The record-union., 1891-01-12
SO-CALLED RAILROAD TRUST.
yice-President Crocker Tells What 1t
Means

III.
ESan Francisco Examiner, Jan. IL.
The general public seems to have be-
come Impressed with the idea that the
meeting of railway Presidents IN New
J ork and the transactions at that meet
Ing mean an endeavoF To establish a
gigantic railway trust. / see. no reason
why such an impression, should have
been produced by the Presidents agrae-
lne1it. Similar affairs or agreements as
tins IN the past have not produced the re-
suits feared by the public. There are
several reasons for the meeting, several
conditions that brought ii about.
1t IS fact that for 4 long time the opera
ton OF these railway properties has not
yielded return or an interest upon the
investments In proportion to the returns
received in other lines of business in
which smaller capital is tied up.
The stockholders have in recent years
been inquiring into the cause for the lack
OF profits, and in looking about over
their various railway properties they
have found that their lines have been
paralleied by other great lines; that COM
petition IS becoming more keen; that
secret rebates are being paid; that COM
missions are being given; that discrimi-
nations are being made, and various other
devices resorted to by the competing
lines TO secure traffic; and this cutting
under one another in n secret way in adj
dition to the open rate wars, has entailed
! expense on the roads that render proper
! returns upon the investments impossible
/ The disastrous results of the continu-
| ance III such course have become so APP
I parent TO the stockholders that thev have
determined, through this meeting of
Presidents, to take upon themselves a
more direct control of these railroad
properties, in order that rates may be
maintained and that determinations may
| be discontinued
The injuries which these properties
| have suffered have come also from the
/ 100 RAPID ana unnecessary construction
/ OF new lines of railway through territory
where they would be brought into COM
petition with the older lines. 1t is in
| tended to avoid this hereafter. through
the operation of this late agreement.
There are also certain fixed expenses
| connected with the management of rail-
road properties, such as interest upon
bonds and taxes, which prevail whatever
the amount of ftraffic or the rate of traffic
may be, and the same is true to a certain
extent in the actual operating expenses.
In my judgment it will be some years
| before the Middle, Western and South
western States viii be sufficiently adj
Vanced to support their railroads. | do
| not mean this to apply to California. and
none of the expressions in this article
refer particularly to the operations OF
! railways in this State. California is af-
fected by the agreement only as regards
! her through traffic and her imports from
points east of the Missouri River. The
theory involved and the general princi-
| pie Of tnls agreement relates to traffic in
the middle western country.
The agreement comes from the stock
, holders III the properties and not from
their servants; and still another consid-
Grafton that prompts it is to bring the
stockholders into closer relationship with
! their properties and to take out of the
hands of the traffic managers and the gem
leral freight agents the enormous execu-
/ tive power that has hitherto been vested
! in them.
They have had absolute control over
/ the rates OF traffic, power that is dele
gated TO servant in no other line of busi-
ness. The stockholders themselves will
set the rate and try to maintain it, thus
taking that absolute control out of the
/ hands Of their employees.
The tendency III railway traffic has al
ways been downward instead of upward,
| and the work of the active railway mama
gers is not to raise the rates, but to keen
them upon an established basis / main
tain that a stable rate is the best for the
business men. 1t puts them all upon an
equal footing If q competitor knows
what the relations of his business rival
| are with the railway companies, and
\ knows that they are the same that he him
self holds, then he is better able to com
pete with his rival.
it is the object and aim of this agree
ment to establish q fair rate and to main
tain it, not increase it. and therefore il
cannot. be called pool, and the reasons
for terfnlng 1t railway trust do not APP
ply. CHAS. f. CRoCKER.