Railroads on Trial

Ray Stannard Baker

McClure’s/March, 1906

“All free governments, whatever their name, are in reality governments by public opinion, and it is on the quality of this public opinion that their prosperity depends. . . . With the growth of democracy grows also the fear, if not the danger, that this atmosphere may be corrupted . . . and the question of sanitation becomes more instant and pressing. Democracy in its best sense is merely the letting in of light and air.”—JAMES RUSSELL LOWELL

THE people are today making up their minds on the railroad problem; out of their present decision will grow laws, and those laws will shape the destiny of the nation. It becomes of incalculable importance, then, to know where the information upon which we now base our thinking is coming from. Are the sources clear? Is the information true?

Railroad owners were undisguisedly astonished last winter by the force of the public demand for railroad legislation; it drove the Esch-Townsend bill through the House of Representatives almost without opposition. Such a measure threatened the existing unrestrained private control of railroad corporations and endangered the prestige of the men who own them.

Though the popular bill was stopped at the doors of an unwilling Senate, the railroad men knew that unless public opinion was modified, other legislation, perhaps more drastic, would be sought when Congress convened this winter. Accordingly they undertook to counteract or modify the swelling force of unfriendly opinion and to create in its place a more favorable regard. Since Congress adjourned last spring, they have been engaged in what is undoubtedly the most sweeping campaign for reaching and changing public thought ever undertaken in this country. No investigation into the meanings of the railroad problem as it now presents itself in this country can be regarded as complete, which does not take cognizance of these remarkable activities.

Consider the conditions. A great cloud had come up out of the west; it was black with complaints against railroad injustice and railroad domination. While the agitation represented the undoubted sentiments of the people, it owed its expression largely to certain shippers and business organizations. And finally it was voiced by President Roosevelt, and definite legislation was demanded.

But the people, however vigorous their demands for reform, are undisciplined and unorganized. They are torn by petty local interests and they are busy. To make the giant bestir himself the issues must be made very clear and the feeling must be deep. By presenting new information, new issues, new arguments, it is therefore evident that a publicity organization may either convince or confuse public opinion so that it does not settle with undivided mind upon definite demands and stick to them until reforms are attained.

Railroad men have a perfect right, of course, in common with all other citizens, to present facts and arguments to the people. The more true publicity there is the better, for the public mind should not only be made up, but made up right. But the people have a duty to inquire concerning the sources of the information they are getting; they are entitled to know, when a man is presenting an argument, whether he represents himself or is paid by someone else. It is one thing to inform the public mind; another thing to deceive it. And finally the people have not only a right but a duty to inquire if the facts which they are receiving are true facts. Perhaps there was never before in our history such need of intelligent discrimination and analysis upon the part of the people as there is at this moment; it is a sort of supreme test of the nation: whether we know enough, whether we are brave enough, to deserve a real democracy.

Wall Street, accordingly, with characteristic thoroughness, organized a campaign; and a committee of three men was appointed to direct operations: Samuel Spencer, president of the Southern Railroad; F. D. Underwood, president of the Erie; and David Wilcox , president of the Delaware & Hudson.

Upon Mr. Spencer fell the main responsibility of the work, and for several reasons. In the first place, he had for years made his headquarters in Washington, the central office of the Southern Railroad, where he naturally formed the acquaintance of many Senators and Congressmen; and he had come to know all the by-paths of legislative activity. An experienced, agreeable, discreet man—he was well fitted for the task. To him the railroads of the country, sharing the burden, contributed all the necessary money. The extent of the various enterprises of the organization will enable us to form some idea of how large a sum was required.

Several channels exist through which public opinion may be reached: newspapers and magazines, perhaps, first of all; speeches, lectures, and sermons; books; conventions; investigations.

The fountainhead of public information is the newspaper. The first concern, then, of the railroad organization was to reach the newspapers.

For this purpose a firm of publicity agents, with headquarters in Boston, was chosen. Their business was not extensive, but both members of the firm were able and energetic; and both had had a thorough training in the newspaper business. They had represented high-class clients; notably Harvard University.

Immediately the firm expanded. It increased its Boston staff; it opened offices in New York, Chicago, Washington, St. Louis, Topeka, Kansas—Kansas being regarded as especially threatening—and it employed agents in South Dakota, California, and elsewhere. I can, perhaps, give the clearest idea of the scope of the work by describing the activities of a single branch office—that in Chicago.

The firm occupies rooms in the Orchestra Building on Michigan Avenue. Its employees in Chicago alone number forty-three. Foremost among these are a corps of experienced newspaper men.

To this office comes every publication of any sort within the Chicago territory—every little village paper in Nebraska, Wisconsin, Illinois, and other states. All of these are carefully scanned by experienced readers and every article in any way touching upon the railroad question is clipped out and filed. But the bureau does not depend upon the papers alone. Traveling agents have visited every town in the country and have seen, personally, every editor. The record of these visits is recorded in an extensive card-catalogue. Here is the name of the town, the name of the editor, the circulation of his paper, whether he is prosperous or not, his political beliefs, his views on the trust problem, on the liquor question, even on religious subjects, the peculiar character of his paper, whether devoted mostly to local news, or whether expressing vigorous editorial opinions. Moreover, there are notations dealing with peculiar industrial and commercial interests of each town—its weaknesses and its strength. In short, reading some of the cards in this catalogue I could almost see the little villages out in the Mississippi Valley, see the country-editor in his small office, and understand all his hopes, fears, ambitions.

Possessed of this knowledge, how adroitly and perfectly the well-equipped publicity agents can play upon each town and influence each editor! Every card bears also, in columns, a list of numbers. Every number refers to an article sent out by the firm. Most of these articles are especially prepared by the staff writers for a certain town, or a group of towns. There is no confused firing of wasteful volleys; each shot is carefully aimed. It is really interesting material often mingled with valuable matter on other subjects, and the country editor, like every editor, is eager for the good things. In cases I know of the railroads have employed very able correspondents at state capitals, or at Washington, who sent daily or weekly letters on various subjects, but never failing to work in masked material favorable to the railroads. Often, perhaps usually, the editor has no idea of where this material comes from. It apparently drops out of the blue heavens like a sort of manna—for these publicity agents are careful not to advertise the fact that they are in any way connected with the railroads.

Having sent out an article to an editor, his paper is closely watched by the readers, and when it appears the number in the card catalogue is checked in red. A glance at a card, therefore, will instantly reveal how much and what sort of railroad articles every paper in the country is publishing, how railroad information is running high in one community and low in another—whether a paper is “good” or “bad” from the standpoint of the railroads.

This card-catalogue is well named in the office “The Barometer.” It is certainly as good an indicator of the atmosphere of railroad opinion in the country as could possibly be devised. It gives the observer, indeed, an impression of hopeless perfection. What chance have feeble, unorganized outsiders to make and register public opinion in the face of such a machine?

Does it get results? Indeed it does. One of the members of the firm told me with pride of the record in Nebraska. In the week ended June 5th, last, the newspapers of that state published exactly 212 columns of matter unfavorable to the railroads, and only two columns favorable. Eleven weeks later, after a careful campaign, a week’s record showed that the papers of Nebraska had published 202 columns favorable to the railroads and four unfavorable. A pretty good barometric condition!

But the work is by no means confined to the offices. If an editor is found to be radically anti-railroad, as frequently happens in the West, an agent goes about among shipping and commercial organizations of the town and stirs up public opinion against the editor. Now, shippers and business men generally are peculiarly subject to railroad influence or discrimination. A very little thing will put them wrong with the railroad. Consequently, when the railroad asks a favor that costs nothing—like the signing of a petition, or the writing of a letter—why, they are inclined to yield and avoid trouble. Moreover, it is of familiar knowledge that the politicians in many towns are pro-railroad. Usually one or more of the prominent lawyers are retained by the railroads, and there is always the local railroad staff to be counted upon.

All these forces are so cunningly marshaled that the recalcitrant editor is “smoked out” by his own people.

Now, I have no evidence that this particular firm of publicity agents had any “corruption fund” or that they paid editors to support the railroad cause. Moreover, I do not believe, knowing something of the character of the men, that they have done it in any instance. Their position was this: they owned a publicity machine—a highly intelligent one. They sold its services to the railroads and thereafter they sent out railroad arguments just as they would have sent out baking-powder arguments if they had been employed by a baking-powder company—without wasting a moment’s thought apparently as to what effect their action might have upon the public welfare.

Two points must be emphasized. In the first place these agents conducted their operations secretly. It is a principle that the attorney must declare what client he defends. If these agents had appeared frankly before the court of public opinion as railroad employees, no one could have quarreled with them; and they would have deceived no one. And why, if the railroad men have a really good argument, should they not make it openly and frankly?

In the second place against such an organization as this, supplied with unlimited money, representing a private interest which wishes to defeat the public will, to break the law, to enjoy the fruits of unrestrained power, what chance to be heard have those who believe that present conditions are wrong? The people are unorganized, they have no money to hire agents, nor experts to make investigations, nor writers to set forth the facts attractively. The result is, that the public gets chiefly the facts as prepared by the railroad for their own defense. The case is exactly that of the rich litigant who goes before the court with lawyers, experts, and unlimited money to combat the poor litigant who must appear without lawyers or experts whom he has no money to hire. And in this case the rich litigant represents the few thousand railroad owners and those powerful shippers who are favored by railroad discrimination, and the poor litigant is the great unorganized public.

So much for the methods employed. Let us now examine the facts so widely circulated by the railroads. Are they true facts?

One example must suffice. The statement which has probably been given wider circulation by the railroads than any other is that “railroad rates in America are the lowest in the world,” and the conclusion drawn is that therefore we have no cause for complaint, that our railroad owners are progressive and unselfish, and the inference is that if we should “regulate” or own the railroads as do the European countries our rates would tend to go as high as theirs.

Now, this is a most insidiously deceptive statement in several ways. It is the use of statistics not to inform but to deceive. On its face the statement—”that the average rate per ton per mile for all freight shipped in America is the lowest in the world”—is true, but the conclusions which the railroads seek to force are false.

In comparing rates in Europe with those in America the railroad publicity agents are comparing things totally unlike. Conditions are entirely different.

There is every reason why the average rate should be higher in Europe. For example, a great bulk of low-rate heavy freight—coal, grain, ore, sand, and so on, which constitutes the chief business of railroads in this country, is there largely carried on canals or by water. Average hauls of freight in Europe are short; here they are much longer, tending to reduce the ton mile rate. Express packages, here charged at high prices, are there carried as freight. In England, the railroads deliver and collect freight with their own teams, thus helping to keep the freight-rates high; in this country the shipper teams his own freight. Germany carries all her government stores, her army and its equipment free; and moreover, she has every year a surplus from operation which goes to help out general expenses of government.

If a perfectly honest comparison were made, taking into consideration all these differences in the service rendered, it would undoubtedly be found that the rates here and abroad are not far different. Cost of terminals and rights of way and taxes are generally higher in Europe than here, another reason why rates should be higher there. But the important point, after all, lies not in the actual comparison, deceptive though it may be. Let us admit that rates are lower in this country; does it therefore follow that they are not still much too high considering the cost of the service performed, or that the profits of the Wall Street owners are not too great, or that discrimination and injustice do not exist?

Besides the direct preparation of articles for newspapers, these publicity agents send out enormous numbers of publications in pamphlet and book form.

Now it is a good thing for the people to have all these arguments; provided, they know the source from which the arguments come and provided the other side has an equal opportunity to present its case. Editors, professors in colleges, prominent lawyers, clergymen, and other public men, anyone, indeed, who is likely to have even a little influence in his community, have been supplied with much of this railroad literature. Most of the pamphlets are not on their face railroad arguments at all, but are seemingly perfectly dispassionate and unprejudiced discussions of the problem. I have a collection of fifty-six such books and pamphlets, all different, issued within the last few months. The literature varies all the way from a cloth-bound book of 486 pages to a leaflet of four pages. Since I began my present series of articles on the railroad question I have had at least thirty copies of one of them, a small book prepared by H. T. Newcomb of Washington, called “Facts About the Railroads,” sent to me from various parts of the country by people who wanted to know where it came from, and whether or not it was a railroad publicity pamphlet. These various publications are planned to reach every interest. One is addressed to the farmers, called “The Farmer and His Friends,” another is for workers, another is a book of 206 pages for lawyers, discussing the legal aspects of the question, with careful summaries of decisions. There are many pamphlets for editors, containing reprints from editorials published by papers in various parts of the country—some of them having been originally written in the office of the publicity agents and sent out to the newspapers.

Finally, there is the new book by Professor Hugo R. Meyer called “Government Regulation of Railway Rates.” This book is being widely circulated by the railroads, and is regarded as one of the strongest arguments in their favor. Professor Meyer is connected with the University of Chicago, and is perhaps the only economist in the country who appears as a thick-and-thin defender of present railroad conditions. His book is well written and interesting, the result of twelve years of work; it bears on its face the marks of the sincerity of the author’s convictions. But the work throughout is marked by singular bias and prejudice, a fact so evident that it comes in for censure from such a publication as the Railroad Gazette. The editor of the Gazette says in the issue of December 1, 1905: “We deeply regret that the learned professor should have approached his subject with such mistaken evidences of partisanship and bias.”

The chief arguments are based on conditions in Germany, although the author has never been in Germany. No doubt this may account for the many inaccuracies in statement—to say nothing of the bias—which mark the work.

Professor B. H. Meyer of Wisconsin, an authority on transportation economics, who has spent much time in Europe studying railroad conditions, devoted the greater part of an address before the American Economic Association at Baltimore, in December, 1905, to pointing out in detail these errors and misapprehensions. He said:

If he (Prof. H. R. Meyer) had ever made inquiries on the ground, the first half of his book would perhaps never have been written; or, at least, its pages would probably have reflected a better temper.

The book contains much about the difficulties and mistakes of foreign governments in regulating railroads; it shows how feeble has been our own Interstate Commerce Commission, and how enterprising and able have been the American railroad managers, and how excellent have been the results of private control.

But the most remarkable feature of this book is its omissions. I read it with care and with interest, but singularly enough I found nothing about the rebates by which the railroads have built up the Standard Oil and the Beef trusts. I found nothing in the book about private cars, terminal roads, midnight tariffs, and other devices by means of which railroads deal unjustly as between citizens. I found nothing about railroad law-breaking, nor about the prevalence of railroad carelessness and accidents in this country, nor about the wholesale giving of free passes to influence editorial and legislative opinion, nor the way in which the railroads are seizing upon coal-lands, iron-lands, and steamship-lines throughout the country. I found no word concerning the present monopolization of railroads in the hands of a few men. There is much discussion of the “Workings of Competition,” nothing of its disappearance. And singularly enough there was nothing in this book concerning railroad influence in politics, the bribery of legislators, the railroad lobbies, the control of senators. These are some of the things the people want to know about, and are they not things to be considered by an honest student who really seeks to teach us—the ignorant public—whether or not the government should regulate the railroads?

But this was not, after all, the most pitiable omission from Professor Meyer’s book—and indeed from all the publications to which I have referred. The only yardstick which Professor Meyer uses to measure methods of industry and government is contained in the queries, “Does it pay?” “Does it build up trade?” “Does it make money?” Industrial progress, wealth piled up, in all this literature is made the sole test of excellence. There is no word of the new standard which is being raised over all this country: “Does the present railroad system make good men?” “Does it produce democratic citizens?” “Does it encourage justice and fair dealing?” W e are learning that the great problem is not the accumulation of wealth, but the just distribution of wealth; that trade is good, but not at the expense of a corrupted citizenship and a ruined democracy. It gets back, after all, to the question: What is your ideal? Money or Men?

But this Boston firm, widespread as are its activities, does not by any means control all of the publicity enterprises of the railroads. The state of Iowa, for example, is exempt from its activities. Iowa has been called the “Q Reservation,” from the political domination of a large part of the state by the Chicago, Burlington & Quincy Railroad. Its railroad dictator is J. W. Blythe, attorney for the Burlington. The railroads have their own publicity department located in Des Moines and headed by W. J. Garrison, who goes a step further than the Boston firm and actually offers to pay editors for printing pro-railroad literature. How can the people form a just opinion upon a subject if the very facts, which should be presented without bias, are warped by railroad money?

Concerning another publicity device of the railroads the Nebraska State Journal says, October 5, 1905:

Editors of country papers have been surprised lately at receiving from some source a proposition to furnish them supplements of good reading matter free of charge, they only to agree to run the supplement as a part of their papers. A few accepted the offer. The first supplement contained hidden in the reading matter an attack on the parcels post, which the express companies are fighting with might and main. The second contains a veiled attack on President Roosevelt’s railroad policy.

The headlines of this article quote Senator Elkins as “willing to co-operate with President Roosevelt in passing satisfactory measures to control the railroads,” but the body of the article gives the senator’s well-known pro-railroad views. It isn’t polite to look a gift-horse in the mouth, but this seems to be one of the cases where politeness is not to be considered.

The supplement here referred to is published by a man who has long been employed by the railroads, chiefly in promoting western agricultural development.

I could give the names of many other such agents, at Washington and elsewhere, but there seems no need of multiplying instances.

So much for the newspapers. Examine now some of the other activities of the railroads in changing public opinion.

I have already referred many times in these articles to the Senate railroad investigation of last spring. Having refused to pass railroad legislation, and feeling sharply the public demand for it, the Senate deputized its regular Committee on Interstate Commerce, Senator Elkin s of West Virginia, chairman, to give hearings on the subject after the adjournment of Congress. The committee accordingly convened in April and sat for over six weeks, the testimony, including that presented during the previous regular session of the Senate, filling five large volumes of about 1,000 pages each.

An investigation like this, conducted under such imposing auspices, attended by great railroad and industrial magnates and statesmen, daily reported by able newspaper correspondents, furnishes about as good a vehicle for influencing public opinion as could well be devised.

Being such a fountainhead of information, it becomes of the utmost importance to look into the character and results of this investigation.

On the face of it the inquiry was an attempt by an unprejudiced committee of great senators to get at all the facts, that justice might be done to all the people—little as well as big, weak as well as strong.

But what do we find? The shrewd men of the railroads knew how important an engine of publicity this investigation would be, and their organization was ready.

They first employed, as a general agent before the committee, Ex-Senator Faulkner of West Virginia. Mr. Faulkner had himself served for twelve years in the United States Senate; he was therefore versed in every twist and turn of senatorial usage, and he knew, as personal friends and associates, all the senators on the committee. In the second place Mr. Faulkner is a very able attorney with much experience in railroad and corporation affairs. During the entire session of the committee he sat just behind Senator Elkins, its chairman, also from West Virginia, with whom he consulted frequently. Mr. Faulkner did not appear as a witness, but with the experience and skill of a thorough lawyer he brought in his witnesses, piled up the evidence in the most effective way, and arranged for proper and regular rebuttal of the fugitive testimony given by witnesses on the other side. After sitting for days in the committee-room the spectator had a sense as of expert scene-shifting, a well-organized working out of a preconceived plan. Beside Mr. Faulkner sat Walker D. Hines, formerly vice-president and attorney for the Louisville and Nashville Railroad. At the beginning of the session he appeared for three days on the stand, presenting the case of the railroads. His testimony alone fills 233 printed pages of the record. One after another, railroad presidents, railroad attorneys, railroad statisticians, great shippers who naturally favor the railroads were brought on by Senator Faulkner to support their case. Professor H. R. Meyer, to whom I have referred, appeared and gave sixty-five pages of testimony. H. T. Newcomb, formerly a government statistician, now employed by the railroads, gave 185 pages of statistical information, prepared, of course, to prove the railroad case.

Many small shippers came from distant points on passes, all expenses paid by the railroads. All these men had a perfect right to be heard, but I wish to point out and emphasize the fact of the perfect organization of the whole railroad case—the facilities which the railroads had—money, passes, the best legal talent, and, above all, perfect discipline. Over two-thirds of the witnesses who appeared defended the railroads or the Armour Car-line Company. So continuous was this stream, that Senator Cullom once remarked to a witness:

“We have heard a good many business men from different parts of the country, I have almost forgotten if we have ever heard anybody who complained of the railroad or favored additional legislation.”

Against this orderly presentation of evidence, facts, and arguments, the witnesses who appeared demanding some regulation of railroad power were almost lost. Bear in mind the fact that all these men had to come on their own time and at their own expense; they had no lawyer to represent them, no expert statisticians, they could make no attempt to direct or centralize their evidence. Most of them knew only local conditions and little of the broader railroad and commercial affairs. The only semblance of organized and intelligent testimony on that side was given by E. P. Bacon of Milwaukee, chairman of the executive committee of the Interstate Commerce Law Convention, and a few of his associates in the movement for governmental regulation of the railroads. But Mr. Bacon was present only a part of the time; and there were whole days when no representatives of the opposing interests were in attendance, and the evidence of the railroads met no opposition whatever. If it had not been for the testimony of the Interstate Commerce Commissioners, of Governor Cummins of Iowa, and a few others real public interest would have made next to no showing at all. And at the close of the session, the committee allowed Mr. Hines, the railroad attorney, to appear and present forty-six pages of testimony in rebuttal of that given by Mr. Bacon and his associates. The disparity between the perfectly organized railroad attack and the feeble, ragged opposition was nothing short of pitiable. The effect on the newspaper correspondents was evident at once, and there is good reason to credit the claim of the railroads, generally made after the adjournment of the committee, that they had changed the sentiment of the whole country.

Let us look a little further into the investigation. It was very remarkable in other respects. Not only did the railroads present their case strongly, but the Senate Committee allowed the railroad witnesses to attack the opposition on personal grounds. They sought to show that all who opposed them were agitators, that they represented no public opinion, and that they were actuated by personal interest.

A. C. Bird, vice-president of the Gould railroads, said to the committee:

“If you will take the list filed here of the constituent bodies of the Interstate Commerce Law Convention (Mr. Bacon’s organization), you cannot find one man in a hundred that knows the difference between a rate, a tariff-sheet, and a time-table. I know this is true. These men are the men who have created this agitation. . . . There is not a man in all these constituent organizations that could earn forty cents a day.”

Mr. Bird also said of Mr. Bacon personally:

“His own interests, the interests of communities which are rivals of his communities, have blinded him.”

Another witness compared Mr. Bacon to “Peter the Hermit.”

And is it possible that Mr. Bird and other railroad men were not blinded by their own interests?

J. J. Hill in his testimony flung aside all the agitation for railroad reform by comparing it contemptuously to an attack of “pink-eye or the grippe,” which “will have to have its run.”

Not only did the Senate Committee allow such disparagement of anti-railroad witnesses, but one or two of the senators themselves indulged in exactly the same sort of flings. Senator Kean of New Jersey was one of these. During the testimony of Mr. Bacon this senator was constantly and sarcastically referring to Mr. Bacon’s “self-interest” as a grain-dealer or as a resident of Milwaukee. But I did not hear Senator Kean attack the appearance of any railroad president on the ground of self-interest! And has not a grain dealer the right to be heard with dignity? or a citizen of Milwaukee?

Who is this Senator Kean, that he talks of self-interest? Senator Kean is from New Jersey; sent to Washington by the New Jersey Republican machine, one of the worst in the country. And who does Senator Kean represent in the Senate? Is it the people of his state or the Pennsylvania Railroad and other corporations? Talk of self-interest!

But I have not yet referred to the most significant of all the features of this investigation. It was, as I have shown, peculiarly an engine for shaping public opinion and yet here is this tremendous fact: The public was almost unrepresented in its deliberations. Among the witnesses were scores of personally interested railroad men, other scores of personally interested shippers; but the producers and consumers who, after all, pay the freight, where were they? Mr. Bacon’s great organization, though it was fighting the railroads, did not, after all, represent the public; it represented oppressed shipping interests. Mr. Bacon himself in his testimony called attention to the helplessness of the real public as against the railroads:

“The public at large,” he said, “who ultimately bear the burden of the rate, upon whom the rate actually falls, has no opportunity of coming before any tribunal and obtaining relief. . . . The great mass of the public, upon whom the rate falls in the end, have no protection whatever, and they have no organization for presenting their difficulties, and they have to depend upon proper legislation for their protection, which will prevent the enforcement of rates that are excessive.”

In the face of such a statement it is well to remember that this investigation was before the representatives of the people and for the people, and yet these senators made no effort to get out the people’s side of the case.

If we except the members of the Interstate Commerce Commission, Governor Cummins, Professor Ripley, and possibly two or three other witnesses, who may be regarded as speaking neither for railroads nor shippers, the public—the producers and consumers—had no representation whatever at this hearing. Where the railroad and the shippers plunder hand in hand as they do, say in the oil industry, in the sugar industry, in the steel industry, there was apparently no complaint of conditions—for the public, which pays high prices for oil, steel, sugar, coal, beef, and the like in small amounts on every pound used—was not organized, had no lawyers, no representatives.

Indeed, nothing was clearer in the investigation than the essential agreement of the railroad men and the big shippers.

To show the high degree of satisfaction with railroad conditions on the part of the shippers, Ex-Senator Faulkner placed various witnesses on the stand. Among them were E. H. Gary, president of the board of directors of the United States Steel Corporation which owns 1,000 miles of railroad and pays $75,000,000 in freight every year.

“Are you generally, as a shipper,” asked Senator Elkins, “satisfied with freight rates?”

“We are,” said Mr. Gary.

“And have no cause of complaint that they are excessive?” asked Senator Elkins.

“We have not,” replied Mr. Gary.

The Steel Corporation, of course, is controlled by J. P. Morgan and John D. Rockefeller. They might as well have placed Mr. Morgan himself on the stand and asked him if he was pleased with the railroads as to have set up Mr. Gary. To anyone who stopped a moment to think, the whole affair was not short of ridiculous.

So they had the testimony of F. J. Hearne, president of the Colorado Fuel & Iron Co. which is owned by George Gould and John D. Rockefeller, and that of many other great shippers—most of whom, it is quite safe to say, get rebates, discrimination, or favoritism in some form from the railroads. And these witnesses were brought in to show that there is no demand for railroad regulation! The public at large, which pays dearly for this fraternal admiration of trusts and railroads, had little or no chance to express any opinion at all!

And having brought out all these things before the Senate Committee, Mr. Spencer’s publicity bureau turned around and circulated all those parts of the testimony favorable to the railroads broadcast throughout the country. The opponents of the railroads, having no money and next to no organization, could not circulate their testimony.

One more great fact regarding this investigation and I am through with it: What are the things after all that the people most wish to know regarding the railroads? Here are some of them:

Do railroads give rebates, who receives rebates, how are they paid?

Are our rates reasonable? And what are the true profits of the railroads?

Do railroads corrupt legislators and the Congress and how do they do it?

Are the railroads controlled by half a dozen men and who are those men?

Why do the railroads kill and wound 80,000 American citizens every year?

These are essential and vital questions, touching the very life and prosperity of every citizen. A great and serious investigation, like that of the United States Senate—one would think—would naturally concern itself with these things especially. But what do we find? With the hand of the railroads in reality guiding and directing the investigation, we find, naturally, just as little as possible about these essential things and just as much as possible about unessentials. As to a downright disclosure of real conditions, like that of the Hughes life insurance investigation in New York, or the railroad inquiry in Wisconsin, there was no sign of it. If anyone in those sessions had dared to ask a railroad president as Hughes asked the life insurance presidents how much he paid to the Republican campaign fund in 1904, there would have been nothing short of an explosion. But there was no one to ask so impudent a question. There was no one who wanted it asked. The downright final truth is that this Senate committee is a railroad committee—I mean the majority. And this investigation therefore has brought out such railroad facts as Senator Elkin’s (railroad owner of West Virginia), Senator Kean (Pennsylvania Railroad and other corporations), Senator Aldrich (Standard Oil and railroads) Senator Foraker (railroads), wanted brought out—and no more. Several of the senators on the committee might have made an honest investigation if they had not been in the minority, and if they had not been afflicted with the trembling palsy which attacks politicians who are called upon to ask uncomfortable questions of railroad men. These are hard things to say, but they must be said, if ever this country comes to a clear understanding of how its public opinion is manufactured and its laws are made.

Both of the enterprises of which I have spoken so far have been constructive in their nature, a positive campaign in the newspapers, a positive direction of the Senate investigation. But the work has also been obstructive. Was there an effort anywhere to make public opinion on the other side, it must instantly be pounced upon and if not wholly smothered at least so confused as to render it innocuous.

They pursued this policy in the South both before and during President Roosevelt’s visit down there. I have before me two pamphlets widely circulated in the South, attacking the President for receiving free transportation from the railroads. Appeals were also made to race prejudice. Thousands of copies of Senator Chandler’s half-humorous observation that if railroad discriminations were stopped then the separate cars or compartments for negroes in the South, known as Jim Crow cars, would have to be discontinued were sent out. The publicity agents knew well that this would touch the sore spot of the South and divert attention from the real issue.

The only organized force in the country worth mentioning which has sought to combat the railroad position is an organization of commercial bodies headed by E. P. Bacon, of Milwaukee. Mr. Bacon is a rather remarkable figure. He is past seventy, and not in vigorous health. He had come to the time of life when he wanted to rest. But once embarked upon the enterprise, he would not let go. He headed the new movement of the shippers, he appeared before congressional and state committees, he became as thorough an authority on the broader aspects of the railroad question as there is among the shippers of the country. And he has clung to the thankless, gratuitous task with singular patience and tenacity. With him as with other leaders in the movement there has been nothing but hard work, money out of pocket, and no rewards. They held conventions of shippers beginning in 1900 and rolled up a big petition to Congress. Immediately the railroads began undermining their organization. Through all their innumerable channels they brought pressure to bear on shippers—so effective in some cases that the very men who signed Mr. Bacon’s call for the conventions turned around and repudiated the whole movement.

But it persisted in spite of everything, and last fall, a convention was called to be held in Chicago, October 26th. This would naturally make public opinion. Weeks in advance the railroads began their operations among the shippers’ organizations which intended to send delegates to the convention. In some organizations like the Chamber of Commerce in Minneapolis the fight raged fast and furious. In nearly every case the big shippers, the men who get favors from the railroads, were anti-Bacon; the little shippers who were discriminated against were pro-Bacon. I quote from the Minneapolis Journal:

Every effort is being made to put the Minneapolis Chamber of Commerce, as a body, on record against the Esch-Townsend bill for the regulation of freight rates by the federal government.

All of the big shippers have signed the protests against federal supervision without any hesitation, but the small fellows refuse to get into line, and a division of the chamber is feared. Some of them say they never will sign the petitions.

When the railroads could not thus elect the men they wanted, they began operations upon the delegates themselves. In many cases they offered them passes and sometimes even agreed to pay all their expenses if they would come to Chicago and “vote right.” Many delegates actually did come in this way. George C. Copenhaver, secretary of the Denver Carriage Builders’ Association, for example, admitted frankly that his expenses were paid. He said in an interview:

“Why should anyone deny that our expenses were paid? I am not ashamed of it. Weaver came here about two weeks before the convention, and offered to pay our expenses. We were not out a cent, and had the best accommodations in Chicago.”

And yet, in spite of all this astonishing activity backed by the unlimited resources of the railroads, the movement still persisted, and a large number of delegates came to Chicago. The railroads, under the direct supervision of the Boston publicity bureau to which I have already referred, opened headquarters in the Auditorium Annex. I saw the agents of this firm getting the delegates together and organizing them. Among those active upon the railroad side were several men with whose activities as organizers and agitators I had made acquaintance when I was studying the labor problem. The bitterest anti-union organizers of two years ago were D. M. Parry, of Indianapolis; J. Kirby, Jr., of Dayton, Ohio; and Daniel Davenport, of Bridgeport, Conn. All these men were here present, but now representing the railroads. Mr. Parry is president of the National Manufacturers’ Association and an officer in the Indianapolis & Southern Railroad Company. Mr. Davenport is not a shipper at all, but a lawyer.

Mr. Bacon had called the convention to ratify the demand of President Roosevelt for railroad regulation. Threatened with a complete defeat by delegates who favored the railroads, the leaders saw that the only way that they could accomplish their purpose was to require every delegate admitted to signify by an agreement in writing that he supported President Roosevelt’s demand for rate regulation.

When confronted with this demand that they express an opinion favorable to the legislation demanded by the President, the delegates favorable to the railroads set up a cry—always popular—that free speech had been stifled. From inquiries made personally I believe that in a few instances, notably those of two or three Southerners who were Democrats and not admirers of the President, this requirement of the Bacon followers did honestly drive shippers away from Mr. Bacon’s convention.

The railroad agents had expected this split and had hired a hall, where the insurgent delegates now came together and organized a convention of their own. This meeting was closely looked after and directed by the railroad publicity agents and by Mr. Parry and Mr. Davenport.

Now no one is denying the right of shippers who favor the railroads, whether they do so from conviction, or personal interest, or, indeed, by purchase, to hold a convention and express their views. But why attempt to break up a convention called for the purpose of advocating the contrary view?

I made a somewhat careful examination of the membership of the anti-Bacon pro-railroad convention. Many of the members represented very large industries which receive favors from the railroads—like the Illinois Steel Company—or industries peculiarly dependent on railroads, like the coal shippers. A very large proportion of those present were coal men. Now, coal is peculiarly related to railroading. A majority, perhaps, of the mines of the country are owned by the railroads, and the railroads are among the chief purchasers and users of coal. The next largest representation was of lumber shippers, who are also peculiarly dependent on the railroads. One of the chief movers in the Railroad Convention was an owner of sawmills in the South operated in connection with so-called “tap lines” or terminal roads, to which the railroad makes allowances in their nature essentially rebates. Naturally, such men did not wish governmental regulation which might stop their private favoritism. As a generalization it may be said that shippers who got favors from the railroads were in the Anti-Bacon Convention and shippers who suffered by railroad discrimination were in the Bacon Convention.

After the conventions were over, some of the delegates who had their expenses paid by the railroads went home, and were roundly abused by the organization which they had misrepresented. One of these was Mr. Copenhaver, to whom I have already referred, and other delegates from Denver. Several of these associations met and passed resolutions denouncing the acts of their representatives and supporting the position of the Bacon Convention. More than that, the railroad interests watched all following conventions of shippers and tried to keep them from passing resolutions favorable to the President’s demands. When the American Hardware Manufacturers’ Association met in Washington, November 7th, Mr. Parry and Mr. Davenport were both on hand trying to influence the delegates — in which enterprise they did not finally succeed.

Now, we must not dispute the right of both of these interests to be heard. It is no disgrace for a man to favor the railroads either because of honest convictions or for wholly selfish reasons. The point I wish to make is this: the Bacon Convention was an outright and honest demand for reform. The Anti-Bacon Convention was nursed and backed by the railroads. It was not what it seemed. By this devise the railroad, keeping its looming figure in the background, tried to deceive public opinion by showing that shippers generally did not want any more legislation. The meat of this whole matter lies in the underhand effort of the railroads not to inform but to corrupt and deceive public opinion—and that strikes at the very root of democracy. We are a fair people; we want to hear the side of the railroads, but why all this secret machinery, all these roundabout methods of stealing men’s minds? Is it not, in itself, a confession of essential wrongness? Last winter, when President Mellen of the N. Y. N . H . & H . Railway came out boldly and frankly and told the Connecticut legislature what he wanted and why he wanted it, the action met the approval of the entire country. I saw at least twenty editorials commending his action. When the railroad comes out fairly into the field, and presents its case, there is no more indulgent hearer than the people. Why, then, won’t they do it?

Having thus constructed public opinion through certain channels and obstructed it elsewhere, the railroads bring together—how cleverly—all this organized sentiment so that it will bear directly upon legislators and congressmen at the very moment when it will do the most good. I happened to be in Washington last winter just before the House of Representatives voted on the Esch-Townsend bill. Several different congressmen showed me how they had been “hearing from their districts.” Congressman Cooper of Wisconsin had a thick pack of telegrams and letters from his constituents.

Sentiment in Wisconsin is strongly in favor of railroad regulation, especially the control of the rate. But did these telegrams and letters urge Mr. Cooper to support the rate regulation bill? Not a bit of it. Every one of them urged just the contrary.

How did this come about? Another Congressmen, Haugen of Iowa, used upon the floor of the House this letter of explanation from a constituent of his in Iowa:

DEAR HAUGEN: — Yesterday the superintendent and freight agent were here wanting us to sign a petition that the present tariff law was good enough for us. We refused. Then they wanted us to regulate the laws for the best interest of the shippers and the railroad companies, which we signed, as Mr. and myself thought it would not have any bearing on you, for that was what you would be in favor of. In fact, I doubt if they sent it to you. I told them I did not know the nature of the law. As I am only one shipper of many, I do not attempt to dictate to you. I signed because the railroad company has been good to me. I am shipping every day, and the petition signed was no benefit to them.

Several documents have come into my possession showing exactly how this “public sentiment” is brought to bear on senators and representatives. Here is a letter from Brent Arnold, freight agent of the L. & N. Ry., located at Cincinnati. It was sent October 11, 1905, to many shippers along the line of that railroad.

GENTLEMAN: I will take it as a favor if you will write letters in duplicate, as here enclosed per samples on your letterheads, sending the originals and copies to me.

Yours truly,

Brent Arnold, Superintendent.

With this communication was enclosed the following letter, in blank, to Senators McCreary and Blackburn, and Congressman Rhinock:


U. S. Senator,

Washington, D. C.

DEAR SIR: — We disapprove pending legislation in Congress, the effect of which will be to extend the powers of the Interstate Commerce Commission so as to practically give to said Commission the authority to make rates. We believe that the present powers of the Commission are sufficient.

We, however, hope that authority will be given to the Interstate Commerce Commission, or some other body, to effectually put a stop to the payment of rebates.

Yours truly,

It is to be observed that Mr. Brent Arnold does not even permit the shippers to use their own language. These letters represent the ideas, not of the people, but of the L. & N. Railroad. Mr. Arnold, as division freight agent, has great power over the destinies of the shippers along his line. A little favor here, or the discrimination of displeasure there, goes a long way in making success or failure. Some shippers sign, then, because they are afraid; some in hope of future favors, some as a matter of personal friendship. But nearly all sign. And the senators and congressmen are flooded with this expression of “public opinion.” Now this is the plain debauchery of that public intelligence which is the very foundation of a democracy. There is all the difference in the world between the man who writes to his congressman out of the hot convictions generated under his own hat—be they either sordid or fired by the noblest ideals—and the man who weakly sells out his convictions, his count-one in a democracy, for the cash or the favor of another person, be he a railroad agent or anyone else.

Supposing now that all this gigantic system of publicity fails, and there is still an opposing public opinion? No one who looks into these matters can fail to be impressed with the marvelous vitality of a genuine conviction. Get an idea into the minds of a few men—a deep, let us say, moral idea, or an idea that they are being wronged, that justice is not being done, and it persists, it thrives in the face of every machine known to human ingenuity. Even overwhelming cash, that excellent smotherer of convictions, cannot extinguish it. And upon that fact rests the hope of democratic institutions.

When all ordinary devices for changing public opinion have failed, then the railroad companies take the next and last step in their campaign. They go about the business, deliberately and in cold blood, of buying up the channels for the expression of public opinion. It seems a terrible thing to say, but the railroads have in at least one case that we know of purchased practically the entire press of a state—a corruption so vast as to be hardly conceivable. Let us see how they did it.

In the first place the railroads advertise in nearly every newspaper and practically every editor rides on a free pass. This represents a steady, fruitful income and in itself disposes the editor to a friendly treatment of the railroads. How easily this patronage may be made the vehicle for influencing the policy of the paper! The editor must be a man of strong convictions indeed to offend regularly one of his largest clients. And how adroitly the agent of the road gives or withholds passes or gives or withholds advertising as the editor is “good” or “bad!”

When this will not do, the railroads begin to buy outright—as they bought many newspapers during their bitter campaign to defeat La Follette of Wisconsin and his reform measures. We know exactly how this was done, because we have affidavits from several editors. Of course, the railroads here operated through the Republican machine, but it was railroad money that did the work. They paid from $200 to $1,000 for the influence of the various papers; and one editor was sharp enough to sell out twice!

I can do no better than to set down here one affidavit among several showing how these newspapers were bought:

FENNIMORE, WIS., Feb. 6, 1902:—In order to acquaint the public as to certain facts in regard to which I believe they ought to be informed, the undersigned desires to make the following personal statement:

“I have not signed a contract to support the Wisconsin Republican League, or its principles; have not sold the editorial space of my paper, and have made no promises or concessions of any nature to said league. I will acknowledge that I league in payment of its equivalent in subscriptions to my paper, which were to have been sent me later, but as the said subscriptions have not yet been received, and I feel that the acceptance and further retention of the money might by some be construed as exercising an undue and perhaps improper influence on myself and the policy of my paper, I have returned to the proper officials of the Wisconsin Republican League the said sum of two hundred dollars. I wish to be free of everything that might possibly be looked upon as a surrender of the privilege of expressing my honest convictions at any and all times and on any subject, political or otherwise; and believe that a publisher ought to be honorable enough to take the public into his confidence in such matters as this.

(Signed) “HENRY E. ROETHE”

State of Wisconsin, County of Grant, ss.: — Henry E. Roethe, being duly sworn, deposes and says that the foregoing is a true and correct statement of any connection he may have had with the Wisconsin Republican League.


Notary Public, Grant County, Wis.

My commission expires August 30, 1903.

It finally came to such a pass that the only way La Follette could reach the people—the newspapers being closed against him—with his arguments on the railroad question, was to publish pamphlets and circulate them broadcast throughout the state.

All this leads up, naturally, to the influence of the railroads in politics, which is quite a different subject. When all these efforts to cloud or corrupt the fountainhead of government—public opinion—have failed, then the railroads take the next step; they go into politics, own political bosses, elect boss-made legislators, and finally buy enough more of them directly to accomplish what they wish.

The question of the “sanitation” of public opinion, then, as Lowell expresses it, “becomes instant and pressing.” If we can let in light and air, if the people understand how they are being approached on every hand by the railroads, though they may not know it; that they are being used to defeat their own best interests, they will at least proceed forewarned.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s