Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1881-03-03
RAILROAD CORPORATIONS.
Queries of q Railroad Publication An.
swered by Hugh j. Jewett of the New
York g. Erie Railroad of Rail-
road Management, But the Desirability


swered by Hugh j. Jewett of the New
York g. Erie Railroad-Defense of Rail-
road Management, But the Desirability
of State Supervision Acceded to.
CHICAGO, March 2.-The Roil,oay Age ad.
dressed letter to VIM. n. Vanderbilt, Hugh
j. Jewett, Jay Gould, John W. Garrett and
George B. Roberts to the effect that they are
looked upon by the public as practically con.
trolling the railroad policy of the United
States, and are, of course, well aware that
there is, in the West particularly, an increas.
| ing feeling on the part of the agricultural
communities, and to some extent of the mer.
camille and manufacturing interests, against
railroad corporations and managers. and that
this hostility is being exhibited very strongly
at the present time in many of the State legis-
latures. The letter continues: The advocates
for legislation against railroads claim
First-That you are opposed to all legisla.
tion upon railway matters, and deny the all.
thority of the right of State or national gov.
ernments to regulate railway management.
Second That there is great danger to the
political liberties of the people In the growing
power of the railway interest.
Third.--That the consolidation Of railway
lines, that has been so rapidly going on, and
seems likely to continue, threatens an increase
in transportation rates by removing competi-
ton.
Fourth...That the pooling arrangements
among railway companies are against public
interest, are also destructive Of competition,
and attended by unreasonable rates Of trans
portation.
Fifth-That the. so-called watering of rail-
way stock, or in case of capital stock conse.
quent upon an increase in its actual value, Is in
no case justifable (while it is proper IN other
entsrprises), but is In effect robbery Of the
public.
sixth--That passenger and freight rates
by rail are unreasonably high and that re-
duced maximum rates ought to be fixed by
law.
Seventh-In short, that the people are suffer.
Ing and in danger Of suffering still more from
railway exactions, discrimination and combi-
nations, and that railways must be regulated
by the most stringent legislation.
Mr.. Jewett, president OF the Erie railroad,
has written an exhaustive answer to this let.
ter. He begins by saying the public attach
too much importance to the position, infu.
ence and power of the gentleman named in your
| letter. Instead of practically controlling rail-
road interests, they are obliged in order to
| manage successfully the properties under
their Immediate charge, to consult with and
! and sentiments of those representing much
larger aggregate of interests and to subordi.
| nate their own Judgment to the judgment and
interests of the public.
| Replying to the first statement Mr.. Jewett
! says: 81 am not opposed to all legislation
on railway matters, but deny the authority
or right Of the national government to legis.
late upon the subject matter Of railway man
agement or in any way to regulate such
mana cement, or that of any other State, cor
poration or institution. To certain extent
do not doubt the right of State legislatures to
regulate railway management. States, how
ever, have no right, by legislation, TO impair
the value of the franchise Of railways or of their
property, unless they are such a public neces-
| sity as would justify compensation therefor.
| Passing onto the third statement the writer
political liberties Of the people In the growing
| railway interest.
Third-There ought to be no consolidation
of partial or competing lines of railway. Such
consolidation ought by law to be prohibited.
| The effect of such consolidation is no doubt
| to suppress healthy and proper competition
and might tend to increase transportation
rates, but the consolidation of continuous
| lines couldn't well have that effect; railways
| to be successful must earn enough to pay ex.
perfect working order and to
| discharge all their obligations, whether to
| holders of their securities, or to their stock
holders. AS these expenses can bs reduced
| the company is enabled to decrease rather than
| increase it's charges for transportation. AS
| long lines of road can be operated at compare
lively less rate of expense than O short one,
the consolidation of continuous lines does not
seem therefore to be Objectionable.
Fourth-We have so little experience in this
| country with pooling arrangements that 1t Is
| very difficult to tell what their effect would
be. So far as my experience and
| observation extend, however, they have
not been destructive of competition, nor have
| they been attended by unreasonable, or even
by an advance of rates for transportation.
| Fifth-As to what is called watering stock,
| think there is considerable confusion in the
public mind relative to the meaning OF the
| term. The capital stock of railway ought
| not to be increased either for speculative pur-
poses, or to represent it's supposed future
earnings, or because of its present earnings
being in excess Of the amount required for its
maintenance, discharge of all it's fixed liabili-
ties, and dividend upon its existing stock
But to a large majority of cases IN which
capital stock of railway has been increased,
| can see no objection.
SIXTH can't understand how any fair
minded man can regard existing passenger
and freight rates as unreasonably high. In
proportion to capital invested, service per-
| formed and to risks incurred, there is no mode
of transportation in this country, or in any
other country, within my knowledge, in
which the rates for carrying passengers or
freight, are so low as those OF the railways OF
this country.
Seventh-That the people are suffering or
are in danger of suffering still more from rail-
way exactions or determinations, is l think
an entire Misrepresentation of the case, as 1t is,
or, as it can hereafter be.
| In conclusion Mr.. Jewett says: doubt not
that selfish, designing and aspiring men, re-
gardless of all duties. of life, are laboring to
cultivate the public mind and to impress it with
every species of unjust prejudice and sentiment,
but my faith in the sober and upright judg-
ment of the people leads me
to the conviction that in the end they
will deal Justly with all interests, all enter
prises and all institutions, regardless of the
purposes sought to be accomplished by indi-
vviduals. My experience has led me to the
] conclusion great deal of apparent hostility