CHAPTER XIV.

MUTUALITY OF INTEREST IN THE PROSPERITY OF

RAILWAYS.

Having pointed out the more important principles that govern the affairs of railroads, and the conditions necessary to the economical and efficient management of such properties, it may be proper to say a word in regard to the concern the community has in their prosperity. It is special and perpetual. The multitude of details incident to the conduct of railroads, while embracing many things that are peculiar, are, in the main, common to every business and of general interest. So far as concerns the construction and keeping in order of the plant, it is not noticeably different from that of other manufacturers. They are liberal consumers of the products of others, and generous and continuous patrons of labor. Their disbursements cover an infinite number of things, and have three purposes in view: the construction of the property, and its successful maintenance and operation. These disbursements embrace every variety of object, from the purchasing of land for tracks, stations, and shops, to the payment of employes; from the erection of mammoth warehouses to the planting of shade-trees; from the purchasing of a locomotive to the procurement of a tin cup; from the purchasing of a cargo

of coal to the insertion of an advertisement in a newspaper; from the hiring of a scrub-woman, through all occupations, trades, and callings, to the employment of a constitutional lawyer. The disbursements of railways are general. They help to aggrandize every class of society, and are the lifeblood of many important interests and trades. They may be likened unto the widespread branches of a great tree, under whose generous canopy widely separated industries find shelter and protection.

The industries, thus nurtured, animate in turn still others.

The disbursements of a railway company are of two kinds, permanent and incidental. Under the former may be embraced those of a preparatory nature, those connected with the building up of a property; under the latter, those incidental to its operation and maintenance. Permanent disbursements cover first cost, including rights, privileges, and franchises. Incidental expenditures include operating expenses, taxes, interest, and dividends.*

A very large and respectable class of people— indeed, I think I may say a majority-do not think of railroads except as common carriers, as real or semi-monopolies; as gigantic properties owned by non-resident stockholders, in the main illiberal in their tendency and short-sighted in policy; aliens, so to speak, having nothing in common with the people they serve; aggregations of capitalists leagued together for profit, without thought of the

*For particulars concerning this phase of railway operations, the reader is referred to the accompanying volumes of "The Science of Railways'' treating of such matters.

permanent interests of the communities they serve; short-sighted, selfish, and soulless. Nothing could be farther from the truth. The interests of railway companies and farmers, manufacturers, and merchants, occupying a common territory, are, as I have pointed out, identical and inseparable. Disaster can not overtake the latter without affecting the former. Nor can the carrier be prosperous if the others are not.

The railroad companies of a country are much more concerned in the well-being of farmers, merchants, and manufacturers, than a newspaper or lawyer can possibly be. Why? Because their prosperity is bound up forever with them. There is no escape; can never be any cessation of interest, any other resource; they rise or fall together.

The capital invested in railroads is so vast, and so fixed in perpetuity in the heart of a country, that owners must always be the first to apprehend any disaster to the people; the first to discountenance any act, the effect of which will be to injure or cripple them. They look to them for support, for a profitable business. Without it their property is valueless.

No other interest is so permanent and consistent as that of a railroad. It can not be moved, and has no value outside its immediate use. Carriers are, for this reason, peculiarly amenable to the good will of their patrons; are especially desirous of securing their confidence and support. Self-interest, if not inclination, compels them at all times to pursue an equitable policy towards their patrons, and selfinterest of this nature, is the only interest that never

changes, is never fickle, is always loyal, alert, and intelligent. All others are transitory, selfish, and short-sighted; quite as likely to injure as to benefit.

Much of the capital invested in railways has never returned anything whatever to its owners. The bulk of the earnings of a great mass of railway property is paid out each month for wages, supplies, and taxes, without leaving anything for the investor. It is estimated that sixty-four per cent. of earnings is expended as fast as it accrues, for operating expenses. The money never leaves the community where it is earned-scarcely reaches the treasury of the carrier. In addition to this, more or less is disbursed each year for improvements and additions. These expenditures will go on forever. Under the most favorable circumstances, the return on railway investments is not such as would satisfy active business men or investors generally. It is, at the best, meagre and uncertain.

A large percentage of the expenses of a railroad company is made up of wages paid employes. They represent a population five times their own number. This enormous mass of people gives employment incidentally to another large class occupied in supplying its wants.* Still another class is engaged in

*"One man out of every eighteen and a half men occupied in any kind of work in this country, either mental or manual, was employed in 1880 in connection with railroads, and since then the proportion has been greater. . . . . For many years, more than one man in every ten men employed in any kind of gainful occupation, aside from agriculture, has been engaged either in constructing or operating railways."-Edward Atkinson, "The Distribution of Products," page 280.

preparing the material which railways need; another class is busied in ministering to the wants of the latter. These classes represent the most industrious and frugal element of society. They are one and all affected, in a marked manner, by the prosperity or otherwise of railroads.

If we should attempt to trace the beneficiaries of railroads, we should find them in every vocation of life; in every trade and calling; in our mercantile houses, in express and telegraph offices, in manufacturing establishments, work-shops, printing rooms, banks, the offices of lawyers and doctors; in stores of every kind; in our mines, in our forests, upon our farms, and in the employ of railroads. Our telegraph and express systems, with their great number of employes and dependent classes, are but appendages of the railway interest; are directly affected by it. If it is injured, they are correspondingly affected. This vast army, so widely separated, so diversified, yet so closely associated in interest, is vitally concerned in the prosperous and uninterrupted operation of railways; in seeing that no injustice is dcne them; in seeing that they are allowed to carry on their business according to its just needs, equitably and fairly. If we should attempt to trace the community of interest, we should find the line lengthened and broadened until it embraced every human being. We should find that there was no diversity anywhere - that injustice or harm to railroads reacted unfavorably on all.

Of the injurious effect on the individual and collective members of society, because of the warfare

19 Vol. 8