The Portland daily press., 1883-09-06
THE RAILROAD. KING.
Jay Gould's Testimony before the
Senate Subj Committee.
His Experience with Railroads and
Telegraph Companies.


Telegraph Companies.
NEW YORK, Sept. 5.--Before the Senate sub
committee on labor aud education in New
York today, Jay Gould was examined. ln re-
spoDse TO q question from Senator Blair he
gave history of his early life and the story of
his progress to his present condition Mr..
Gould described his efforts to build up the
Gould system of railroads in the South and
West, and said that at the time this was taken
up he had passed the point where money max
ing was an object, and his only idea in carry
ing out the system was merely to see what
could be done by combinations The earnings
of these lines when he took possession were
about $40, 900 per month. The earnings for the
past month we're Sc, 100000. Mr.. Gould stated
that he was a director in the Chicago and
Northwest, Chicago and Rock Island, Della
ware, Lackawanna and Western, New York
and New England and several other smaller
lines Incidental to his railroad interests he
had become largely In terested in the telegraph
buiness. He was instrumental in starting the
American Union, but finding 1t impossible to
compete with the Western Union on account
OF the latter's connections, he then turned his
attention to getting.controi OF the Western I'M
ion. Finding it paying investment he had
been constantly increasing his interest His
object in securing control OF the Western I'm
ION was to make his friend General Eokert,
manager. The railroad facilities which are
now possessed by the Western Union arc in
valuable, and it is impossible to estimate their
value.
'Can you give us your opinion as to the prac-
tbility of a Government postal telegraph,
which would take the place Of the present sys-,
TEN, Mr.. Gould?" asked Mr.. Blair.
II think the institutions of this country are
opposed 10 any such thing as that" replied
Mr. Gould. "Telegraphic business more than
any other requires to be managed by experts,
and the dividends of the Western Union are
obtained because it does the business well. Un-
der Government system the whole manage
ment OF the great interests would be subject TO
chance, and the particular political party then
in power.''
Mr.. Gould also thought that the mail SER
vice would be better accomplished by private
enterprise than by the Government He would
not object TO the Government taking hold Of
the telegraph system Of the Western Union If
1t would pay for it, what it was worth on
fair appraisal, but in his opinion II would uot
be success. Uniform tariffs could be secured
under private enterprise as we'll as under a
Government supervision, and the Western
Uniou's policy tended TO accomplish this. In
Nsw York State there is q uniform system OF
rates. There could be no lasting competitor
against the Western Union on account of its
great facilities, hen there were powerful rivals
the rates were not reduced, because the COM
petition was obliged 10 charge rates as high as
the Western Union in order to live. Mr.. Gould
said thai this had been his ex perieDce, and If
any one though he could do better than himself
he was entirely at liberty to try,
The value of the stock in corporation de-
pended upon its earnings power There
might be- water in the Western Union, but
the same could be said of all kinds of property
which had increased in value. He thought
the government had a right to fix the limit be-
yond which the profits of the company could
not go. So long as the rates we're not un-
reasonable it had no right under Republican
institutions TO take away private property
from It's citizens without just compensation.
Senator Blair inquired whether he could give
an approximate estimate of the value of the
Western Union Company.
Mr.. Gould replied that this would be inn
possible, as he was not in position to give
such an estimate. He thought per cent. was
fair estimate of the earning power of the
Western Union. He did not think there was
as much water in the stock of the Western
Union as in that of many other companies. The
value of the Western Union was very nearly
the New York Central probably could not be
duplicated for its present capitalization.
Mr. Blair-Don't you think New York city
cost more than it would sell for?
81 don't think my opinion on that subject
wsuld be very valuable" replied Mr.. Gsuld
"At any rate / do not think should care to
buy New York if could get plenty of corner
lots" Mr.. Gould stated he did not think 1t
was possible for company to get an exclusive
privilege, for in case of any railroad another
could be constructed alongside if sufficient
number of wise men or fools could be found
who would put their money into the enter
prise. Eventually, however, the stronger
roads wonld always swallow up the weaker.
In all lines controlled by him in the west the
rates for fares and freights were regulated by
State statutes. In many cases, however, COM
petition reduced the rates charged below the
limits fixed by law. Mr.. Gould declined to
specify the railroads whose capitalization was
greatly in excess of the cost OF construction or
real value. He did not believe In government
interference as rates would always be regulated
by competition. The system of pooling
had undoubtedly saved great many corpora
tions from being injured seriously. Its affect
was merely TO protect roads entering into the
pool from ruinous competition. A pool could
not affect rates very materially on account of
various elements which entered into the sys-
tenn There were outlets by way of the Missis-
5ippi river, canals and routes via Canada rail-
roads for freight, and with these in existence
the rates could never be maintained beyond
certain points. He explained in general way
the local system as it existed at present.
Gould continued his testimony. "Do you
think that the price of food is Influenced by
btOck speculation OF speculation III 1000 pro-
ducts" inquired Senator Blair. 'It might to
certain extent increase the price for short
period, "repliedGould ,"but supply and demand
will always regulate those things and keep up
the balance. Ii there is a large crop the price
will be so much below the average that specu-
lation to keep up the prices willfalways fail. "
Gould said he was not familiar with the
method of speculation in corn and wheat, but
thought that there was nothing unfair in
stock speculation. Each transaction repre-
sented sale and delivery and the influence of
the transaction did not go beyond the parties
themselves. The Western Union Company
he thought paid more attention to its en-
ployes than any other company with which he
was connected. The recent strike In his
opinion was the result Of feeling of diss ats
faction on the part OF the poorer class of en-
ployes. The better class of workmen ss o
general rule did not care so much how
many hours they worked, as they were contin-
ually hoping for higher position in the ranks.
1t was fact that the Western Union paid its
employees better wages than any other COM
pany. Labor and capital, If left to themselves,
would bring about a satisfactory adjustment
There was always more or less dissatisfaction,
and there was no ranacea that would remove
these feelings of discontent.
"Do you think that labor gets its fair share
of wealth. which is the product OF labor and
capital?" asked Senator Blair.
II do,' replied Mr.. Gould. Returns for
capital are in this country continually growing
less. Inc prOutS represent tn6 returns OF capl-
tai, and all the rest, with the exception of
what goes to pay for raw Materials is devoted
to labor"
"What do you think is the explanation of the
present discontent?"
"In my opinion there Is surplus of labor
in this country. There has been large immi-
grafton, and recently railroad building has
been stopped and the market is overcrowded
with laborers. Initime theseIthings will adjust
themselves This surplus of labor is placing
itself in the West and Northwest. Immi-
grants are rapidly OCCUPYING Government
aud railroad lands in the west" Mr.. Gould
said the majority sof employees regarded their
employers with friendly feelings, and any ami.
moslties and grievances that might exist had
been fostered and exaggerated by the societies
10 which many of the laboring classes belong.
On the question of legislation, MIR. Gould de-
cared the safety OF society was in education OF
the masses. Anything would be good which
would tend to educate and elevate their moral
condition. He did not know whether trades
unions and labor organizations we're any benefit
or not. They had legitimate field when they
we're confined to mere benevolent institutions;
bat when they rose beyond this they were lost
| in great sea which they cannot control. La
| Dor, as everything else, was governed by the
| law of supply and demand.
| At this point Senator Blair said he had
| finished his examination, and Senator Call
| asked leave to put before the witness few
| questions which had been submitted by some
| gentlemen in regard to afnassing of wealth by