quote briefly from decisions of the United States Supreme Court, which, in the case of Wabash Railway vs. Illinois, uses this language: “The highways in a State are the highways of the State. The highways are not of private but of public institution and regulation. In modern times, it is true, government is in the habit, in some countries, of letting out the construction of important highways, requiring a large expenditure of capital, to agents, generally corporate bodies created for the purpose, and giving them the right of taxing those who travel or transport goods thereon as a means of obtaining compensation for their outlay; but a superintending power over the highways, and the charges imposed upon the public for their use, always remains in the government.” Again, in Olcott vs. the Supervisors, it is held that: “Whether the use of a railway is a public or private one depends in no measure upon the question who constructed it or who owns it. It has never been considered of any importance that the road was built by the agency of a private corporation. No matter who is the agent, the function performed is that of the State.”
Mr. Justice Bradley says: “When a railroad is chartered it is for the purpose of performing a duty which belongs to the State itself…. It is the duty and prerogative of the State to provide means of intercommunication between one part of its territory and another.”
If, as appears, such is the duty of the State (nation) why should not the State resume the discharge of this duty when the corporate agents to which it has delegated it are found to be using the delegated power for the purpose of oppressing and plundering a public which it is the duty of the government to protect?
The abilities of the man who cannot become a multi-millionnaire with the free use, for twenty-five years, of $33,000,000 of government funds, must be of a very low order, and it is no wonder, that after having for so many years had the use of such a sum without payment of interest, Mr. Dillon and his associates are very wealthy, and, like others who are retaining what does not belong to them, think it an impertinence when the owner inquires what use they are making of property to which they have no right. Had the nation built the Union Pacific there would have been no “Credit-Mobilier” and its unsavory scandal, and it is safe to say that the road would not now be made to represent an expenditure of $106,000 per mile, and that Mr. Dillon and some others would not have so much money as to warrant them in putting on such insufferable airs. When it is remembered what use Oakes Ames and the Union Pacific crew made of issues of stock, it is not at all surprising that the president of the Union Pacific should think it an impertinence for a citizen to question the amount of capitalization or the use to which a part of such issues have been put, some of which are within the knowledge of the writer, so far as relates to issues of that part of the Union Pacific lying in Kansas and built by Samuel Hallett, who told the writer that he gave a member of the then federal cabinet several thousand shares of the capital stock of the “Union Pacific Railway, Eastern Division,”—now the Kansas Division of the Union Pacific—to secure the acceptance of sections of the road which were not built in accordance with the requirements of the act of Congress, which provided that a given amount of government bonds per mile should be delivered to the railway company when certain officials should accept the road; and it was a quarrel with the chief engineer of the road in relation to a letter written by such engineer to President Lincoln, informing him of the defective construction of this road, that caused Samuel Hallett to be shot down in the streets of Wyandotte, Kansas, by engineer Talcott. It is within the knowledge of the writer that the member of the cabinet to whom Mr. Hallett said he gave several thousand shares of stock, held an amount of Union Pacific shares years afterwards, and that many years after he left the cabinet he continued to draw a large salary from the Union Pacific Company. Mr. Hallett also told the writer what were the arguments applied to congressmen to induce them to change the government lien from a first to a second mortgage of the Pacific Railway lines, and what was his contribution in dollars to the fund used to enable congressmen to see the force of the arguments. When issues of railway shares are used for corrupt purposes it is certainly an impertinence for a citizen to make inquiries or offer any remarks in relation thereto.
The seventh objection to State owned railways is that they are incapable of as progressive improvement as are corporate owned ones, and will not keep pace with the progress of the nation in other respects; and in his Forum article Mr. Acworth lays great stress upon this phase of the question, and argues that as a result the service would be far less satisfactory.
There may be force in this objection, but the evidence points to an opposite conclusion. When the nation owns the railways, trains will run into union depots, the equipment will become uniform and of the best character, and so sufficient that the traffic of no part of the country would have to wait while the worthless locomotives of some bankrupt corporation were being patched up, nor would there be the present difficulties in obtaining freight cars, growing out of the poverty of corporations which have been plundered by the manipulators, and improvements would not be hindered by the diverse ideas of the managers of various lines in relation to the adoption of devices intended to render life more secure or to add to the public convenience. That such is one of the evils of corporate management is demonstrated daily, and is shown by the following from the Railway Review of March 7, 1891: “It is stated that a bill will be introduced in the Illinois Legislature, at the suggestion of the railroad and warehouse commissioners, governing the placing of interlocking plants at railway grade crossings. It sometimes happens that one of the companies concerned is anxious to put in such a plant and the other objects. At present there is no law to govern the matter, and the enterprising company is forced to abide the time of the other.” Instead of national ownership being a hindrance to improvement and enterprise, the results in Australia prove the contrary, as in Victoria the government railways are already provided with interlocking plants at all grade crossings, and one line does not have to wait the motion of another, but all are governed by an active and enlightened policy which adopts all beneficial improvements, appliances or modes of administration that will add either to the public safety, comfort, or convenience. It is safe to say that had the nation been operating the railways, there would have been no Fourth Avenue tunnel horror; and Chauncey Depew and associates would not now be under indictment, as the government would not have continued the use of the death-dealing stove on nearly half the railways in the country in order to save money for the shareholders.
Existing evidence all negatives Mr. Acworth’s postulate “that State railway systems are incapable of vigorous life.”
An objection to national ownership, which the writer has not seen advanced, is that States, counties, cities, townships, and school-districts would lose some $27,000,000 of revenue derived from taxes upon railways.
While this would be a serious loss to some communities, there would be compensating advantages for the public, as the cost of transportation would be lessened in like measure.
Many believe stringent laws, enforced by commissions having judicial powers, will serve the desired end, and the writer was long hopeful of the efficacy of regulation by State and national commissions; but close observation of their endeavors and of the constant efforts—too often successful—of the corporations to place their tools on such commissions, and to evade all laws and regulations, have convinced him that such control is and must continue to be ineffective, and that the only hope of just and impartial treatment for railway users is to exercise the “right of eminent domain,” condemn the railways, and pay their owners what it would cost to duplicate them; and in this connection it may be well to state what valuations some of the corporations place upon their properties.
Some years since the “Santa Fe” filed in the counties on its line a statement showing that at the then price of labor and materials—rails were double the present price—that their road could be duplicated for $9,685 per mile, and the materials being much worn the actual cash value of the road did not exceed $7,725 per mile.
In 1885 the superintendent of the St. Louis & Iron Mountain Railway, before the Arkansas State board of assessors, swore that he could duplicate such railway for $11,000 per mile, and yet Mr. Gould has managed to float its securities, notwithstanding a capitalization of five times that amount.
