Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1888-12-30
RAILWAY MANAGEMENT.
The Exceptional Temptations and
Opportunities That Beset Railway
Managers.
The Necessity for Supervision by the Men
Who Own the Railroads OF the
Country.
New York Times.

Francis Adams on thu disregard of good
management have brought out some more
or less indignant protests against the Sc
verify of his judgment. The most COM
mon answer to his charges has been that
railroad officers and agents are no better
or worse than other men
engaged in business, and then
their defenders proceed to excuse the
practices of which they are accuse on one
ground or another connected with the
conditions of the railroad business. 1t
may be admitted that men who 90 into
railroad management are just ordinary
human beings, with no more tendency to
cheat and steal than the average men,
but the average men escapes good deal
of iniquity in this world through lack of
opportunity and the close watch that is
kept upon him. Many man has
reputation for virtue and honor that
might not stand against strong tempta-
ton and the chance of making dishonest
gains impunity.
The popularity in the business position
of railroad men is that they have excep-
tional temptations and opportunities to
profit ut the expense of others, while they
really hold places of trust in which they
are not held to strict account by those
whose interests are cOnfded to them. 1t
is Il position which demands to an eXcep-
tional degree Il high sense of
honor and strict regard for
other than selfish and personal in
terestS, and the men who occupy it do not
seem to realize that fact, and public
opinion does not force them to observe it.
Practices which in bank or i'll ordinary
mercantile business, still more in rela-
tons of special trust, would be regarded
as dishOnOrable and even criminal, are
eXcusable i'll railroad management as if
they were matters of necessity. In the
first place, the railroad business is pub
lie trust. It is conducted upon privi-
leges granted by public authority, for
the benefit of the community, fair
profit being allowed as compensation for
the capital and service that it requires.
The public has rights which ought to be
strictly regarded in all its operations, and
yetathe officers and agents of railroad cor
pOrations are apt to deal with it as if 1t
were solely their private business, in
which they are entitled to take every ad-
vantage of the public that they can, and
get all the profit out of it that is possible.
This is in itself violation of an impor-
tant trust.
Besides, the officers and agents of the
corporations hold relation of trust
toward the stockholders and the owners
of securities in the enterprises which they
manage. As rule, they hold a COM
paratively small share in the ownership
nf bn
selves, and are really handling the prop
erty of others i'll the capacity of
trustees. They are therefore doub-
ly bound to observe the principles
of honorable conduct But their prac-
teal relations to the business and their
control over its operations give them
great opportunities to injure the bust
ness confided to their care without suf-
fering any harm themselves. They may
pursue course which will injure or
benefit the property which they manage,
which will alternately depress and
elevate the securities belonging to
others, and by specializing in those
securities they may make money for
themselves at the expense of those whom
they represent in relation trust. The
practice of dealing in stocks upon mar
gins presents great temptations for this |
kind of manipulation, and it is certain |
that many officers and directors and even
traffic agents yielu to them. This is pc
culiarly dishonorable, and similar prac- |
tice in banking business would be re- |
garded as disreputable, even criminal.
One great trouble with the railroad |
business is that not only do the corpora
lions deal with a public function as if it |
were merely private affair, but their
officers and agents deal with the corpor-
ate business rs if it were their own. The |
business is so complicated that they alone
fairly understand its conditions and re-
quirements. The great body of stock
holders is compelled to trust them with
its management, with very little
restraint over their doings. Directors
and officers holding small proportion of
the stock i'll their own names, though
representing majority of it,
are able to deal with the great interests
to their charge almost at will.
They are very apt to disregard the num-
arous and scattered holders of the bulk
Of the stock, and conduct the bust
Of ring of larger holders, in
Guiding themselves, who have all sorts
IF designs for their own profit in re-
gard to which other stockholders are
hardly consulted. At the time of cleo
ions the directors and officers and those
who are taken into their councils control
he result by obtaining proxies from those
who understand nothing of the details of
he corporate business and are led to
rust those who are supposed TO be in a
position TO know what is best to be done.
This gives another opportunity for the
betrayal of trust which is often used.
What is most needed is a more effective
'ontrol over the action of railroad corpor-
Itons by those who own their stock and
whose property is the subject of manage
nent in the practical operation of the rail-
Dads. Men who buy railroad stocks in
mall lots as an investment usually know
cry little about the conduct of the prop
rty interests represented, and are abso-
utely helpless to exercise any control or
influence over it. 1t is hardly practi-
able for them to unite to make them
elves felt. There ought really to be
ONE plan devised for Il minority repre-
in railroad corporations, but
more important still is some means of
the action of small stock
olders. Giving proxies to directors and
arge stockholders is merely playing into
heir hands if they are disposed to
buse the confidence. 1t has been sug-
ested that these scattered holders of
mall amounts Of stock miupt in6nca | I