, it decided that the sys- tem of a uniform rate was the best possible system for all engaged in the traffic, a system than which none other could be equally useful or more just. From that decision Commissioner Morrison dissen- ted. Nine years later, under Mr. Morrison's leader- ship, the Commission decides that this same system of a uniform rate is unreasonable and unjust, and, being prejudicial to producers and shippers nearer the point of delivery, it is, therefore, in violation of sections i and 3 of the Act to Regulate Commerce. There was ample reason for reducing the uniform rate on milk full one hundred per cent. The evi- dence showed that the transport tax levied by the Milk Contractor Westcott and his associates Westcott clears over $50,000 a year from his milk contract upon this essential of life was full three times the cost of its transportation; there was also XIV PREFACE. good reason for making the toll on milk and cream the same, for there is certainly no difference in the cost of the transport of a forty-quart can, whether it contains milk or cream. Such a procedure would have saved to the whole body of milk con- sumers and milk producers upwards of $1,300,000 a year, or more than one third of a cent on each of the 320,000,000 quarts of milk consumed by the men, women, and little children of the Greater New York in 1895. The whole galaxy of railway experts had testified in favor of the uniform rate, had declared that the cost of the service in the transportation of a can of milk was in no real sense dependent on the length of the haul. The one reasonable course for the Commission, as the repre- sentative of the Government of the whole people, was to have reduced the uniform rate. This would have tended to put every community and every in- dividual interested in the milk traffic on even stand- ing ground; it would have been one more step in the slow but steady movement toward equality of commercial conditions. The one thing, however, on which the decision of March 13, 1897, lays especial stress is the fact that of late the Commission has, uniformly, con- demned the fixing of railway rates with a view of equalizing commercial conditions. Their final conclusion is ' ' That each community is ENTITLED to the benefits arising from its location and natural conditions," but such conclusions carry with them a very dangerous boomerang. PREFACE. XV If it is the business of the Interstate Commission to preserve to each community the benefits of its location and natural conditions, then, per contra, its power the power of the National Government may be invoked to compel each unfortunately located community, each community that happens to be located inland, on one line of railroad, sub- ject to the will of one railroad manager, to compel such unhappy communities to submit to the evils of their location and natural conditions, and forth- with, the Commission becomes a pregnant power, in the exaggeration of the natural inequalities of commercial conditions, and a most potent instru- ment of tyranny. This very thing was done in the noted Readville Case, decided by the Commission, October 30, 1890, and referred to on page 107. Readville is an inland community on the railroad from New York to Boston, and about eight miles from Bos- ton. Because New York and Boston are seaports, enjoying low rates of transport by sea, they are, therefore, said the Commission, entitled to equally low rates by rail over the land. The railways charged eighteen cents a hundred on flour, New York to Readville ; to Boston the railway rate was but nine cents, and the Commission said these rates were right and lawful. In effect, the Com- mission made the distance from New York to Bos- ton the same as that from Readville to Boston, nine miles. It measures, on the railway map, 232 miles. The result of this Readville decision and of other XVI PREFACE. similar decisions is seen in the report of the New England Road of October 28, 1897, in which the railway managers say boldly that they are to-day levying three times as heavy transport taxes on their pooled, local business as on the through busi- ness over which their power is not yet absolute business not yet pooled. The Commission has made itself an instrument for driving the people from their country homes to city dove-cotes; an in- strument for the impoverishment and enslavement of the common people. The reasoning from natural conditions adopted by the Commission, carried out to its logical con- clusion, would banish the bicycle, enjoin the use of the motor carriage, destroy railways and tramways, abolish even our common highways and bridges and remand us back to the happy natural condition which prevailed throughout the Western Continent when the Spaniards landed in Mexico, and the only means of land transportation was by human burden bearer, and that burden bearer usually a woman. I take direct issue with the Commission both as to the object of its existence and the object of the existence of the railroad. The business both of the one and of the other is to equalize commercial conditions, to secure to every community and to every individual within the limits of the United States the nearest possible equality of transporta- tion service. The Commission has done valuable work in many lines, but it is altogether mistaken in its theory as PREFACE. xvil to the determination of transport taxes and as to the real business of the railway. In this connec- tion it is interesting to note that, while the Com- mission condemns the adoption of one wide zone of uniform rates and of equal commercial conditions for the whole people, it admits the principle of grouped rates and of equal commercial conditions within limits, determined by its peculiar methods of guesswork and comparison. Behold its just system of rates on milk brought by railway to New York : Group i. 40 miles from terminal. Can Milk (forty quarts), 23 cents. Can Cream (forty quarts), 41 cents. Group 2. Next sixty miles (40 to 100 miles). Can Milk, 26 cents. Can Cream, 44 cents. Group 3. Next 90 miles (100 to 190 miles). Can Milk, 29 cents. Can cream, 47 cents. Group 4. 190 miles to 417 miles or more. Can Milk, 32 cents. Can cream, 50 cents. I fail to see anything affecting the cost of the service in a grouped rate of forty miles that will not hold good for any distance. What reason can there be for adding three cents for the sixty miles of group 2, and but three cents for the ninety miles of group 3, and again three cents more for the two hundred miles or so of group 4 ? And why charge more for cream than for milk ? What business have XV111 PREFACE. either the railway managers or the Commission to pry into the contents of the can ? The Interstate Report of 1895 affords the follow- ing valuable information : On the 30th of June, 1895, there were 30,000 railroad trains in use on the Royal-Railed Highways of the United States. The average train represents in its own cost and its share of the cost of tracks, stations, etc., about $365,000, or the value of a year's labor of a thou- sand Massachusetts farmers. (See May number of Yale Review, 1897, page 64.) The cost of its daily operation, including its share in the mainte- nance of the tracks, etc., which exist for its use, is a little over sixty-six dollars a day, and to run it and keep its iron road in good condition, requires the constant service of twenty-six men. The total daily charge against the average train, including its share of the interest on the cost of the entire equipment is about $100 a day. The average freight train weighs hardly less than 400 tons, and the average passenger train hardly less than 160 tons, or one ton per passenger seat. Both trains are hauled by tireless iron horses easily capable of making 300 miles a day. My fourth proposition, page 6, that the transport tax levied to meet the cost of the shortest distance in any particular class of railway service will meet the cost for any distance in that class of service, within a railway system the long haul will very often cost less than the short haul this proposition does not mean that five-cent fares, with but forty persons PREFACE. XIX or less occupying the 160 seats in the average $365,000 train throughout each zone of 25 miles, in a daily course of 100 miles, would meet the ex- penses chargeable to that train; neither does it mean that under any imaginable condition, every railroad train could be made to meet its expenses; it does mean that, with five-cent fares in ordinary railway service, the average train would require seats for at least 200 passengers whose average trips would probably be not over ten miles, and in that case, the average train would earn, from its five-cent uniform fares, $100 a day as against $80 a day from its average fare of about fifty cents. With daily runs of 300 miles the New Britain third-rail electrics make 324 miles a day the five-cent train would make average daily earnings of $300. The cost of running the average passenger train on the Genesee & Wyoming Valley Railroad is about 95 cents a mile, but, with an average train- load of only i-J persons, the cost to the road per passenger mile is 67^ cents, and for the whole length of the road 5^ miles the cost of the pas- senger trip is about $3.70. On the New Haven Road the cost per train mile is about 98 cents, but, with train-loads of about 75 passengers, the cost to the road, per passenger mile, is only about lySg- cents. It actually costs the New Haven Road less to haul a passenger the whole length of its main line, New York to Boston, 232 miles, than it costs the Genesee & Wyoming Valley Railroad to haul a passenger over its line of but 5-^ miles. The XX PREFACE. 52-mile passenger trip on the Genesee road costs that road more than seven times as much as the cost of the 24.02 miles trip of the average railway passenger of the United States. A study of pages 404 to 473 of the Interstate Report of 1893 will dis- close very many instances of this character. In September, 1896, a uniform five-cent fare was adopted on the Blue Island Line of the Chicago & Northern Pacific Road. The Line is twenty miles in length. Under the old mileage plan it did not meet its expenses. A year later, with five- cent fares, the Line was making money. There is more money in a five-cents uniform fare than in a three-cents-a-mile fare, says the Manager, S. R. Ainslie. The receipts of grain at New York by canal, up to June 19, 1897, thirty-five days after the opening of the Erie Canal, were 4,000,000 bushels; by rail, 13,365,370 bushels. Whether this grain was carried by the railways at 1.8 mills per ton-mile, the re- ported and not disputed rate of the summer of 1895, does not appear, but at this rate, in train- loads of 1800 tons, the gross earnings per train- mile would be $3.24, or double the earnings of the average freight train of the country. {R. R. Gazette, July 2, 1897). 1.8 mills per ton-mile is but 22\ cents per ton, and less than $7 per car-load of 30 tons for the average haul of 1895, about 123 miles. George R. Blanchard sums up his long argument on ' ' Railway Pools ' ' in this quotation from the PREFACE. XXI Report of the Committee of the German Empire prior to its purchases of its main railway lines: " The uniting of the property, of the traffic, and of the management of the inland main lines under THE STRONG ARM OF THE STATE, are the only efficient and proper means to solve the task." We have already had Mr. Blan chard's endorse- ment of a uniform milk rate. The conclusion is irresistible. The Royal-Railed Highways of every country must be under the management of the state, and of the state alone. So long as these national highways are supported by tolls, those tolls must be low, uniform, stable, the same for all distances. J. L. C. NOTE. The figures used in the first edition of this book as to train-loads, etc., and still retained in some places, were taken from the Interstate Commerce Report of 1894. CONTENTS. CHAPTER. PACK. I. THE POST-OFFICE SINCE 1839 . . I II. ABUSES OF THE PRESENT SYSTEM OF RAILWAY MANAGEMENT . . .26 III. DISTANCE A FALSE BASIS FOR THE DE TERMINATION OF RAILWAY RATES . 69 IV. THE COST-OF-SERVICE PRINCIPLE AND ITS APPLICATION TO PUBLIC TRANS- PORTATION, UNDER THE CONTROL OF THE POST-OFFICE .... IO5 V. THE UNITED RAILWAYS OF AMERICA VS. THE UNITED STATES OF AMERICA . 156 VI. PRUSSIAN RAILWAY ADMINISTRATION . 263 INDEX 2 9 J xxiii A GENERAL FREIGHT AND PASSENGER POST. CHAPTER I. THE POST-OFFICE SINCE 1839. NEARLY sixty years have passed since Rowland Hill startled the people of England with his pro- ject of a " Penny Post," proposing at one sweep to reduce the average rate of inland postage from about tenpence to a penny, and to carry a letter from Land's End to John O'Groat's at the same charge as from London to the nearest village. The scheme involved both a radical reform in rates and an equally radical change in the aims of the government. At the close of the seventeenth century, the Post-office was a part of the public service, being run on the cost of the service princi- ple. During the early part of the nineteenth cen- tury, its chief end was taxation, and the rates were determined on the modern railway principle of exacting as nearly as possible the full value of the 2 A GENERAL FREIGHT service rendered, or in other words " what the traffic will bear." In the days of Charles II., when the only means of transportation were on foot or on horse-back, the postal routes of England were divided into two great groups, with a uniform rate of two pence up to eighty miles from London and three pence for greater distances. A hundred and seventy-five years later, with the post-coach traversing the smooth roads of Telford and McAdam, and with the cost of distance practically annihilated, the rates were three or four times higher than in the olden time, and were carefully determined at so much a mile. In 1695, the postage from London to Liverpool on a single letter was three pence ; in 1813, it was eleven pence. " In 1695, a circuitous post would be converted into a direct one, even though the shorter distance carried less postage ; in 1813, a direct post was being constantly refused on the plea that a loss of postage would result." The following rates were in force from 1812 to 1839 : four pence a single letter up to fifteen miles, five pence for twenty miles, eight pence for eighty miles, etc. For " double and treble letters," the rates were two and three times higher than the single rates, and for " ounce letters," four times higher. The complications in postal rates were almost as bewildering as are the complications in freight rates to-day. There was hardly a town in the king- AND PASSENGER POST. 3 dom where accurate information could be obtained as to the rate on a letter addressed to another town. The high charges forbade the use of the mails to the poor, hindered the development of trade and of commerce, and, in the end, greatly injured the postal revenue. In 1838, the net receipts were actually less than in 1815, although in the mean- time the population had increased by some six million. The postal laws of England were in perfect harmony with the rest of that system of class legis- lation which, as Thorold Rogers says, had been con- cocted for the purpose of cheating the workman of his wages, of tying him to the soil and of degrading him to irremediable poverty. On the other hand, the privileged classes sent their letters free. Franks were sometimes sold and were often given to ser- vants in lieu of wages. It was under these circumstances that Mr. Hill brought forward his apparently wild proposition. " What ! " said the tax-gatherers, " carry a letter a hundred miles at the same rate as for one mile ? Mr. Hill is mad ; the idea is absurd ; it is impos- sible." But the tax-payers, the common people, those who bore the burdens of life, heard the re- former gladly. The project was hardly made pub- lic before it attracted great and hearty support. Petition after petition was presented to Parliament in favor of the scheme, and, in less than three years after its first promulgation it was carried into effect. 4 A GENERAL FREIGHT " Colony after colony, and state after state, fol- lowed in the wake of Old England. Rates were continually reduced and in nearly every instance the revenues, at the reduced rates, were greater than before the reductions." If for a time the English Post-office proved an exception to the rule, the fact may be easily ac- counted for. Mr. Hill's opponents were, for several years, in charge of his scheme and they desired its failure. But, strange as it may appear, the potent influence against its immediate success was the railway. Instead of carrying the mails for less than the stage lines, railway managers charged very much more. They first drove off the stages and then compelled the government to pay two, three, and in some cases four times as much as the stages had charged for a similar service. Some towns were long without ordinary postal facilities, owing to the high railway cha-rges. The extravagant demands of the London and South- western Railway Company for several years de- prived the town of Alton of the advantages of a daily mail. In not a few instances, the postal authorities were obliged to abandon the railway and go back to the post-wagon for the conveyance of the mails. In one case, where speed was not a matter of importance, Mr. Hill effected a saving of $4000, and in another case of $10,000 annually, by thus reverting from the locomotive to the horse, for the carriage of mail bags. The following quotation from Her Majesty's AND PASSENGER POST. $ Mails, by William Lewins, is of great interest in this connection : " The gain to the Post-office," says Mr. Lewins, " through railways is certainly enormous ; besides the advantage of increased speed, they make it possible to get through the sorting and the carrying of the mails at the same time, but here the gain ends ; and the cost to the public of the service really done is heavy beyond all proportion. The cost of carrying the mails by coaches averaged twopence farthing per mile ; the average cost under railways (now that so many companies take bags by all trains) for 1864, averages sixpence a mile, some railways charging five shil- lings a mile for the service they render. The cost of running a train may be reckoned, in most cases, from a shilling to fifteen-pence a mile ; and thus the Post-office, for the use of a fraction of a train, may be said to be paying at the ratio of from fifty to two hundred and fifty per cent, in excess of the whole cost of running." No wonder that there was a falling off in the net receipts of the English Post-office at the opening of the railway era. The wonder is that the " Penny-Post " could have survived such exac- tions. But the taxes imposed on our National Govern- ment, by the farmers of our post-roads, were even more exorbitant than those levied in England. Under the Act of July 7, 1838, the lowest compen- sation given to the railroads, for the transportation of the mails, was twenty-five per cent, higher than O A GENERAL FREIGHT the highest compensation allowed to the old stage lines for a similar service, and this notwithstanding the fact that the cost of the service to the railroads was hardly a fiftieth part the cost by stage. The rates paid to the American roads were, in general, double the English rates, and the American Postmaster- General had no control of the running of trains, and therefore no power to determine when the mails should be delivered. Here are some of the figures given by Postmaster-General Wycliffe, in 1843: New York to Paterson, N. J., seven times a week by the old stage contracts, $800 a year ; by rail, six times a week, $1385 ; Buffalo to Niagara Falls, seven times a week, in each case, by stage, $572, by rail $1122 ; Springfield, Mass., to Albany, N. Y., six times a week, in both cases, by stage, $4762, by rail $10,000 ; and the railways claimed still more. Postmaster-General Cave Johnson, in his report of 1845, says : " Great and important advantages are enjoyed by citizens, by the reduction of the price of transportation, travel, etc., by the railroads, but they have universally increased the price of transporting the mails and, in some instances, to the extent of 200 or 300 per cent, above the former prices. It would be difficult to find a satisfactory reason for the difference in the price of transport- ing a thousand pounds of newspapers and letters, and a thousand pounds of merchandise, in the same car, between the same places and at the same time ; yet more than ten times probably is de- manded in the one case than in the other." AND PASSENGER POST. 7 The Post-office to-day pays fifty per cent, more for the transportation of a ton of mail-bags from New York to Buffalo by railway, than it used to cost to send ordinary freight the same distance by boat and by wagon, in the days before the opening of the Erie Canal. Books, carpets, cutlery, hats and caps, boots and shoes, gloves and laces, are carried from Liverpool, via steamer to New Orleans and thence by railway to San Francisco, for $1.07 a hundred pounds. Our express companies carry all sorts of parcels, from the domicile in New York to the station, thence by rail a thousand miles to Chicago, and deliver at the domicile in that city, at a rate of $3.00 a hundred pounds, but the rail- ways tax the Government eight cents a pound, $8.00 a hundred, $160.00 a ton, for the transporta- tion of its mail-bags for an average haul of not over 442 miles. For the first ten years after the railroads began to carry the mails there was a continual deficit in the revenues of the post-office, and it was only met by the increase of the business which followed the decrease of the postage and the wide grouping of rates, in 1845. The deficits in the business of the Post-office in recent years are easily accounted for by the burdensome taxes levied by our railway kings. These taxes remain, in most cases, at the same rate to-day as in 1878. In some instances the receipts from the Post-office probably more than pay the entire cost of the trains that carry the mails. 8 A GENERAL FK EIGHT But notwithstanding the failure of the people's representatives to compel the managers of our " post-roads " to give to the public reasonable postal transportation, and notwithstanding the waste of postal revenues in bounties given to such concerns as the Standard Oil Company's Anglo- American Steamship Line, the extension of the sphere of the Post-office has gone steadily, though slowly, forward. The Act of Congress of 1845 made the letter rate five cents a half ounce within distances of three hundred miles, and ten cents for longer distances. In 1849, Congressman Palfrey, of Massachusetts, advocated the abolition of the franking privilege, a prepaid, uniform two-cent letter rate for all dis- tances, and free city delivery. He believed that the two-cent rate would speedily send the letters up to 200,000,000 (the number of paying-letters had increased under the Act of 1845 from 24,267,- 552 in 1843, to 58,069,075 in 1849), and make all recourse to the general Treasury unnecessary. The expenses of the department would be somewhat increased, by such a multiplication of letters, but not materially. " // is the keeping up of the system that costs so much money, and not the amount of the business. The increased cost for transportation would be but trifling." The institution of free delivery would save to the city of New York alone $900 a day, or nearly a third of a million dollars a year. But Mr. Palfrey was far ahead of his time. The next step was not taken until 1851, when books AND PASSENGER POST. 9 were first introduced into the mails and the rates on letters were made three cents a half ounce for distances within three thousand miles, and six cents for greater distances. In 1855, prepayment by stamps was made compulsory. It was not until 1863 that a uniform three-cent letter rate was adopted, and a system of free delivery was inau- gurated in our large cities. It was only in 1873 that the franking privilege was abolished, to be revived in a modified form later. The country waited for thirty-four years (until 1883), before it secured a Congress bold enough and far-sighted enough to complete the scheme of Mr. Palfrey and give to the people a uniform two- cent letter rate. In 1885, the weight of letters was increased to one ounce. The English Post-office, as organized by James I., in 1603, provided not only for the handling of the correspondence of his subjects, but also for the conveyance of their persons and property up to thirty pounds in weight, and this inland traveller's post was not abandoned until 1780, after an exist- ence of 177 years. The Penny-Post, established by Wm. Docwra, in 1683, carried parcels up to one pound anywhere within a ten-mile circuit of London, and as late as 1711 this service extended to certain towns as far away as twenty miles from the metropolis. The Act of Parliament, Ninth of Queen Anne, chapter 10, establishing a postal department in the American Colonies, made it the especial duty of 10 A GENERAL FREIGHT the Postmasters to furnish horses for the transpor- tation of travellers at a rate of three pence a mile for a horse and four pence a mile for a guide, parcels up to eighty pounds to be carried on the guide's horse free of charge. We also note among the curious articles franked to foreign parts, by the old English packet service, the following : " Fifteen hounds going to the King of the Romans with a free pass." " Two maid-servants going as laundresses to my lord Ambassador Methuen." " Dr. Crichton, carrying with him a cow and divers other accessories." Previous to 1689, the Harwich Post-office packets running to Brill, in Holland, were entirely sup- ported by the receipts from freight and from pas- sengers, and in the year 1822 the Dublin-Holyhead line carried over 16,000 passengers. In 1827, the steam flotilla of the English postal department comprised nineteen vessels of an aggregate of 4000 tons burden, and it was only in 1830 that the regular over-sea mail service of England was turned over to private hands. These facts are of great interest, as showing the original functions of the post-office, and as indicat- ing its possibilities, but it is doubtful if the possi- bilities of this wonderful public service were ever thoroughly appreciated, and we know that for many years previous to 1860, both in England and in America, it was closely confined to the convey- AND PASSENGER POST. II ance of letters and newspapers. Up to that time the interests of the private common carrier seem nearly always to have prevailed against the interests of the public. The Act of Queen Anne was partially revived by our National Government in 1861, when a few articles of merchandise, maps, photographic materials, scions, seeds, etc., were admitted to the mails in very small parcels. In 1864, this list was somewhat extended, and finally, in 1879, it was made to cover almost any- thing that could be carried in a mail-bag without injury to the rest of the contents, the rate being one cent an ounce, in parcels up to four pounds. In 1885, it was further provided that publishers and news-agents might send their merchandise, paper-covered books, and newspapers, through the mails to their customers, anywhere in the United States, at one cent a pound, and in any quantity from a pound to a car-load ; and to-day the con- veyance of this kind of merchandise makes up two thirds of the business of the Post-office. The aggre- gate weight of second-class matter in 1895 was 312,- 000,000 pounds (156,000 tons), being an increase over 1894 of 13,000,000 pounds or 6,500 tons. It is said that a certain publisher in Maine has sent out through the mails 1600 tons of books in a sin- gle year, and a number of publishers, at some seasons of the year, ship two tons a day. The city of New York deposits in its Post-office 30,000 sacks of this merchandise every month. These 12 A GENERAL FREIGHT figures give us some idea of the use that the public will make of the mails when the Post-office is once opened to the general service. Postal cars, moveable post-offices, have been hired of the railroads since 1863, but as will be shown later, on terms that would have bankrupted any ordinary business. This year, 1863, is also notable for the gathering of the first Congress of Nations for the formation of an International Postal Union, and it is very gratifying to know that the prime mover in this grand scheme was an American, the Hon. John Kasson. But although there has been a considerable ex- tension of the postal service in this country in the last half century, the Old World has gone far beyond us. England has inaugurated a system of Postal Savings' Banks that have proved of wonder- ful utility ; she has also brought the telegraph within the sphere of the Post-office, with the result that English telegrams cost but half as much as ours, and there is twice as much use of telegraphic facilities in England as in this country. But perhaps the greatest step, in advance that the English Post-office has taken is in the exten- sion of its service to the conveyance of parcels. A national parcels post formed part of the com- prehensive plan of Sir Rowland Hill, but it was killed by the railroads, and their opposition was only overcome when Postmaster-General Fawcett, in 1883, agreed to give them 55 per cent, of all the receipts from railway-carried parcels. This tax AND PASSENGER POST. 13 has proved so burdensome that, in some cases, the Government has abandoned the railway for the post-wagon, for the conveyance of parcels as well as of letters, but notwithstanding this drawback, the experiment has proved a wonderful success. The rates run from threepence a pound up to eighteen-pence for an eleven pound parcel, not ex- ceeding three and a half feet in length and six feet, combined length and girth. Twopence extra in- sures a parcel up to $25, and sixpence up to $125. In 1889, nearly 40,000,000 parcels were sent through the English Post-office, at a cost to the people of a little over ten cents a parcel. And so well satis- fied are the railway managers of England with the project that, Sir George Findley, then manager of the London and Northwestern Railway, in a speech made in February, 1890, paid to it the following tribute : " The parcels post, compiared with its elder brother, the letter post, is yet in its infancy, but it has, at a bound, become one of the great insti- tutions of the country and has fully justified its inception." That the English people thoroughly appreciate the advantage of the freer trade and the greater equality of service secured to themselves, by this nationalization of the express business, is proved by the fact that, in the year 1894 the number of parcels transported in the mails, was over 56,600,000, an increase of over 40 per cent, in five years. 14 A GENERAL FREIGHT The conveyance of parcels by the Post-office has been long common, in Europe, and at rates usually lower than the English rates. In Germany, for parcels up to eleven pounds, the charge is six and a quarter cents up to ten miles, and for greater distances within the limits of the empire, twelve and a half cents. In Belgium, the uniform rate for similar parcels is sixteen cents by express trains, and ten cents by slow trains, in each case delivered at the domicil. Under the International Parcels Post Convention, formed at Paris in 1880, and now including, probably, half the civilized world, outside the United States, the cost of carrying an eleven pound parcel across each of the countries of the convention,' is but ten cents, and the entire charge for the conveyance of such a parcel from any post-office in Germany to any office in Egypt, is only forty-five cents ; ten cents across each of the countries, Germany, Swit- zerland and Italy ; ten cents across the Mediterra- nean, and five cents to the place of delivery in Egypt. Sixty-five cents carries an eleven pound parcel from France or Germany to nearly every post-office in the greater part of South America. In 1891, the people of Germany sent $27,000,000 worth of merchandise to their customers and friends through the International Parcel Post ; Austria sent over $55,000,000, and little Switzerland nearly $20,000,000, and they received nearly as much in return. It was an American who brought the International Postal Union into being, but the de- AND PASSENGER POST. 15 velopment of this greatest of " associations for the preservation of international peace and for the ad- vancement of international prosperity," has been left to other hands, and the Government of the United States still refuses to our people the grand advantages which this Parcel Post Convention holds out to them. Our authorities have, however, concluded Parcel Post Conventions with a few of the West India Islands, and with certain South American countries, Mexico and the Sandwich Islands, and it is a curious fact that eleven pound parcels of merchandise may be exchanged between certain of our great cities and these far away for- eigners, through the Post-office, at a charge of but twelve cents a pound, while the cost of a corre- sponding service at home is sixteen cents a pound. In 1893, the English Post-office handled 2,785,- 000,000 pieces of mail matter, at a profit of over $14,000,000. Our Government, handling in the same time about 5,000,000,000 pieces, made a loss of $5,177,171, a loss increased in 1895 to nearly $10,000,000. This deficit is easily accounted for, however, as has been shown, by our exorbitant rail- way taxes and by our unnecessary bounties to subsidized steamers. Such, in brief, is the story of the extension of the sphere of the Post-office, inaugurated by the wonderful reform of Sir Rowland Hill, in 1839. The part played by the different governments in this business, has been that of directors of their respective public business corporations, either 1 6 A GENERAL FREIGHT building or purchasing the different agencies of public transportation and communication, or mak- ing contracts with the various private agencies for the use of their equipment, and providing the necessary revenues by levying for each particular service, a tax, at once low and uniform for all per- sons, regardless of differences of distance and of the volume of the traffic, and, in so far as this theory of governmental duty has been applied, it has everywhere proved a decided success. As to the future, in this country, Postmaster- General Wanamaker declared in his report of 1891, that one-cent letter postage, three-cent telephones, and ten cent telegrams were all near possibili- ties under an enlightened and compact postal sys- tem using the newest telegraphic inventions ; and in his last report he said, " one-cent letter postage to every place in the world is what this nation is surely coming to." Mr. Wanamaker also favored a consolidation of the third and fourth classes of postal matter, with a uniform rate of one cent for two ounces, or eight cents a pound, saying that the high rate now charged for merchandise prevented the proper use of the post-office by the people, and that if the number of parcels were doubled or trebled, the additional burden upon the postal service resulting from the increase would be very slight. It seems to me, however, that a very sensible classification of postal matter would be as fol- lows : AND PASSENGER POST. I/ First class : letters, at a rate of one cent an ounce. Second class : all free matter. Third class : merchandise, with a uniform rate of one cent a pound, in parcels from one pound to sixty pounds, or from the dimensions of a pint to a bushel, transported by passenger trains ; and in parcels of from twenty-eight pounds to two hundred pounds, or from the dimensions of a half bushel to a barrel, at a half cent a pound, by fast freight trains. 1 The objection that such rates would enlarge the already great deficit in our postal revenues, I have already answered. Our railways are post-roads ; they can carry and they should be made to carry merchandise for the Post-office as cheaply as they now do it for the express companies. If this were done, the Post-office would undoubtedly pay its expenses even at these rates, and it would soon be possible to lower them. But it is objected that although this business may be done more cheaply by the Post-office, it will not be done with the same despatch as by private express companies. Ex- perience, however, tells a different story. The London Spectator is my authority for the statement that until the agitation commenced in England for a government parcels post, the rail- roads seemed to despise the business. The air they assumed was that of a person conferring a favor, who will do the business offered when there is no more important business on hand. Such a 1 See scheme suggested in Chapter V. 1 8 A GENERAL FREIGHT matter as a fixed and low tariff and promptness of despatch and delivery were quite beneath their notice. All this was changed by Mr. Fawcett's determination to give the public a parcels post, and long before the parcels post became a reality. The only agency that could subject the railway companies to effectual competition was an institu- tion having already in existence a machinery for collection and distribution to all parts of the coun- try, and the result was seen in the better work of the companies. But in a direct trial as to despatch, the Post-office beat the railroads. Mr. Shaw Le- Fevre, when Postmaster-General, made the experi- ment of sending off a hundred pair of parcels to places selected haphazard, one of each pair, by the Post-office, and one by the railroads. In seventy- one of the hundred cases, the parcel was delivered quicker by the post than by the railroad, the ad- vantage in time being, on the average, five hours. The Post-office, moreover, in every case, delivered its parcel at the address, while, in many cases, the railroad only brought it to the nearest station, a custom which prevails to-day, to a considerable extent with our American express companies, which are in reality, little more than departments of the railroads. A friend of mine had a parcel sent from Titus- ville, Penn., to Richmond, Va., a short time ago, by express. The time occupied in transit, was seventy- two hours, just twice that taken by the Post-office for the carriage and delivery of a letter. AND PASSENGER POST. 19 At my old home, in Farmington, Conn., an extra charge of ten cents is made for the carriage of parcels between the railway station and the village, and it is next to impossible to learn be- forehand what is to be the expressage on an out- going parcel. Express rates are liable to be changed any day, and as many times a day as suits the whim of the general manager. There are no public rate sheets. This further evil also follows : namely, that persons of influence are frequently able to secure free expressage, and to throw the whole burden of the business upon their unfortu- nate neighbors. These evils -are characteristic of the private management of this class of public business, and they are evils that can be met only by placing it in the hands of the Government. As to the economic advantage of the proposed reform, the following testimony from one of the largest manufacturing concerns of Ohio, is of great value. Writing to me, in February, 1895, the sec- retary of the company says that the savings accru- ing from a parcels post system would be immense, and that it would be a saving not only in express charges but in time. " I know of instances where lawsuits have resulted from delays of shipments, and of instances where customers have failed to meet their obligations to manufacturers, because of the failure to receive in due time the repairs necessary to operate their machinery. We have hundreds and thousands of customers who live anywhere from five to forty miles from railways, 2O A GENERAL FREIGHT and who lose anywhere from three days to a week on every order for repairs that they place, and the loss of time figured up and saved to our customers would be quite an object, and will run into thou- sands of dollars when you embrace them all. " Here is room for reform." But why confine the business of the Post-office to the mere handling of letters, newspapers, and small parcels of merchandise ? Why cannot we have "A General Freight and Passenger Post," as well as a " Letter and Parcels Post ? " Is there any essential difference between the transportation of ordinary postal matter and of other freight and of passengers ? Certainly not. The rail- way is the common servant of all. Every piece of postal matter, every ton of freight, and every passenger is received, carried to its destina- tion, and delivered by the same transportation agencies. True, a letter or a newspaper is less in bulk and in weight than a man or a ton of freight, but it costs less to haul a ton of freight a thousand miles in the great railway trains of to-day, than it used to cost to carry a letter half that distance with the old time transportation facilities. The modern Post-office, moreover, deals with tons instead of ounces, and its machinery can be adapted to handle tons of other freight as easily as it now handles tons of mail bags. According to Postmaster-General Wilson's estimates, the weight of the United States mails in 1895 was over 234,000 tons. On some roads the mails AND PASSENGER POST. 21 weigh a tenth as much as the passengers. The receipts of the railways of the country for the transportation of the mails in 1895 were more than ten per cent, of the receipts from the passengers. The grand principles on which the postal systems of the world are based are as follows : First. When once a postal system is established, the machinery must run, and it makes no practical difference in the cost of the business, whether a letter, or a newspaper, or a parcel is carried one mile or a thousand. Once the mail has started on its trip, it is impossible to figure the difference in cost whether a piece of postal matter is left at the first office at which the mail stops, or goes to the farthest office in the system. At every office a part of the mail will be left and new matter taken on ; one piece in a hundred perhaps will go the whole route and there will always be room for it. The average post will be short. If one could send a letter round the world for nothing, the bulk of the postal business would still consist of the exchange of friendly and commercial messages between near neighbors. Distance, in short, costs practically nothing in the business of the Post-office and therefore postal rates should be the same for all distances. This was the great discovery of Mr. Hill, and the method by which he arrived at his conclusions, is as follows : Out of an annual expenditure of ,700,000 in the business of the Post-office, the total amount found to be chargeable to distance 22 A GENERAL FREIGHT was but ^144,000 (about one fifth). Dividing this by the number of paying letters, and allowing for the greater weight of newspapers, it left the cost for the average conveyance of each letter less than one tenth of a penny, an amount so small that any attempt to divide it, according to distance would be manifestly absured. Further investigation proved, moreover, that the cost of conveyance per item of postal matter was not infrequently less for a long distance than for a short distance. Thus, in the case of the mail, on the longest and most important route in the king- dom, that from London to Edinburgh, some four hundred miles in length, the cost of the conveyance of the whole mail, per trip was five pounds, and this amount, divided according to the weight of the paying letters and newspapers, gave one sixth of a penny as the absolute cost for the conveyance of a newspaper of an average weight of one and one half ounces, and one thirty-sixth of a penny for that of a quarter-ounce letter. These sums being the full cost for the whole distance, Mr. Hill assumed that the same rating would do for any place on the road. It was admitted on all sides, that the chief labor was ex- pended in making up, opening, and delivering the mails ; therefore, the fact whether it was carried one mile or one hundred, made comparatively little difference in the expenditure of the Post-office. The expense and trouble being much the same, perhaps even less at Edinburgh than at some in- AND PASSENGER POST. 23 termediate points, why should the charges be so different ? But the case could be made still stronger. The mail for Louth, containing, as it did, comparatively few letters, cost the postal authori- ties, as the simple expense of transit, five farthings per letter. Thus, an Edinburgh letter, costing an infini- tesimal part of a farthing, paid a postage of one shilling and three halfpence, while a letter for Louth, costing the Post-office fifty times as much, paid but ten pence. Mr. Hill's opponents were therefore compelled either to accept his proposition, or to stand as the defenders of the existing system under which the highest price was often paid for the cheapest business. " At first sight, it looked extravagant that per- sons residing at Penzance or the Giant's Causeway, at Waterford or Wick, should pay the same postage on their letters. In practical experience, however, it was the nearest possible approximation to perfect justice. The intrinsic value of the con- veyance of a letter is a very different thing from the cost of such conveyance. The value of the service rendered by the Post-office in any particular case, is exactly equal to the time, trouble, and expense of the despatch of a private messenger on that par- ticular errand, and may be fairly measured by distance, but it is the glory of the modern Post- office that, by the use of its vast machinery, this burdensome expense is practically eliminated and all the resulting benefits are equally divided among 24 A GENERAL FREIGHT the whole people. On the other hand, the curse of our present system of railway rates, based on distance, consists in this, that it enables our railway managers to guage their charges so as to take to themselves nearly all the difference between the cost of conveyance by human burden-bearer or by ox-team and by railway. They are thus rapidly absorbing the wealth of the entire country. Second. The postal rate is a tax, a tax on com- munication, a tax on the nervous system of the body politic, and it is a tax especially burdensome upon the poor. The postal rate, therefore, must be as low as possible, and it must be the same for all. Third. The only power that can be safely en- trusted with the right to levy postal taxes, is the General Government. The experience of more than half a century has triumphantly demonstrated the truth of these prop- ositions as applied to postal freight, and what is true of the postal business is equally true of ordi- nary railway traffic. The post-office and the rail- road are indeed inseparably connected, and the common interest demands that both shall be under the same control, and shall be managed on the same principles. Not until the different govern- ments of the world have applied the postal prin- ciple to telegraph and telephone rates on the one hand, and to railway rates on the other, under the control of the Post-office, will that great institution be able to perform its whole duty, as the grand AND PASSENGER POST. 2$ centre of the nation's circulating and nervous system. The office of the letter, the newspaper, the tele- graph, and the telephone is to give mankind in- formation as to where and how they may best satisfy their wants and dispose of their wares. The business of the different agencies of public transportation (and the railway is the chief of these agencies), is to provide the public with the cheapest, the quickest, and the best possible ma- chinery by which they can avail themselves of this information. It is doubtful if any one has an adequate idea of the evils that are certain to fol- low the continuance of the present system of pri- vate management of these great public works, with its franking privileges for the favored few, and its unjust and unstable taxation of the many, or, on the other hand, of the blessings that are equally certain to accrue to the people at large from the proposed widening of the sphere of the Post-office, with its system of equal, stable, just, and uniform taxation for all. 26 A GENEKAL WEIGHT CHAPTER II. ABUSES OF THE PRESENT SYSTEM OF RAILWAY MANAGEMENT. THE railways are the circulating system of the country ; the tracks are the arteries and veins ; the trains are the life-bearing current ; the freight and the passengers in the trains are the life itself. It is no more possible to discover the difference in the cost of the conveyance of freight and of pas- sengers between the different stations of a railway system, than it is to measure the difference in the efforts of the human heart, whether the life essence be transported from one valve of the heart to the other, or from the life centre to the finger tips. In the one case, as in the other, the office of the cir- culating system is to relieve congestion here and starvation there, to the end that there may be a perfect body, complete in every part, and each part dependent upon and subservient to every other. In either case, the cost of transportation is a matter of life and death. Check the flow of the life blood to the hand and it withers and dries up ; cut off an individual or a town from the national system of circulation, or what is practically the AND PASSENGER POST. 2J same thing, discriminate against it in railway rates, and it dies. If Mr. Depew, President of the New York Cen- tral Railroad, is to be believed, thousands of towns in this country are thus dying to-day, be- cause of the tariff discriminations of our railway kings, and tens of thousands of individuals are being deprived of opportunities to labor and to enjoy the fruits of their labor by the same arbitrary power. " It is a matter of time only" (Mr. Depew is re- ported to have said before the Interstate Commerce Committee of Congress, in the winter of 1893), " when the small dealer who is compelled to pay the regular tariff will go to the wall. If this law [the Interstate Commerce Act, which he claims to be the cause of rate cutting] continues in force five years longer, there will not be an independent business man in any of the large cities of the United States. It [this cutting of rates] is trans- ferring the great business of the country from its old position into the hands of a few great dealers, and it is growing at a speed beyond anything we know, forming great trusts and combinations" Note that Mr. Depew attributes the growth of the trusts to railway discriminations, and how it is done is admirably told by Albert J. Stickney in his Rail- road Problem. " A railway manager finds it more convenient to deal with one man or one corpora- tion, than to deal with a number of individuals ; the manager therefore commences operations by 28 A GENERAL FREIGHT giving to some enterprising party an advantage over his neighbor in rates. The favored individual, of course, soon obtains a complete monopoly in his particular trade ; it may be in the product of mines or of oil wells, of farms or of factories. After a time, the grantees of these monopolies become rich, and instead of receiving rebates as a favor, they become masters of the railways and, by play- ing one against another, they practically dictate the rates they pay. Thus it has happened that in some kinds of business, the oil business, for instance, a. single concern, the Standard Oil Company, after having received from the railroads ten million dol- lars in the short space of eighteen months, has gained an absolute monopoly." In other classes of business, like that of dressed beef and the handling of grain, the monopoly is in the hands of three or four individuals. " They parcel the United States out among themselves," says Mr. Depew, " and they send their products [the product in which the railroads first made them privileged dealers], by any railway they see fit. To-day they send it over the New York Central ; to-morrow they arbitrarily change it to the Penn- sylvania Railroad. One of these privileged dealers, for instance, is able to send five or ten cars of first- class goods per day from Chicago to New York. The regular rate is seventy-five cents a hundred, but in order to get his trade, the railways offer him a rate of thirty-five or forty cents." Taking a carload of first-class freight at ten tons, this AND PASSENGER POST. 2Q great firm, at a rate of thirty-five cents, receives an advantage over its competitors of $80 per car, from $400 to $800 a day, and from $125,200 to $250,400 for the working year of 313 days, according as it ships five or ten cars a day. In November, 1891, the Federal grand jury returned an indictment against Swift & Co., dressed beef shippers of Chicago, for having received $30,000 in rebates in the previous six months from the Nickel Plate Road alone. Is it any wonder that in a short time the competitors of such a firm are wiped out ? And," says Mr. Depew, " this is going on at every terminal of this country and by all lines, so that you find business is being concentrated at the ter- minals. It is being concentrated at Chicago, and concentrated at New York, concentrated at Pitts- burgh, at Philadelphia, and at Boston, and at other terminals all over the country, while small places are being wiped out ; their industries are being taken from them. " A bill is passed to prevent trusts ; manufac- turers get round it by forming a big corporation. The managers discover that, owing to discrimina- tions in freight rates in favor of terminal points, great savings are to be made by removing the plants in the smaller towns and villages to these terminals, so they take away the business from the small town and close up the factory. The work- men follow the business ; the town goes to ruin." " And yet," says Mr. Depew, " the growth of this country is dependent upon the building up of the 3O A GENERAL FREIGHT smaller places. The best political and economic results are against the concentration of business at a few places and in a few hands." And then the great railway manager goes on to speak of the general impression that railways seek to encourage these combinations because they can thus deal with fewer people, and he says this is a false impression. Unfortunately for Mr. Depew, however, this impression is absolutely correct. The investigations of the Hepburn Committee of the New York Legislature, prove that on the very road of which Mr. Depew is now President and of which he was then the leading counsel, this system of building up the rich at the expense of the poor has been a prevailing practice. Mr. Wm. H. Van- derbilt swore that, as a rule, all large shippers who asked for them, got special rates, and among those whose wealth he had thus helped to build up, he mentioned the name of Mr. A. T. Stewart, the great dry-goods merchant of New York City. Drawbacks and rebates, he said, were very large. The evidence showed that, in some towns, one man paid three times the rates given to his neighbor. In these special rates, distance was altogether lost sight of, one rate of twenty cents being made to Little Falls, 217 miles from New York, while that to Syracuse, 291 miles away, was but ten cents, and the rate to Black-Rock, a distance of 455 miles, was exactly the same as to Little Falls. The only rule for the determination of the transportation AND PASSENGER POST. 31 taxes levied on the New York Central Railroad. was the will of the President and that of his traffic manager. They changed the rates at some seasons of the year three or four times a day, said Mr. Vanderbilt. This perversion of the use of this greatest of pub- lic works continues, and must continue as long as this business of managing our post-roads is farmed out to private individuals and to private corpora- tions. Nor can this evil condition of things be al- together remedied by the collection of transporta- tion taxes by State officials, as long as the value of the service rendered by the railways, rather than the cost of the service, continues to be the basis on which these taxes are determined. The growth of railway terminals and the concen- tration of business in the hands of a few great con- cerns at or beyond those terminals, at the expense of the intervening country (so much bewailed by Mr. Depew, and at the same time so much favored by his influence), is no new thing in railway history, nor is it confined to this country. It seems, in- deed, to have been specially provided for in one of the earliest charters ever granted to a railroad cor- poration, namely, that given to the Stockton & Darlington road, of England. The provisions of this charter show that the rail- way projectors of that early age well knew that dis- tance was hardly worth considering as a factor in the cost of railway service, while they fully realized the tremendous power which it would have as a tax 32 A GENERAL FREIGHT factor in enabling them not only to exact the full value of that service from those living along their lines, but also to take from them well-nigh the full value of their property and of their earnings. The Stockton & Darlington charter provided that its projectors might levy a tax of eight cents a mile per ton on coal used along their lines, while coal for export, that is to say for use at terminals and at places beyond the terminals, was to be taxed but one cent per ton, per mile. And this system, inaugurated on the Stockton & Darlington Rail- road, seems to have been copied everywhere and by all railway managers, whether at the head of state or private roads. The prevailing custom seems to have been to exact as nearly as possible the full value of the service from local traffic, while the through business has always been done as nearly as possible on the basis of the cost of the service, and notably in disregard of distance. Terminals have had lower rates than intermedi- ate stations, and the terminals, in their turn, have been subjected to higher rates than were levied on the same classes of freight shipped beyond the ter- minals. Thus, flour shipped from Minneapolis for consumption in Chicago, or Milwaukee, though pay- ing less than from Minneapolis to intermediate sta- tions, sometimes pays more, by a third, than flour for shipment beyond those places. It is a notorious fact that coal shipped from Pennsylvania mines for use in Philadelphia, pays a much higher transportation tax to Pennsylvania AND PASSENGER POST. 33 railroads than coal carried to that port for ship- ment beyond Philadelphia. Corn shipped from Minneapolis to Boston has paid $44 per carload of twenty tons, more than if taken on board ship at Boston for foreign consumption. 1 Nothing indeed is more common than such railway discriminations in favor of foreigners at the expense of citizens in the transportation of exports, nor are instances want- ing of similar discriminations in the transporta- tion of imports. In 1893, Representative Ikert, of Ohio, testifying before the Ways and Means Com- mittee of Congress, said : " The German manufac- turer can ship his goods from Germany to distribut- ing points in the interior of the United States at a less cost than can the domestic manufacturer in New Jersey or Ohio." At one time the rate on tin plate from Liverpool, via Philadelphia and the Pennsylvania Railroad to Chicago, was twenty-four cents a hundred, while the rate from Philadelphia to Chicago, on the same article, over the same road, was twenty-eight cents a hundred. The record in the Texas and Pacific case, lately tried before the Supreme Court of the United States, shows that the rate per hundred pounds charged for the transportation, on through bills of lading, of books, buttons, carpets, clothing, and hosiery, from Liverpool and London, via New Orleans, over the Texas and Pacific and Southern Pacific railway systems to San Francisco, is $1.07. On the same kind of domestic articles carried, it may be in the same train, the transportation tax 1 Interstate Report, 1892, p. 284. 34 A GENERAL FREIGHT over the same railroads is $2.88 from New Orleans to San Francisco. On foreign boots and shoes, cashmeres, con- fectionery, cutlery, gloves, hats and caps, laces and linens, the same blanket rate, $1.07 a hundred pounds, is levied for transportation from these English ports to San Francisco, while upon similar American goods shipped from New Orleans to the same destination, the railroad tax is $3.70 a hun- dred. A more absurd system of taxation than this could hardly be imagined, and yet the majority of the United States Supreme Court (Justices Harlan and Brown and Chief-Justice Fuller dissenting, however,) has decided that it is both just and law- ful, and that American railway managers may with perfect impunity continue to tax Americans three or four times as much as they tax foreigners for a similar service. And, according to Mr. Grierson, General Manager of the Great Western Railway of England, this sort of discriminating " protection " of foreign producers and of foreign consumers against native producers and native consumers, exists in every country where railroads have been developed. The export rate on baled cotton goods from Manchester to Hull is ijs. 6^/., while the local rate is 31^. &d. From Manchester to London the export rate is 25,?., while the local rate is 405. 8d. American beef, on the other hand, is carried from Liverpool to London for 25^. ($6.25) per ton, while the rate from Wolverhampton to London (hardly two thirds the distance) on Eng- AND PASSENGER POST. 35 lish beef, is 45^. ($11.25) P er ton - The state roads of Germany ship coal from German mines to Ham- burg for foreign consumption, for $1.25 a ton less than if it is to be used by Germans living in Ham- burg. " The German-Dutch rates," says Mr. Grier- son, " are invariably lower than the rates to inland towns lying between the forwarding station and the port." Even Belgium levies a much heavier transporta- tion tax on coal brought from the interior for the use of her own citizens living at Antwerp than if it is to be forwarded to strangers. According to the Evening Post of New York, of February 20, 1896, the New York roads were then carrying Minneapolis manufactured flour from ' Buffalo to New York City for ten cents a hundred pounds, while they charged New York State millers eighteen cents for the same service. Everything, indeed, in relation to the exchange of kindly ser- vices between individuals and between nations seems to be at sixes and sevens. On the one hand we have the various governments of the world (that of England being almost the only exception) levying taxes on the transportation of imports across their frontiers for the " protection of the home market," and, on the other hand, we have private railway corporations and the managers of State roads making discriminations in transporta- tion taxes within national frontiers which not only tend to nullify the effect of the custom's tariffs, but, in many cases, actually favor the foreigner at 36 A GENERAL FREIGHT the expense of the citizen. Of the two, railway tariffs have vastly more influence over life and over business than have custom's tariffs. Especially is this true of the United States. " In America," says the English writer Acvvorth, " the railway rate is a matter of life and death. In America, rates vary from day to day as wildly as the price of fish at Billingsgate. An oriental despot, a Baber, or an Aurungzebe did not make and unmake cities with more absolute and irre- sistible power than did an American railway king." " We are told that the American railways have ruined the English farmer ; people forget that they have ruined the American farmer also." " This power," says Mr. Stickney, " like a govern- ment, has authority to make tariffs and to enforce their collection. It claims a right which no civil- ized government claims, and no sovereign has dared to exercise for centuries, of rebating a por- tion of its tariff, and thus discriminating between its subjects in the collection of its revenues. It is safe to say that if the Congress of the United States should enact a law which established on any commodity one impost duty for the city of New York and a different duty for other cities, or one duty for one firm and another duty for another firm, no matter how slight the difference, the people would resort to arms, if need be, rather than submit." (See A. B. Stickney's Railway Problem, page 31.) AND PASSENGER POST. 37 " These railway kings," says Mr. Bryce, " have power, more power that is, more opportunity to make their will prevail, than perhaps any one in political life, except the President or the Speaker, who after all hold theirs only for four years and two years, while the railroad monarch holds his for life. When the master of one of the great Western lines travels toward the Pacific in his palace car, his journey is like a royal progress. Governors of states and territories bow before him ; legislatures receive him in solemn session ; cities and towns seek to propitiate him, for has he not the means of making or marring a city's fortunes ? " (Bryce's American Commonwealths, vol. ii., page 653.) In an article, in the Times of Hartford, Conn., of August 26, 1893, discussing the then proposed consolidation of the Boston & Maine and the New York, New Haven & Hartford Railroad systems, we find the following : " When this is accomplished, you will see a corporation with $300,000,000 of capital and it will be the biggest railroad combination in the country. We shall have to go to Germany, where all the railways are in the hands of the Government, to find anything to compare with the New England Railroad system as it will be five years hence. What then will the office of Governor in any New England State be worth, in comparison with that of President or General Manager of this vast railway system ? A United States Senatorship will be a poor prize in comparison with that of Director of the New Eng- 38 A GENERAL FREIGHT land Railway system. No doubt the salary of the man at the head of the organization will be equal to that of the President of the United States, $50,000 a year." Less than three years have passed and this pre- diction is almost more than fulfilled. If not con- solidated in law there is every reason to believe that these two great corporations are consolidated in fact, and that the government of the Consoli- dated Railroad, long practically absolute in Con- necticut has now extended its (chartered ?) power of unlimited taxation over all New England. Ac- cording to the Railroad Gazette of March 20, 1896, the New York, New Haven & Hartford Railroad now owns all Southern New England, with its fast growing cities as in fee simple. It has not only absorbed our principal lines of land transportation ; it has also obtained nearly complete control of almost every important wharf in our chief New England harbors and of almost every competing steamboat line that plies along our coast. It has already seized more than one of the trolley lines which were built to secure to local travel a reason- able service, at reasonable rates, and a decree has gone forth from the Railroad Capital, in the city of New Haven, that not another electric tramway shall ever be laid down on any of the highways which the people of Connecticut have built and which the tracks of this road parallel. There is to be no avenue of escape from the burdensome taxes which this corporation sees fit to levy upon its sub- AND PASSENGER POST. 39 jects. Recent events would seem to indicate that even the church is not to be free from its encroach- ments. Henceforth the presiding council of this Impe- rial Railroad Government are to regulate all the conditions of life in New England. The wages of New England labor, the profits of New England business are to be determined by their will. Her cities, towns, and villages are to wither and dry up or to grow and flourish at their pleasure. It will be of no avail for the factories of the interior to move to the seaboard, for this railroad despotism rules the sea as well as the land. It completely dominates the navigation of Long Island Sound, the great ship canal that bathes our southern bor- der. A view taken from the top of Bunker Hill monument will show that almost every dock in Boston Harbor is in its control. From Eastport, Maine, to New York City, the tariff laws of this de facto consolidated government have infinitely more influence upon life and upon business than have the tariff laws of Congress. Notwithstanding the fact that the New York, New Haven & Hartford Railroad Company, with its comparatively level track and few curves, can haul the heaviest loads at the lowest cost of almost any road in the country its average freight rate per mile is among the highest in the country. It is nearly double the average rate in the United States ; it is more than double the average rate in the Middle States, in Ohio, Illinois, Indiana, and 40 A GENERAL / 'HEIGHT Michigan. This is no eleemosynary corporation, said General Freight Agent Mellen, at a meeting of the Board of Trade of Hartford, Connecticut, in the fall of 1895, and to make his meaning clear he said that it was perfectly just and reasonable to charge $60 for hauling a carload of peaches from Harlem River to Hartford, no miles (a whole freight train can be hauled the same dis- tance for about $30) ; and with the same degree of reason he charges $60 for the haul of the peach-car to New Haven, 73 miles. A brick con- cern located on a side-track of this road about 2| miles from Hartford needs slack coal in its busi- ness. Its value delivered on the cars at Meriden is $30 for a carload of twenty tons. The rail- road demands seventy-five cents a ton, $15 for hauling this car 14 miles. The service would add to the expenses of the road perhaps fifteen cents. Again this same brick concern wants cer- tain carloads of wood hauled from Hartford to its side-track. The Connecticut farmer gets $2.15 for growing, cutting, hauling, and loading this wood upon the car. The railroad demands seventy-five cents a cord for simply hauling the wood 2\ miles, a service that would hardly add to the expenses of the road five cents. The passenger fares on the various lines of this consolidated road are, in most cases, nearly as high as they were in 1850, and, in some cases, con- solidation has very much increased the fares. On the main stem, the fare from New Haven to AND PASSENGER POST. 41 New York to-day is one dollar and a half, the same as in 1849, but from most of the stations west of New Haven the fare for the round trip to New York is from ten to twenty cents higher. From Bridgeport the increase for the round trip is thirty cents, from Hartford ten cents. From Boston, the traveller of 1850, could make a trip to and fro New York, over the three or more short lines of the route via Springfield and New Haven, for one dol- lar less than to-day over the consolidated through line. The increased charge for the round trip from New York to Kent, over that in force in 1850, is thirty-six cents ; to Falls Village, forty cents ; to Great Barrington, one dollar and ten cents ; to Lee, Lenox, Stockbridge and Pittsfield, one dollar and fifty cents, and yet the cost of running a rail- road train, hauled by modern coal burning engines over the consolidated steel track of to-day is far less than it was over the short iron roads, with the slow, wood burning engines of 1850. In speed, in accommodation, in ease and com- fort of travel, the gain to the public from the im- provements made in the railroads, in the last half century, has been wonderful, but, as I have shown, the transportation tax levied on the traveller to-day is very generally as high as it was at the commence- ment of the railroad era, and it is full half as high per mile as was the charge on the old stage lines, although the cost to the railroad, where the trans- portation tax is such that the people can use rail- way trains up to their capacity, is not a fiftieth as v 42 A GENERAL FREIGHT much as by stage. In the transportation of freight there has been a considerable reduction from the cost by ox-cart, but there is no such thing as equal- ity or uniformity or stability or certainty in the tax levied on freight ; neither is there any such thing as equality of service. I shall also show later that freight taxes are vastly higher than they ought to be. The evil of the situation lies right here. Un- der the mileage system of rates applied in local traffic, and the lack of any other rule for the determination of through rates than the will of the railway king, modified to some extent by the wills of other railway kings, the public are obliged to pay the actual value instead of the mere cost of the service rendered by the rail- ways, and the difference, amounting in many cases to half and in some cases to the full value of the products transported, is taken by the railroads, which are thereby rapidly absorbing the greater part of the wealth of the country. In the spring of 1895, certain farmers of my acquaintance endeav- ored to make contracts with the railroads to carry their crops to market for half what they would sell for, but their propositions were laughed at. Hav- ing the power the railroad managers preferred to confiscate the entire proceeds. And this, as the following instances will prove, they actually accom- plished. Saving names of persons and of places, the following are exact copies of original bills, relating to sales and freight on watermelons, made in the summer of 1895. AND PASSENGER POST. 43 PHILADELPHIA, July 22, '95. Sales by A. B., Commission Merchant in Fruit and Vegetables. For account, J. K. G. of G., South Carolina, July 22. Car 1389. 7/22 1109 melons at 12 cents $133 08 Freight $122 05 Charges, Commis- sions ii 09 $133 14 Due A. B. from farmer 06 PHILADELPHIA, July 26, '95. one car No. July 25, 1250 melons at g\ cents $118 75 Freight $85 84 Commissions n 88 Net proceeds 21 03 $118 75 The A. and B. Co., C VILLE. July 27, '95. Mr. J. K. G., G., South Carolina. DEAR SIR : I enclose check for $53.00 net amount for car 15185 Sold for $175 5 Less freight 122 50 $53 oo Yours truly, F. B. P. 44 A GENERAL FREIGHT Please observe that on the carload of melons, shipped to Philadelphia on the 22d of July, the freight was $122.05 and three days later the rate was reduced to $85.84 ; while on the car shipped July 2yth to C ville, Va., perhaps two thirds the distance to Philadelphia, the rate was the same as on the first car and nearly fifty per cent, more than the rate on the second car to Philadelphia. Note also that, at this very time, the rate on flour shipped from the North to the town of G., was but $40, while that on the melons sent to the North, perhaps in the same car, the same distance, and over the same roads, was more than three times as much. Mr. G. shipped eight carloads of melons in the summer of 1895, for the transportation of which the railroads exacted $1100, while Mr. G. received about $123 for raising the melons, hauling them from his farm to the station, and loading them on to the cars. No wonder that he became disgusted with the business and turned over the rest of the crop to his stock. And my friend's experience was the same with regard to Irish potatoes ; and " The worst of it is," he says, " there seems to be no hope of anything better." A company of Connecticut peach growers have lately set out a peach orchard of some six hundred acres at Fort Valley, Georgia. In 1895 they shipped their first crop, of which some eighty-five cars came North. The railway charges were as follows : For icing, $90 per car to New York ; $100 a car to AND PASSENGER POST. 45 Hartford ; for haulage, $174 per car for the haul of about 1000 miles from Fort Valley to New York, and $60 per car from New York to Hartford. It is safe to say that the haul from Fort Valley to Hartford did not cost the railroads anywhere near $60 per car. The Arena of October, '95, tells the following story : " A carload of potatoes was shipped from Colorado to Chicago in the summer of '95, and, upon arrival at Chicago, the railroads confiscated the whole load, and went after the shipper for $28 more. A gardener shipped thirty cases of green peas from Texas to Chicago by express. The peas sold on the market for $22 ; the express charges were $26.50." A short time ago, one of my friends had a book sent from Philadelphia to Titusville. He paid one dollar for the book, seventy-five cents for the ex- pressage. A similar service performed by the Ger- man Post-office would cost twelve and one half cents. Along in 1885, Daniel Buchanan went to the new State of Washington to see what were the prospects for settlement. Coming to the station known as Ritzville, on the Northern Pacific Road, he found the land in the vicinity well adapted to the raising of grain, and examining into the matter of transportation (for there is no use in raising grain unless one can get it to market), he ascer- tained that the rates to St. Paul from Washington points were forty cents a hundred. These rates 46 A GENERAL FREIGHT seemed to leave a reasonable margin for profit at the price asked for the land, and accordingly Mr. Buchanan bought two sections from the railroad company. It is to be noted that the value of the land was practically a matter of railway rates and of railway facilities. At the rates then charged, the land had some value, and Mr. Buchanan paid that value. Higher rates would mean practical confiscation not only of the land, but of all the improvements thereon. For three years the rates remained the same, and the production of grain along the road increased rapidly. Then, in 1888, in order to check production and to save itself the necessity of providing additional facilities for the transportation of the increasing produce, the com- pany increased the rate on wheat to forty-five cents. But this did not sufficiently dampen the ardor of the farmers, and the next year the railroad raised the rate on wheat to fifty cents, and on bar- ley to fifty-six cents, the total increase being twenty- five per cent, in the one case, and thirty-three and one third per cent, in the other. Mr. Buchanan appealed to the Interstate Commerce Commission. They decided that, under the law, the action of the railroad was perfectly justifiable. The in- creased rate was not unreasonable, and, since Mr. Buchanan had failed to secure from the railroad company at the time of his purchase an agreement not to increase rates in the future, he had no remedy. In other words, under the law, a man may be AND PASSENGER POST. 47 induced to purchase land of a railway by the offer of low rates, and when he is once located the rates may be raised so as to practically force the settler to give to the railway not only the original value of the land, but the value of his improvements, and the value of his labor for all the future. And people wonder why Western farmers fail to pay the interest on their mortgages ! We used to hear a great deal about the evils of Irish landlordism, but recent investigations prove that, both in Ireland and in America, the railway manager has more to do with the untoward condi- tions of life and of business than all other causes put together. " The real rulers of Ireland," says a recent writer, " are the conference of representatives of the Irish Railway and Steamship lines. " The traffic is managed without regard to pub- lic needs or convenience. The local rates are so exorbitant as to have stamped out several once flourishing industries and to have crippled those that remain." " No idea exists save to put as heavy a toll as possible upon everybody and every- thing appearing at the station." With a slight modification these statements apply admirably well to the condition of things in this country. The real rulers of the United States are the Joint Traffic Association. Already within the first brief year of its existence, this Association had gone far towards attaining its declared end of "strengthening rates everywhere." Freights on 48 A GENERAL FREIGHT east-bound products from California by the Sunset Route have been increased fifty per cent. The local rates, on beef on the hoof, on the Michigan Central, have been increased one hundred per cent. Excursion rates from the central passenger district to Niagara Falls are one hundred per cent, higher in 1896 than they were in 1895. The Eastern railway and coal pool has made the price of stove coal at tide water for the summer of 1896, one dollar and thirty cents a ton higher than in the summer of 1895 and forty-five cents higher than the summer average for the past six years. (SeeTV^. Y. Herald, June 30, 1896.) And the Western railway and coal pool is doing in the West what the Eastern association has done in the East. And this increase in the charges for transportation has taken place in the face of enormous reductions, in the actual cost of doing the business, and at a time when the low value of products and of labor demanded that the advantages accruing from the improvements in transportation should be shared by the whole people. The prices of Western pro- duce were never lower ; the demand for Eastern manufactures was probably never more stagnant. Each needs the other's produce and the world needs the surplus of both, but the managers of our private systems of communication and trans- portation stand between each man and his cus- tomer, and allow the exchange of products and of services only on terms which amount to practical confiscation. 1 1 The prosperity of the West in 1897, sectional at best, can- not be permanent. AND PASSENGER POST. 49 Even this might be endured if it were likely to result in any corresponding benefit to the masses of the stockholders in these public service corpora- tions. It is probable, however, that as a rule the stockholders in these corporations will suffer with the general public. As long ago as 1888, Franklin B. Gowen of Pennsylvania, estimated that from $50,000,000 to $100,000,000 of the transportation taxes then exacted from the people by railroad managers were distributed annually among a few favored shippers, and " as a result of a personal examination made as an expert for stockholders," he declared that one of the great trunk lines had, in the previous twenty years, thus diverted to favorites of the managers $100,000,000 of the money belonging to the stockholders. One of the most subtle methods by which rail- road managers at once increase their profits, and, at the same time, without cost to themselves, pur- chase the support of the most powerful organs of public opinion, is by the issue of passes. The fol- lowing testimony sworn to before the Interstate Commerce Commission, by the officers of the Bos- ton & Maine three or four years ago, shows the prevailing practice in New England and presumably throughout the whole country. The persons to whom free transportation is given, are divided into ten classes. Class I " includes sick, necessitous or indigent persons, in short all cases of charity strictly." As to the particular sick, necessitous or indigent 50 A GENERAL FREIGHT persons upon whom the railway manager shall be- stow these imperial favors, he is of course the sole judge. Whether clergymen are placed in this cate- gory or in Class X, which covers persons whose " good-will is of importance to the corporation," we are not informed. Special provision, however, was made in the Interstate Act (was it done by railway officials ?) to enable the growing railway state to bring the church to its support by allowing " re- duced rates to be given to ministers of religion," and we shall see later that no pains have been spared, by railway managers, to carry out this par- ticular provision of law both as to its intent and as to its letter. Class II " includes gentlemen long eminent in the public service." A traveller on one of the Pullman cars bound for Washington, at the opening of the Fifty-fourth Congress, is reported to have said that he was the only person on the car who paid any fare. All the rest, " gentlemen in the public service," Con- gressmen, travelled free. Class III is made up of " the proprietors of summer hotels and large boarding-houses, con- formably to a practice which has long existed among all railroads in New England." Class IV " includes wives of employees and other immediate members of employees' families." Do the wives and children of engineers and fire- men, of brakemen and trackmen, of conductors and station-masters, get free transportation over AND PASSENGER POST. 51 our railroads? Not often, I think. It is far more probable that this class is intended to cover those railway employees who frequent legislative halls and the chambers of municipal councils. We have heard of such employees who, it is said, are not only provided with free transportation but are also paid thousands of dollars annually for their valuable services. Class V " includes all agents of ice companies and all milk contractors doing business on the line of the Boston & Maine Railroad, or any part thereof extending between two states, said agents and con- tractors travelling on trains in the conduct of their business." A word right here as to these milk contractors. It is a very common practice for railway managers to give to a single man or corporation the exclusive control of all the milk business on their lines and to refuse to farmers or other milk dealers, the transportation of their milk except through the agency of these favored individuals. Some of these milk agreements, moreover, are so very lucrative to the contractors that it is next to impossible to avoid the conclusion that the profits are shared with the individual railway official or the small group of officials responsible for the agreements. In his brief (pages 33 and 38) in the case of The Milk Producers' Protective Association against the Delaware, Lackawanna & Western Railroad and others, tried in New York, in December, 1895, Joseph H. Choate, counsel for the petitioners, 52 A GENERAL FREIGHT shows that the milk contractor on the D., L. & W. R.R., receives twenty per cent, of the entire receipts of the road from its milk traffic, 6-^ cents on every forty-quart can of milk and ten cents on every forty-quart can of cream. Out of a total of $489,000 paid to this road for the transportation of 1,649,773 cans of milk and cream, in 1894, the contractor received $97,000. The counsel of the railroad, in their reply to Mr. Choate, (see pages 8 and 34 of their brief) admit that this contractor " practically controls the milk business on the line of the road because he has in his hands the dealers who take the supply " ; and they further admit that his current expenses, in 1894, were but $45,000. His milk salary therefore for that year was $52,000, or $2000 more than the salary of the President of the United States. In 1895, he earned the same income from the same business in nine months that he had earned in 1894 in twelve months. Mr. Choate speaks of this money as " taken actually and absolutely out of the pockets of the stockholders." I prefer to look at it as a forced contribution from the farmers along the D., L. & W.'s lines and from the consumers of milk in New York City and its neighborhood. It Is but fair to add that, of this $52,000 salary, the defend- ant's counsel estimate that $30,000 to $35,000 were invested in creameries, so that the contractor's clear pocket-money was only $19,000 for 1894, but as the materials of the creameries were carried free and as the creameries were to be sold for his ben- AND PASSENGER POST. 53 efit, we may assume that they proved a very good investment for his surplus. The evidence in this case seems to be conclusive that the rates charged, by the railroads west of the Hudson, on milk for the New York market, are two or three times higher than they would be on a cost of the service basis. The farmers work their farms, the railroads and railrcad contractors take the farmers' legitimate profits. In addition to their other powers these contractors seem to have no small amount of influence in the distribution of passes. Perhaps the most glaring instance of personal injustice brought to light in this trial was that of Messrs. Howell, Brothers, of Goshen, New York, by the Ontario & Western Railroad. Some time in 1890 or '91 these gentlemen established a cream- ery on this road, covering the two points of Ham- den and Delancy, for the manufacture of cream from new milk by the centrifugal process. Fifteen cans of milk were concentrated into one can of cream and the consequent saving in transportation was immense. Things appeared to go on very well until the 26th of November, 1892, when the firm received the following letter : " NEW YORK, ONTARIO, & WESTERN RAILROAD Co, " November 26, 1892. " Howell, Bros., Goshen, New York. " GENTLEMEN : " Before you went on the Delhi Branch, we used to have the milk from Hamden and Delancy but I 54 A GENERAL FREIGHT regret, since you began operation, we have lost half the bulk of our revenue. In looking back I see that our receipts from these two stations were over $17,000 a year. In May, June, and July, 1892, your shipments were $355, $435, an ^ $53 respec- tively. We have therefore determined to build two creameries, one at Hawley's and one at De- lancy, and to put a New York milk dealer in pos- session and see if we cannot build up our milk business to what it formerly was. I trust you will appreciate our position in this matter. We do not, of course, want to do anything to hurt your busi- ness but, at the same time, we feel that this is one of the finest milk territories in the East and should be worked for all it is worth. " J. C. ANDERSON, " General Freight Agent." , This letter was followed by a proposition for an appraisal of Messrs. Howell's property by disinter- ested parties and by an agreement on the part of the railroad company to accept the appraiser's finding. This agreement, however, was no sooner made than it was broken by the railway company and Messrs. Howell were obliged to turn over their creamery to the railroad appointee at his own terms and at a heavy loss. Verily, Wm. H. Van- derbilt made a great mistake, in 1879, when he said, " The railroad corporation is organized pri- marily for the benefit of the State." He should have said, " The State exists simply for the rail- AND PASSENGER POST. 55 road." But to return to the matter of passes issued by the Boston & Maine Railroad. Class VI includes the higher officers of state, in the States of Maine, New Hampshire, Vermont, and Massachusetts and certain prominent officers of the United States, like Collectors of Customs. Class VII includes the Railroad Commission- ers of Maine, New Hampshire, Vermont, and Massachusetts. Class VIII includes the members of the Rail- road Committee, for the time being, of each of the legislatures of Maine, New Hampshire, Vermont, and Massachusetts. Class IX includes persons who are trustees under mortgages on the property of the corporation who are entitled to inspect its property, by virtue of deed or indenture constituting them trustees. Class X called complimentary, includes persons whose "good-will" is important to the corporation and who, so long as the practice remains what it now is, might justly take offence if, in the matter of free transportation, they were to receive from the Boston & Maine Road different treatment from that received from other railroads. A very interesting schedule really, but lacking in one particular. The Boston & Maine Railway managers are not sufficiently pious. For real downright piety, one must go to the Pennsylvania Railroad and, in evidence of it, read the following reply reported to have been made by one of its officials to some carping critic who complains of 56 A GENERAL FREIGHT the worldly spirit of their clerical friends. The following quotation from the New York Recorder, published in The Coming Nation of Feb. 15, 1895, bears this significant title : " Why the Pulpit is Silent on the Subject of Railway Rates, Shaping Public Opinion." " The officers of the Pennsylvania Railroad sys- tem cannot understand the complaint which has been made by a neighbor in the business, that there has been a misuse of the clerical half rate. ' No road in the country has issued more of these tickets than ours,' said Assistant General Passenger Agent Boyd/and we have certainly had no cause to believe that our clerical friends have in any way misused their privileges. Last year (1894) we issued be- tween 13,000 and 14,000 orders to clergymen on our lines east and west of Pittsburg. " ' We give them not only to ministers of the gospel, but also to missionaries and Salvation Army officers ; but care is taken to see that only proper persons get them, and I guess in that fact lies the reason they do not get into the hands of unworthy persons. Clergymen, in their work of shaping public opinion and elevating the moral tone of the people, are certainly a most worthy class, and this corporation has always felt that liberal treatment accorded them would serve the double purpose of contributing to the good work, and of aiding a most worthy class of at least badly paid workers.' " To those acquainted with the history of this cor- poration as set forth in the investigations of the AND PASSENGER POST. 57 Hepburn Committee of the New York Legislature, and in the various investigations made by Con- gress, the high regard for public morals asserted in this reported statement seems infinitely absurd. There can be but one motive for the distribution of special railway privileges among those who shape public opinion, and whose "good-will" is therefore of importance to railway managers. No man whose life is consecrated to the advancement of the common welfare will, I believe, accept such favors when he once understands what is expected of him in return. But the list of American privileged classes is not yet complete. It is especially provided by law that every railroad company may exchange passes or tickets with other railroads for their officers and employees. Not infrequently this has been interpreted to include their families, and now, " after a long and interesting agitation, representa- tives of the more prominent steamship lines are to have annual passes over the roads west of Chicago, parties to the Western Pass Agreement." Evi- dently the abatement of " the free pass nuisance," spoken of by Van Oss in his work on American railways, was but temporary. It seems more than probable that, as was the case ten or twelve years ago, so now, must " business men carry their annual." " In the West at least one fifth of all passengers travel on free passes. Another regrettable usance is that railroad advertisements as a rule are paid for with tickets which are frequently sold." 58 A GENERAL FREIGHT As long ago as 1871, it was said that this deaden- ing railway power cost the people of New Jersey at least ten millions a year, from the depression it caused to agriculture, while its effect upon the political morality of the State and upon its educa- tional interests was to make New Jersey a synonym for sloth and backwardness in civilization. And in Pennsylvania, " in the coal regions, where their power is absolute, they have inaugurated a sub- jection of labor to capital which is unsurpassed anywhere in the civilized world. This region of country presents a social order which, in the degradation of labor and the supremacy of the employer surpasses even the worst results which slavery attained. The political influence, how- ever, of these combined monopolies has been strong enough to oblige the General Government to station detachments of its troops, at its own ex- pense, for the suppression of any discontent among the miners, should their ignorance and degradation lead to acts of violence." The Westminster Re- view^ January, 1871. In December, 1872, an article appeared in the Atlantic Monthly, entitled : " The Fight of a Man with a Railroad." Some time in the early part of 1868, John A. Coleman, of Providence, R. I., pur- chased a ticket from Providence to New York via the New York, New Haven, & Hartford Rail- road. Detained by business in New Haven until it was too late to continue his trip by rail, he made the rest of the iourney by boat and, thus had his AND PASSENGER POST. 59 coupon for the trip from New Haven to New York on his hands. No opportunity came for its use until June u, 1868, when, being in New York, it occurred to Mr. Coleman that it might be available for his return trip. He accordingly presented the coupon to the guard stationed at the cars. The officer declared the ticket good for nothing, and ordered him not to board the train. Mr. Coleman then purchased a ticket to Providence via New Haven, and entered the cars, still determined, how- ever, to use his idle coupon, if possible. The con- ductor, on being offered the ticket, said that it was good from New Haven to New York, but not for the reverse trip, and demanded another ticket of Mr. Coleman, adding that otherwise he would be put off the train at Stamford. On arrival at the Stamford station the conductor entered the car with five or six assistants, and pointing to Mr. Coleman, said : " This is the man, pull him out and put him on the platform." A struggle ensued, in which Mr. Cole- man was struck several times on the head, and was finally thrown upon the platform. When he next reached Boston, he attached the Boston Express train, and brought suit in the Massachusetts Su- perior Court for $10,000 damages. The case was tried four times, and although in each of three out of four trials the jury gave to the plaintiff over $3,400 damages, it was not until the end of the fourth trial, and after a four years' contest that the corporation yielded. In the long course of these various trials, one of 60 A GENERAL FREIGHT the influential persons connected with the corpora- tion made the remark which stands at the head of the Atlantic article, and which ought, I think, to be engraven on the mind of every American citizen : " The Road has no personal animosity against you, Mr. Coleman, but you represent the public, and the Road is determined to make it so terrible for the public to fight it, right or wrong, that they will stop it. We are not going to be at- tacked in this way!' In 1877 there occurred the fearful riots at Pitts- burgh, riots which, according to Van Oss, were directly traceable to the exercise of this terrible railroad power against the public welfare. He says that Pittsburgh, " being for many years dependent upon the Pennsylvania Railroad in its intercourse with the East, has probably suffered more from railway tyranny than any other city in the Union. It is generally known how favorably the city of natural gas is situated ; so favorable, indeed, that in spite of adverse rates it has become the Ameri- can Birmingham. Yet its iron and glass industries went through many a crisis which can be traced directly to railroad discriminations against its busi- ness. The riots of 1877, for instance, caused by a lockout, could have been averted if rates had been more favorable ; it has been proven that in that case Pittsburgh industries could have worked for exportation, and that there was a sufficient profit on railway transportation to admit of a very sub- stantial reduction of the tariffs." AND PASSENGER POST. 6 1 If further evidence be wanting as to the charac- ter of this power, it has just been furnished by the in- vestigations of Postmaster-General Wilson as to the carnage of the railway mails. Notwithstanding the enormous taxes levied upon the General Govern- ment by the railways for mail transportation, it appears that, for fifteen years past, railway man- agers have been accustomed not only to pay no postage on their own mail matter transported over their own lines, but also to carry one another's mails without making any return therefor to the Government. It is said that an average of about 300,000 pieces per month of this unpaid postal matter, some of them very bulky, pass through the Chicago railway mail exchange alone, and the most of them are letters which pass over other roads than those on which they originate. The editor of the Railway Review acknowledges that this is a plain infraction of law and, very curiously, uses it as an argument against the Government management of railways. The laxity of the Post-office depart- ment in not enforcing the law in respect to this business is a good illustration, he thinks, of what might be expected were our railways operated by the Government. But there is another way of looking at this matter. No ordinary Postmaster- General would venture to criticise the acts of this terrible power which has so often proved itself stronger than the Government. It is altogether possible that the enforcement of the law in this case will turn the present postal deficit into a handsome profit. 62 A GENERAL Fit EIGHT One further evil, and perhaps the greatest of all the evils incident to the private management of these public works, is the custom of giving away stocks and bonds (paper currency drawing interest), sometimes for nothing, sometimes for ten cents on the dollar, and then attempting, by means of high transportation taxes, to force the public to redeem these fraudulent paper issues in gold at one hun- dred cents on the dollar. According to Von Oss, (see his American Railroads as Investments^ page 139) there were in existence of these stocks in 1892, some $4,650,000,000 of which only $465,000,000, and probably less, represented any real investment of capital. The balance, over $4,000,000,000, was simply the measure of the intent of railway mana- gers to levy unnecessary taxes upon the people. *' Hence shares now return," Von Oss says, " at least eighteen per cent, upon actual investment. True, those owning $1000 in shares receive but an average of $18 per annum upon them ; but in the majority of cases shares cost the investor nothing." And as to bonds : " These bonds represent no par investment ; the average price at which they reached the first investor probably did not exceed 77, no matter what somebody who buys them to-day pays for them." This adds some $1,500,000,000 more of paper issues representing little but fraud, but which it was and is intended, none the less, the public shall redeem at par in taxes paid in solid gold. All that has been said to the contrary not- withstanding, water emphatically begets a desire AND PASSENGER POST. 63 on the part of railway managers to charge such rates as will pay returns upon fictitious capital. We see its hand in the recent rise in the price of anthracite coal. 1 The New York Herald of June 30, 1896, says: "All of the coal compa- nies had yesterday fallen into line with an ad- vance of twenty-five cents, making the price at tide-water, $4.10 per ton. This is $1.35 a ton above the level at which coal was sold a year ago, and is 45 cents a ton above the average, at this season, for the last six years." " The advance made yesterday," says another great New York daily, speaking of the same move- ment, " is equal to $12,000,000 a year exacted from consumers by the coal producers, whose trust is now working perfectly for the first time in six years." As we read this story, we are forcibly re- minded of the condition of things in France before the great Revolution, and the more so that almost every serious trouble that we have had in this country in the last thirty years has been due to the arbitrary acts of our railway kings, who in their rule have been as dicta- torial, as unmerciful, and as capricious as were ever the old rulers of the French. Here, too, as in old France, we find a court with its priv- ileged classes provided with practically free trans- portation over the king's highways, while the workers on the farm, in the mine, the forest, and the factory, tied by railway law to their 1 This refers to 1896. 64 A GENERAL FREIGHT narrow homes, are compelled to work from year's end to year's end to provide for the privileges and the profits secured to these American roy- alties, as they claim, by the divine right of their charters. In some cases, moreover, as for instance in Con- necticut, the railway king, not satisfied with his ordinary revenue, is actually going back to the old French Corvee, and is compelling the peo- ple to work, without pay, on his highway im- provements. Of this character is every dollar exacted from the people for the elimination of grade crossings. The city of Bridgeport is thus to contribute some $400,000 of the labor of its citi- zens for the improvement of the Consolidated Railway. But our railway rulers do not rest even here. While calling to their aid all the power of the Government to compel their employees to run such mail trains as they may find convenient, railway managers change mail schedules and even take off mail trains altogether at their pleasure, and, in neither case, do these royal personages rec- ognize the existence of the Government, except so far as to send to its officials the newly-printed time- tables. As long ago as November 26, 1887, Postmaster- General Vilas spoke of the relation of the Post- office to the railways in the following language : " The difficulties of solving this problem do not diminish with the lapse of time ; they steadily in- AND PASSENGER POST. 65 crease. The peril to the public is not lessened, but augments yearly. There must be legislation adapted to the conditions of the time, or this wretched system, with its inequalities, its injus- tice, unnecessary expenditure, irritating complica- tions, and risk of signal disaster, must remain a reproach to the Department until some serious misfortune awakens decisive action. The statute is seriously defective in its omission to require and compel the service of the railroads in mail trans- portation. So far as the statute goes, it is at the mere option of these common carriers to serve the Government, and it illustrates the defect and evil of it to state that one road, the Old Colony Rail- road Company of Massachusetts, has notified the Department of its refusal to comply with the statute. The managers of some of the New England roads have refused to furnish the space or apartment in a car necessary for the proper distribution of the mails, and, as a result, this branch of the service has been caused some embarrassment in that section, and the people living adjacent to such lines given just cause of complaint." 1 And then, proceeding to outline the legislation needed for the common welfare, Mr. Vilas shows that it would be a very great benefit to the Gov- ernment to own its postal cars. The 432 cars then in the service, 342 in ordinary use, 90 in re- serve, could be bought, or their duplicates manu- 1 Report of the Superintendent Railway Mail Service, November II, 1887. 66 A GENERAL FREIGHT factured for $1,600,000, while the entire annual cost, embracing all necessary labor and ordinary repairs would not be over $720 for each of the 342 cars, in ordinary use, or $246,240, making a total of $1,846,240. Yet for the mere use of these cars, including cleaning, etc., the Department was then paying $1,881,580 a year, and the amount demanded for the ensuing year was $2,000,000, this in addition to the eight cents a pound paid under the general item of transportation of the mails by railroads. On one line $59,037.75 was annually paid for the use of four cars that could be built and fully equipped in the best modern style for less than $17,500, and this in addition to the full weight pay for transportation, amounting in this case to $504,- 573.69 annually. Mr. Vilas estimated that the pur- chase of its postal cars would save to the Govern- ment at least $1,500,000 a year, against which the only charge would be the cost of casualties. " It cannot be objected," he said, " that the Department is unable to assume the charge of these cars. The Department can easily discharge these functions. It might receive the custody of all the cars in the service and thenceforth care for them, on a month's notice. With moderate addition to its force, the railway mail-office can provide for the manufac- ture of all necessary. Whatever may be done by any private hands, may as well be done by the Department. Ownership by the Government of its postal cars cannot but much relieve the difficul- AND PASSENGER POST. 6? ties of the compensation problem. But it will be indispensable, at the outset, whatever shall be at- tempted, to exert the rightful prerogative of Gov- ernment and impose it, as an imperative duty, on all railway carriers, to accept and transport, at the compensation established by law and according to the statute and departmental regulations, all mails, mail supplies, postal clerks, and inspectors on duty, with sufficient sanctions to enforce compli- ance. Unless such legislation be provided, no success, upon any plan can be assured. The right to this acquiescence in the purposes of the Govern- ment is undeniable. The absence of means to compel acknowledgment by obedience constitutes a menace to the business of the country which ought not to continue." And yet this menace still continues and the railroads continue to charge the Government for the annual rental of its travelling post-offices far more than it would cost to build them. In the last fifteen years, the Government has paid out for the use of these cars over $30,000,000, of which, according to the estimate made by Mr. Vilas, in 1887, $1,500,000 a year at least, or a total of full $22,500,000 has been absolutely wasted, and this in addition to the other millions paid out for so-called special facilities and for unnecessary steamship subsidies, to say nothing of the extrava- gant sums appropriated for ordinary railway mail- service. And yet the deficiency in the postal ser- vice is attributed to the cent a pound rate on 68 A GENERAL FREIGHT second-class matter. Unquestionably there will be a deficiency in the business of the Post-office so long as the Government pays the railroads eight cents a pound for doing only about half the ser- vice for which it receives one cent. But is it necessary to pay railway managers this enormous tax ? Which is the Government of this country, the Congress of the United States or the members of the Joint Traffic Association, or is Congress but the agent of this railway association ? Certain of the trans-continental roads have been battling before the United States Courts for the last nine years for the legal right to carry foreign books, carpets, cutlery, etc., from New Orleans to San Francisco for eight tenths of a cent a pound and as we have seen, they have just gained their suit. Would these railroads have made the long fight for these rates if they had not been profit- able ? But if they can carry these foreign products across the continent for eight tenths of a cent a pound, then surely they can carry Government mail-bags, average hauls of 442 miles for very much less money. Five tenths of a cent a pound, ten dollars a ton would be a large payment for such a service. The probabilities are that with the Gov- ernment ownership of postal cars, the business could be done at a very much lower rate. The conclusion of the whole matter seems to be that the real governing powers of a country are the powers that determine its public transportation taxes. AND PASSENGER POST. 69 CHAPTER III. DISTANCE A FALSE BASIS FOR THE DETERMINATION OF RAILWAY RATES. THE evil in the present condition of the Ameri- can railway world is almost as much in the principle on which transportation taxes (local taxes) are de- termined, as in the arbitrary power of the private corporations by whom these taxes are farmed. The ton-mile, passenger-mile basis of rates, says Mr. Haines, late president of the American Railway Association, is fallacious, misleading, untrue, and without practical value to the railway superin- tendent or railway manager. The local passenger rate is lost sight of when competition or commuta- tion or excursions are to be considered, and the rate per ton-mile is the last thing thought of in making freight tariffs, and finally he concludes his notable address, delivered in New York, October 14, 1891, with the statement that he has sought to impress his audience with the absurdities of the ton-mile, passenger-mile basis of rates, and the in- justice to railway managers of using such a basis for measuring their operations or criticising their management. It is but fair to add that, in this 70 A GENERAL FREIGHT address, Mr. Haines is discussing through traffic. We all know that, in local business, ton-miles and passenger-miles continue to be measured out with the greatest care and with the result that, instead of one uniform tax, for each class of service for all distances within a railway system, there are millions of different taxes levied even on single systems. It is said that there are thirty million different rates on the London and Northwestern Railway system / of England. I This mileage system is followed not because there is any equity in it, not because distance measures the real cost of the conveyance of persons or of property by railway, but because it does fairly measure the cost by the old methods of transporta- tion in vogue before the invention of the railway the cost of transportation on foot or on horseback and because it thus enables the railway manager to so guage his non-competitive rates that the people will find it just a little cheaper and a little quicker, just a little more convenient, and a little more comfortable, to travel by train than to walk or to hitch up their teams. A more effective means for exacting all the traffic will bear and for keeping the districts through which the railways pass in their original human burden-bearer and ox-team condition could not be devised. Our local railway tariffs are usually from fifty to seventy-five per cent, higher than their through tariffs, and they are ac- companied by a correspondingly poorer service. One of the friends of the New York, New Haven, AND PASSENGER POST. Jl & Hartford Railway Company testified before the Railway Committee of the Connecticut Legislature, in the winter of 1895, that he could wish for no greater punishment for the managers of that road in the next world than to be obliged to travel con- tinually on their own accommodation trains. But there is another evil connected with this mileage system of rates that is also worthy of the most thoughtful consideration. The longer the track between stations, the more the miles to be taxed to local traffic. The possible profit to be ex- torted from this traffic by running trains over long and crooked lines, leads to a waste of capital at the outset, by encouraging the construction of unneces- sary mileage in the building of new roads, and to a perpetual waste of time and of labor in the opera- tion of the roads, by discouraging the cutting out of unnecessary miles in old lines. The mileage taxes levied on the way traffic of the New York Central bring in a revenue so much be- yond the cost of running the trains that the com- pany could not afford to allow their road to be shortened by several miles, even if the work was done at the expense of the State. They would lose an opportunity to levy unnecessary taxes upon way travel alone, amounting to at least forty cents a train-mile for every mile of track cut out of their main line. The fifty way travellers on the average passenger train on the main line not only pay a profit of forty cents a train-mile on the cost of their own transportation, but also pay the entire cost of 72 A GENERAL FREIGHT the transportation of the fifty through passengers on the train. And this business of taxing way traffic is ordinarily so profitable that, according to the highest railway authority, it is rather worse than money thrown away for any average road to spend money in shortening its line. The only class of road that can afford to shorten its lines is that on which there is a great through business and very little way traffic. A large non-competitive business alone may entirely neutralize the pecuniary value to the company of saving distance. 1 Bearing in mind these facts, it is almost amusing to recall the lament of Mr. Depew over the decay of the small towns and the ruin of the small deal- ers in the districts through which the railroads run, and the concentration of business in the hands of a few great dealers at those terminals. The real won- der is that, under the present condition of things, any kind of business in which transportation plays an important part continues to be done anywhere except at the terminals, and that any business can exist except it be in the hands of a trust big enough to meet the railway king on equal terms. Verily, if these be the results of determining transportation taxes according to distance, then there can be no doubt as to the soundness of the conclusion " that as a matter of purely public policy that is to say, if the interests of the railways were identical with the interests of the community as a 1 A. M. Wellington's Economic Theory of Railway Location, pp. 234-236. AND PASSENGER POST. 73 whole, railway rates would be the same for all distances." 1 But this mileage system of railway rates is not only opposed to the public interest ; it is equally opposed to the real interests of those who have built the railroads, and it is also opposed to com- mon sense and to right reason. " For, since the real service rendered is the transportation of persons and property from one terminus to another, the precise length of track should have no more effect upon the price paid than the precise amount of curvature, or the rise and fall, and much less than the rate of the ruling grades ; all should be con- sidered or none should be. " Not one single item of railway expenditure, large or small, not even fuel or wear and tear of wheels, varies in direct ratio to distance, or in anything like direct ratio, and more than one half of them are not a whit affected thereby. Grades, curvatures, cost of construction, terminal expenses, volume of traffic, whether the cars return full or empty, all these have much more to do with the cost of ser- vice than the mere distance transported." 3 It is estimated that it costs thirty per cent, more to haul a train over a continuous II* 30' curve, one mile long, than over a mile of tangent. The same engine will not haul half as heavy a load on a twenty-six feet grade as on a level ; on a fifty-two feet grade, about a fourth as much ; on an eighty 1 Wellington, p. 197. 2 Wellington. 74 A GENERAL FREIGHT feet grade, about one fifth, and on a grade of one hundred and five feet, a light American engine will hardly draw an eighth of its level load, and the heaviest engine hardly one sixth. The mere stop- ping and starting of a train running thirty miles an hour, wastes power enough to haul it two miles, and the cost of the stop of the average train is esti- mated at about forty cents. In extreme cases such as the Manhattan Elevated Road of New York, where there are stations nearly every three eighths of a mile, three fourths of the coal con- sumed and one fourth of the time occupied, is due to stops. It is said that even on express trains one fourth of the time between termini is thus lost. The New York Limited loses fifty-five minutes in its eight regular stops between New York and Chi- cago, and Wellington says that, including slowing up through towns and yards, stops at crossings, etc., it loses not less than three hours out of twenty- four. With most fast trains the loss of time due to these causes would be twice as much. Even the cost of the road itself is not propor- tioned to distance. A single mile of tunnel, or through a crowded city, often costs more than a score of miles in the open country. Some roads, moreover, have more miles of siding at stations than of main track between. Thus the New York Central and Lake Shore Roads, in 1893, had 1090 miles of siding, 962 of main line ; the Erie, 557 miles of siding, 460 of main line, etc. The cost of the terminals at New York is estimated at $35,000,- AND PASSENGER POST. 75 ooo enough to build 1000 miles of main line at $35,000 a mile and yet these terminals are said to be smaller in extent and less expensive per head than at most important cities, and very much smaller than at some of them. The annual ter- minal expenses at New York are estimated at $10,000,000, and to meet them there is a fixed terminal charge of four or five cents per 100 pounds, or from 20 to 25 per cent, of the entire charge from Chicago to New York. Twenty-eight per cent, of the locomotives in service in the State of New York are switching engines, and it is esti- mated that over one fifth of the motive power of the entire railway service is expended in switching, and this independent of the switching of regular trains in transit. Thus, with every step of our investigations, the absurdity of the idea that distance is an important factor in the cost of railway traffic becomes more and more apparent. It is a very small factor even in the cost of the movement of railway trains. What folly to pretend that railway managers have any right to use it as a means for subjecting the movements of persons and of property on the rail- ways to their wills. Were railway charters granted in order to enable the public to receive the utmost possible benefit from this greatest of all inventions, or was it intended that railway fares and freight rates should always be measured out according to the cost of conveyance by human burden-bearers and by ox-teams, or even by stage-coach ? 76 A GENERAL FREIGHT The essential facts to be considered in the rail- way business are as follows : When once a rail- road is built, trains must run and it makes very little difference in the cost of the business whether the cars go full or empty, or whether a locomotive runs alone or with a long and heavily laden train behind it ; neither does it make a measurable dif- ference in the cost, whether a part of the train-load is left at one station or at another. Are the rates so high that only a royal personage can purchase a ticket ! Then that single individual must bear the entire expense of the train that carries him On the other hand, are the rates so low that a hun- dred persons can avail themselves of the oppor- tunity to travel, then each traveller will be obliged to pay but a hundredth part of the cost of the train, and that cost will be increased only by the interest and wear and tear of one additional car during the trip. The expense of moving the train wiH be practically the same in either case, and it will hardly make a whit difference whether one passenger or all the passengers leave the train, at the first station at which it stops, or go through to the end of the journey. " When once a train has started from Boston to San Francisco, there is not a man living can tell the difference, in the cost of running that train, whether a passenger gets off at the first station out of Boston, or goes through to the Golden Gate. At every station some pas- sengers will leave the train, others will take their places. One traveller, in a thousand perhaps, will AND PASSENGER POST. JJ go the whole journey. There will always be room for him." The fastest through train in the country, in its trip of a thousand miles from New York to Chicago, makes, on an average, one stop in every 125 miles, and the principle which is applicable on the slowest way-train, is equally applicable here. The cost of carrying a traveller who goes but 125 miles is prac- tically the same as that of the traveller who goes the full thousand miles. The short-distance traveller who occupies a seat at the beginning of the journey prevents the occupation of his seat by a through traveller, and there is a fair chance that as a result of his short occupation his seat may remain empty for the rest of the trip. It is possible that the presence of a half dozen short-distance travellers at the opening of a trip of the New York Limited Express, may cause the haulage of an additional car not only for 125 miles, but for the whole thousand miles, and that with very few passengers. The train is run for the accommodation of all its occupants, wherever they board it and wherever they leave it, and all should pay the same short-distance tax. The cost of railway transportation per ton and per passenger is in inverse proportion to the num- ber of tons and of passengers transported upon a railway system, regardless of the distance they are carried. It is said that if an English locomotive runs with a load of fifty tons behind it, it consumes twenty pounds of coal per mile ; when it is hauling 78 A GENERAL FREIGHT 600 tons, it burns perhaps sixty pounds, so that between no load at all and a long and heavily laden train the variation in locomotive expenses is only the cost of forty pounds of coal per mile, say six cents (six cents per mile for the haulage of eighteen cars each weighing with its load thirty tons). Mr. Wellington estimates that the addition of thirty tons dead weight (and live weight is no heavier than dead weight) to a train of five cars will not increase the cost for coal, in this country, over one cent a mile, and since all the passengers that can be squeezed into five cars will not weigh thirty tons, it therefore follows that the variation in the haulage cost of a five-car train carrying 300 or 400 passengers and an empty five-car train is but one cent a mile. Professor Hadley says that on any line where a good canal can run, a railroad can handle a net train-load of 600 tons, at a direct expense for fuel, trainmen, and train repairs (that is for expenses due to distance) of not over forty cents, and sometimes as low as thirty cents a mile, or one twentieth to one fifteenth of a cent a mile per ton. In other words, the cost of the average haul of the country, 126 miles, in train-loads of 600 tons, on such roads as the New York Central, is not over seven to nine cents a ton, and with loads up to the capacity of our large loco- motives (1800 tons or more, on the New York Central) the cost per ton and per passenger due to distance is even less than these figures. Taking the entire expenses of an eight-car AND PASSENGER POST. 79 passenger train, on the New York, New Haven & Hartford Railroad main line, at $1.00 a mile (the cost of the average passenger train on that road for the year ending June 30, 1893, was less than ninety-eight cents a mile), the total cost for a 100- mile trip, is $100, or less than twenty cents for each of its 520 seats, for the whole distance. The average trip of the traveller on this road, however, is but 17.04 miles, so that the average train empties itself five and eight-tenth times on a loo-mile journey, and therefore the actual seating capacity of an eight car way-train on such a trip is over 3000, and the cost of each seat for the average ride of 17.04 miles, some of the travellers going the whole distance, others but from one station to the next, is less than three and one third cents, and even if the train is but half filled, the cost per pas- senger per trip is but seven cents. But the modern locomotive can haul a twelve-car train on this road at almost the same speed that it can haul eight cars, and with an additional expense, including extra brakemen, and use of the extra cars, of certainly less than $15.00 for the loo-mile trip, and these cars will afford accommodation for 1500 more passengers, for the average 1 7-mile ride, at a cost to the railroad of less than one cent for each seat. These figures are astonishing enough, but the following statement made by the conservative Wil- liam M. Acworth, the highest railway authority in England, goes far beyond my estimates. Mr. Ac- 8O A GENERAL FREIGHT worth says that if a passenger who would otherwise have staid at home, were induced to go from London to Glasgow, by the offer of a first-class ticket for three-pence (six cents), the company would, unless indeed there was no first-class seat available on the train, secure a net profit of two and three-quarter pence (five and one-half cents) for, the remaining farthing (one half a cent) is an ample allowance for the cost of haulage. The exact figures, in de- tail, are as follows : For coal, three sixteenths of a penny, the remaining one sixteenth of a penny is more than sufficient to pay for the extra oil, and stores, and water consumed, making a total of one fourth of an English penny or one half of an Amer- can cent. Add, say, another half a cent for the wear and tear of the seat and you have one cent. Up to the capacity of the railway trains of a country, the cost of the additional passengers who could be induced to travel by low fares, would not be over one cent for a distance of 410 miles. 1 Taking the average American train, at two cars, (sixty-five seats in a car) its forty-four occupants, in 1895, could have taken eighty-six friends along with them, for a 4io-mile ride, at an additional ex- pense, to the railroads, of eighty-six cents. If there were three cars in the average train of 1895, the 151 vacant seats could have been occupied, during such a journey, at a cost to the railroads of $1.51. The world will realize, some day, the truth of 1 See " Taxes on Transport," Nineteenth Century Magazine, January, 1892. AND PASSENGER POST. 8 1 the statement made in 1849 by Mr. Palfrey with reference to the Post-office, namely, that in business of such a character, the cost of running the machinery is practically the same whatever be the volume of the traffic. This truth is, indeed, most wonderfully exemplified in the railroad experience of many dif- ferent countries during the last twenty-five years. The following is from my article, " Equality of Opportunity How Can We Secure It ? " in the Arena of December, 1895 : " In i88i,the third-class fares on the East India Railway were reduced from about three fourths of a cent to half a cent a mile, and * From the very first the effect of the reduced fare was clearly seen, not only in the increased numbers and in the slow but steady increase of receipts, but also in the manifest advantage which it gave to good's traffic, in facilitating the movements of smaller traders.' " In 1892, the net earnings of this road, with fares of but two and a half pies (five twelfths of a cent) a mile, were nine and sixty-two hun- dredths per cent, on its capital. The Madras road has lately adopted a rate of two pies (about one third of a cent) a mile, and with very encouraging results. It is believed that for the carriage of food, grains, minerals, and the lowest class of passen- gers, the Indian rates are the lowest in the world. ' At the same time,' says Horace Bell, the consult- ing engineer of the State railways of India, ' it is by no means to be assumed that rates and fares have reached their lowest remunerative level. In- 82 A GENERAL FREIGHT deed, there is every reason to believe that, in the class of goods above mentioned, and in third-class pas- sengers, further reductions are to be made in the near future, and on sufficiently profitable con- ditions. ' The statistics of the railways which serve the poor and populous districts point to the certainty that, with large numbers (and large numbers always follow low fares), low speeds, and properly fitted vehicles, passengers could be carried at one pie (one sixth of a cent) a mile, and leave a profit of 20 to 30 per cent. ; the cost of carriage (per ton of freight and per passenger) is a quantity varying with the volume of traffic, and it may be found that an even lower rate is possible.' " (Mr. Bell puts the value of the pie at one twelfth of an English penny, one sixth of a cent.) And high speed, up to the capacity of a locomo- tive for hauling its load, is far more profitable than low speed, for the higher the speed of the trains, the greater the possible use of the whole equip- ment. The cost of the extra fuel and water re- quired is hardly worth considering in comparison with the extra service which the trainmen and trains are thus enabled to render. " Twenty-five years ago," says J. M. McConnell, Superintendent of motive power on the Union Pacific Road, " with a schedule of twenty-two miles an hour, it would have been considered an impossibility for an engine to haul ten cars on a schedule of forty miles an hour, yet it is now done every day and AND PASSENGER POST. 83 these (modern) engines maintain a speed of fifty- five miles an hour between stations, with ten cars. In 1894, it cost the Union Pacific Road $1,040,000 less to haul their freight cars than it did, compar- ing the same number, in 1890 all due to the increased service of locomotives and to no other cause." The average train-load of this road in- creased from 15.86 cars in 1890 to 21.88 cars in 1895, and this increase of load was attended by a decrease of locomotive expenses from 26.45 cents a mile to 25.03 cents, and by a consequent decrease in the cost of hauling a loaded freight car from 3.17 cents a mile in 1890 to 2.01 cents in 1895. The cost per mile of hauling freight cars on the Soo Line in 1895 was but one cent. In other words the actual cost of distance in the handling of freight on the Soo Line, in carloads of twenty tons, in 1895, was but six and three-tenths cents per ton for the average haul of the United States, 126 miles. The secret of low cost of railway traffic is, large train-loads moved quickly to their des- tination and trains kept in constant use. 1 The lowest average load of the passenger trains of the Indian roads is over 126. The Madras road carries more than 260 in its average train, and the Bengal, Northwestern, & Tirhoot road more than 290. With average passenger trips of ten miles (the average trip on the Providence & Worcester road of Massachusetts is but 8.39 miles, and on the New York & New England it is but 11.84 miles), 1 Railway Review, for 1896, pp. 32, 116, and 173. 84 A GENERAL FREIGHT the trains of the New York Central would empty themselves, on an average, ten times in a 100- mile journey, and with average loads of 300, these trains, at five-cent fares (one half a cent a mile for the average trip) would earn $150 in a 100- mile journey, or $1.50 a train mile. An average train-load of two hundred would yield $1.00 a mile and this, with twenty cents a mile from express and mail matter, would bring the earnings up to $1.20 against the actual earnings of the average passenger trains of this road, for the year ending June 30, 1894, of less than $1.19 per mile. And Mr. McConnell's experience teaches us that such trains might be hauled at even less cost than the present trains. In thinly settled Russia, under the new tariff of December, 1894, the third-class fare for short dis- tances, .666 of a mile to 106.8 miles, is but little over three fourths of a cent a mile, and for longer distances the fares are still lower. A passenger can travel 106 miles for eighty-one cents, and 464 miles, or farther than from New York to Buffalo, for $2.32. For a trip of 1989 miles, the fare is but $5.95, and our Consul at St. Petersburgh says that, if travel increases, as it has increased under pre- vious reductions of fares, there is every reason to believe that these low rates will not only be a great benefit to the Russian people, but will also prove profitable to the railways. Special workingmen's trains have been running for many years on the railroads of Belgium, on AND PASSENGER POST. 8$ which it is possible to buy weekly tickets to and from their work, six days in a week. 3 miles from their homes for 21 cents a week. /- it ti it it it ti it 11 12 " " " " " 37 " " " o II II II II tl tt U tt lo 41 It tl II II It tl II (t 2 4 45 s it tl II II II ' tl tt ll tl II II II It II It 4 2 57 Consul Wilson of Brussels, in his report of 1883, earnestly advocated the running of such trains on our roads, saying that these trains had enabled vast num- bers of workingmen to live, at more moderate rates, outside the dense centres of industry where they were employed, while at the same time, they largely increased the profits of the roads. So well satis- fied are the Belgian authorities with their policy of running their railroads for the encouragement of the material industries of the country and for the convenience of the public, rather than for the pay- ment of large dividends, that some two years ago, they commenced selling passenger tickets good for fifteen days for any distance over the entire system of government roads, some 2500 miles, at the fol- lowing rates : 50 francs or $10.00 for a first-class ticket. 38 " " 7.60 " " second-class ticket. 25 " " 5.00 " " third-class ticket. " The effect of the liberal railway policy of Bel- 86 A GENERAL FREIGHT guim has been to make it a most attractive coun- try for working people. Although one of the most thickly settled districts in the world, the immigra- tion into Belguim, since the inauguration of her progressive railway policy has steadily exceeded the emigration. " Side by side with the state administration of the Belgian roads and the successive reduction of rates and fares, Belgium has developed a degree of prosperity unequalled by any other nation of similar population and resources in the world. On the other hand, Ireland, suffering under a system of transportation taxes levied by private corporations who care nothing for the districts through which the railroads pass, is to-day one of the most back- ward countries on the face of the earth. The result of the present system is that rates (railway rates) prevent the development of local resources that existing industries are strangled and that profits are devoured by transit charges. There is a constant reiteration of the same class of evidence, pointing to works closed, mills stopped, undertak- ings abandoned, and a decrease of native produc- tion, all of which is assigned sometimes partially and sometimes wholly to the railway system. It is probable that agriculture suffers most but all indus- tries are crushed while no attempt can be made to establish any industry. Enterprise can take no root in the country. The coal and mineral rates prohibit inland manufactures." 1 1 Charles Waring, Stale Ownership of Railways. AND PASSENGER POST. 8/ The same experience follows the same policy everywhere. Transport taxes high, uncertain, un- stable, discourage trade and paralyze industry ; on the other hand, transport taxes low, certain, stable, always encourage trade and stimulate industry. The people always respond, almost at a moment's notice, to the opportunities which low transport taxes secure to them. " During one of the trunk line wars, the passen- ger rates on all the lines between San Francisco and Chicago were reduced from $120 to $15. The result was that the big passenger coaches, having a capacity of sixty persons, ran full all the time, instead of three fourths empty, and the rail- roads received for their haul, about 2600 miles, $900 per car, whereas the rate for a carload of cattle, for any such haul, would, at the most, have been but $220. 'This low rate, I am told,' says Moreton Frewin, * was actually found profitable to the roads and it stimulated enormously the general through business. The Chicago drygoods and other houses trebled their drummers, and every intervening point, like Omaha, Denver, Salt Lake, etc., recognized at once a great development of local enterprises." The railroads of to-day would find $5 a passen- ger, or $300 a car, a wonderfully profitable busi- ness for such a trip. It is indeed probable that the cattle rate of $220 a car would provide an ample income to the transcontinental roads, if it were applied to human beings for the trip from 88 A GENERAL FREIGHT San Francisco to Chicago. Humanity, unlike cat- tle, load and unload, and take care of themselves ; the haul of the cattle car and of the passenger car costs practically the same ; if there be any differ- ence in favor of the cattle car, that difference in- cluding the increased cost due to the interest and the repairs of the more expensive passenger car is far more than made up by the greater use of equipment made possible by the greater speed of the passenger train. We have seen that a ten-car passenger train is capable of making a schedule of forty miles an hour ; then such a train can certainly make the ordinary thirty-mile schedule of the transcontinen- tal roads, and can haul six hundred passengers from the lakes to the Golden Gate in less than eighty- seven hours, earning in that interval, at five dollars a passenger, $3000 or $1.15 a train mile from its passengers alone. Add twenty cents a train-mile from mail and express transportation, a low esti- mate, and you have a total of $1.35 a mile, five cents more than the average earnings of the New York Central in 1890, and fifteen cents more than those trains earned in 1894. At $3.50 a passenger, about $220 a car, such trains would earn, on a Chi- cago to San Francisco trip, as much per mile as the average passenger trains of the country earned in 1894, and twelve-car trains would earn vastly more. These calculations are based on the expectation that all the travellers in these trains would take the through trip, but this seldom happens. I doubt if AND PASSENGER POST. 89 the average trip, even on such trains, would be over three hundred miles, in which case a fifty-cent fare, per trip, would enable a car to earn far more than $220, in the journey from the lakes to the Pacific. Would not Omaha, Denver, Salt Lake, and all the other towns along the transcontinental lines recog- nize a mighty development of enterprise under such conditions ? And then suppose these low passenger rates to be accompanied by similar low, uniform, stable freight rates, and suppose these rates to be accompanied by a vastly improved service, what would not be the development of this country under such government railway management ? The possibilities in this direction have been ad- mirably exemplified in the following cases : " More than thirty years ago there was a contest between the South Eastern and the Great Western Railways of England, for the London and Reading traffic, that lasted a year and a half. The distance on the South Eastern is sixty-seven miles, and the company carried passengers the round trip 134 miles, by every train, for seventy-five cents, first- class, and fifty cents, second-class ; and at the half- yearly meetings the chairman of the company said that the company had lost nothing by the low fares. They paid the same dividends, and they were very- well satisfied to go on. Nevertheless, the South East- ern and the Great Western were charging, on one part of their lines, about ten times as much as they were charging on other parts, and on those parts where they were carrying lowest, their profits amounted to 90 A GENERAL FREIGHT about two hundred and fifty per cent, on the cost of conveyance by each train. " The most remarkable case of this character, however, that ever happened in Great Britain, previous to 1865," says William Gait, " was the re- sult of a sudden reduction of fares on the Edin- burgh and Glasgow line, some ten years earlier, to about one-eighth of the ordinary charge. This was the result of a quarrel with the Caledonian com- pany. The Edinburgh and Glasgow line is forty- six miles in length, and the regular fares for the three classes respectively, were eight, six, and four shillings ; these were suddenly reduced to one shil- ling, ninepence, and sixpence (twenty-five, eighteen, and twelve cents for a forty-six mile trip). " The Caledonian, of course, followed suit, carry- ing at the same fares. For a year and a half this contest continued, to the great satisfaction, no doubt, of those two great Scotch cities, but to the serious injury of the stockholders." " Those of the Edinburgh and Glasgow line re- ceived one per cent. ; of the Caledonia, one-half per cent, less dividends." Even in that far-away time, it was proved, by the testimony of the chairman of the Eastern Counties Railway, that coal could be transported from Peterborough to London, seventy-six miles, for twenty-five cents a ton, and the total cost of running a freight train, carrying 190 tons of coal, was less than fourteen pence (twenty-eight cents) a mile, this including the train's share in keeping up AND PASSENGER POST. 91 the permanent way and of general management and office expenses. But recent experience in this country affords, perhaps, the best evidence as to the possibilities of railway service. On the 8th of August, 1895, three excursion trains were run over the Cleveland, Canton and Southern Railroad from Zanesville, Ohio, to Cleve- land and return, 286 miles, for seventy-five cents the round trip, less than three-tenths of a cent a mile. Each of these trains consisted of ten cars, carrying 700 passengers. The receipts, therefore, amounted to $525 per train trip, $1.835 P er train mile ; fully seventy-five per cent, more than the earnings of the average passenger train of the country, and ten per cent, more than the earnings of the average train of the New York, New Haven and Hartford Railroad in 1890, when it was paying ten per cent, dividends. These trains made about the same speed as the regular trains, and at very little more cost. They had the same number of hands, and on the round trip each consumed about twenty tons of coal at a cost of, perhaps, ten cents a passenger. Granting the cost to have been fifty per cent, more than its regu- lar trains, $0.4719 per train-mile, in 1893, the cost to the railroad was but little over one-tenth of a cent a mile per passenger, or less than thirty cents for the whole trip, and the profit on each passenger was over one hundred and fifty per cent. As to freight, the Railroad Gazette tells us that, 92 A GENERAL FREIGHT at times, during the summer of 1895, the New York Central and Hudson River Railroad hauled grain from Buffalo to New York, 440 miles, for 3.96 cents a hundred pounds, less than eighty cents a ton, and these low rates, resulting in train-loads of 1800 tons, sixty cars of thirty tons each, earned for the road over $3.24 a train-mile, or more than double the average earnings per freight-train mile of the country, $1.55744, in 1894, and far more than the earnings per mile of its own average freight train. It is safe to say that, even now, grain can be transported from Buffalo to New York over the New York Central and Hudson River Road for fifty cents a ton at a very handsome profit ; 1800 tons at fifty cents a ton equals $900. The cost of running the average freight train on this road, in 1893, was $1.38654 per mile, and for 440 miles, $610.08, leaving a profit on trains of 1800 tons, at fifty cents a ton, of nearly three hundred dollars per train trip. But if this be true now, what will not be possible with the new locomotives of Mr. Westinghouse, which promise to do the same amount of work as the present engines, with but one-eighth the amount of fuel ? It is further to be noted that the simple addition of air-brakes and block signals to the New York Central has nearly doubled the capacity of its freight equipment, while it has decreased the number of brakemen employed on its through trains by fully one-third. Note too the statement of the editor of the Bond Record vi February, 1896, AND PASSENGER POST. 93 that the pooling of railway business by the Joint Traffic Association has already reduced the ex- penses of some of the companies from $100,000 to $150,000 a year in the small item of switching charges alone. We may also study the statistics of the Consolidated road of Connecticut in this connection with great advantage, and, turning to these statistics, we discover that the average ton- nage of its freight trains of 1892 and of 1893 might be almost doubled without adding a single pound to the weight of the train, and without adding one cent to the cost of freight transportation. Taking the average w.eight of a freight car at io tons, the average trains of 1892 and 1893 consisted of about 290 tons of cars and no tons of freight, total 400 tons ; in 1895, of 225 tons of cars and 143.28 tons of freight, total about 369 tons. The 21.48 car-train of 1895 carried on an average 33 tons more freight than the 27.6 car-train of 1892 and 1893, and yet one-fourth of the cars of 1895 ran empty and the loaded cars carried less than half their capacity. If the rates were so low that the people could use the facilities offered, it would be easy to carry the average load of the train of 1895 up to 175 tons, and the cost of haul- age, the distance factor in transportation, would not be a cent more than for the 27.6 car-trains of 1893 with their 290 tons of cars and no tons of freight. If the additional 64 tons were made up of goods in bulk, products loaded and unloaded by 94 A GENERAL FREIGHT shippers and consignees, there would be no in- creased cost for handling. These trains, indeed, could easily haul 400 tons with scarcely any more expense than at present, and with such average train-loads this Consolidated road would receive a far higher net income from a uniform, stable tax of fifty cents a ton, regardless both of distance and of classification, than it now receives from its 143- ton trains with an average tax of $1.23087 per ton. If rules were adopted making freight bills pay- able in advance, say by postage stamps, and limit- ing the time for loading and unloading cars to twelve hours [milk trains are unloaded and loaded at Jersey City in less than eight hours, while in New England the demurrage limit for the unload- ing and loading of a freight car is eight days], I think I am safe in saying that the freight equip- ment of the country would be fully quadrupled' in its capacity for service, with the result that we might probably have a uniform grouped rate for the whole country of fifty cents a ton regardless of classification, and this fifty cent uniform, stable rate would prove far more profitable than the present average freight rate of the country, of about $1.00 per ton per haul, 1 made up, as it is, of hundreds of millions of different rates, determined not on any settled principle, but, as the editor of the Railway Review says, " on guesswork, modified by a comparison," and that comparison always in favor of the biggest dealer. The statement of H. T. Newcomb in the North American Review of 1 This refers to 1894. AND PASSENGER POST. 95 July, 1896, that the average freight car of this country now does little over twelve full days' work in the course of a year, goes far in the support of these conclusions. With a reasonable system of classification it would seem possible to reduce the transportation tax on coal and products of its class to twenty-five cents per ton per haul. As to the low cost at which freight can be handled in small packages, English experience, both past and present, furnishes us most valuable information. As long ago as 1859, there was much parcels delivery in England by private carriers, at rates of from one to two cents a pound. Parcels under seven pounds were carried upwards of sev- enty miles for twelve cents, and parcels under twenty-eight pounds, thirty-nine miles for sixteen cents. In 1889, an English clergyman, Henry P. Dunster, published an article in the Nineteenth Century Magazine, in which, after showing how English railway discriminations, in favor of for- eign agricultural products as against native prod- ucts, injured English agriculture, he proposed the extension of the service of the Post-office to cover general produce, at a rate of sixpence for packages up to fourteen pounds in weight, ninepence for twenty-eight pounds, and one shilling for fifty-six pounds. " However," he says, " a uniform charge of sixpence for all packages up to fifty-six pounds would be a greater boon, and I feel persuaded that when the service is in full working order this low charge would be found sufficient to cover expenses A GENERAL and leave a profit. If the Great Eastern Railway can carry three-gallon cans of salt water, in weight, I apprehend, much exceeding fifty-six pounds each, over their entire system, delivering these cans within a large area in London and elsewhere, and collect all ' empties,' at a uniform charge of sixpence, is it too much to expect that the Post-office can manage the same weight at the same cost ? For such a service as is here suggested, small farmers and their customers would be brought close together. Farm produce would be cheaper to the consumers and more remunerative to the growers ; both would be fairly treated. The poor who had gardens in the country would be able to send away the fruit and vegetables which they had to spare to relieve the wants of others of their own families who live in cities and crowded districts where fresh fruits and vegetables are seldom seen." And then Mr. Dunster proceeds to suggest the manufacture of package cases of such size and shape as would accommodate both the consignor of such products and the carrier. These sugges- tions fell, for the time, on dull ears, but to-day they are bringing forth fruit. The railroad managers of England are, at last, waking up to the fact that their power is in danger. Public ownership is in the air, and to meet the demand for it, and if pos- sible to prolong their rule, we find the Great Eastern Railway leading off in what is perhaps the most important railroad innovation of the century. AND PASSENGER POST. 97 In January of this year, 1896, this road, extend- ing over more than a thousand miles of territory, inaugurated an agricultural parcels post, with the following uniform rates, regardless of distance : Packages under 20 pounds, 8 cents ; 20 to 25 pounds, 10 cents ; 25 to 30 pounds, 12 cents ; and so on up to 60 pounds, for which the charge is one shilling or 25 cents, the charges to be pre- paid and the products to be packed in boxes of a certain shape furnished by the railroad at the fol- lowing prices : 2o-pound size, for 3 cents ; 35- pound, for 6 cents, and 6o-pounds for 10 cents. The object in furnishing the boxes is twofold : first to have the products in shape convenient for handling and packing in the cars, and, second, to put an end to the handling of returned " empties." And the Great Eastern Railway proposes not only to carry these packages at these rates between any two of its non-competitive stations, and on passen- ger trains, but it will also, and without further charge, deliver such packages at the consignee's domicile, although this will involve a haul by wagon, from its terminals, of anywhere from one to eight miles. That this movement of the English railways (for the other roads are following the lead of the Great Eastern) will check the demand for Government ownership of the railways, I doubt ; but, in any case, it shows what English railway managers believe to be possible in the way of reducing rates, and in the way of public service, and more than 7 98 A GENERAL FREIGHT this, it is a great advance towards the adoption of a uniform standard rate, regardless of distance, within the whole English railway system ; it is one more acknowledgment of the axiomatic truth that the postal principle is the natural law for the deter- mination of railway rates. (By the way, almost the last word that comes to us from England is the following query from the Colliery Guardian : " Shall British iron and steel and other heavy in- dustries be sacrificed on the altar of railway monopoly ? " ) Evidently the actual cost of the transportation of persons and of property by railway is a very small item. It is not easy however to realize that the cost of a long through trip and of a short way journey is practically the same, and yet the longest journey in a railway system may cost less than the shortest. In the first place, the through locomotive hauls a much heavier train than the way locomotive, and the through car generally carries a larger load. Albert J. Fink makes the average load of the through freight car three times that of the way car. Through trains have been run, in some instances from Chicago to New York over the high-grade Pennsylvania road, with forty and forty-five full loaded cars of thirty tons each, that is to say with net loads of 1200 and 1350 tons, and we have seen that, in 1895, trains of sixty cars of thirty tons each, 1800 tons in all, were hauled from Buffalo to New York over the New York Central. The AND PASSENGER POST. 99 average number of cars in the Consolidated freight train of Connecticut, in 1895, was but 21.48, of which 5.51 cars ran empty and the rest carried on an average less than nine tons and only 143.28 tons in all. The through train also runs much faster than the way train. Instead of spending time and fuel in stops, the through locomotive oc- cupies itself with making miles between its distant terminals. Some of our through freights make over 300 miles, and we have one or two passenger trains that make 1000 miles a day. It is doubt- ful if the way freight makes 75 miles a day, and even the way passenger train will probably average less than 100 miles. The way train must make three or four trips in order to do the amount of business performed by the through train in one trip. But the average passenger trip and the average haul of freight will always be short. If railway transportation were altogether free, even then the world would not go flying, neither would any part of the world be flooded with the products of any other. Under the best of circumstances, the aver- age trip of the railway traveller of the United States will be hardly more than 25 or 30 miles. The masses of mankind must always labor for their bread ; they can seldom spend time to go more than an hour's journey from their homes. Their places of labor and of trade, their schools and their pleasure resorts, must always be near at hand. The great bulk of the freight busi- IOO A GENERAL FREIGHT ness too must always consist in the exchange of products between neighbors. The special purpose, indeed, for which railroads are built is the development of local traffic. " The through business," says Mr. Fink, " is but a mere incident of a road. The main stay of a road is or ought to be local traffic. The local traffic of the Pennsylvania (one of the greatest of the through lines) from 1881 to 1885 was ten times its through traffic, and of the two the local traffic continues to increase much the more rapidly." From the report of the Interstate Commerce Commission of 1893, it appears that of 531,183,988 passenger trips taken on the railroads of this country in 1892, only 153,741 extended across the continent less than one in 3500. Less than 1,000,000 tons of freight passed be- tween Pacfiic Coast points and points on or east of the Missouri River, in the year January, 1891, to February, 1892, while the total freight handled by the railroads in the year ending June 30, 1891, was 676,608,385 tons. As a mere incident of railway business then, the through traffic ought to have very little influence in determining our general railway policy. Granting, however, to through railway traffic its greatest possible importance, even then the tax levied for any particular class of service should be no greater for the longest haul in a railway system than for the shortest, for the cost in each case is practically the same. The question arises, if the preceding statements AND PASSENGER POST. IOI be true, how happens it that our private railway managers do not adopt the policy suggested ? How happens it that railway managers never voluntarily reduce rates ? The answer to this question is given in the rather cynical language of the editor of the Railway Gazette, in his issue of June 5, 1896. Com- menting upon the refusal of the managers of the Joint Traffic Association to approve certain pro- posed excursions from Cleveland to Niagara Falls, he says : " We surmise that one reason for the action of the managers is the feeling that the roads can make just as much money at a little higher rate" and the result is a hundred per cent, higher rate for 1896 than for 1895. In the same line, note the statement of the Journal of Commerce of New York of March 16, 1896, that one of the direct re- sults of the Presidents' Joint Traffic Association which now rules traffic affairs with an iron hand, is to be the abandonment of two cent mileage tickets. Writing in 1892, Van Oss says that the transpor- tation taxes levied by the Southern Pacific Rail- road on the people of California were then so great that California grapes could not compete east of the Mississippi with those brought all the way from Spain, while oranges and other fruits were less marketable than they would be at lower rates. Nearly all fruit was dried or canned and shipped round the Horn to New York, whence it was sent by rail to inland points, the journey of 15,000 miles being frequently cheaper than the one of 2400. IO2 A GENERAL FREIGHT The price of a passenger ticket from Portland to San Francisco, six hundred miles, was $37.50, over six cents a mile. And the people were robbed of their time as well as of their money. " The S. P. trains have no competitors and hence pay little re- gard to speed ; even express trains take things easy, and one wonders what the local service is like." Los Angeles is some four hundred miles south of San Francisco. The S. P. trains, running at about the rate of seventeen miles an hour, take twenty-four hours to cover this distance, as against eight or nine hours for a similar service in the East. This in 1892. To-day the ton-mile, pas- senger-mile taxes levied by the king of California upon his subjects seem to be at a point altogether beyond " what the traffic will bear." The people are going back to horse teams for the movement of their produce. The Railway Gazette of May 15, 1896, says that a large cargo of wool was recently carried from Fresno to San Francisco, two hundred miles, by wagon. The teamster was eight days on the way with his six-horse team, and yet he saved twenty-five per cent, on the rates charged by the S. P. Railroad. He took a large load of freight on his return trip. Returning once more to the East we see an illus- tration of the absorption of the property of the people by railway magnates in the case of Jersey City. Of the 10,325 acres of land in that munici- pality, it is said that the railroads own 1185. Of AND PASSENGER POST. 103 a total valuation of property in the city of $80,- 000,000, $22,500,000 are owned by railroads, and this does not include the passenger depots, which are valued at $10,000,000. Thus $32,500,000 of ratables are taken out of a total of $80,000,000, leaving the other $47,500,000 to bear almost all the burdens of the maintenance of the municipality. The condition of things in this country resulting from the " what the traffic will bear " system of levying taxes upon transportation and communica- tion by private individuals, is certainly grave, but recent events have proved that the people are not yet powerless. New York has already entered upon the enlargement of the Erie canal as a means of saving its industries from railway rapacity. Several of the States have passed laws compell- ing the railroads to carry bicycles free. Like straws floating upon the surface of a stream, these events indicate the direction of the current. A study of the following table, taken from Poor's Manual of 1897, will, I trust, at once strengthen the volume of this growing current of public opinion and accelerate its velocity. YEAR. Ave. Train- load, No. Passengers. Ave. Earn- ings per Train-mile. Ave. Pas- senger Trip. Ave. Passen- ger Tax, per Trip. 1892 1893 1894 1895 1896 41-93 44-25 41.72 38.66 35- 6 7 Cents. 90.62 91.70 84.47 79.99 78.58 Miles. 2 3-59 25.09 23.87 23.88 24.38 Cents. 599 53-oo 48.34 49-25 49.58 104 A GENERAL FREIGHT Poor's figures differ somewhat from those of the Interstate Commission, but they convey the same lesson. The avowed policy of the New Haven Road to tie the workman to the soil, not to allow him to work in one town and to live in another town this is the prevailing policy of the railway managers of the United States, and to this end we find, nailed upon the walls of the average passenger railroad station, the following proclamation : The regular transport tax levied on this road for an hour's journey to and fro a man's job and his home is $i. (On some roads it is $1.50; on other roads, $2.) The object of this tax is to prohibit the use of this road to all individuals who, like the aver- age Massachusetts farmer, earn but one dollar a day. 1 And the tax has its intended results. It debars the use of the railroads to the masses of the people; it also, in a vast number of cases, debars stock- holders in railroads from expected dividends. Prohibitory rates prohibit profits. " Certainly of the lines west of Chicago, and probably (with one exception) of the lines west of Buffalo and Pittsburgh, there is not a single road but what conducts its passenger business at a loss." (" Railroading under Existing Conditions," R. R. Review, December 18, 1897.) 1 Yale Review, May, 1897, page 64. AND PASSENGER POST. 105 CHAPTER IV. THE COST OF SERVICE PRINCIPLE AND ITS APPLI- CATION TO PUBLIC TRANSPORTATION, UNDER THE CONTROL OF THE POST-OFFICE. " AN ideal system of transportation," says E. Porter Alexander, formerly one of the leading railway managers of the South, " would be one in which each shipper might sit quietly in his office and contract to deliver freight at any town in the United States, by referring to a printed tariff which would show rates as uniform as the rates of postage and not exorbitant in amount." And, in his address before the Congressional Committee, already referred to, describing what the New York Central and the Pennsylvania roads will do, when their power has been extended over the whole country, Mr. Depew says : " Then the strong lines will say to the weak lines : ' We will see that you get your percentage ; we will transfer enough of the entire consignable freight from our lines to yours to bring up your percentage, to enable you to support yourselves. If we cannot do that, we will make a money pool and will transfer sufficient money into your treasuries to support 106 A GENERAL FREIGHT you.' Then when the great combination comes along and wants special privileges, we will say : * No, we have no privileges to grant ; there is our tariff published in our office, published in our freight depots and in our passenger stations. It is like a government postage stamp everybody knows what it is. And so far as the carriers of this country are concerned, every man is treated alike. That is the ideal position -toward which you have been legislating ; that is what you have sought to accomplish.' " Now what are the characteristics of the postage stamp ? First. The postage stamp carries its parcel to its destination, whether the distance be one mile or 35- Second. Every man pays the same price for his stamps, whether he buys one stamp or 10,000. Third. The postage stamp is intended to repre- sent the cost of the service rendered ; it is sold by the government, and the revenues derived there- from are distributed by government officials. Once give to railway tariffs the characteristics of the postage stamp, and we shall arrive at the ideal position toward which we have been legisla- ting. As yet, however, we have taken but a very short step in this direction. The Interstate Act, as its name implies, left each of our railway kings in complete control of his own particular kingdom that is to say, in control of the local traffic of the districts through which the railways pass, while the AND PASSENGER POST. 1 07 tariffs levied on the borders of their respective kingdoms remained subject to such terms of peace or war as the different potentates might agree upon. The fourth section of the Act, the long and short haul section, made distance the prime factor in the determination of rates at non-competitive points, and allowed it to be altogether disregarded between places not similarly situated. The Commission has decided that, under this section, it is lawful for railway managers to carry products for persons living at great terminals for one-half the rates levied upon those living at inter- mediate stations. Thus, in the noted Readville case, the railways were allowed to charge eighteen cents a hundred pounds on flour from New York to Readville, while the tax from New York to Boston, eight miles further on, was but nine cents. Boston and other terminals, favored by nature with their location on the ocean, the lakes, and on nav- igable rivers, are thus, by law,/ given this further artificial advantage of receiving their supplies and sending off their products at half the rates levied upon the intervening country. The result is to leave the country between terminals almost as badly off, so far as the cost of movement is concerned, as before the railways were built. The local rates levied by the railways in these cases are, indeed, only just enough below the actual cost of convey- ance on foot or on horseback, by wagon or by ox- cart, to keep the people from reverting to these original methods of transportation. IO8 A GENERAL FREIGHT Distance, as I have said before, measures very accurately the cost of the old forms of private con- veyance, and, by using distance for the determina- tion of local rates, railway managers are very suc- cessful in keeping the districts between terminals in the same condition in which the railways found them. In many cases these intervening districts are, in fact, worse off than they were in the olden time, for they ran in debt to build the railroads only to see their local enterprises and their brightest men driven away by railway discriminations in favor of the terminals. But the height of absurdity in this business was reached when the majority of the Supreme Court of the United States decided that it was lawful for American railway managers to charge three or four times as much for the transportation of goods from American workshops to their American customers as was charged for the transportation of similar goods from Europe to the same customers. 1 This decision not only tends to nullify our customs legislation ; it almost compels the American manu- facturer, who would continue to supply the Ameri- can market, to move his plant to Europe or Asia. Evidently it would be a great step in advance to so amend the Interstate Act that the tax for the shortest haul, the tax representing the cost of the average service, should be the uniform, standard tax for all hauls. 1 See Texas and Pacific case. AND PASSENGER POST. ICX) Finally, the Interstate Act forbids pooling. In- stead of looking at the railroads as the great circu- lating system of the country, each line existing for the development of its particular territory, and all working together for the harmonious growth of the whole, the Interstate Act regards each road as somehow the competitor of every other. The idea seems to me as ridiculous as it would be to regard the arteries and veins of the human body as com- petitors ; the arteries as competitors of the veins, and each artery and vein as the competitor of every other. It is no wonder that Mr. Depew styles this giant piece of legislation a mere skeleton. Yet it is something to have a skeleton, for we may clothe it with flesh and blood and breathe into it the breath of life. The solution of the railroad problem involves both our industrial and our political liberties. It is as essential to our common welfare to-day that the regulation of railroad tariffs should be taken from our various railroad governments, and that the revenues therefrom should be pooled under the direction of the general Government, as it was to the common welfare of our ancestors, in 1789, that the regulation of the customs tariff should be taken from the different States, and that the revenue arising therefrom should be taken under the con- trol of the same central power. We are no longer a mere confederation of inde- pendent States or of independent railroad provinces, but a great nation of individuals, indissolubly 110 A GENERAL FREIGHT bound together, and the strongest ties that unite us are those of friendly and of commercial inter- course ; that intercourse, moreover, is almost entirely dependent upon the railways which, from their birth, have been our great fost-roads and, as such, have always been subject to the eighth sec- tion of the first article of our national Constitution. For many years the Post-office has handled the commerce in paper-covered books, both within states and across state boundaries. If it is within the limits of the Constitution for the Postal De- partment to undertake this branch of transporta- tion, then it is equally constitutional to extend the sphere of the Post-office to cover the entire busi- ness of public transportation. The Interstate Act requires a new baptism and a new name, and the new Act may well be called " An Act for the Establishment of a National and an International Freight and Passenger Post." This scheme does not necessitate the immediate ownership of the railways by the Government ; it is not absolutely essential for its success that the Government should own one dollar's worth of rail- way property. Its adoption, however, will make it very desirable that the Government should own the car-equipment of the country, and it is prob- able that the bonds issued for this purpose could be paid for in a very brief period out of the ordi- nary revenues ; this, too, after paying the railroads most handsomely for the haulage of the cars and for other services. AND PASSENGER POST. Ill The 7,937 (in round numbers 8000) postal, bag- gage, and express cars in the United States could be paid for in two or three years, even in one year, out of the annual taxes now levied upon the people for the transportation of the mails and of express matter, and this after allowing the railroads a very liberal amount for the haulage of these cars. This equipment is certainly not worth over $2500 per car (the baggage and express cars of New York State are only valued at $1500 per car), and, at this rate, the 8000 cars would come to $20,000,000 The interest on this amount, at 3^- per cent, is 700,000 Allowing $720 a year for the care and repair of the average car (the amount estimated by Mr. Vilas for postal cars, in his report of 1887), we have 5,760,000 The Fitchburg Railroad of Massachu- setts furnishes its milk contractors with cars, heated in winter, for $573 P er car P er vear - The Boston and Maine Road taxes its milk contractors but $3000 per year per car. The cost of hauling a freight car on the Soo Railroad, in 1895, was but one cent a mile, at which rate the cost of hauling one of these cars on a passenger train, 300 miles a 112 A GENERAL FREIGHT day, would be $3.00, or $1095 a year. But even allowing the railroads $5000 a year, for the mere haulage of the average baggage, express and postal car, the cost to the Government would be only 40,000,000 Making a total of $46,460,000 The people paid the railroads, for the transportation of mail and express matter, in the year 1894, however, as follows : For the carriage of the mails $30,094,957 For express service. . .. 23,035,300 Total $53,130,257 This shows a difference in favor of the government ownership of pos- tal, baggage, and express equip- ment, per year of $6,670,257 At $3000 a year, per car, for haulage, the annual saving to the people would be $22,670,257, or $2,670,257 more than enough to pay for the entire equipment in a single year. Even if the railroads were allowed the exorbitant rate of $5000 a year per car for haulage, the Gov- ernment would require but three years' savings to purchase this entire equipment, while having at the same time the entire control of the property and AND PASSENGER POST. 11$ carrying baggage absolutely free, or at a charge only high enough to pay for the wages of the bag- gage-masters for handling it, a charge which might be distributed over all the baggage handled or which could be easily met by a small charge on extra baggage as at present. Where railway lines pass through a thinly settled country, the ordinary mail-agent would be able in many cases to attend to the whole business of handling mail bags, trunks, and express matter. The Government ownership of our baggage, ex- press, and postal cars would secure to the United States the cheapest letter, parcels, and baggage post in the world. As to postal cars, it is quite as important that the Government should own these traveling post-offices, these wooden mail-bags, as that it should own its leather mail-bags. Almost every great business concern in the country finds it necessary to own its cars to-day, and surely the Government, the greatest business corporation of them all, should at least own its postal cars. The common welfare unquestionably demands that the general government should both own and operate the railways, and the change from private to public ownership cannot come too soon. The result would be not only no increase but a large decrease in the interest account of the country, while there would be an end forever of those issues of fraudulent railway paper currency (over four thousand million dollars in 1892) which are con- 114 A GENERAL FREIGHT tinually increasing both the interest and the prin- cipal of our national obligations. The scheme would simply require the exchange of government stock bonds or consols payable at the will of the government, and bearing perhaps two and one half per cent, interest for railway securities drawing anywhere from one to twenty per cent. In 1892, according to Van Oss, the people of the United States were taxed, on the average, eighteen per cent. on the actual capital represented by railway shares, and 4.36 per cent, on the real capital invested in railway bonds. It may by said that the fraudulent issues of 1892 have been wiped out of existence in the last four years, but the subjects of the New York Central are still paying interest on stock that is more than one-half water, and the returns of the Interstate Commerce Commission show that the old shares and bonds of bankrupt roads have been frequently replaced by new issues having little other basis for credit than the possible power of railway managers to raise these securities from the value of the paper on which they are written up to par in solid gold by unnecessary taxes wrung from the common people. The speculators of 1896 have, moreover, this advantage over those of 1892 : The Joint Traffic Association of New York seems to have secured wellnigh absolute control not only of the railways, but of the National and State governments, and its power to levy taxes for the payment of interest on these fictitious issues seems to be practically illimitable. The protection AND PASSENGER POST. 11$ of innocent speculators in stocks seems to be a special function of our courts. " The anthracite roads combined in 1896 with the purpose of adding some $40,000,000 a year to the cost of anthracite coal consumed by the people of the United States; it was expected that the bitu- minous roads would pile a similar extra burden upon their constituents. How much the poor suf- fered during the winter of 1896-97 from high-priced fuel will never be known. How many coal miners, anxious to work, starved through lack of employ- ment, will also remain a riddle. This, however, is known. In the summer of 1897, a large number of coal miners, goaded to desperation, rose in a great strike against their oppressors. But the strike ended as such movements usually end, with the practical discomfiture of the strikers. They gained, perhaps, a promise of higher wages, but a score of poor, ignorant men were shot, and the whole com- munity suffered heavy loss. The place to strike is at the ballot-box ; the thing to strike for is ' The control of the National Highways by the National Government.' " I have just alluded to speculators in railway stocks and bonds. The case against the speculators in produce and their associates, is well stated in an article entitled " Railways Manufactur- ing Anarchists," in The Republican, of Springfield, Massachusetts, of August 2, 1896. " Are the western farmers anarchists ? " asks The Republican; "then, according to President A. B. Stickney, of the Chicago Great Western railroad, 11 6 A GENERAL FREIGHT they have reason to become so, and the railroads have been largely responsible. Testifying before the Interstate Commerce Commission, in a recent investigation which, he claimed, certain other roads had brought on, in the hope of catching him engaged in unlawful practices, President Stickney turned upon the accusing attorneys, and said : . . . 'You charge the Kansas and Nebraska farmer thirteen cents to haul his grain two hundred miles. You charge the grain dealer six cents to haul that same grain twice as far to Chicago. I tell you it is that kind of business that is making anarchists west of the Missouri River. Here is the trouble. I have been acquainted with this northwestern country for thirty-five years. In all that time there has never been a year that the corn crop was moved until after the corn was in the hands of dealers who had the rate. Once the farmer is compelled to sell his grain, then you fellows cut the rate for the dealer. There is in Kansas, this year, 240,000,000 bushels of corn. Not over 25,000,000 has been moved so far this year. The farmer, the small dealer, has not the rate. He is compelled to sell, and then you fellows make the rate for the purchasers, and then the corn moves.' That is to say," continues The Republican, " the railroads beyond the Missouri River make to the farmer, for carrying his grain to the Missouri River dealer, what rate they please. They make a mileage rate four times as high as is charged the dealer for moving the grain over the competitive distances between the Missouri River AND PASSENGER POST. I I/ and Chicago. They play in with the dealers and against the farmers, and they further freeze out small shippers, from the Missouri River by making secret rates in favor of the large ones." And the railroads have been doing this for many years, building up the strong at the expense of the weak, and doing more than all other causes put together probably to promote concentration of great wealth in few hands. Well may the editor conclude that the proposition for the public owner- ship of railways is far from being as anarchistic as that for a continuation of private management within the limits of the present lawlessness. Happily the protection of the taxpayer from the lawless raids of the tax farmer does not require that the government should take immediate posses- sion of the entire property of the railways. It is, however, essential, I think, to our continued ex- istence as a free people, that the government should, without delay, secure absolute control of railway trains ; the taxes levied for the support of the rail- ways, post-roads, should be determined on the postal principle and should be collected and dis- tributed by government officials. In other words, the entire business of public transportation should be pooled under the management of the Post-office. In the proposed reform of our transportation taxes it will probably be found advisable, at the be- ginning, to follow the example of Sir Rowland Hill in his reform of the old English postal system, and to adopt, as the uniform rate for each class of ser- Il8 A GENERAL FX EIGHT vice for all distances, the lowest rate now charged for the shortest distance for that class of service. In some cases, however, as for instance in the transportation of milk, it will be possible to com- mence with a uniform rate much lower than the lowest rate now charged for the shortest distance, a rate for milk perhaps as low as ten cents for a forty quart can. Even a ten cent rate would secure to a car carrying but two hundred cans, earnings of $20 a day, or $6260 per year of 313 days, or $7300 including Sundays. The average cost of the service of transporting milk, regardless of differences of distance up to 330 miles, on the Erie, the Ontario and Western, the Lehigh and Hudson, and the Susquehanna Railroads, in 1894, was less than eight cents a can. The tax, however, was fifty cents for a forty-quart can of cream, and thirty-two cents a forty-quart can of milk. 1 This postal principle, this cost of the service principle, is applicable to railway traffic, either under the present system of railway management or under government control of railways or under government ownership. It may be applied within State limits by acts of our different State Legisla- tures. It would work miracles in human advance- ment, whether it were adopted on the railroads of Belgium, which are the property of the Belgian people, or on the post-roads of the United States, 1 See brief of Joseph H. Choate, in the Milk Case tried in New York before the Interstate Commerce Commission, in December, 1895, pp. 3, 102. AND PASSENGER POST. 119 which are farmed by joint-stock companies, but not until applied under the national government can any country reap its full benefits. It will in- deed reach its full fruition only under some scheme which shall embrace all the governments of the earth in one great International Transportation Union. There is nothing new in this project, neither is it based on mere theory. It is said that Napoleon III. conceived the idea of extending the sphere of the Post-office to cover the general railway business of France. A similar scheme was advocated in England some fifty years ago by William Gait, and again, about twenty years later, by A. J. Williams, and by Raphael Brandon. It has been recently taken up by Charles Waring, who proposes a uni- form rate of four shillings (one dollar) a ton per haul for ordinary merchandise, and one shilling (twenty-five cents) a ton for minerals on the rail- ways of England, Scotland, and Wales, and for Ireland a merchandise rate of eighty-three cents a ton, and twenty-five cents for minerals. The thought was suggested to me some years ago by C. N. Yeomans, then manager of the New Haven and Northampton road of Connecticut ; the idea has evidently found lodgment in the fertile brains of Mr. Depew and Mr. Alexander. " To the con- sumer," says A. J. Grierson, Manager of the Great Western Railway of England, " the ideally perfect state of things would be a tariff for the conveyance of merchandise based on the same principle as I2O A GENERAL FREIGHT the ' Penny Post.' Commodities would be con- veyed at a low price, and producers over an im- mense area would be able to send them to market. To the consumer it would be in every way desira- ble that all disadvantages of distance or geograph- ical advantages should disappear." Our express and telegraph companies have long applied this postal principle, in a limited degree, to their business. A parcel sent from New Haven to Birmingham, Alabama, costs thirty cents ; the charge on the same parcel from New Hav*en to New York is twenty-five cents. The express com- panies are carrying certain publications issued by our state governments at a uniform rate through- out the whole country, and it is an interesting fact that the express rates are always just a little lower than the rates which the Post-office levies. The U. S. postage on a Massachusetts Railroad Report, is thirteen cents; the express on the same book from Boston to New Haven, Conn., is twelve cents. The postal principle has been almost universally adopted on horse-car lines, cable roads, and elec- tric tramways. It is the foundation of the pros- perity of the elevated railways in our great cities. The following facts will prove, moreover, that leg- islation to secure the general grouping of stations with uniform rates regardless of distance, within a state or within the limits of a nation, would only be the enactment into law of what is already a very common custom and a rapidly growing custom, and AND PASSENGER POST. 121 I would suggest that most of our legislation that is of real value is based on custom. Law is, indeed, little more than crystallized custom. The grouping of stations with a uniform rate has been customary from the first in the milk business of the principal railway lines bringing milk to New York City. On the milk trains of the New York, Ontario and Western, the Erie, and the Susquehan- na railways which, in 1887, carried nearly one-half the milk consumed in New York, the rates during that year were the same within zones of 21 to 183 miles, on the Erie ; 56 to 262 miles on the Ontario and Western, and 29 to 84 miles, on the Susque- hanna. About that time, certain Orange County farmers living nearer the metropolis than some of their competitors, brought suit before the Interstate Commerce Commission to compel these railways to adjust their milk rates according to distance, claim- ing that the uniform rate deprived them of the natural advantage of their location and was there- fore contrary to law. The Commission decided, however, in favor of the grouped rate, saying, " It has served the people well. It tends to promote consumption and to stimulate production. It is not apparent how any other system could be devised that would present results equally useful or more just. To subdivide the rate according to distance, or even to introduce a system of shorter grouping of rates, would necessarily compel a new system of receiving, delivering, and accounting, would cause great inconvenience to carriers and dealers, would 122 A GENERAL f A' EIGHT impede the rapid and reliable management of the traffic, would restrict the extent of the territory re- quired for future public demands, and apparently would not, in the slightest degree, benefit the com- plainants. It (the Commission) is moreover im- pressed with the belief that the present system is, upon the whole, the best that can be devised for the general good of all engaged in the traffic." In October, 1895, the milk producers of Orange County again brought suit against the railways be- fore the Interstate Commerce Commission, on the same plea, adding, however, the complaint that the uniform rate was too high. The decision of the Commission in this last trial which it was my privi- lege to attend, has not yet been given to the public, but the testimony, while showing that the milk zone has widened full fifty per cent, in seven years and now covers distances up to 330 miles, sustained the former decision at all points, and that decision must, I believe, be confirmed. 1 It is a curious fact that in this trial the representatives of the rail- ways were to be seen pleading for the common grouped rate, and the strongest witness in its favor was George R. Blanchard, formerly Vice-President of the Erie, and now one of the officials of the Joint Traffic Association. When asked by Commissioner Knapp, " If it is to the advantage of the railway companies and of the consumers of milk to have a uniform rate up to 330 miles, why not up to 1000 " ? Mr. Blanchard's reply was, " I know of no reason." But Messrs. Rogers, Locke and Milburn, the lead- 1 Decided against uniform rate. See Preface. AND PASSENGER POST. 123 ing counsel of the defendant railways in this case, go even farther than Mr. Hlam hard, fur they say, ''The distance (within which the rate should he uniform) need only be limited by the length of time required to make it with the train and meet the wants of the New York market with milk not affected by its t ransporl at ion." In other words, if milk a P- plied to local passenger traffic, on Blue Island Line, Chicago & N. P. R. R., in 1896, uniform five-cent fare 20 miles, 212 ; on Nantasket Beach Line, N. H. R. R. in 1895, 221 ; argument for general application under post-office, 20-25, 141-153, and Chapter V Value of service, differs from cost of service, 23, 259, 260 Vilas, Postmaster-General, on imoortance government owner- ship of postal cars, 65-67 W Wait, James T.. on railway discriminations, 161 Walker, Aidace F., says railway managers waste over $30,- 000,000 in hiring private cars and do not use their own, 146 Wanamaker, Postmaster-General, on one-cent letter postage, 16 ; average haul mail bags, 442 miles, 240 Waring, Geo., author State Ownership of Railways, sup- ports uniform rates, 119 ; on Belgium and Ireland, 86 Wellington, Arthur M., author Economic Theory of Railway Location, supports uniform rates, vii, 72, 201 ; on curves, grades, stops, etc., 71, 73, 78 Westminster Review, on political influence railroad monopo- lies, 58 Wheatly, car-accountant, waste in misused car equipment costs over $15,000,000 ; annually, 146 Williams, A. J., author State Appropriation of Railways, on uniform rates and classification of freight, 119, 143 312 INDEX. Wilson, Consul, on workingmen's trains of Belgium, 85 Wilson, Postmaster-General, weight of mails in 1895, 234,000 tons, 20 ; a one-cent letter rate very profitable, 238 Workingmen's trains, 85, 135, 234, 235 Wycliffe, Postmaster-General, on railway extortion and the Post-office, 1843, 6 Yale Review, on earnings Mass, farmers, 199 ; on Pennsyl- vania riots, 1897, 200 Z Zone of Necessity, 197-201 Zone Tariff of Hungary, 126, 127 Economics. Hadley's Economics. An Account of the Relations between Private Property and Public Welfare. By ARTHUR TWINING HAD- LEY, Professor of Political Economy, in Yale Uni- versity. 8, $2.50 net. The work is now used in classes in Yale, Princeton, Harvard, Amherst, Dart- mouth, Bowdoin, Vanderbilt, Bucknell, Bates, Leland Stanford, University of Oregon, University of California, etc. "The author has done his work splendidly. 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Being an Ac- count of the Gold and Silver Monies and Monetary Standard of Europe and America together with an Examination of the Effects of Currency and Exchange Phenomena on Commercial and National Progress and Well-Being. By W. A., SHAW M. A. Svo . . . net $3 75 11 The present bimetallic controversy has given birth to nothing more profound and convincing. . . . Mr. Shaw's work possesses a permanent historical interest far trans- cending the present battle of the standards."^. Y. Nation. G. P. PUTNAM'S SONS NEW YORK AND LONDON "-fi: 77 Primar Basis 79 Joint-]Y tion 80 " Comn PUTNA 82 A Soun Securei 84 Real Bi EVERE' cloth . 85 Congress: 86 Money ar High W 88 The War Paper, 4 89 A General Third edi 91 Monetary 1 92 The Propc GARDINEI 93 Our Right t A. GARDII 94 The Wheat 95 The Regene GRINNELL 96 Railway Cor NEW 27 X 29 WEST TWENTY-THIRD STREET 75m-7,'30 LONDON 24 BEDFORD ST., STRAND YC 2570^ QUESTIONS OF THE DAY. AUTHOR INDEX TO THE "QUESTIONS OF THE DAY" SERIES. Alexander, E. 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