The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-01-05
sharcowrcrs and Boards OF Railroad
Directors.


Directors.
This utterance, reported 70 have been
nude recently by Senator ELKINs, in
relation 60 the railway ra,e question, is
Of q character TO arrest attention:
what ve cnu 90 Is TO empower a court TO de-
clare when rate s excessive. and IN ,ha, way send
the rate bset 10 NE r4aroad to be lowered.
u do not rlnk wc need fear that the roads VIII
attempt to cvade the execution o. such Instruction
in good f4th by attempting TO come back again
with another RATE so slightly lowered as to result
IN no banent Wa caa depend upon public opinion
as power 70 force them 10 accept tlis method OF
regulating the i-ics In good fish. II the lower
rate they a. Is not low enough It again be de-
clAred 10 be too high and would 90 5sek 10 nep'.'
Now, why cannot public opinion be
depended upon to persuade the direc-
tors Of railways TO fix proper and reason
able rates in tho frs, instance, after
hearing complaints2
Why cannot the shareowners OF a
railway, or of a railway system be them
selves depended upon to do justice
to those " HON the railway serves2 Why
call in Federal officials and politicians?
1t will be found that in the beginning
of railway construction and operation
in our country the chartering State
empowered the directors of the road to
fix rates by corporation bylaws, or in
some other appropriate and specified
way. Probably there was n maximum
mile rate prescribed by the State for
passengers. That right to fix rates was
an inducement to build and operate the
road Before very long, when the State
attempted TO diminish the rates, the
railway pleaded a contract which pre-
vented The Federal courts decided that
the bylaw rate must yield to a lower
rate fixed by a conflicting State statute.
Further on, when State made u railway
rate confscatory, the Federal courts put
an end TO that
1t may be said that railways have out
grown their primitive days when business
was small and board Of directors could,
by their own personal Investigations,
really direct all the Affairs Of the cor
poration. The systems have become too
vast and the traffic management too
complex for actual oversight by the
average directors sitting and voting to-
gether. An entire board of directors is
not now chosen for such exacting and
t;ring work; since if such work shall be
required Of directors the men cannot be
had who will serve IL may be said that
directors are now selected to fill up the
statutory number and those are named
who will be complaisant to the president
and a few captains OF the industry;
that the chief traffic manager and the
local freight and passenger agents fix
rates, which the directors ratify, but do
not thoroughly investigate and super
wise, and that the majority of such board
are respectable dummies chosen under
a proxy system manipulated by tho
president and a few active and large
shareowners, at home and abroad, who
really direct from the outside.
To all that we answer: BE it sol' not
because it is quite true, but as a basis
Of discussing and asking whether or not
the evils are irrcmedablc
For example, shareowners who ere
not in the swim arc yearly ycxcd by
being the recipients Of proxies TO sign,
which appoint agents to vote at share