The Railroad Question
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Title: The Railroad Question
Author: William Larrabee
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The Railroad Question.
THE RAILROAD QUESTION
A HISTORICAL AND PRACTICAL TREATISE ON
RAILROADS, AND REMEDIES FOR THEIR ABUSES
BY
WILLIAM LARRABEE,
LATE GOVERNOR OF IOWA.
_Salus populi suprema lex._
NINTH EDITION.
CHICAGO:
THE SCHULTE PUBLISHING COMPANY.
1898.
Copyright, 1893,
BY
WILLIAM LARRABEE.
PREFACE.
The people of the United States are engaged in the solution of the
railroad problem. The main question to be determined is: Shall the
railroads be owned and operated as public or as private property? Shall
these great arteries of commerce be owned and controlled by a few
persons for their own private use and gain, or shall they be made
highways to be kept under strict government control and to be open for
the use of all for a fixed, equal and reasonable compensation?
In a new and sparsely settled country which is rich in natural resources
there may be no great danger in pursuing a _laissez-faire_ policy in
governmental affairs, but as the population of a commonwealth becomes
denser, the quickened strife for property and the growing complexity of
social and industrial interests make an extension of the functions of
the state absolutely necessary to secure protection to property and
freedom to the individual.
The American people have shown themselves capable of solving any
political question yet presented to them, and the author has no doubt
that with full information upon the subject they will find the proper
solution of the railroad problem. The masses have an honest purpose and
a keen sense of right and wrong. With them a question is not settled
until it is settled right.
It must be conceded that of all the great inventions of modern times
none has contributed as much to the prosperity and happiness of mankind
as the railroad.
Our age is under lasting obligations to Watt and Stephenson and many
other heroes of industry who have aided in bringing the railroad to its
present state of perfection. Their genius is the product of our
civilization, and their legacies should be shared by all the people to
the greatest extent possible. An earnest desire to aid in attaining this
end has prompted this contribution to the literature on the subject.
The author is not an entire novice in railroad affairs. He has had
experience as a shipper and as a railroad promoter, owner and
stockholder, and has even had thrust upon him for a short time the
responsibility of a director, president and manager of a railroad
company. He has, moreover, had every opportunity to familiarize himself
with the various phases of the subject during his more than twenty
years' connection with active legislation.
He came to the young State of Iowa before any railroad had reached the
Mississippi. Engaging early in manufacturing, he suffered all the
inconveniences of pioneer transportation, and his experience instilled
into him liberal opinions concerning railroads and their promoters. He
extended to them from the beginning all the assistance in his power,
making not only private donations to new roads, but advocating also
public aid upon the ground that railroads are public roads.
As a member of the Iowa Senate he introduced and fathered the bill for
the act enabling townships, incorporated towns and cities to vote a five
per cent. tax in aid of railroad construction. He favored always such
legislation as would most encourage the building of railroads, believing
that with an increase of competitive lines the common law and
competition could be relied upon to correct abuses and solve the rate
problem. He has since become convinced of the falsity of this doctrine,
and now realizes the truth of Stephenson's saying that where
combination is possible competition is impossible.
It is the object of this work to show that as long as the railroads are
permitted to be managed as private property and are used by their
managers for speculative purposes or other personal gain, or as long
even as they are used with regard only for the interest of stockholders,
they are not performing their proper functions; and that they will not
serve their real purpose until they become in fact what they are in
theory, highways to be controlled by the government as thoroughly and
effectually as the common road, the turnpike and the ferry, or the
post-office and the custom-house.
This book has been written at such odd hours as the author could snatch
from his time, which is largely occupied with other business. He is
under obligations to many of our ministers and consuls abroad for
statistics and other valuable information concerning foreign railroads,
as well as to a number of personal friends for other assistance,
consisting chiefly in rendering the railroad literature of Europe
accessible to him.
WILLIAM LARRABEE.
_Clermont, Iowa, May, 1893._
CONTENTS.
I. HISTORY OF TRANSPORTATION 17
II. THE HISTORY OF RAILROADS 46
III. HISTORY OF RAILROADS IN THE UNITED STATES 76
IV. MONOPOLY IN TRANSPORTATION 90
V. RAILROAD ABUSES 124
VI. STOCK AND BOND INFLATION 163
VII. COMBINATIONS 189
VIII. RAILROADS IN POLITICS 205
IX. RAILROAD LITERATURE 231
X. RAILROAD LITERATURE--_Continued_ 273
XI. RAILROADS AND RAILROAD LEGISLATION IN IOWA 319
XII. THE INTERSTATE COMMERCE ACT 349
XIII. THE RATE QUESTION 370
XIV. REMEDIES 389
APPENDIX--TABLES AND STATISTICS 459
LIST OF AUTHORS AND WORKS CONSULTED AND QUOTED
ACWORTH, W. M. The Railways of England
ADAMS, C. F., JR. Railroads, Their Origin and Problems
ADAMS, H. C. Public Debts
ADAMS, HENRY History of the United States
ATKINSON, EDWARD The Distribution of Products
BAGEHOT, WALTER The English Constitution
BAKER, C. W. Monopolies and the People
BEACH, CHARLES F., JR. On Private Corporations
BLACKSTONE, W. Commentaries on Laws of England
BOISTED, C. A. The Interference Theory of Government
BOLLES, ALBERT S. Bankers' Magazine
BONHAM, JOHN M. Railway Secrecy and Trusts
BRYCE, JAMES The American Commonwealth
BUCKLE, H. T. History of Civilization of England
CAREY, H. C. Principles of Social Science
" " Unity of Law
CARY, M. View of System of Pennsylvania Internal
Improvements.
CLOUD, D. C. Monopolies and the People
CLEWS, HENRY Twenty-eight Years in Wall Street
COOLEY, THOMAS M. Constitutional Limitations
CONGRESSIONAL RECORD.
COMPILATION OF ENGLISH LAWS UPON RAILWAYS.
DABNEY W. D. The Public Regulation of Railways
DILLON, SIDNEY North American Review
DORN, ALEXANDER Aufgaben der Eisenbahnpolitik
DRAPER, J. W. Intellectual Development of Europe
ENCYCLOPEDIA, AMERICAN.
ENCYCLOPEDIA BRITANNICA.
ENCYCLOPÄDIE (RÖLL'S) DES EISENBAHNWESENS, 1892.
FINDLAY, GEORGE Working and Management of English Railways.
FINK, ALBERT Cost of Railroad Transportation, etc.
FISHER, G. P. Outlines of Universal History
FISK, JOHN American Political Ideas
" " Critical Period of American History
FOREIGN COMMERCE OF AMERICAN REPUBLICS AND COLONIES.
GRAHAM, WM. Socialism Old and New
GIBBON, EDWARD Decline and Fall of the Roman Empire
GREEN, JOHN K. History of English People
GILPIN, WM. The Cosmopolitan Railway
GRINNELL, J. B. Men and Events of Forty Years
GUNTON, GEORGE Wealth and Progress
GUIZOT, M. History of Civilization
HABOUR, THEODOR Geschichte des Eisenbahnwesens
HADLEY, A. T. Railway Transportation
HALL'S LIFE OF PRINCE BISMARCK.
HUDSON, J. T. The Railways and the Republic
JEANS, J. S. Railway Problems
JERVIS, JOHN B. Railway Property
JEVONS, W. S. Methods of Social Reform
KENT, JAMES Commentaries on American Law
KIRKMAN, M. M. Railway Rates and Government Control and other
works.
LECKEY, W. E. H. England in Eighteenth Century
LIEBER, FRANCIS Political Ethics
" " Civil Liberty and Self-Government
" " Miscellaneous Essays
LODGE, H. C. Life of General Washington
MARTINEAU, HARRIET History of England
MCMASTER, J. B. History of People of United States
MACAULAY, T. B. History of England
MOTLEY, J. L. The Dutch Republic
" " The United Netherlands
PAINE, CHARLES The Elements of Railroading
PATTEN, J. H. Natural Resources of the United States
PEFFER, W. A. The Farmer's Side
POOR'S RAILWAY MANUAL.
PORTER, HORACE North American Review
RAWLINSON, GEORGE Seven Great Monarchies
REDFIELD On Law of Railways
RECORDS OF CENTRAL IOWA TRAFFIC ASSOCIATION, 1886-1887.
RECORDS OF ASSOCIATION OF GENERAL FREIGHT AGENTS OF THE WEST.
RECORDS OF JOINT WESTERN CLASSIFICATION COMMITTEES.
REPORTS OF STATE BOARDS OF COMMISSIONERS.
REPORT OF HEPBURN COMMITTEE.
REPORTS OF UNITED STATES CENSUS.
REPORT OF WINDOM COMMITTEE.
REPORT OF BANKERS' ASSOCIATION, 1892.
REPORT OF CULLOM COMMITTEE.
ROEMER, JEAN Origin of English People, etc.
REUBEAUX, F. Der Weltverkehr und seine Mittel
RICHARDSON, D. N. A Girdle Round the Earth
ROGERS, JAMES E. THOROLD Economic Interpretation of History.
ROSCHER, WM. Political Economy
SCHREIBER Die Preussischen Eisenbahnen
SCHURZ, CARL Life of Henry Clay
SMITH, ADAM Wealth of Nations
SPELLING, T. CARL On Private Corporations
SPENCER, HERBERT Synthetic Philosophy
STERN, SIMON. Constitutional History and Political
Development of the United States.
STICKNEY, A. B. The Railroad Problem
STATISTIQUES DES CHEMINS DE FER DE L'EUROPE, 1882.
TAYLOR, HANNIS Origin and Growth of the English Constitution.
THE AMERICAN RAILWAY. Published by Charles Scribner's Sons.
VERSCHOYLE, REV. J. History of Ancient Civilization
VON WEBER, M. M. Privat-, Staats- und Reichs-Bahnen
" " " " Nationalität und Eisenbahn Politik
VON DER LEGEN, ALFRED Die Nordamerikanischen Eisenbahnen.
WALKER, ALDACE F. The Forum
WEEDEN, W. B. Economic and Social History of New England.
THE RAILROAD QUESTION.
CHAPTER I.
HISTORY of TRANSPORTATION.
While the prosperity of a country depends largely upon its
productiveness, the importance of proper facilities for the expeditious
transportation and ready exchange of its various products can scarcely
be overrated. The free circulation of commercial commodities is as
essential to the welfare of a people as is the unimpaired circulation of
the blood to the human organism.
The interest taken by man in the improvement of the roads over which he
must travel is one of the chief indications of civilization, and it
might even be said that the condition of the roads of a country shows
the degree of enlightenment which its people have reached. The trackless
though very fertile regions of Central Africa have for thousands of
years remained the seat of savages; but no nation that established a
system of public thoroughfares through its dominion ever failed to make
a distinguished figure in the theater of the world. There are some
authors who go even so far as to call the high roads of commerce the
pioneers of enlightenment and political eminence. It is true that as
roads and canals developed the commerce of Eastern Asia and Europe, the
attention of their people was turned to those objects which distinguish
cultured nations and lead to political consequence among the powers of
the world. The systems of roads and canals which we find among those
ancients who achieved an advanced state of civilization might well put
to shame the roads which disgraced not a few of the European states as
late as the eighteenth century.
Among the early nations of Asia of whose internal affairs we have any
historic knowledge are the Hindoos, the Assyrians and Babylonians, the
Phoenicians, the Persians and the Chinese.
The wealth of India was proverbial long before the Christian era. She
supplied Nineveh and Babylon, and later Greece and Rome, with steel,
zinc, pearls, precious stones, cotton, silk, sugar-cane, ivory, indigo,
pepper, cinnamon, incense and other commodities. If we accept the
testimony of the Vedas, the religious books of the ancient Hindoos, a
high degree of culture must have prevailed on the shores of the Ganges
more than three thousand years ago. Highways were constructed by the
state and connected the interior of the realm with the sea and the
countries to the northeast and northwest. For this purpose forests were
cleared, hills leveled, bridges built and tunnels dug. But the broad
statesmanship of the Hindoo did not pause here. To administer to the
convenience and comfort of the wayfaring public, and thus still more
encourage travel and the exchange of commodities, the state proceeded to
line these public roads with shade trees, to set out mile-stones, and to
establish stations provided with shady seats of repose, and wells at
which humane priests watered the thirsty beasts.
At intervals along these routes were also found commodious and
cleanly-kept inns to give shelter to the traveler at night. Buddha, the
great religious reformer of the Hindoos, commended the roads and
mountain passes of the country to the care of the pious, and the Greek
geographers speak with high praise of the excellence of the public
highways of Hindostan.
Among the Babylonians and Assyrians agriculture, trade and commerce
flourished at an almost equally remote period. The ancient inhabitants
of Mesopotamia cultivated the soil with the aid of dikes and canals, and
were experts in the manufacture of delicate fabrics, as linen, muslin
and silk. To them is attributed the invention, or at least the
perfection, of the cart, and the first use of domestic animals as beasts
of burden. Their cities had well-built and commodious streets, and the
roads which connected them with their dependencies aided to make them
the busy marts of Southeastern Asia.
During the later Babylonian Empire immense lakes were dug for retaining
the water of the Euphrates, whence a net-work of canals distributed it
over the plains to irrigate the land; and quays and breakwaters were
constructed along the Persian Gulf for the encouragement of commerce.
While highways among the Babylonians served the development of
agriculture and the exchange of industrial commodities, they were
constructed chiefly for strategic purposes by the more warlike
Assyrians, whose many wars made a system of good roads a necessity. The
Greek geographer Pausanias was shown a well-kept military road upon
which Memnon was said to have marched with an Assyrian army from Susa to
Troy to rescue King Priam. Traces of this road, called by the natives
"Itaki Atabeck," may be seen to this day.
The Phoenicians, who were the first of the great historic maritime
nations of antiquity, occupied the narrow strip of territory between the
mountains of Northern Palestine and the Mediterranean Sea. From their
situation they learned to rely upon the sea as their principal highway.
They transported to the islands of the Mediterranean as well as the
coast of Northern Africa and Southern Europe heavy cargoes consisting of
the product of their own skill and industry as well as of the manifold
exports of the east. They sailed even beyond the "Pillars of Hercules"
into the Atlantic Ocean and the North Sea. Through their hands "passed
the gold and pearls of the east and the purple of Tyre, slaves, ivory,
lion and panther skins from the interior of Africa, frankincense from
Arabia, the linen of Egypt, the pottery and fine wares of Greece, the
copper of Cyprus, the silver of Spain, tin from England, and iron from
Elba."
But while the Phoenicians for their commercial intercourse with other
nations relied chiefly upon the sea, the great highway of nature, they
neglected by no means road-building at home. They connected their great
cities, Sidon and Tyre, by a coast road, which they extended in time as
far as the Isthmus of Suez. They also established great commercial
routes by which their merchants penetrated the interior of Europe and
Asia. Caravan roads extended south to Arabia and east to Mesopotamia and
Armenia, penetrating the whole Orient as far as India, and even the
frontiers of China. The Phoenicians thus became the traders of
antiquity, Tyre being the link between the east and the west.
The Persian Empire, which under Darius stretched from east to west for a
distance of 3,000 miles and comprised no less than two million square
miles, with a population of seventy or eighty millions, had, with the
exception of the Romans, perhaps the best system of roads known to
ancient history. Indeed, it is doubtful whether without it such a vast
empire, more than half as large as modern Europe, could have been held
together. Each satrap, or prefect of a province, was obliged to make
regular reports to the king, who was also kept informed by spies of what
was taking place in every part of the empire. To aid the administration
of the government, postal communication for the exclusive use of the
king and his trusted servants connected the capital with the distant
provinces. This postal service was, four or five centuries later,
patterned after by the Romans. From Susa to Sardes led a royal road
along which were erected caravansaries at certain intervals. Over this
road, 1,700 miles long, the couriers of the king rode in six or seven
days. Under Darius the roads of the empire were surveyed and distances
marked by means of mile-stones, many of which are still found on the
road which led from Ecbatana to Babylon. These roads crossed the wildest
regions of that great monarchy. They connected the cities of Ionia with
Sardes in Lydia, with Babylon and with the royal city of Susa; they led
from Syria into Mesopotamia, from Ecbatana to Persepolis, from Armenia
into Southern Persia, and thence to Bactria and India.
The Chinese commenced road-building long before the Christian era. They
graded the roadway and then covered the whole with hewn blocks of stone,
carefully jointed and cemented together so that the entire surface
presented a perfectly smooth plane. Such roads, although very costly to
build, are almost indestructible by time. In China, as well as in
several other countries of Asia, the executive power has always charged
itself with both the construction and maintenance of roads and navigable
canals. In the instructions which are given to the governors of the
various provinces these objects, it is said, are constantly commanded to
them, and the judgment which the court forms of the conduct of each is
very much regulated by the attention which he appears to have paid to
this part of his instructions. This solicitude of the sovereign for the
internal thoroughfares is easily accounted for when it is considered
that his revenue arises almost entirely from a land-tax, or rent, which
rises and falls with the increase and decrease of the annual produce of
the land. The greatest interest of the sovereign, his revenue, is
therefore directly connected with the cultivation of the land, with the
extent of its produce and its value. But in order to render that produce
as great and as valuable as possible, it is necessary to procure for it
as extensive a market as possible, and, consequently, to establish the
freest, the easiest and the least expensive communication between all
the different parts of the country, which can be done only by means of
the best roads and the best navigable canals.
In Africa the Egyptians and Carthaginians are the only nations of
antiquity of which we have much historic knowledge. The former kept up a
very active commerce not only with the south, but also with the tribes
of Lydia on the west and with Palestine and the adjoining countries on
the east. To facilitate commerce, they constructed and maintained a
number of excellent highways leading in all directions. One of the most
important among these was the old royal road on the coast of the
Mediterranean Sea, or the "Road of the Philistines" of the Scriptures.
This road crossed the Isthmus of Suez and led through the land of the
Philistines and Samaria to Tyre and Sidon. Another road led, in a
northwesterly direction, from Rameses to Pelusium. This, however,
crossed marshes, lagoons and a whole system of canals, and was used only
by travelers without baggage, while the Pharaohs, accompanied by their
horses, chariots and troops, preferred the former road. A third road
led from Coptos, on the Nile, to Berenice, on the Red Sea. There were
between these two cities ten stations, about twenty-five miles apart
from each other, where travelers might rest with their camels each day,
after traveling all night, to avoid the heat. Still another road led
from the town of Babylon, opposite Memphis, along the east bank of the
Nile, into Nubia. Much of the commerce of Egypt in ancient times, as in
our day, was conducted on the Nile and its canals. The boatman and the
husbandman were, in fact, the founders of the gentle manners of the
people who flourished four thousand years ago in the blessed valley of
the Nile. There is one canal among the many which deserves special
mention. It flowed from the Bitter Lakes into the Red Sea near the city
of Arsinoe. It was first cut by Sesostris before the Trojan times, or,
according to other writers, by the son of Psammitichus, who only began
the work and then died. Darius I. set about to complete it, but gave up
the undertaking when it was nearly finished, influenced by the erroneous
opinion that the level of the Red Sea was higher than Egypt, and that if
the whole of the intervening isthmus were cut through, the country would
be overflowed by the sea. The Ptolemaic kings, however, did cut it
through and placed locks upon the canal.
Carthage was a Phoenician colony. The city was remarkable for its
situation. It was surrounded by a very fertile territory and had a
harbor deep enough for the anchorage of the largest vessels. Two long
piers reached out into the sea, forming a double harbor, the outer for
merchant ships and the inner for the navy. This city early became the
head of a North African empire, and her fleets plied in all navigable
waters known to antiquity. Her navy was the largest in the world, and
in the sea-fight with Regulus comprised three hundred and fifty vessels,
carrying one hundred and fifty thousand men. Though we have but meager
accounts of the internal affairs of Carthage, there can be no doubt that
much attention was given, both at home and in the colonies, to the
construction of highways, which were distinguished for their solidity.
It is said that the Romans learned from the Carthaginians the art of
paving roads.
European history began in Greece, the civilization of whose people
passed to the Romans and from them to the other Aryan nations which have
played an important role in the great historical drama of modern times.
The physical features of the Balkan Peninsula were an important factor
in the formation of the character of its inhabitants. The coast has a
large number of well-protected bays, most of which form good harbors.
Navigation and commerce were greatly stimulated in a country thus
favored by Nature. Nearly all the principal cities of Hellas could be
reached by ships, and the need of internal thoroughfares was but little
felt. Nevertheless, public highways connected all of the larger towns
with the national sanctuaries and oracles, as Olympia, the Isthmus,
Delphi and Dodona. Athens, after the Persian wars the metropolis of
Greece, was by the so-called Long Walls connected with the Piræus, its
harbor. This highway, protected by high walls built two hundred yards
apart, was over four miles long, and enabled the Athenians, as long as
they held the command of the sea, to bring supplies to their city, even
when it was surrounded by an enemy on the land.
Rome is the connecting link between antiquity and mediævalism. The great
empire sprang from a single city, whose power and dominion grew until
it comprised every civilized nation living upon the three continents
then known. Under the emperors, the Roman empire extended from the
Atlantic to the Euphrates, a distance of more than three thousand miles,
and from the Danube and the English Channel to the cataracts of the Nile
and the Desert of Sahara. Its population was from eighty to one hundred
and twenty millions. The empire was covered with a net-work of excellent
roads, which stimulated, together with the safety and peace which
followed the civil wars, traffic and intercourse between the different
regions united under the imperial government. More than 50,000 miles of
solidly constructed highways connected the various provinces of this
vast realm. There was one great chain of communication of 4,080 Roman
miles in length from the Wall of Antoninus in the northwest to Rome, and
thence to Jerusalem, a southeastern point of the empire. There were
several thousand miles of road in Italy alone. Rome's highways were
constructed for the purpose of facilitating military movements, but the
benefits which commerce derived from them cannot easily be
overestimated. These military roads were usually laid out in straight
lines from one station to another. Natural obstacles were frequently
passed by means of very extensive works, as excavations, bridges, and,
in some instances, long tunnels. The resources of the Roman Empire were
almost inexhaustible, and no public expenditures were larger than those
made on account of the construction of new roads. The fact that many of
these roads have borne the traffic of almost two thousand years without
material injury is abundant proof of the unsurpassed solidity of their
construction. The Roman engineers always secured a firm bottom, which
was done, when necessary, by ramming the ground with small stones, or
fragments of brick. Upon this foundation was placed a pavement of large
stones, which were firmly set in cement. These stones were sometimes
square, but more frequently irregular. They were, however, always
accurately fitted to each other. Many varieties of stone were used, but
the preference was given to basalt. Where large blocks could not be
conveniently obtained, small stones of hard quality were sometimes
cemented together with lime, forming a kind of concrete, of which masses
extending to a depth of several feet are still in existence. The
strength of the pavements is illustrated by the fact that the substrata
of some have been so completely washed away by water, without disturbing
the surface, that a man may creep under the road from side to side while
carriages pass over the pavement as over a bridge. The roads were
generally raised above the ordinary surface of the ground. They
frequently had two wagon-tracks, which were separated by a raised
foot-path in the center, and blocks of stone at intervals, to enable
travelers to mount on horseback. Furthermore, each mile was marked by a
numbered post, the distance being counted from the gate of the wall of
Servius. The mile-post was at first a roughly hewn stone, which in time
was exchanged for a monument, especially in the vicinity of Rome and
other large cities. The most celebrated road of Italy, which has always
excited the admiration of the student of antiquity, was the Via Appia,
the remains of which are still an object of wonder. It was first built
from Rome to Capua by Appius Claudius Cæcus in the fourth century before
Christ, and was afterwards continued as far as Brundisium. It was broad
enough for two carriages to pass each other, and was built of solid
stone. The stones were hewn sharp and smooth, and their corners fitted
into one another without the aid of any connecting material, so that,
according to Procopius, the whole appeared to be one natural stone. Each
side of the street had a high border for foot-passengers, on which were
also placed alternately seats and mile-stones. In spite of its age and
heavy traffic parts of this road are still in a good state of
preservation. After the completion of the Via Appia similar roads were
constructed, so that under the emperors seven great highways started
from Rome, viz.: the Via Appia and Latina to the south; two, Valeria and
Salaria, to the Adriatic; two, Cassia and Aurelia, to the northwest; and
the Via Æmilia, serving for both banks of the Po.
Nor were the provinces by any means neglected. During the last Punic war
a paved road was constructed from Spain through Gaul to the Alps, and
similar roads were afterwards built in every part of Spain and Gaul,
through Illyricum, Macedonia and Thrace, to Constantinople, and along
the Danube to its mouths on the Black Sea. So, likewise, were the
islands of Sardinia, Corsica, Sicily and Great Britain crossed by them.
It has justly been said that the roads of the Roman Empire, whose strong
net-work enlaced the known world, were the architectural glory of its
people. These military roads caused in the various parts of the empire a
wonderful social and commercial revolution. They made it possible for
civilization to penetrate into the most remote retreats and to conquer
their inhabitants more completely than could Cæsar at the head of his
legions.
The Romans also had an efficient postal service, which was first
instituted by Augustus and greatly improved by Hadrian. The former, as
Gibbon states in his "Decline and Fall of the Roman Empire," placed
upon all roads leading away from the golden milestone of the Forum, at
short distances, relays of young men to serve as couriers, and later
provided vehicles to hurry information from the provinces. These posts
facilitated communication through all parts of the empire, and while
they were originally established in the interest of the government, they
proved serviceable to individuals as well, for there is no doubt, that,
together with the official dispatches, every courier carried private
letters also.
The expenses of the post were largely defrayed by the cities through
which it passed, these cities being obliged to provide the stations
established within their territories with the necessary stores. At the
principal stations were found inns, where the proprietors were held
responsible for injuries suffered by travelers while in their houses.
The communication of the Roman Empire was scarcely less free and open by
sea than it was by land. Italy has by nature few safe harbors, but the
energy and industry of the Romans corrected the deficiencies of nature
by the construction of several artificial ports.
After the downfall of the Roman Empire its roads were either destroyed
by the people through whose territories they led or by the conquerors,
to render more difficult the approach of an enemy.
Civilization and commerce greatly suffered through the downfall of Rome,
and did not again revive until after the struggles of the Northern
Christian races with the Southern and Eastern nations, which had become
Mohammedan. The sixth and seventh centuries were the darkest in the
history of Europe. Charlemagne, toward the close of the eighth century,
caused many of the old Roman roads to be repaired and new ones to be
constructed. He, as well as several of his immediate successors, made
use of mounted messengers to send imperial mandates from one part of the
realm to the other. The rulers of the succeeding centuries did not
profit, however, by this example, and the roads of the empire again fell
into decay. Moreover, the public safety was greatly impaired by robbers
and feudal knights, whose depredations were so heavy a tax upon commerce
as to greatly discourage it. Trade under these circumstances would have
been entirely destroyed, had it not been for the merchants' unions which
were formed by the larger cities for the protection of their interests.
These organizations maintained the most important thoroughfares, and
even furnished armed escorts to wayfaring merchants. Commerce thus
flourished in, and commercial relations were kept up among, the cities
immediate between Venice and Genoa, as well as the cities on the Rhine
and Danube. Florence, Verona, Milan, Strasbourg, Mayence, Augsburg, Ulm,
Ratisbon, Vienna and Nuremberg were flourishing marts, and through them
flowed the currents of trade between the north and the south. Out of
these commercial unions grew in time the Hanseatic League, which from
the thirteenth to the fifteenth century controlled the commerce of the
northern part of Europe on both the water and the land. The object of
this league, which at the height of its power included eighty-five
cities, was to protect its members against the feudal lords on the land
and against pirates on the sea. Its power extended from Norway to
Belgium and from England to Russia. In all the principal towns on the
highways of commerce the flag of the Hansa floated over its counting
houses. Wherever its influence reached, its members controlled roads,
mines, agriculture and manufactures. It often dictated terms to kings,
and almost succeeded in monopolizing the trade of Europe north of
Italy.
It is characteristic of the social and political condition of this time
that the postal service was not carried on by the state, but was in the
hands of the various municipalities, convents and universities. During
the fifteenth and sixteenth centuries national power and national life
made themselves felt, and with a change in the political system the
system of communication and transportation changed also. Louis XI. of
France took the first step toward making a nation of the French when he
transferred the postal service from the cities and other feudal
authorities to the state. Two or three centuries later, France obtained
a national system of roads and canals. The idea was largely due to
Colbert, the minister of Louis XIV. It was, however, not executed in
detail until the middle of the last century. Many abuses grew up in
connection with it, but on the whole it was probably the soundest and
most efficient part of the French administration. A system of lines of
communication, radiating from Paris, was constructed by skilled
engineers, and placed under the supervision of men of talent, especially
trained for the purpose at the Ecôle des Fonts et Chaussées. The whole
system was further improved by Napoleon, and has served as a basis for
the present system of railroad supervision.
The first artificial waterway constructed in France was the Languedoc
Canal, connecting the Bay of Biscay with the Mediterranean. This
gigantic work, designed by Riquet, was commenced in 1666, and completed
in 1681. The canal is 148 miles long and its summit level is 600 feet
above the sea, the works along its line embracing over one hundred locks
and fifty aqueducts. A large number of canals have since been
constructed, and France has at present over 4,000 miles of artificial
waterways, or more than any other country of Europe.
Nowhere else was the same completeness of organization possible. The
regular mail service of Germany dates back to the year of 1516, when
Emperor Maximilian established a postal route between Brussels and
Vienna and made Francis Count of Taxis Imperial Postmaster-General. The
postal service of the empire greatly improved up to the time of the
Thirty Years' War, which completely demoralized it. After the war the
individual states and free cities, usurping imperial prerogatives,
established postal routes of their own and thereby crippled the national
service. The same war also did great damage to the public thoroughfares,
and the commercial and manufacturing interests of the German empire were
until the end of the eighteenth century in a deplorable condition.
Frederick the Great, recognizing the fact that the industrial paralysis
of Germany was owing chiefly to its defective means of communication,
commenced to construct turnpikes and canals in Prussia, and the minor
German princes one by one imitated his example, until the Napoleonic
wars again put an end to internal improvements. The good work was
resumed, however, after the downfall of Napoleon, and in 1830 Germany
was intercrossed by from three to four thousand miles of turnpike.
In the Netherlands canals were constructed as early as the twelfth
century. Being particularly well adapted to the flat country of Holland,
they were rapidly extended until they connected all the cities, towns
and villages of the country, and to a large extent took the place of
roads. The largest canal of Holland is the one which connects the city
of Amsterdam with the North Sea. It was constructed between the years
of 1819 and 1825 at an expense of more than four million dollars. The
city of Amsterdam owes to this canal its present commercial prosperity.
Public roads and the state postal service are of comparatively recent
origin in Great Britain. The first public postal route was established
in 1635, during the reign of Charles I. In 1678 a public stage-coach
route was established between Edinburgh and Glasgow. The distance is
only forty-four miles, but the roads were so bad that, though the coach
was drawn by six able horses, the journey took three days. It was
considered a great improvement when in 1750 it could be completed in
half the time originally required. In 1763 a mail-coach made only
monthly trips between London and Edinburgh, eight long days being
required for the journey, which to-day is made in less than twelve
hours. The number of stage passengers between these two capitals
averaged about twenty-five a month, and rose to fifty on extraordinary
occasions. In those days coaches were very heavy and without springs,
and travelers not unfrequently cut short their journeys for want of
conveniences.
Turnpikes in Great Britain do not even date as far back as
stage-coaches. It is true the first turnpike act was passed as early as
1653, but the system was not extensively adopted until a century later.
Previous to that time the roads of England, such as they were, were
maintained by parish and statute labor. In the latter half of the last
century, under improved methods of construction, turnpike roads
multiplied rapidly. Both roads and vehicles attained, previous to the
advent of the railroads, such a degree of perfection that the
stage-coach made the journey between London and Manchester, 178 miles,
in 19 hours; between London and Liverpool, 203 miles, in less than 21
hours; and between London and Holyhead, 261 miles, in less than 27
hours.
In spite of these improved facilities, the transportation of merchandise
continued to be very expensive. Goods had to be conveyed from town to
town by heavy wagons, and the cost of land-carriage between Manchester
and Liverpool, a distance of thirty miles, was at times as high as forty
shillings per ton.
The various disadvantages of land transportation directed, toward the
middle of the last century, the attention of the British people to the
importance of a system of canals. They realized that these water
highways would open an easier and cheaper communication between distant
parts of the country, thus enabling manufacturers to collect their
materials and fuel from remote districts with less labor and expense,
and to convey their goods to a more distant and more profitable market.
It would also facilitate the conveyance of farm produce to a greater
distance and would thereby benefit both the producer and consumer. The
canal era was formally inaugurated in 1761, when the Duke of Bridgewater
presented to Parliament a petition for a bill to construct the canal
which has since borne his name. The canal was commenced in 1767 and was
completed in 1772. The next forty years were a period of great activity
in canal building, but it was left to private enterprise, with very
little aid from the government. Over a hundred canal acts were passed by
Parliament before the year 1800. The largest canal of the British Isles
is the Caledonian, extending from Inverness to Fort William, a distance
of sixty-three miles. It was commenced in 1803 and completed in 1847,
and cost £1,256,000. Other canals of importance are the Great Canal,
which connects the North Sea with the Atlantic Ocean, and the Grand
Function Canal, which is over one hundred miles long and connects most
of the water-ways of central England with the Thames River. It is
estimated that there were over 2,200 miles of navigable canals in Great
Britain before the introduction of railroads.
Canal-building in Spain dates back to the beginning of the sixteenth
century, when Charles V. built the Imperial Canal of Aragon, which is
over sixty miles long. The political and commercial decline of the
country during the seventeenth and eighteenth centuries, however,
brought the development of her highways to a standstill, and, with the
exception of Turkey, probably no European country has at the present
time more deficient transportation facilities than Spain.
The comparatively high state of civilization which existed in the
Italian cities during the middle ages, their commercial and industrial
thrift and the importance of Rome as the metropolis of the Catholic
Church combined to maintain many of the excellent ancient highways of
Italy. A number of canals were built in Northern Italy as early as the
fifteenth century, and it is claimed by some writers that locks were
first used on the Milanese canals in 1497. But while public
thoroughfares have always been well maintained in Northern Italy and
even as far south as Naples, they were during the past two or three
centuries permitted to greatly deteriorate in the southern part of the
peninsula, to the great detriment of both agriculture and commerce. The
condition of the large Italian islands is still more lamentable, Sicily
and Sardinia being almost entirely devoid of roads. She that was the
granary of ancient Rome to-day scarcely produces enough grain to supply
her own people.
Denmark and the Scandinavian peninsula had a good system of highways
long before the railroad era. Among the many excellent canals of Sweden
may be mentioned the Göta Canal, which was commenced by Charles XII. in
the early part of the last century, but was not entirely completed until
1832. It is, inclusive of the lakes, 118 miles long, and its
construction cost $3,750,000, three-fifths of which was contributed by
the state. This canal connects the Baltic Sea with Lake Wener, as well
as, through the Göta-Elf, with the North Sea.
Next to Turkey and Spain, no country of Europe has been as slow to
appreciate the advantages of a system of highways as Russia. At the
beginning of the nineteenth century the vast empire of the Czar had but
a few roads connecting its principal cities, and these were almost
impassable in the spring and fall. Much progress has, however, been made
since then, and at present Russia has over 75,000 miles of wagon-road
and artificial waterway, and 19,000 miles of railroad. A road has been
built through Siberia, extending from the Ural Mountains to the city of
Jakutsk on the Lena and sending out many branch roads north and south.
The development of Russia's resources has kept pace with that of her
system of highways, and the agricultural and mineral products of that
country are in the markets of the world constantly gaining ground in
their competition with the products of Western Europe and America.
Passing now to the Western Hemisphere, we find that in ancient Peru the
Incas built great roads, the remains of which still attest their
magnificence. Probably the most remarkable were the two which extended
from Quito to Cuzco, and thence on toward Chile, one passing over the
great Plateau, the other following the coast, Humboldt, in his "Aspects
of Nature," says of this mountain road: "But what above all things
relieves the severe aspect of the deserts of the Cordilleras are the
remains, as marvelous as unexpected, of a gigantic road, the work of the
Incas. In the pass of the Andes between Mausi and Loja we found on the
plain of Puttal much difficulty in making a way for the mules over a
marshy piece of ground, while for more than a German mile our sight
continually rested on the superb remains of a paved road of the Incas,
twenty feet wide, which we marked resting on its deep foundations, and
paved with well-cut, dark porphyritic stone. This road was wonderful and
does not fall behind the most imposing Roman ways which I have seen in
France, Spain and Italy. By barometrical observation I found that this
colossal work was at an elevation of 12,440 feet." The length of this
road, of which only parts remain, is variously estimated at from 1,500
to 2,000 miles. It was built of stone and was, in some parts at least,
covered with a bituminous cement, which time had made harder than the
stone itself. All the difficulties which a mountainous country presents
to the construction of roads were here overcome. Suspension bridges led
over mountain torrents, stairways cut in the rock made possible the
climbing of steep precipices, and mounds of solid masonry facilitated
the crossing of ravines. Under the rule of the Spaniards the roads of
the Incas went to ruin. In fact, throughout South America but little, if
anything, was done by the mother country to aid transportation.
North America, or at least that part of it which was settled by the
Anglo-Saxon race, fared much better in this respect. The great utility
of good roads was universally recognized even in the colonial times, but
the scarcity of capital, the great extent of territory as compared with
the population, and the want of harmonious action among the various
colonies, delayed extensive road and canal building until after the
establishment of the Union. Mistaken local interests but too often
wrecked well-advanced plans, and what road-building was done during the
colonial times was almost entirely left to individual exertion, without
any direct aid from the government.
The first American turnpike was built in Pennsylvania in 1790. From
there the system extended into New York and Southern New England. Up to
1822 more than six million dollars had been expended in Pennsylvania for
turnpikes, one-third of which sum, or over $1,000 a mile, had been
contributed by the commonwealth.
In 1800 three wagon-roads connected the Atlantic coast with the country
west of the Alleghanies, one leading from Philadelphia to Pittsburgh,
one from the Potomac to the Monongahela, and a third passed through
Virginia to Knoxville, in Tennessee. Much as was done during this period
for the improvement of the roads, stage-coach travel remained for years
comparatively slow. In 1792 Mr. Jefferson, then Secretary of State,
wrote to the Postmaster-General to know if the post, which was then
carried at the rate of fifty miles a day, could not be expedited to one
hundred. Even this latter rate was considered slow on the great
post-roads forty years later. In the year 1800 one general mail-route
was extended from Maine to Georgia, the trip being made in twenty days.
From Philadelphia a line went to Lexington in sixteen and to Nashville
in twenty-two days. The government of the United States, appreciating
the importance, for military purposes, of good roads leading to the
frontiers, commenced the construction of national, or military, roads.
A road was thus built from Baltimore through Cincinnati to St. Louis,
and another from Bangor to Houlton, in Maine. In 1807 Albert Gallatin,
Secretary of the Treasury, advocated the extensive construction of
public roads and canals by the general government. Mr. Gallatin took the
ground that the inconveniences, complaints, and perhaps dangers,
resulting from a vast extent of territory cannot otherwise be radically
removed than by opening speedy and easy communications through all its
parts; that good roads and canals would shorten distances, facilitate
commercial and personal intercourse, and unite by a still more intimate
community of interests the most remote quarters of the United States,
and that no other single operation within the power of the government
could more effectually tend to strengthen and perpetuate that union
which secured external independence, domestic peace and internal
liberty. The principal improvements recommended by Mr. Gallatin were the
following:
1. Canals opening an inland navigation from Massachusetts to North
Carolina.
2. Improvement of the navigation of the four great Atlantic rivers,
including canals parallel to them.
3. Great inland navigation by canals from the North River to Lake
Ontario.
4. Inland navigation from the North River to Lake Champlain.
5. Canal around the Falls and Rapids of Niagara.
6. A great turnpike road from Maine to Georgia, along the whole extent
of the Atlantic sea-coast.
7. Four turnpike roads from the four great Atlantic rivers across the
mountains to the four corresponding Western rivers.
8. Improvement of the roads to Detroit, St. Louis and New Orleans.
Mr. Gallatin also recommended that a sufficient number of local
improvements, consisting either of roads or canals, be undertaken so as
to do substantial justice to all parts of the country. The expenditure
necessary for these improvements was estimated at twenty million
dollars. Local jealousy and State rights prejudice practically defeated
this movement, the Cumberland road, or National Pike, being the only
result of any importance. The failure of the government to provide the
country with adequate roads left the construction of turnpike roads to
private enterprise, and these roads, before the general introduction of
railroads, often yielded much profit to capitalists. Great as were the
conveniences afforded by the turnpike, they were entirely inadequate for
the development of the resources of the interior of the country. The
products of a forest or a mine could not be transported upon them to any
great extent. The crossing of a single water-shed, owing to the
necessity for largely increased motive power, would often materially
decrease the value of the goods to be transported.
These drawbacks of land transportation directed, toward the close of the
last century, the attention of the people of the United States to the
necessity of providing for a system of canals that should bind together
the various parts of their extended country in the interest of commerce.
General Washington was among the first to urge upon his countrymen the
introduction of this great highway of interstate traffic, although but
little was done in this direction until after the War of 1812. The
people of New York had from an early period of the settlement of their
State been impressed with the importance of connecting the Hudson with
the Western lakes. In 1768 the provincial legislature discussed this
subject, but the political agitations of the times and the following
revolutionary struggle arrested further proceedings. After the war the
project was frequently brought before the legislature, but nothing was
done until 1808, when the assembly appointed a committee to investigate
the subject and to solicit the coöperation of the general government, if
the project should be found practicable. The report of the committee
concerning the practicability of the undertaking was in every respect
favorable, and in 1810 the legislature provided for a survey of the
entire route from the Hudson River to Lake Erie. The survey was made,
but, the expected aid from the national government not being
forthcoming, the matter rested until after the war with England. In 1816
a new board of commissioners was appointed, and the following year an
act was passed providing for a system of internal improvements in the
State. On the 4th day of July next the excavation of the Erie Canal was
commenced, and on the 26th of October, 1825, the first boat passed from
Lake Erie to the Hudson. The canal was 378 miles long and four feet
deep. It had a width of 40 feet at the surface and 28 feet on the
bottom, and carried boats of 76 tons burden. Owing to the rapid increase
of trade, the capacity of the canal was found inadequate within ten
years after its opening, and in 1835 measures were taken to enlarge it
to a width of 70 and 56 feet by a depth of seven feet, thus allowing the
passage of boats of 240 tons. The total length of the canal was,
however, subsequently shortened 12-1/2 miles, making its present length
365-1/2 miles. This enlargement was completed in 1862, and cost the
State over $7,000,000, making the total cost of the canal about
$50,000,000. New York has, inclusive of branches, some ten other canals
in operation, among them the Champlain Canal, extending from the head of
Lake Champlain to its junction with the Erie Canal at Waterford; the
Oswego Canal, from Lake Ontario at the city of Oswego to the Erie Canal
at Syracuse; the Black River Canal, from Rome to Lyon Falls; the Cayuga
and Seneca canals, extending from the Erie Canal to the Seneca and
Cayuga lakes. The State has expended for the construction of canals not
less than $70,000,000.
Canal-building in the State of Pennsylvania commenced about the time
that the original Erie Canal was completed in New York. In 1824 the
legislature authorized the appointment of commissioners to explore canal
routes from Philadelphia to Pittsburgh and the West. A year later
surveys were authorized to be made from Philadelphia to Pittsburgh, from
Allegheny to Erie, from Philadelphia to the northern boundary of the
State, and also south to the Potomac River. The construction of the main
lines of communication between the east and the west and the coal fields
in the north was soon commenced. Large loans were repeatedly made, and
the work was vigorously prosecuted. In 1834 Pennsylvania had 589 miles
of State canals, among them the Central Division Canal, 172 miles long,
and the Western Division Canal, 104 miles long. Public opinion strongly
favored an extended system of internal improvements, and it was believed
that these water-ways would soon become a source of revenue to the
State. These expectations might have been realized had the State carried
on enterprises on a less extensive and more economical basis. In 1840
the financial condition of the State had become such that canal-building
had to be abandoned. The amount expended by the State of Pennsylvania
for canals, including the Columbia Railroad, was about $40,000,000,
while the difference between net earnings and interest paid by the State
up to that time is estimated at $30,000,000. In 1857 and 1858 these
works were sold to the Pennsylvania Railroad Company and the Sunbury and
Erie Railway Company for $11,375,000, or about one-sixth of their cost
to the State.
In Ohio the legislature authorized the survey of a canal from Lake Erie
to the Ohio River. In 1825 an act was passed providing for the
construction of the Ohio Canal and a number of feeders. In 1831 the
canal was in operation from Cleveland to Newark, a distance of 176
miles, and the whole system was finished in 1833.
The State of Illinois completed in 1848 the Illinois and Michigan Canal,
connecting Chicago with La Salle on the Illinois River. This canal is
102 miles long, 60 feet wide and six feet deep. The construction by the
general government of the Hennepin Ship Canal, connecting the
Mississippi with Lake Michigan, has long been agitated in the Northwest.
Such a canal would be one of the most important channels of commerce in
the country, and it is to be hoped that this great project will be
completed at no distant day.
We have besides in the United States a large number of canals that were
constructed, and are still operated, by private companies, as the
Delaware and Hudson in New York and Pennsylvania, the Schuylkill, Lehigh
and Union canals in Pennsylvania, the Morris Canal in New Jersey, the
Chesapeake and Ohio and Maryland, etc. A large number of canals, some
public and others private property, have since the construction of
railroads been abandoned. Thus in New York 356 miles of canals, costing
$10,235,000; in Pennsylvania 477 miles, costing $12,745,000; in Ohio 205
miles, costing $3,000,000; in Indiana 379 miles, costing $6,325,000, are
no longer in use. All the canals that were ever built in New England
have likewise been abandoned for commercial purposes.
Nor was Canada slow in realizing the advantages which a system of canals
connecting the great lakes with the Atlantic Ocean promised to give her.
The construction of the Welland and St. Lawrence canals made it possible
for vessels to clear from Chicago direct for Liverpool, and this has to
a considerable extent diverted grain shipments to Montreal, giving the
Canadian dealers a decided advantage in this traffic.
It is a strange fact that, at least in this country, the zenith of the
canal-building era is found in the decade following the invention of the
steam railroad. For many years it was not believed that under ordinary
circumstances the iron horse could ever compete with the canal boat in
rates. The most sagacious business men had unlimited faith in the
destiny of the canal as a prime commercial factor and invested largely
in canal stocks. To many these investments proved a disappointment. The
marvelous improvements in locomotives and other rolling stock, the
unprecedented reductions in the prices of iron and steel, and above all
the fact that in our climate canal carriage is unavailable during five
months of the year, gave the railroads a decided advantage in their
competition with canal transportation. There can be no doubt, however,
that the presence of this competition was one of the chief causes of the
great reduction of railroad rates on through routes. In this respect
alone the canals have accomplished a very important mission. In the
transportation of many of the raw products of the soil and the mine
canals still compete successfully with the railroads, and it is still an
open question whether future inventions may not enable them to regain
lost ground in the carriage of other goods. It would certainly be a
short-sighted policy for our people to discourage the construction of
new canals.
For the improvement of navigable rivers, appropriations have been made
by Congress ever since the establishment of our national government, and
these appropriations now amount to millions of dollars annually. Since
the introduction of railroads the usefulness of these national highways
of commerce has ceased to depend upon the tonnage carried upon them, but
the influence which they exert upon the cost of transportation is so
great that it is not likely that the policy of making annual
appropriations for the improvement of these water ways will be abandoned
by the American people for many years to come.
There has recently been a strong agitation in some portions of the
United States in favor of extending government aid to the Nicaragua Ship
Canal, and there seem to be indeed many arguments in favor of such a
policy. President Harrison said in his annual message to Congress in
December, 1891:
"The annual report of the Maritime Canal Company of
Nicaragua shows that much costly and necessary preparatory
work has been done during the past year in the construction
of shops, railroad tracks and harbor piers and breakwaters,
and that the work of canal construction has made some
progress. I deem it to be a matter of the highest concern to
the United States that this canal, connecting the waters of
the Atlantic and Pacific oceans, and giving to us a short
water communication between our ports upon those two great
seas, should be speedily constructed, and at the smallest
practical limit of cost. The gain in freights to the people
and the direct saving to the government of the United
States in the use of its naval vessels would pay the entire
cost of the work within a short series of years. The report
of the Secretary of the Navy shows the saving in our naval
expenditures which would result. The Senator from Alabama,
Mr. Morgan, in his argument upon this subject before the
Senate of the last session, did not overestimate the
importance of the work when he said that 'The canal is the
most important subject now connected with the commercial
growth and progress of the United States.'"
And in his message of 1892 that:
"It is impossible to overestimate the value from every
standpoint of this great enterprise, and I hope that there
will be time, even in this Congress, to give it an impetus
that will insure the early completion of the canal and
secure to the United States its proper relation to it when
completed."
It is sincerely to be hoped that the people of the United States can be
convinced of the advisability of extending government aid to this
enterprise. It must be admitted that the experience of our government
with the Pacific railroads has created a strong prejudice among the
masses against such subsidies as were granted to those corporations, but
it is probable, with the people on the alert, that Congress would not
again permit great impositions to be practiced against the government.
When the great advantages to be derived by the people of the United
States from the use of this canal and the small outlay required are
considered, it would seem to be a wise policy for our government at once
to take such steps as are necessary to secure the early completion and
the future control of this great international highway.
CHAPTER II.
THE HISTORY OF RAILROADS.
In making inquiry into those inventions and improvements which were the
precursors of the modern railroad, we meet early the desire to render
the movement of wagons easier by a smooth roadway. Traces of this may be
found even in ancient times. The Romans constructed tracks consisting of
two lines of cut stones, and in the older Italian cities stone tracks
may still be seen in the streets, corresponding to wagon tracks, and
evidently designed for the purpose of rendering the movement of the
wheels easier.
The first rail tracks of which we have any knowledge were constructed at
the end of the sixteenth century. These rails, which were made of wood,
appear to have been an invention of miners in the Hartz Mountains. They
were the result of pressing necessity, for, as mines were usually so
situated that roads could only with great difficulty and expense have
been built to them, some cheaper sort of communication with the high
road had to be contrived.
After various experiments the wooden railway was adopted, and the
product of the mine was carried upon them to the place of shipment by
means of small cars. Queen Elizabeth had miners brought into England, to
develop the English mines, and through them the rail track was
introduced into Great Britain. Later the wooden rail was covered with an
iron strap to prevent the rapid wear of the wood, and about the year
1768 cast-iron rails commenced to be used. At the end of the last
century wheels were constructed with flanges, to prevent derailing.
More attention was also paid to the substructure, wood, iron and stone
being used for this purpose. Wrought-iron rails were patented in 1820.
The first authentic account of heat or steam engines is found in the
"Pneumatica" of Hero of Alexandria, who lived in the second century
before Christ. Hero describes a number of contrivances by which steam
was utilized as a source of power. Although these contrivances were at
the time of very little practical value, they are interesting as the
prototypes of the modern steam engine. The attempts to move wheels by
steam date back to the seventeenth century, when a number of experiments
were made, but their exact nature is not known, because they were all
soon abandoned, either on account of unsuccessful results or lack of
means. At the beginning of the eighteenth century Denis Papin
constructed a small steamboat, upon which he sailed in 1707 on the Fulda
River from Cassel to Munden, a distance of about fifteen miles.
The construction of locomotives engaged the attention of ingenious minds
a century and a half ago. It is claimed that Newton experimented with a
steam motor in 1680. Dr. Robinson described in 1759, in his "Mechanical
Philosophy," a steam vehicle. The Glasgow engineer James Watt devoted
himself from 1769 to 1785, with great energy, to the development of the
steam engine, and succeeded in inventing the system which became the
parent of the modern engine. An American, Oliver Evans, constructed at
the beginning of the present century a carriage propelled by steam, and
exhibited it, in 1804, in the streets of Philadelphia, before twenty
thousand spectators. While Evans' invention was never put to any
practical use, he prophesied that the time would come when steam cars
would be considered the most perfect means of transportation. On
Christmas eve, 1801, Richard Trevithick exhibited at Camborne, England,
a steam coach, and soon afterwards he and his cousin, A. Vivian,
obtained an English patent on a "steam engine for propelling carriages."
Seven years later a Mr. Blinkensop, of Middleton Colliery, near Leeds,
constructed another locomotive engine, upon which he obtained a patent
in 1811. These and a number of other inventors of steam engines vainly
expended great ingenuity in attempting to overcome a purely imaginary
difficulty. They believed that the adhesion between the face of the
wheel and the surface of the road was so slight that a considerable
portion of the propelling power would be lost by the slipping of the
wheels. It was not until about the year 1813 that the important fact was
ascertained that the friction of the wheels with the rails was
sufficient to propel the locomotive and even drag after it a load of
considerable weight. On the other hand these inventors failed to provide
in their engines adequate heating-power for the production of steam. In
1814 George Stephenson commenced to apply himself to the construction of
an improved locomotive. When, owing to his invention of the tubular
boiler, he saw, after fifteen years of arduous toil, his labors crowned
with success, the civilized world entered upon a new era of social,
industrial and commercial life. The first line upon which Stephenson's
invention was used was the Liverpool and Manchester Railway. In the year
1821, a number of Liverpool merchants formulated a plan for the
construction of a tramway between their city and Manchester. The
question of motive power was left open as between horses and the steam
engine, with which Mr. Stephenson was then experimenting. After much
opposition on the part of Parliament and the public a charter was
obtained in 1826. When the construction of the road was nearly
completed, the directors of the company, after having determined upon
the use of steam engines, offered a prize of £500 for the best
locomotive engine to run at a public trial on the Liverpool and
Manchester Railway. This proposal was announced in the spring of 1829,
and the trial took place at Rainhill on the 6th of October of that year.
The competing engines were the Rocket, constructed by Mr. Stephenson;
the Sanspareil, by Hackworth; the Perseverance, by Burstall, and the
Novelty, by Messrs. Braithwaite and Ericsson. Both Braithwaite and
Ericsson became subsequently residents of the United States, and the
latter achieved immortal fame as the inventor of the screw propeller and
the builder of the Monitor. The Rocket was the only engine that
performed the complete journey proposed, and obtained the prize. It is
claimed by the biographers of John Ericsson that he had really built a
much faster locomotive than Stephenson, and that, although it had to be
constructed very hastily and therefore broke down during the trial, the
superiority of the principle involved in it was universally recognized
by the engineers of that time. The Stephenson engines became the motive
power of the Liverpool and Manchester road, which was opened for public
traffic on the 16th of September, 1830. This line was, however, neither
the first public railway nor even the first steam railway. The first
railway or tramway act was passed in England in 1758, and in 1824 no
less than thirty-three private railway or tramway companies had been
chartered. In 1824 a charter was granted by Parliament authorizing the
construction of the Darlington and Stockton Railway, to be worked with
"men and horses, or otherwise." By a subsequent act the company was
empowered to work its railway with locomotive engines. The road was
opened in September, 1825, and was practically the first public carrier
of goods and passengers. The Monklands Railway in Scotland, opened in
1826, and several other small lines soon followed the example of the
Darlington and Stockton line and adopted steam traction, but the
Liverpool and Manchester Railway was the first to convince the world
that a revolution in traveling had taken place.
The road was from the very first successful, its traffic and income
greatly exceeding the expectations of its managers. It should also be
noted here that the cost of construction fell largely below the
elaborate estimates made by several distinguished engineers. The company
had expected to earn about £10,000 a year from passenger traffic, and
the very first year the receipts from that source were £101,829. The
gross annual receipts from freight had been estimated at £50,000, but
were £80,000 in 1833. From the first the stockholders obtained a
dividend of eight per cent., which soon rose to nine and to ten per
cent. It has since been demonstrated that the revenues of new roads
almost always exceed expectations.
The success of this railway stimulated railway enterprise throughout
Europe and America. But while railroad projects created much enthusiasm
on one side, they also met with bitter opposition on the other. The
prejudice of the short-sighted and the avarice of those whose interests
were threatened by a change in the mode of transportation used every
weapon in their power against the proposed innovation. The arguments
used were often most absurd. It was said that the smoke of the engine
was injurious to both man and beast, and that the sparks escaping from
it would set fire to the buildings along the line of road, the cows
would be scared and would cease to give their milk, that horses would
depreciate in value, and that their race would finally become extinct.
Nor did many of the European governments favor the new system of
transportation. Some openly opposed it as revolutionary and productive
of infinitely more evil than good. The Austrian court and statesmen
especially looked upon the new contrivance with undisguised distrust;
and from their point of view this distrust was perhaps well founded. The
rapid movement of the iron horse seemed to savor of dangerous
radicalism, not to say revolution. When the Emperor finally, in 1836,
concluded to sign a railroad charter, he based his action upon the
dubious ground that "the thing cannot maintain itself, anyhow." It may
be said that the history of the railroad is a conspicuous illustration
of human short-sightedness. The Prussian Postmaster-General Von Nagler
opposed the construction of a railroad between Berlin and Potsdam upon
the ground that the passenger business between those two cities was not
sufficient to keep even the stage-coach always full. It never occurred
to the Postmaster-General, as it does not occur to many railroad men of
to-day, that new and cheaper means of transportation increase the
traffic. Even so wise a statesman as Thiers said when railroad
construction was first agitated in France: "I do not see how railroads
can compete with our stage-coaches." M. Thiers also opposed for years
the building of a railroad between Paris and Versailles, declaring that
on account of a railroad not one passenger more would make the journey
between these two places.
But railroads came whether monarchical governments liked them or not.
The success of the Liverpool and Manchester Railroad stimulated railroad
building in England to a marvelous extent. Between 1830 and 1843 no
less than seventy-one different companies were organized, representing
about 2,100 miles. During the next four years 637 more roads, with an
authorized length of 9,400 miles, were chartered. The construction of
each new road required a special act of Parliament. These early roads
averaged only fifteen to thirty miles in length. The competition which
ensued soon led to the consolidation of roads, which continued until now
the 14,000 miles of railway in England and Wales are practically owned
by only a dozen companies. The total number of miles of railroad in
Great Britain and Ireland is at present over 20,000.
The news of the opening of the first steam railway in England spread
through Europe comparatively slowly. There were in those days but few
newspapers printed on the continent, and these were read very sparingly.
Railroad discussions were confined to merchants and manufacturers. Even
after the success of the railroad was assured in England, a large number
of people would not believe that, except between the largest cities,
railroads on the continent could ever be profitable. But few railroads
have ever been built which with honest, efficient and economical
management would not pay a fair rate of interest on actual cost of
construction. But in spite of this we have to this day a large number of
otherwise well-informed people who question the financial success of
every new railroad that is proposed.
In those days it occurred only to the most sagacious minds that with
increased facilities commerce would expand. The missionaries of railroad
enterprise found it therefore a difficult matter to interest capital in
their projects. Railroad committees were in time formed in all cities of
any importance, but, with capital cowardly, as usual, and governments
distrustful, their task was often a thankless one. Railroad projects
matured very slowly, and, when matured, were often wrecked by jealous
and short-sighted governments. After the formation of a company five and
even ten years would often pass away before a charter could be secured
and the work of construction commenced. It is true, there were some
laudable exceptions to this rule. Thus the governments of France and
Belgium led the people in railroad construction; but upon the whole it
can be said that the railroad forced itself by its intrinsic merit upon
monarchical governments. It soon became evident even to the most stupid
of autocratic ministries that it was a choice between the new mode of
transportation and national atrophy.
The first German line was built between the cities of Nuremberg and
Furth in 1835. It was only about four miles long, but the success of the
experiment gave an impetus to railroad building in other parts of
Germany. The Leipzig and Dresden line followed in 1837, and the
Berlin-Potsdam and Brunswick-Wolfenbuttel lines in 1838. At the end of
1840 Germany had 360 miles of railroad. In that year Frederick William
IV. succeeded to the throne of Prussia and inaugurated a new and
exceedingly liberal railroad policy in his realm. In 1843 the Prussian
government concluded to guarantee certain railroad companies a dividend
of 3-1/2 per cent. on the capital actually invested. The state also
secured considerable influence in the administration of the roads as
well as in the right to assume the management of the various lines under
certain conditions. The governments of the states of Southern Germany
now commenced to build state roads, and their example was, chiefly for
strategic reasons, soon imitated by Prussia. The system has since grown
to over 26,000 miles, and no less than eighty-seven per cent. of the
mileage is under state control. In all the states and provinces of the
empire, except Bavaria, the rates for transportation of passengers and
freight on all lines are controlled absolutely by the government.
In Austria, as has already been indicated, the building of railways was
greatly discouraged by the government until 1836. In that year the
Emperor rather reluctantly granted Baron Rothschild a charter for a
railway from Vienna into the province of Galicia. Another charter was
granted to a Baron Sina for a line from Vienna to Raab and Gloggnitz.
The policy then adopted in Austria guaranteed to each railroad company a
monopoly in its own district during the period for which the charter was
granted. Soon after the state also commenced building lines, but the
growth of the Austrian system was slow until after the war of 1866. An
era of railroad speculation was then inaugurated, which ended with the
crisis of 1873. The total length of the railroads of Austria-Hungary was
10,790 miles in 1875. At present that monarchy has nearly 16,400 miles
of railway, 8,600 of which are owned by private companies.
It has been the policy of Austria to reduce rates, and several roads,
especially those built in mountainous districts, have a certain revenue
guaranteed to them by the government.
The zone system recently adopted in Hungary reduced both the passenger
and freight rates of the government roads at least one-third, and this
reduction has, contrary to expectation, greatly increased their net
revenues.
In France railroad agitation commenced in 1832. A few short lines were
opened, as those from Paris to St. Germain and to Versailles; but,
owing to the conservatism of French capitalists, but little more was
done until the state took the matter in hand. Thiers proposed a scheme
by which the state was to furnish about half the cost while private
companies were to build the lines and operate them. The Western
Railroad, the first line of any great extent, was opened in 1837 between
Paris and Rouen, and the Eastern Railroad was opened two years later.
There were in 1859 six large companies operating their lines with
profit, but, to induce them to build additional lines that were needed,
the state guaranteed the interest on the capital required to make their
improvements. In 1884 there were about 17,000 miles of railroad in
operation. To bring about the construction of another 7,000 miles of
road, and to thus complete the railroad system of the country, the
government now guaranteed each company a dividend equal to the average
of recent years, but not to exceed seven per cent. It is doubtful
whether this system of monopoly has in all respects been favorable to
the encouragement of enterprise in the railroad circles of France. In
granting charters the state has, however, reserved valuable rights which
at a future period it will have an opportunity to assert for the public
benefit. The railroad companies have generally a lease for ninety-nine
years, and their lines become the property of the state after the
expiration of that period. To extinguish the bonded debt and stock, a
sinking fund has been created, from which a certain portion of the
shares and outstanding bonds is annually paid off and canceled. The
government requires of the companies the free carriage of the mails and
the transportation of military and other employes at very low rates.
Besides this the state levies upon the traffic of the railroads a duty
of ten per cent. of their gross earnings from passengers and from all
goods carried by fast trains. These facts are usually overlooked by our
railroad men when they indulge in making comparisons between the
railroad rates of this country and those of France. The French Republic
had 13,400 miles of road in 1875, and 22,600 in 1890. When all of the
proposed lines are completed, the total mileage of that country will be
over 25,000.
Belgium has the best-developed track system on the continent. The state
commenced the construction of railroads as early as 1834, and the first
line (Brussels Malines) was opened May 5th, 1835. Four great state lines
were constructed in different directions, and between these lines
private roads were permitted to be built. Between 1850 and 1870 the
private lines increased from 200 to 1,400 miles, and competition between
them and the state lines became so active as to reduce rates to the
lowest possible point. In 1870 the government decided to buy a large
number of competing lines. In 1874 it had acquired more than half, and
at present, with a few exceptions, they are all owned and controlled by
the state. The exceptions to this are a few short lines that were built
in the early days of railroad construction. The total mileage is now
3,210. Rates have, however, not been increased since this consolidation,
and they are still lower than any other country in Europe. The
transportation of mails is free, and troops, military materials and
prison vans are carried at reduced rates.
Railroads were originally built in Switzerland merely for the
accommodation of tourists and the local traffic. The first line, between
Zurich and Aarau, was completed in 1847, but general railroad enterprise
did not develop until after 1860. The St. Gothard route was then
projected, which opened a direct through line between Italy and
Germany. The roads are all owned by private companies, but are under
strict government control. Great publicity of their affairs is required.
The total mileage of Switzerland was 2,043 in 1891.
In Italy railroad enterprises have received attention since 1853. The
first roads were those of Lombardy, being commenced while that province
was still under Austrian rule. The treaties of Zurich in 1859 and of
Vienna in 1866 delivered these roads and the Venetian lines to the
kingdom of Italy. Between 1860 and 1870 the systematic construction of a
railroad net was commenced which connected the various lines with each
other and with Rome. Nearly all the railroads of Italy fell into the
hands of the government, but in 1885 they were leased for a term of
sixty years to three companies, terminable at the end of twenty or forty
years by either party upon two years' notice. Under the lease the state
received two per cent. of the gross receipts. The tariffs are fixed by
the state, are uniform and can be reduced by the state. A Council of
Tariffs, composed of delegates for the government, for agriculture,
commerce and industry, and for the railroad companies, all elected by
their own boards, has been instituted to study the wants and best
interests of the country. The total number of miles of railroad in Italy
was 8,110 in 1889.
The first road in Spain was opened in 1848 between Barcelona and Mataro.
The government greatly encouraged railroad construction by subsidies,
and during the decade following 1855 the development of the railway
system of the country was rapid. More than thirty companies have been
formed, which have built about twenty main lines, aggregating 6,200
miles.
In Portugal very little railroad building was done previous to 1863,
when a little over three hundred miles of road was constructed. The
government owns nearly half of the roads of the country, the remaining
lines being the property of private companies. The total number of miles
operated in the kingdom in 1889 was 1,280. The service and the financial
condition of the roads of Portugal are far from being satisfactory.
In Denmark the first railroad was built on the island of Seeland in
1847. Previous to 1880 the larger part of the roads of the kingdom was
owned by private companies. Since then several of the most important
private roads have been purchased by the state, which in 1889 owned 963
miles, while only 251 miles remained in private control. Only about
thirty miles more have since been constructed. The roads are well
managed, but their net earnings are less than two per cent. of the
capital invested.
On the Scandinavian Peninsula the railroad system has developed rather
slowly. Norway built the first line from Christiana to Eidsvold in 1854,
and Sweden commenced railroad building two years later. The narrow-gauge
system is fully developed here. While in Norway the greater part of the
lines is owned by the state, the roads of Sweden are chiefly in the
hands of private companies which on an average control but little more
than twenty-five miles each. The total mileage of Sweden is 5,970, and
that of Norway 970.
The first line of railroad in the Russian Empire was constructed from
St. Petersburg, sixteen miles, to Tsarskoji-Sielo, in 1842. The St.
Petersburg and Moscow line was opened in 1851. Railroad building then
stagnated until after the Crimean War, when a large number of lines
were constructed at once. The roads were surveyed by the government, but
constructed and operated by private companies.
State aid was, however, freely given. During the past ten years the
Russian government has directed its attention to the development of the
railroad system in its Asiatic possessions. A railway between the Black
and Caspian seas was completed in 1883, and the Siberian railroad is
extended as fast as the financial condition of the empire permits. There
are now about 20,000 miles of road in the Russian Empire operated by
private companies. The construction of a large number of the Russian
railways was dictated by military rather than commercial considerations.
Maximum rates are specified in charter, and every change of rates must
be approved by the Minister of Finance.
In the Balkan Peninsula railroad facilities are still ill provided for.
A few lines have been built, but these are, as a rule, badly managed.
Trains are slow, and rates often so high as to be prohibitory. Roumania
has undoubtedly the best railroad system of any of the Balkan states,
the government controlling 1,000 miles of road. Greece is also making
some progress and has at the present time 610 miles of railway. There is
reason to believe that through communication will soon be established in
these countries on a larger scale.
The introduction of the railway into Asia has been, except in the
Russian and English possessions, a very difficult task. The conservatism
or ignorance of the governments and the superstition of the people
combined to throw numberless obstacles before those who proposed to pave
the way for the iron horse. British India opened her first railway for
public traffic between Bombay and Tannah on November 18, 1852. In 1855
she had 841 miles of road, which increased to 6,515 miles in 1875 and to
15,828 miles in 1889, of which 8,423 miles were owned and operated by
the state. The total cost of these roads was $880,000,000.
In Asiatic Turkey the first line was opened between Smyrna and Trianda
on the 24th day of December, 1860. This line was in 1866 extended to
Aiden, and in 1882 to Sarakio. There are at present five lines with a
total extent of 446 miles, all owned by English companies. New lines,
covering in all 3,952 miles, have recently been projected.
The first line in Persia, only seven miles long, and extending from
Teheran to Schah-Abdal-Azzim, was opened on the 25th day of June, 1888.
Another line, from the Caspian Sea to Amol, is now in process of
construction. A line was opened last September between Joppa and
Jerusalem. It is 53 miles in length.
Japan may be said to be already thoroughly familiar with the European
system. The first and principal line was opened on the island of Napon,
between Tokio and Yokohama, on the 14th of October, 1872. Two other
short lines followed in 1874 and 1876, when the total extent of the
Japanese roads was about 135 miles. In 1883 the construction of the
Grand Trunk Railroad, from Tokio to Kioto, was commenced, which line has
been in operation for the past five years. Other lines, aggregating over
400 miles, will soon be opened for traffic. The total extent of road in
operation in 1888 was 580 miles, 310 of which were controlled by the
state, and the remainder by private companies. In 1890 the total number
of miles exceeded 900. The total average cost per mile was $58,000.
No nation has probably opposed the introduction of the railway as
stubbornly as the Chinese. The first railroad, scarcely seven miles
long, was built by an English company near Kaiping to facilitate the
transportation of coal from the mines in that vicinity. In 1886 a
Chinese company purchased this line and has since extended it to
Tientsin, making its present length about eighty-four miles. The Chinese
government has recently authorized the further extension of this line to
Yangchou, a place but a few miles distant from Pekin.
Of the Asiatic islands Java has the largest and oldest railroad system.
On the 10th of August, 1867, the first line was opened between Samarang
and Tangveng. Other coast lines have since been constructed, but
communication is still sadly neglected in the interior. In 1889 there
were operated on the island nearly 800 miles of road, the greater part
being the property of private companies.
A road was opened upon the island of Ceylon between Colombo and Kandy in
1867, to which several branch lines and extensions have since been
added. The total system comprises at present about 180 miles.
Short lines have also been built in Burmah (1889); in the Malay
Peninsula (1885), in Sumatra (1876), and in Cochin China (1885). A line
from Bangkok to Bianghsen, in Siam, is being projected at the present
time.
In Africa, if we except its northern coast, the construction of
railroads has only kept pace with the slow development of the resources
of that continent. Its European colonies are still but thinly inhabited,
and their industrial and commercial life still resembles much that of
the American colonies of the seventeenth century. There can be little
doubt, however, that with the increasing immigration the growing demand
for better transportation facilities will speedily be met by European
capital.
The first railroad upon African soil was built by the Egyptian
government from Alexandria to Cairo, and from there through the desert
to Suez. A part of this line, 130 miles long, was opened to traffic in
1856, and the remaining ninety miles the year following. Nothing further
was done until after Ismail Pasha ascended the throne, in 1863. The
railroad system of Lower Egypt, between Alexandria in the west, Cairo in
the south, and Ismaila in the east, was then greatly extended and the
service materially improved.
After the opening of the Suez Canal the line through the desert to Suez
was abandoned. The railroad system of Egypt comprises at present about
1,250 miles, all of which belongs to the government except two short
lines which are private property.
The beginning of the railroad system of Algiers dates back to 1860, when
the French government gave a charter to the Companie des Chemins de Fer
Algérians, authorizing it to build a number of lines connecting the
principal cities of the province with the Mediterranean. The line from
Algiers to Blidah, thirty-two miles long, was opened on September 8,
1862. Further construction was then delayed until 1863, when the charter
of the original company was transferred to the Paris, Lyons and
Mediterranean Railroad Company. The original plans were then in the main
carried out, until the disturbances caused by the Franco-Prussian war
again put an end to railroad enterprises. In 1874 three new companies
were chartered and railroad building was resumed. In 1888 the Algerian
railroad system comprised 1,350 miles.
The first road in Tunis was built in 1872 from the city of Tunis to
Bardo and Gouletta by English capitalists. It was, in 1880, sold to an
Italian company to which the Italian government for political reasons
had seen fit to guarantee certain dividends. Other small lines have
since been constructed, and more important ones have been prospected.
The number of miles at present in operation is 153.
The French colony on the Senegal River has a number of short lines, of
which the first was opened in July, 1883. These lines aggregate at
present about 200 miles. It is now contemplated to extend this system to
the upper Niger. This would necessitate the construction of 240
additional miles of road.
The Cape Colony has the largest mileage of any of the European colonies
in Africa, the absence of navigable rivers rendering railroads here more
necessary than elsewhere. The first line was opened on the 13th of
February, 1862. It then extended from Cape Town to Earste River, but was
extended to Wellington the following year. The number of miles of road
in operation in 1875 was 906, and in 1891 it had increased to 2,067. All
the roads of the colony, excepting a line of 93 miles belonging to the
Cape Copper Mining Company, are operated by the colonial government.
Their net revenue in 1886 was 2.84 per cent. of the capital actually
invested.
Port Natal built her first railroad in 1860. It was only two miles long
and extended from the city of Durban to its harbor. Since then several
inland lines, aggregating over four hundred miles, have been constructed
at a cost of twenty-two million dollars. The roads are operated by the
colonial government and yielded in 1891 a net revenue of 4.4 per cent.
on the capital expended.
Short lines have also been built on Mauritius and Reunion, and there is
now every indication that Portuguese Africa and the Congo State will be
provided with railroad facilities in the near future.
The introduction of railroads into Australia dates back to the sixth
decade of the present century. The total number of miles of road
reported in 1889 by the several colonies was 8,883. If we estimate the
population of the continent at 3,000,000 for that year it will be seen
that Australia has more miles of road per capita than any other grand
division of the globe, save North America.
New South Wales, the mother colony of the Australian continent, opened
its first road on September 26, 1855, between Sydney and Paramalta. This
road was built by a private company, but was soon after its completion
purchased by the colonial government, and was in 1869 extended to
Goulbourn. In 1875 the colony had only 436 miles of road in operation.
The mountains, however, which separated the wide plains of the interior
from the coast had been surmounted, and the government commenced to push
the construction of new roads with great vigor. At the end of the year
1886 New South Wales had no less than 1,888 miles of road in operation,
for which the colony had expended $113,000,000. The net revenue during
that year was 2.9 per cent. on the capital invested. The total number of
miles of railroad in this colony was 2,247 in 1889.
Victoria, the smallest of the colonies, has made by far the greatest
progress in railroad building. The first road in the colony, and, in
fact, the first road upon the Australian continent, was built in 1854
between the city of Melbourne and its port, a distance of two and
one-half miles. Within the next five years four other lines were
constructed, connecting Melbourne with Williamstown, St. Kilda,
Brighton and Echuca, respectively. In 1870 there were in the colony 275
miles of railroad, which had increased to 1,198 miles in 1880, and to
2,283 miles in 1889. Several of the roads were originally owned by
private companies, but all of them were in time acquired by the colonial
government, the last one in 1878. The total capital invested in 1887 was
$125,000,000, which yielded a net revenue of $5,800,000. All lines are
under the control of a board so constituted as to be entirely removed
from political influence.
In South Australia a short line was built in 1856 from the city of
Adelaide to Port Adelaide. Another line was constructed in 1857 from
Adelaide to Salisbury, which three years later was extended to Kapunda.
The colony had then forty miles of road. The increase during the next
decade was only ninety-three miles. Since then the development has been
much more rapid, the whole system of railroads comprising 1,752 miles in
1889. All the roads save a few suburban lines are owned and operated by
the colony. Their total cost is not far from $60,000,000, and their net
annual revenue is about two and one-half per cent. of the capital
invested.
The colony of Queensland has only a system of narrow-gauge roads, with
the construction of which it commenced in 1865. Up to September, 1887,
the colonial government had constructed 1,641 miles of road at a total
cost of $47,700,000. The total number of miles has since been increased
to 2,058. The net revenue of the roads was a little over one million
dollars in 1886.
The transportation facilities of West Australia are still far behind
those of her sister colonies. The first line was opened in 1873, and the
total number of miles of road operated in the colony in 1889 was only
496. The government controls nearly all the railroads of the colony.
Of the islands of Australasia, Tasmania and New Zealand are as yet the
only ones that have railroad communication. The former built its first
road in 1870 and had at the end of the year 1890 about 1,900 miles in
operation. New Zealand opened its first railroad between Christchurch
and Lyttleton on December 1, 1863. The development of the system was
slow at first, there being but 25 miles of road in operation in 1870. In
1891 the number of miles of road had increased to 1,916, all but 92
miles being operated by the colonial government. The total amount
expended by the government for railroads is $55,000,000. The net revenue
in 1887 was about 2-1/2 per cent of the amount invested.
In South America railroad building is of comparatively recent date. The
first road was built in 1851, but the line was short and remained the
only one for several years. With thirty million people the South
American states have at present but little more than 16,000 miles of
railroad, a condition which must at least in part be ascribed to the
peculiar conservatism of the Latin race.
The United States of Colombia possesses less than 250 miles of road. Its
first line was the Panama Railroad, from Colon to Aspinwall. It connects
the Pacific with the Atlantic ocean, is 48 miles long and was
constructed in 1855. This, as well as the several other roads of
Colombia, is the property of private companies. A number of new roads
have recently been surveyed.
Venezuela opened in 1866 a road, 56 miles long, from Puerto Caballo to
Palito, which in 1870 was extended to Aroa. A number of other short
roads, aggregating about 350 miles, have since been constructed. The
total extent of railroad in Venezuela was 432 miles in 1889, of which
the greater part was operated by private companies. Several important
lines are in the process of construction, and will connect Caracas with
Carabobo, San Carlos and the port of La Guayra.
The Republic of Ecuador constructed in 1876 a road from Jaguachi to
Puente de Chimbo, a distance of 43 miles. This line was recently
extended to Siambe, and has now a total length of 94 miles. In 1886 a
charter was granted to a North American company, authorizing the
construction of a road from San Lorenzo to Esmeraldas and guaranteeing
certain dividends on the investment. At the close of the year 1889
Ecuador had 167 miles of road.
The first railroad in Peru was built in 1851, connecting the seaport
Callao with the capital, Lima. After this but little was done for more
than twenty years. At the beginning of the seventies an extensive
railroad system was projected at the instigation of President Don Manuel
Pardo, and the construction of the principal road of the system from
Mollendo on the Pacific Ocean to Santa Rosa was at once entered upon.
This road ascends the Western Cordillera, crosses a number of prodigious
mountain passes, reaches Lake Titicaca, and then proceeds in a
northwesterly direction to Santa Rosa. It is over 300 miles long, and
reaches near Puna an altitude of 14,700 feet. An extension of this line
from Santa Rosa to the old Inca city Cuzco was opened in 1875, but was
subsequently destroyed in the war with Chile, and has not been reopened.
Another road, extending from Callao to San Mateo, was opened in 1876. It
is eighty-seven miles long, and reaches with its enormous grades a
height of over 13,000 feet. It belongs, with the Santa Rosa road, to the
boldest creations of railroad engineering. Since the war with Chile
railroad enterprise has been checked. The number of miles of road in
operation rose from 962 in 1875 to 1,615 in 1880, but was, owing to the
abandonment of certain lines, diminished to 813 in 1884. Since that time
about 400 miles of new road have been opened.
In the Republic of Bolivia the first railroad was built about twenty
years ago from Antofogasta to Solar. After the cession of the province
of Antofogasta to Chile there remained but thirty-five miles of road in
Bolivia. More than 200 miles have since been added by the construction
of several short roads, chiefly the property of mining companies.
The Republic of Chile was the first of the South American states to
initiate the construction of railways. The building of a line from the
seaport Caldera to Copiapo was commenced in May, 1850, and was completed
on January 2, 1852. This line was constructed and operated by a private
company. The first state road, extending from Valparaiso to Santiago,
was opened on the 15th of September, 1865. To this road has since been
added an extension to Talcahuana, as well as several branch lines. The
total amount that has been expended by the Chilean government for the
construction of railroads is $43,000,000. The total number of miles of
road operated in Chile in 1887 was 1,674, of which 992 were the property
of private companies and 682 miles were owned by the state. Two hundred
and fifty miles of road have since been constructed, and the
construction of 700 additional miles of railroad has been authorized by
the government.
The Argentine Republic opened its first road, extending from Buenos
Ayres to Belgrano, in December, 1862. Several other lines soon
followed, and in 1870 over 600 miles of road had been constructed. This
number had increased to 1,440 in 1880 and to 5,100 in 1889. Since then
several new lines have been completed, aggregating over 600 miles. Among
the principal lines of the Argentine Republic is the transcontinental
road which connects the Atlantic with the Pacific Ocean. The whole line
is 880 miles long, of which 665 miles are in the Argentine Republic and
the remaining 115 miles in Chile. Of the 3,705 miles of road which were
in operation at the beginning of the year 1887 the republic owned 1,148,
the province of Buenos Ayres 572, the province of Santa Fe 102, and
private companies 1,888 miles. The total amount invested in railroads
was $154,000,000 in 1887, which yielded an average dividend of 3.9 per
cent.
The oldest railroad in Brazil is the Petropolis road. It was built by a
private company and opened on December 16, 1856. In 1881 the total
number of miles in operation was 2,422, and in 1889 it had increased to
5,766. Furthermore charters had been granted for the additional
construction of 2,271 miles of road. Of the lines in operation about
1,200 miles are the property of the state, yielding a revenue of nearly
3 per cent. on the capital invested. The state gives aid, besides, to
several private roads. The most important road of Brazil is the state
road Dom Pedro I., which connects the three richest provinces of the
country, Rio de Janeiro, Minas Gerals and Sao Paolo, with the national
capital. It was opened in 1883, and has a total extent of 544 miles.
The principal roads of Uruguay were built between 1865 and 1875. In the
latter year the total number of miles in operation in Uruguay was 190,
which in 1880 had increased to 230, and in 1889 to 469 miles.
In the remaining political divisions of South America the railroad
extended its dominion still more slowly. Paraguay opened as early as
1863 a line 45 miles long from Asuncion to Itangua, and in 1892 her
railroad system had increased to 159 miles in extent. British Guiana
completed in 1866 a line from Georgetown to New Amsterdam, but not one
mile of railroad has been built in that colony since. Of the islands of
South America Trinidad is the only one into which the railroad has been
introduced. The island has at present 50 miles of road, to 16 in 1878.
Central America has less than 600 miles of railway. The causes which
have retarded the development of the railroad system in South America
are also operative here. Of the five republics of Central America Costa
Rica has the largest number of miles of railroad, viz.: 161. It has
three different lines, of which the Limon and Carillo line, seventy
miles long, is the most important. This road, which connects with a New
York line of steamers at Limon, has greatly furthered the cultivation of
bananas in the Santa Clara valley.
Nicaragua completed its first road in 1880 between Corinto and
Chinandega, and has at present about 100 miles of railway in operation.
The Nicaragua Canal Company is constructing a road from Juan del Norte
to Ochoa, a distance of thirty-two miles, to be used in the construction
of the canal.
Honduras opened in 1871 its only line, thirty-seven miles long, between
Puerto Caballo and San Jago. In recent years an extension of nine miles
has been added to it.
San Salvador has, besides a street-car line between the cities of San
Salvador and Santa Tecla, only one line of railroad between Acajutla
and Armea, which was constructed with public funds and opened for
traffic on July 15, 1882.
Guatemala was the last of the Central American States to introduce the
railroad. Its first road, seventy-four miles long, and extending from
San Jose on the Pacific Ocean to the capital, Guatemala, was built by a
San Francisco company and opened on August 20, 1884. The state has at
the present time about 100 miles of road, with several short but quite
important lines under construction.
The West Indies have between 1,200 and 1,400 miles of railway, of which
more than 1,000 are in Cuba. The first road upon this island, 179 miles
long and extending from Habana to Guanajay, was opened as early as 1837.
The next ten years developed almost the whole of the railroad system of
the western half of Cuba. A number of important roads have since been
opened in the central and eastern portions of the island, whose railroad
mileage is at present larger per capita than that of any other political
division of the Western Hemisphere save that of Canada and the United
States. The second of the West India islands to construct a railroad was
Jamaica. A line connecting Kingston and Spanishtown was opened on the
21st of November, 1845. Two branch lines have since been added, making
the total number of miles of road on this island seventy-six at the
present time. About twenty-five miles more are now in the process of
construction. San Domingo and Hayti have also recently commenced to
build railroads. In the former republic a line from Sanchez to LaVega,
sixty-two and one-half miles long, is now open to traffic, and Hayti is
constructing a line from Gonaives, on the western coast, to Porte de
Paix, on the eastern coast of the island. The Spanish government in
1888 also granted a charter for the construction of a railroad on the
island of Porto Rica.
Of our neighbors on the North American continent, Mexico and Canada, the
former has been by far the slower to avail herself of the advantages of
railroad communication. The slow growth of the railroad system of Mexico
must be ascribed chiefly to the frequent political disturbances of the
country as well as to the many topographical obstacles which presented
themselves to the railroad engineer. The first Mexican railway,
excepting tramways, was the one which connects the capital with the city
of Vera Cruz. It was constructed by an English company and was opened on
the first day of January, 1873. In 1875 the total number of miles of
road in Mexico was 327, and five years later somewhat less than 700.
Since then the development of the system has been much more rapid. In
1880 several companies were formed for the purpose of building a system
of roads which would connect the Mexican capital with the United States
as well as with the most important harbors of the gulfs of Mexico and
California. The projectors of these lines, who were citizens of the
United States, received the hearty coöperation of the Mexican
government, and the work was at once pushed very vigorously. At the end
of the year 1885 more than 2,500 miles of new road were open for
traffic, and a thousand miles more at the end of the following year. In
1889 Mexico had 5,332 miles of road. The principal one of the newly
constructed roads is the Mexican Central, which connects Paso del Norte
with the City of Mexico. This line will also, when its branches are
completed, form a through route between the Gulf of Mexico and the
Pacific Ocean. Another scarcely less important through line north and
south is the National Mexican Railway, which is 722 miles long and
connects Laredo, on the Rio Grande, with the capital and the southern
states. Another line has recently been opened from Torreon to Durango.
The number of miles of road at present in operation in the Republic of
Mexico is about 6,800, with a number of new lines rapidly nearing
completion. The development of Mexico's resources has, during the past
decade, kept pace with the rapid expansion of its railroad system.
In the Dominion of Canada about fifteen miles of railroad line were
built as early as 1837, but only forty-three miles was added during the
next ten years. In 1852 there was still only 212 miles of railroad in
all of the British possessions in North America. At that time the
construction of the Grand Trunk system was commenced, the first section
of the system, Portland-Montreal, being opened in 1853. After this
railroads increased very rapidly in Canada, reaching an extent of 2,087
miles in 1860, 4,826 miles in 1875, 6,891 miles in 1880, and 10,150
miles in 1890. The majority of Canadian railroads are in the hands of
private companies, some of which have been very materially aided by the
government. One of the conditions upon which the union of the several
British provinces, except Newfoundland and Prince Edward Island, was
effected in 1867, was the construction of a railroad by the Dominion
government connecting the provinces of Ontario, Quebec, Nova Scotia and
New Brunswick. This road, the main line of which extends from Point
Levis, opposite Quebec, to Halifax, was accordingly built, and is still
operated by the Canadian government. Its cost was about 46,000,000.
But the most important enterprise in which the government is interested
is the Canadian Pacific Railway. Like the intercolonial railway, this
line was a result of the political union of the colonies. Its
construction was commenced by the government, but was subsequently
assigned to a private corporation, the Canadian Pacific Railway Company,
all that had been done by the government being turned over to the
company as a gift. It is estimated that the direct gifts of money, the
land grant and other privileges conferred by the Dominion government
upon the Pacific Railway Company exceed $100,000,000 in value, and that,
with the amount of bonds and stock guaranteed by the government, the par
value of its various aids amounts to $215,000,000, or $48,000,000 more
than the cost of the road, as will be shown by the following table,
taken from the report of the Interstate Commerce Committee of the Senate
of the Fifty-first Congress:
Subsidy granted by the act of Parliament of
February 13, 1881 $25,000,000
Seven hundred and fourteen miles of railroad
constructed by the Dominion Government, original
cost and interest 36,760,785
Capital stock guaranteed 65,000,000
Loan to the company authorized by Parliament of
1884, in part 29,880,912
Balance of above loan 15,000 000
Bonds, interest guaranteed by the Dominion for
50 years at 3-1/2 per cent 15,000,000
Land grant bonds 25,000,000
Subsidy of $186,000 a year, for 20 years 3,720,000
------------
Total $215,361,697
Total cost of road, according to the company's
balance sheet of December, 1888 $131,350,019
The Dominion Government owns and operates four railways, the cost of
which up to June 30, 1890, was $52,800,000. It has also granted to
railroad companies cash subsidies which to June 30, 1889, amounted to
over $46,000,000. The total number of miles of railroad in Canada was
14,004 in 1890. The people of Canada have, since the political union of
the colonies, pursued an exceedingly liberal policy toward their
railroads, but it appears that the great indulgence of the government
only bred license in railroad circles. The evil increased from year to
year, until the many complaints on the part of the public against
railroad management caused Parliament in 1886 to appoint a commission to
examine into the alleged abuses and to report as to the advisability of
the adoption of a general railroad law, and the appointment of a Board
of Railroad Commissioners. The committee reported to the
Governor-General of Canada on the 14th of January, 1888, and, acting
upon its recommendation, Parliament passed the Railway Act of May 22,
1888. This act, containing 309 paragraphs, provides for the complete
regulation of railroad affairs, and for this purpose creates a Board of
Railroad Commissioners, consisting of the Minister for Railroads and
Canals, the Minister of Justice and two or more members of the Privy
Council. The act also repeals all former railroad laws. Though it has
been in force less than five years, its beneficial effects are already
extensively felt by the Canadian public.
CHAPTER III.
HISTORY OF RAILROADS IN THE UNITED STATES.
In no country in the world has the growth of railroads been so rapid as
in the United States. With a population less than one-fifth as large as
that of Europe this country has a larger number of miles of railroad
than that continent. While European countries generally opposed the
introduction of the new system of transportation, our people extended to
it a hearty welcome. This difference of sentiment can easily be
accounted for. At the time of the invention of railroads Europe had a
system of turnpikes and canals which, at least for the time being,
answered every purpose. It became necessary for the railroads to enter
into competition with these well-established agencies of transportation,
which had the test of time, popular prejudice and governmental sanction
in their favor. Moreover, the railroad as a new and unknown quantity
caused a feeling of uneasiness in all conservative circles. It seemed to
make war against time-honored principles of statecraft and society, and
threatened to bring about a revolution the outcome of which no one could
foresee.
The condition of things was entirely different in the United States.
There were but few good roads and still fewer turnpikes and canals. A
vast territory in the interior awaited cultivation. Excepting the coast
and a few cities situated on the large navigable rivers, the East and
the West and the North and the South were practically without commercial
relations, and were only held together by a community of political
traditions and the artificial cement of a common constitution. Even had
the country had a system of turnpikes and canals, the Mississippi River
would still have been a forty days', and the extreme Northwest a three
months' journey distant from New York. It seems extremely doubtful
whether the different sections of so large a realm, having so little
community of commercial interests, could long be kept together under a
republican system of government. The settlement of the central portion
of the country and the development of its resources seemed to be the
task of future centuries. The railroad under these circumstances made
its appearance at a most opportune time for America, and the American
people were not slow to make the best of the opportunities presented to
them.
In the United States, as in England, the railroad was preceded by the
tram-road. The first tram-road in this country was opened in 1826. It
connected the granite quarries of Quincy with the Neponset River, and
was operated by horsepower. The second road of this kind was the Mauch
Chunk tramway, in Pennsylvania, opened in 1826, for the transportation
of coal. The trains were drawn up an inclined plane by stationary
engines and were moved down by their own weight. During the same year
the Delaware and Hudson Canal Company opened the Carbondale and
Homesdale tramway, connecting their mines with the Delaware and Hudson
Canal. It appears that an English locomotive was imported for use on
this line in 1828, but that it did not answer its purpose.
During the same year was commenced the construction of the first line of
importance in this country, the Baltimore and Ohio. The line was opened
for traffic in 1830, having then an extent of fourteen miles. In 1831 it
was extended sixty-one miles, and the year following sixty-seven miles.
For a year the road was operated by horsepower, but in 1831 the company
purchased for its road an American locomotive.
The first road upon which a locomotive engine of American manufacture
was used was the South Carolina Railroad, which was commenced in 1830.
The engine was manufactured at West Point and was placed upon the road
in December of the same year. The line had then an extent of ten miles.
In 1832 it had increased to sixty-two miles, and in 1833 to 136 miles.
The construction of the Mohawk and Hudson was commenced in August, 1830,
and the road was opened in September of the following year. Its first
locomotive engine was also imported from England, but, being found too
heavy, was soon replaced by an American engine of half its weight. In
1831 two other New York roads were commenced, the Saratoga and the New
York and Harlem. A small portion of the latter was opened during the
same year, and the former in July, 1832. The Camden and Amboy Railroad
in New Jersey was likewise commenced in 1831, but its completion was not
reached till 1834. The New Castle and Frenchtown Railroad was completed
in 1832, the Philadelphia and Trenton in 1833, and the New Jersey in
1834. In 1835 the Washington branch of the Baltimore and Ohio was
opened, and the entire line had at the end of that year attained an
extent of 115 miles. During the same year three Massachusetts roads,
connecting Boston with Providence, Worcester and Lowell respectively,
were opened. In 1836 the New York Central route was opened to Utica. In
1837 the Richmond, Fredericksburg and Potomac Railroad was completed
from Richmond to Fredericksburg. In 1838 the Richmond and Petersburg and
the Philadelphia, Wilmington and Baltimore railroads were opened. The
Wilmington and Weldon Railroad was completed in 1840, and the Petersburg
and Roanoke three years later. There was now a continuous line of
railway from the Potomac to Wilmington, North Carolina. In 1842 the
whole line of the Boston and Albany road was completed, which thus
became the first important through route in America.
The construction of railroads in the United States was from the first
carried on without a system. Railroads in an early day were purely local
affairs. Each locality operated its own road in its own interest and
without any supervision from the State which had granted its charter.
Acts of incorporation or charters were granted as a matter of course.
Railroads were looked upon as the natural feeders of canals, and their
future importance was foreseen by very few men. The early roads were a
heavy burden on the capital of the country. A number of small roads were
built that proved unprofitable and had to be abandoned. After the
financial panic of 1837 there was, except in New England, a very
perceptible stagnation in railroad enterprise, which lasted until the
discovery of gold in California, in 1848. The average number of miles of
road constructed per annum during the ten years preceding 1848 was 380,
while it was nearly 1,800 per annum during the seven years following.
It may be said that with the discovery of gold in the West ends the
first or formative period of railroad construction. From the first
opening of the Baltimore and Ohio to the beginning of the year 1848, a
period of eighteen years, there were constructed in the United States
5,205 miles of railroad, or an average of 289 miles per annum. The
discovery of gold on the Pacific gave a new impetus to railroad
construction throughout the country. Railroads now ceased to be local
works and became interstate or national thoroughfares. Extensive new
lines were built and through routes were formed by the coalition of
local roads. It was during this period that railroad companies first
became conscious of the importance of their mission and that they
commenced to compete with river and canal carriers. In 1848 a through
route was completed between Cincinnati and Lake Erie. A more direct
line, the Cleveland, Columbus and Cincinnati road, was opened in 1851.
During the same year the Erie Railroad reached Lake Erie and connected
the lake with the Hudson, and a year later Chicago received railroad
connection with the East by the completion of the Michigan Central and
Michigan Southern. In 1854 the Chicago and Rock Island reached the
Mississippi River, and in 1855 the Chicago and Galena was opened. One
year later the Illinois Central reached the Mississippi at Cairo, and
the Chicago, Burlington and Quincy Railroad was opened to Quincy. The
Ohio and Mississippi, between Cincinnati and St. Louis, was completed at
about the same time. The Pittsburgh, Fort Wayne and Chicago, an
extension of the Pennsylvania road, was completed to Chicago in 1858. At
the beginning of 1859 the Hannibal and St. Joseph Railroad reached the
Missouri River, and eight years later the Cedar Rapids and Missouri was
completed to the Missouri at Council Bluffs.
To encourage the extension of railroads into new and thinly settled
territories, and to thus hasten their settlement and the development of
their resources, the people of the United States began at the
commencement of this period to favor the policy of land grants. Such
grants had repeatedly been made to roads and canals prior to the crisis
of 1837. The first railroad that received a land grant was the Illinois
Central. The scheme was proposed as early as 1836, but the act making
the grant was not passed until September 20, 1850. Other grants followed
in 1852 in Missouri, in 1853 in Arkansas, in 1856 in Michigan,
Wisconsin, Iowa, Florida and Louisiana. As a rule these lands were
granted by the National Government to the States, and by them to the
railroads. The land grants made during President Fillmore's
administration amounted to eight million, and those made during Pierce's
administration to nineteen million acres. The financial crisis of 1857
and the War of the Rebellion again checked railroad building, but this
period developed a new phase of railroad enterprise as well as of the
land grant policy. In those times of national trial a railroad to the
Pacific Coast seemed a political necessity. The project of connecting
the Atlantic and Pacific oceans by a line of railroads was first brought
prominently before the American people by Asa Whitney of New York. At a
meeting held under his auspices in Philadelphia on the 23d day of
December, 1846, a movement was inaugurated for the purpose of
interesting the people in this enterprise and securing the aid of the
government for its accomplishment. Various plans were urged, and earnest
discussions followed, in which the ablest minds of the nation
participated. The continual agitation of the subject finally led, on the
1st of July, 1862, to the passage by Congress of an act incorporating
the Union Pacific Railway Company and the adoption of the central route.
The Union and the Central Pacific companies received a virtual money
subsidy of $30,000,000 and a land grant aggregating nearly twenty-three
million acres, a domain almost equal to the State of Indiana. Other
direct grants of territorial lands soon followed. The Northern Pacific
received, just before the close of the war, a grant of forty-seven
million acres of land. In the Southwest public lands were also freely
given to new Pacific lines. The various grants made to railroads
comprise no less than 300,000 square miles, equal to four and a half
times the area of New England, or six times that of the State of New
York, or equal to the total area of Iowa, Wisconsin, Illinois, Indiana,
Michigan and Ohio. Where these grants were not deemed sufficient
inducement for the construction of roads, counties, cities and towns
freely voted subsidies, while private citizens made donations to or
subscribed for the securities of the new railroads.
As has already been stated, the consolidation of connecting lines and
their transformation into a few large through routes was one of the
characteristic features of this period. As through traffic, and
particularly through freight, grew in importance, it became more and
more apparent that frequent transhipment was an expense to the railroads
as well as a burden to the public. The system of railroad ownership and
management soon adapted itself to the necessities of business. The
change seems to have been inevitable, for it occurred in all parts of
the world at about the same time. Sagacious men early recognized the
importance of railroads as national lines of communication. This idea no
doubt controlled the projectors of the Baltimore and Ohio, of the Erie,
and of the Boston and Albany roads. The first consolidation of any
importance took place in 1853, when eleven different roads between
Albany and Buffalo were united to form the New York Central. Five branch
roads were added to the system between 1855 and 1858. In 1864 Cornelius
Vanderbilt secured control of the Hudson River road, and in 1867 of the
New York Central, which lines he consolidated in 1869. By gaining soon
afterward control of the Lake Shore and Michigan Central and Southern
Canadian roads, he united under one management over 4,000 miles of
railroad between New York and Chicago, and thus created the first
through line between the East and the West.
As has already been stated, the Pennsylvania road gained control of the
Pittsburgh, Fort Wayne and Chicago in 1858 and thus extended its system
as far as Chicago. Through the absorption of other lines it reached an
extent of over 7,000 miles. The creation of this through route was
chiefly the work of Thomas A. Scott, at that time vice-president, and
later president, of the Pennsylvania railroad.
In 1874 the Baltimore and Ohio, under the management of John W. Garrett,
extended its system to Chicago, and became a competitor of the two older
lines in the transportation of through freight. At about the same time
two other parallel trunk lines were developed, the Grand Trunk on the
north, and the Erie, between the Lake Shore and Pennsylvania lines.
There were, therefore, in 1874 five rival trunk lines competing for the
business between the West and the seaboard.
During the same period large rival lines developed west of Chicago and
St. Louis. From the former city radiate the St. Paul and Northwestern
systems, each with from 6,000 to 8,000 miles; the Atchison, Topeka and
Santa Fe with over 9,000 miles; then the Rock Island, the Chicago,
Burlington and Quincy, the Illinois Central, the Chicago Great-Western,
and the Chicago and Alton, their systems ranging from 1,000 to 6,000
miles in extent. From St. Louis radiate the various branches of the
Missouri Pacific and the closely allied Wabash system, controlling
together some 10,000 miles of road.
This process of consolidation also went on in the Southern States,
though to a less extent. Their systems do not run parallel, like the
trunk lines, nor do they radiate from a common center, like the roads of
the Northwest, but they radiate from the principal ports of the Atlantic
and the Gulf of Mexico toward the interior.
We now enter upon the third period of the history of American railroads,
the period of combinations. During the time of great activity in
railroad construction following the War of the Rebellion many abuses in
railroad management had been developed, which caused general complaint
and led to what is known as the Granger movement. Laws were demanded,
especially in the agricultural States of the West, which should regulate
the rates, methods of operation, and the political relations of the
railroads. The friends of this movement were successful in the political
contests that followed, and Granger legislatures were elected in the
States of Illinois, Wisconsin, Iowa and Minnesota. Laws were passed
fixing the rates on different classes of roads and providing penalties
for their violation. The companies contested these acts in the courts,
but were defeated at every step, until in 1877 the Supreme Court of the
United States sustained the constitutionality of the Granger laws. In
the meantime railroad managers tried their utmost to render, by shrewd
manipulation, these laws obnoxious, and they finally succeeded in having
them repealed or so amended as to render them largely ineffectual.
It was the principal object of the Granger movement to do away with the
many discriminating tariffs which so injuriously affected local points.
It is true, discriminations between individuals were practiced at
business centers, but rates upon the whole were low at such points as
compared with those which obtained at local stations. While the Granger
contest was still going on in the West, a new evil developed in the
East, which became characteristic of the period and finally grew into
one of the most intolerable abuses of railroad management. Railroad men
had gradually learned that it was in their power to maintain high rates
at competitive as well as at non-competitive points, provided all the
roads centering at such points could be induced to coöperate, or rather
to conspire for that purpose. The final solution of the problem was,
after some experimentation, found in the device to control the prices of
transportation generally known as the pool. It is doubtful whether any
contrivance connected with railroad management ever threatened to
subvert long-established principles of the common law more completely
than this. Within a few years it extended its dominion over the whole
country, exacting a heavy tribute from its commerce, until the people's
patience finally became exhausted and their determined demand for
railroad reform led to the enactment of the Interstate Commerce Act in
1887.
When this act passed, dire results were predicted by nearly every
railroad man in the country. Prophecies were freely made that it would
ruin half of the roads and seriously cripple and sadly interfere with
the usefulness of the other half, that it would derange the business of
the country, greatly depreciate all railroad securities and put an end
to railroad construction. Nearly seven years have passed since the
adoption of the law, but not one of these prophecies has come to pass.
There are at present probably less bankrupt roads in the United States
than there have been at any time for twenty years, our business
interests have been improved, the securities of honestly managed roads
are in better repute than they were previous to the passage of the law,
and the railroad mileage of the country is increasing at the rate of
about 6,000 miles a year. If any branch of business has suffered in
consequence of the enactment of the law, it is the branch monopolized by
Wall Street. Since 1885, the time when the Interstate Commerce Bill was
first seriously agitated, the aggregate of railroad securities has
increased nearly $2,500,000,000, or about one-third. This certainly does
not look as if capital had been seriously frightened by the Interstate
Commerce Act. There are other proofs of railroad prosperity. In 1885 the
gross earnings of the railroads of the United States were $772,568,833,
or 9.9 per cent. on their reported capital. In 1886 their gross earnings
were $829,940,836, or 10.2 per cent. on the reported railroad capital.
In 1890 the gross earnings had increased to $1,097,847,428, and equaled
10.8 per cent. on the reported capital. This includes even the
capitalization of new lines and others not reporting operations. Mr.
Poor gives the reported cost of the lines actually operated as
$8,519,670,421, against $10,122,635,900 reported cost of all the
railroads built. Omitting from the computation the lines not reporting
operations, the gross earnings of the roads actually operated equaled
12.7 per cent. and their net earnings 4 per cent. on the actual cost of
the lines which reported. The gross earnings for 1891 were
$1,138,024,459, and for the year ending June 30, 1892, $1,222,711,698.
The gross earnings per mile have increased from $6,265 in 1885, and
$6,570 in 1886, to $6,946 in 1890, and $7,409 in 1892. In 1885 the
capitalization per mile of road was $55,059 and the net earnings per
mile were $2,185. In 1890 the capitalization per mile had decreased to
$53,783, while the net earnings per mile increased to $2,195. The
railroad mileage of the country has grown from 128,361 in 1885 to
166,817 in 1890, to 170,601 in 1891, and to 175,000 in 1892.
The railroad system of the United States has had a phenomenal growth,
especially since 1870, since which time nearly 120,000 miles of road, or
more than two-thirds of the total mileage, have been constructed. The
table below shows the number of miles of railroad constructed and in
operation, by quinquennial periods from 1830 to the close of 1890,
inclusive:
YEAR. MILES IN OPERATION. INCREASE.
1830 23
1835 1,098 1,075
1840 2,818 1,720
1845 4,633 1,815
1850 9,021 4,388
1855 18,374 9,353
1860 30,626 12,252
1865 35,085 4,459
1870 52,922 17,837
1875 74,096 21,174
1880 93,296 19,200
1885 128,361 35,065
1890 166,817 38,456
It will be noticed that in the sixty years covered by the above table
there are but two quinquennial periods which show a falling-off in the
rate of growth, viz.: 1860-65 and 1875-80. During the former period
railroad construction was partially checked by the War of the Rebellion,
during the latter by the general financial depression following the
panic of 1873.
The length of railroads in the world has grown from 206 miles in 1830 to
about 400,000 miles in 1892. The following table shows the growth of
railroad mileage by quinquennial periods:
YEAR. MILES.
1830 206
1835 1,502
1840 5,335
1845 10,825
1850 23,625
1855 42,340
1860 66,413
1865 90,280
1870 131,638
1875 182,927
1880 231,190
1885 303,172
1890 385,000
From this table it is seen that the railroad mileage of the world has
doubled during the past fifteen years, and that its average annual
increase is at present not far from 17,000 miles. There is no doubt that
the extent of railroad construction has everywhere exceeded all
anticipations. So fast has the railroad system expanded in the most
highly civilized countries that it soon outgrew in nearly all of them
the laws originally adopted for railroad control. In time an almost
universal demand arose for reform, and the most progressive governments
were not slow in heeding it. For the past fifteen years there has been a
decided drift on the European continent toward state ownership of
railroads, or to such strict control of the transportation business as
virtually deprives the operating companies of the power to do injustice
to the public.
The railroad is assuming more and more the character of an international
highway. A movement is on foot to connect the railroad systems of the
United States with those of South America by an intercontinental or
"Pan-American" railroad. Appropriations have been made by the United
States and several of the South American republics for a preliminary
survey of the proposed line. Three different surveying parties are in
the field, one in Central America and the other two in the United States
of Colombia and Ecuador. The progress so far reported by them is
encouraging, and there is now some hope that before the close of the
nineteenth century one may be able to travel by railroad from New York
to Valparaiso without even a change of cars.
It has also been proposed to span Behring Strait and connect North
America with Asia and Europe by an international railway. This line, if
constructed, would be simply an extension of the proposed Pan-American
railroad and would follow the western coast of the United States as far
as Behring Strait, then cross over into Asia, traverse Siberia and
finally reach London via St. Petersburg, Berlin and Paris. It is very
questionable whether such a line is at present feasible either from a
technical or financial point of view, but the time will probably come
when the railroad track will connect New York and London.
CHAPTER IV.
MONOPOLY IN TRANSPORTATION.
From time immemorial efforts have been made by designing men to control
either commerce or its avenues, the highways on the land and on the sea,
by a power which law, custom, ingenuity, artifice or some other agency
had placed into their hands.
The ancient Phoenicians early aimed at and finally obtained the empire
of the sea by making themselves masters of the most commodious harbors
of the Mediterranean Sea and the Arabian Gulf. They established a
regular intercourse with the countries bordering on the Mediterranean as
well as with India and the eastern coast of Africa. From these latter
countries they imported many valuable commodities which were not known
to the people of other parts of the world, and during a long period they
held this lucrative branch of commerce without a rival. The character
and the situation of the Phoenicians aided them greatly in acquiring
this mastery of commerce. Neither their manners and customs nor their
institutions showed any marked national peculiarity; they had no
unsocial prejudices and they mingled with the people of other countries
without the least scruple or repugnance. As their native country was
small and quite barren, they early learned to rely upon commerce as the
best source of riches and power. Like the other Semitic tribes, the
Phoenicians were noted for their energy and acumen, and while they
were not a literary people in the strict sense of the word, ancient
civilization received probably a more powerful impetus through their
commercial supremacy than through any other agency.
During the reign of King Solomon the Jews made an attempt to wrest from
the Phoenicians at least a part of the world's trade. Solomon built
ships and imported Phoenician sailors for his fleet. For a time it
seemed as if the Israelites might become the rivals of their teachers in
the art of navigation and in the mysteries of trade; but their peculiar
religious customs in that early day proved a serious impediment to
commercial ascendancy, as it rendered them incapable of that unreserved
intercourse with strangers so essential in commerce.
The monopoly of the sea, at least of the Mediterranean, passed to the
Carthaginians, their descendants. The latter extended their navigation
toward the west and north. They planted colonies and opened new harbors,
and up to the time of the Punic wars kept almost the entire trade of the
countries bordering on the Mediterranean in their hands.
After the downfall of Carthage the control of the commerce of Southern
Europe and Northern Africa descended to the Romans. When Rome became the
capital of the world, it gathered the wealth and valuable productions of
all its provinces. Under the consuls and the earlier emperors the
vigilance of the Roman magistrates and the spirit of the Roman
government gave every possible security to commerce and prevented for a
time the rise of monopoly. Nowhere was national union so complete or
commercial intercourse so perfect as in the Roman empire. The
intelligence and the power of Rome stimulated and regulated the industry
of her people and permitted them to enjoy the fruits of their efforts
without public or private restrictions.
We have seen that the intercourse of Rome and her provinces was
facilitated by the construction of roads and the establishment of
imperial posts. During the decline of the empire the maintenance of
these posts led, however, to a grave abuse. We are informed by Gibbon in
his "Decline and Fall of the Roman Empire":
"But these beneficial establishments were accidentally connected with a
pernicious and intolerable abuse. Two or three hundred agents or
messengers were employed, under the jurisdiction of the master of the
offices, to announce the names of the annual consuls and the edicts or
victories of the emperors. They insensibly assumed the license of
reporting whatever they could observe of the conduct either of the
magistrates or private citizens, and were soon considered as the eyes of
the monarch and the scourge of the people. Under the warm influence of a
feeble reign they multiplied to the incredible number of ten thousand,
disdained the mild though frequent admonitions of the laws, and
exercised in the profitable management of the posts a rapacious and
insolent oppression. These official spies, who regularly corresponded
with the palace, were encouraged by favor and reward anxiously to watch
the progress of every treasonable design, from the faint and latent
symptoms of disaffection to the actual preparation of an open revolt.
Their careless or criminal violation of truth was covered by the
consecrated mask of zeal; and they might securely aim their poisoned
arrows at the breast either of the guilty or the innocent, who had
provoked their resentment."
After the downfall of the Romans, commerce remained paralyzed during the
period of Gothic ignorance and barbarism. The crusades for the recovery
of the Holy Land from the Saracens, in the eleventh and following
centuries, opened again communication between the east and the west by
leading multitudes from every European country into Asia; and though the
object of these expeditions was conquest, and not commerce, their
commercial effects were both beneficial and permanent. The crusades were
especially favorable to the commercial pursuits of the Italian states.
The vast armies which marched from all parts of Europe toward Asia gave
encouragement to the shipping of Venice, Genoa, and Pisa, which
sometimes transported them, and always supplied them with provisions and
military stores. Besides the immense sums which these states received on
this account, they obtained commercial privileges of great consequence
in the settlements which the crusaders made in the East. All the
commodities which they imported or exported were exempted from every
imposition, the property of entire suburbs in some of the maritime
towns, and of large streets in others, was vested in them, and all
questions arising among persons residing within their precincts, or who
traded under their protection, were decided by their own laws and by
judges of their own appointment. When the crusaders took Constantinople,
the Venetians did not neglect to secure to themselves many advantages
from that event. Nearly all the branches of commerce were in time
transferred from Constantinople to their city. At the end of the crusade
period Venice had monopolized nearly all the foreign trade of Europe.
She supplied the people of Italy, France and Germany with those
commodities with which the crusaders by their intercourse with more
refined nations had become acquainted. The possession of many Eastern
ports and the maintenance of a powerful navy made it possible for the
Venetians to retain their monopoly for several centuries.
The growth of commerce in Central Europe was but slow, owing to the
dangers to which it was exposed in those days of feudalism. The mountain
fastnesses of robber knights, which controlled every road and navigable
river, were so many toll-gates at which the wayfaring merchant was
stopped to pay tribute. In time this system of plunder grew to such an
extent that hundreds of feudal lords relied upon it for their support.
Such a tax upon commerce greatly enhanced the value of all commodities,
and this deplorable state of things lasted until the cities made their
power felt by forming alliances for mutual protection. One of these
alliances, the Rhenish League, comprised in time seventy towns, and the
ruins of the strong castles destroyed by its forces still exist along
the Rhine, picturesque memorials of these lawless times.
Perhaps the most powerful commercial union of the middle ages was the
Hanseatic League. To protect their commerce, the cities of Hamburg and
Lubeck formed about the middle of the thirteenth century an alliance for
mutual defense. The advantages derived from this union attracted other
towns to the confederacy. In a short time about eighty of the largest
cities lying between the Baltic and the Rhine joined this famous league,
which in time became so formidable that its alliance was courted and its
enmity was dreaded by the greatest monarchs. The League divided its
territory into several districts. Its members, like railway associations
of the present day, made their own laws, and met for this purpose at
regular intervals in the city of Lubeck. The original object of the
League, mutual assistance against outside attacks, was soon lost sight
of, and its constantly growing power was used to obtain still greater
commercial privileges in the adjoining countries, and even to force
their rulers to concede to its members a commercial monopoly. In 1361 a
controversy arose between the League and the King of Denmark, which led
to a long and bitter war between them. This war was participated in by
no less than seventy-seven cities on the part of the League. It
terminated in 1370, leaving the Hansa master of the situation. For many
years after this the League exerted its power in Denmark, Sweden and
Norway, and the rulers of these countries were compelled to respect the
wishes and even submit to the orders of these proud merchants. The
countries bordering on the Baltic Sea remained the domain of the League
for several centuries. They gathered there immense quantities of raw
material, which they sold in the various ports of Europe. The influence
of the League even reached as far as Novgorod in the east and London in
the west. In both cities the League had its quarters, and within them it
virtually exercised the right of sovereignty. Its main market was at
Bruges in Flanders, which was then a bee-hive of industry and thrift.
There the Italian traders came with the products of the east, such as
spices, perfumes, oil, sugar, cotton and silk, to exchange them for the
raw materials of the north. While taxes and imposts everywhere else
harassed merchants, commerce was free in the cities of Flanders, owing
to the liberality, or rather shrewdness, of her rulers. In Bruges the
members of the Hansa met the merchants of Venice on equal terms, and the
exchange of the products of the north for those of the east and south
could be effected there to the greatest advantage of both.
While it must be admitted that the Hanseatic League developed the
resources of Northern Europe, and that, even at the time of its greatest
power, there was always competition among its own members, the fact
remains that it abused its power by the suppression of all outside
competition, and that it usurped rights which belong only to the state,
thus often producing abuses as great as those which it was organized to
remedy. Its final downfall was caused by the development of national
power in the northern kingdoms and the growth of commerce and
navigation in Great Britain. A stubborn assertion of antiquated
privileges on the part of the Hansa involved it in a feud with the
illustrious and lion-hearted Queen Elizabeth of England. In 1589 the
Queen caused sixty of their vessels to be captured on the Tagus, and
later even took possession of their hall and wharves in London. After
this the League's decline was very rapid, though its organization was
kept up till 1669, when its delegates held their last session.
Contemporary with the decline of the Hanseatic commerce in the north was
that of the Italian cities, especially Venice, in the south. They had
prospered by their commerce with the Levant until Vasco de Gama
discovered the sea route to East India in 1497. His countrymen, the
Portuguese, soon utilized this discovery. They took possession of the
coast of India and of the islands to the south of it. They also
succeeded in excluding the Arabs from the commerce with that country, of
which up to that time they had had exclusive control. For this purpose
they built fortresses and factories on the west coast of Hindostan, took
possession of the island of Socotra in the Arabian, and of Ormus in the
Persian Gulf, and forced the Indian princes to grant them the exclusive
privilege of trading with their subjects. They also captured the city of
Malacca, where the trade between China, Japan, the Philippine Islands,
the Moluccas and India had concentrated itself. In this way they got in
a comparatively short time control of the commerce of India, Arabia, and
even Egypt. By forcing the Venetians and their commercial allies out of
those markets, they secured for themselves a monopoly of the commerce
between Europe and the east. The political ascendancy of the Turks in
the islands situated in, and in the countries bordering on, the Eastern
Mediterranean, caused the loss of Cyprus, Crete (Candia) and Morea to
the Venetians and greatly aided the Portuguese in establishing their
commercial supremacy. Less profitable for the latter was the possession
of their American colonies. They, as well as the Spaniards, adopted here
a policy which ultimately brought commercial and industrial ruin upon
both. Entirely neglecting agriculture and relying on the mineral
resources of their transatlantic colonies, which were believed to be
inexhaustible, they strove to amass riches by reserving for themselves
the exclusive privilege of supplying them with the manufactures of
Europe in exchange for American gold. Neglecting home industries, they
bought their supplies as well as those of their colonies in France,
Holland and England. A spirit of speculation and adventure enervated
their people, and led in time to commercial bankruptcy and political
disaster.
Spain also drained her treasury by her wars with her Dutch dependencies,
and the loss of her northern provinces was a serious blow to her
commerce. Antwerp, which had become the successor of Bruges as the
commercial emporium of the north, began to decline, and Amsterdam, the
metropolis of the new Dutch republic, became heir to its glory and its
riches. The young republic at once commenced to compete in the carrying
trade with Spain and Portugal, and to make inroads into the eastern
commerce of the latter.
The Dutch East India Company, which was organized in 1602, sent a fleet
of fourteen vessels into the Indian Archipelago to found colonies in
Java, Sumatra and the Moluccas. In a short time they had monopolized the
entire spice trade, which immediately became a source of great wealth.
A cargo of five vessels, which returned to Amsterdam in 1603, consisted
of over two million pounds of spices. This cargo was purchased for
588,874 florins and was sold for 2,000,000 florins. It is under these
circumstances not surprising that the dividends of the company's
stockholders often amounted to 75 per cent., and never went below 12-1/2
per cent. previous to 1720. Holland's colonial trade made Amsterdam the
commercial metropolis of Europe. It became the grain market from which
Spain, Italy and other countries drew their supplies. All the products
of the world found purchasers here, and a well-developed banking system
greatly facilitated the exchange. The rapid accumulation of fortunes by
the Dutch merchants and bankers was without precedent in Europe. Besides
this, the progress which Holland made in ship-building and navigation
and the advantages which she derived from her colonial trade placed her
in a position to outstrip all other nations in the carrying trade of
Europe. During the first half of the seventeenth century the Dutch were
justly called the freighters of Europe. But the injury which their
policy did to the commercial and manufacturing interests of other
European nations led both England and France to adopt measures well
calculated to accomplish, in a short time, their commercial
emancipation. Louis XIV., in order to build up French shipping,
collected a tonnage from every foreign ship which entered a French
harbor. England went still further. In 1651 Oliver Cromwell promulgated
the Navigation Act, by which foreign ships were prohibited from
importing into England any goods except such as were produced or
manufactured in their own countries. This was a heavy blow at the Dutch,
who were thus deprived of the privilege of effecting the exchange of
commercial commodities between England and her colonies as well as the
continent. The war which the Dutch Republic waged against England, to
force her to revoke this act, resulted in favor of the latter and ended
the commercial supremacy of the Dutch in Europe.
England, which before this time had played but a secondary role as a
commercial power, rose fast to prominence after her successful struggle
with the Dutch. She commenced to strengthen her industries by the
adoption of a high tariff policy, and her merchants were encouraged to
enter into commercial relations with colonists and foreigners. The
privileges which had been given to foreign tradesmen were revoked, while
ship-building and navigation were greatly favored by the government. As
England gained greater strength as a naval power, her foreign policy
became more aggressive.
In 1600 the "Company of Merchants of London Trading to the East Indies"
obtained a charter, and, in spite of Dutch and Portuguese opposition,
soon gained a foothold on the Moluccas and the coast of Malabar, whence
it extended in time its dominion to Surat, Bombay, Madras and Calcutta.
Here they built forts and established their commerce. From these places
the company pushed into the interior, until finally, after repeated
struggles with the natives and European rivals, the whole of Hindostan
came under English dominion. As its power increased, the company
commenced to abuse shamefully the monopoly which it had been granted, by
inaugurating a system of plunder and oppression which is perhaps without
its equal in the annals of history. These growing abuses led to frequent
revolts and seriously imperiled England's dominion in these territories.
To remedy these evils, Parliament at the close of the seventeenth
century annulled the charter of the company and declared the commerce
with the East Indies open to all of the King's subjects. A number of
small companies were formed, but in 1702 they all combined and organized
the East India Company. Monopoly was again established, but the patience
of the natives was exhausted, and England's interests in Hindostan were
in a critical condition. At this juncture the East India Company adopted
a policy of moderation, and this, together with the aid which the
government gave to the company, enabled it to strengthen again its
weakened commercial relations and to further enlarge its territory. But
the temptation to abuse its power was too great for this strong
corporation to be long resisted. Abuses again crept into its management
and continued to grow until its charter was finally repealed.
The policy adopted by Great Britain for the government of her American
colonies during the eighteenth century was less rapacious, but scarcely
more just than that pursued in her eastern possessions. To retain those
colonies as commercial no less than as political dependencies,
Parliament enacted laws compelling their people to trade with the mother
country exclusively and laying restraint on their manufactures. But the
American pioneers felt that they had brought with them across the ocean
the rights of Englishmen; they objected to taxation without
representation, and the men who for opinion's sake had left comfortable
homes to brave upon a distant shore the dangers of frontier life were
prepared, if necessary, to emphasize their objection by armed
resistance. England, intent upon maintaining her barbaric system of
discriminative duties and commercial monopolies, blindly attempted
coercion, but the war which resulted wrested from the English crown its
brightest jewel, and the War of 1812 established upon American soil the
principle of industrial and commercial liberty.
It must not be supposed, however, that America and the United States in
particular have been free from monopolies growing out of the
transportation business. Nothing would be farther from the truth. There
is no law so stringent but that it will be violated; there is no
government so vigilant but that it will at times be imposed upon. It is
true, our government sanctions no monopoly, but the very liberty of
action which exists here among corporations as well as individuals
offers to organized wealth and power a wide field for abuses.
We have seen in the foregoing that almost from time immemorial efforts
have been made to monopolize transportation and trade, and that these
efforts were successful whenever either from ignorance or weakness the
masses fell into political apathy. There is a natural tendency among men
to utilize commercial advantages to the detriment of others. In modern
times the opportunities for building up large monopolies have greatly
increased and have been turned to the most profitable account by
designing men. Great and even unbearable abuses have always followed
where the greed and ambition of such men have not been checked by
governmental agencies. In this respect the people of the United States
have had about the same experience as the rest of mankind. Ever since
the introduction of railroads into this country there has been a
well-marked drift toward monopolizing the transportation business.
As long as the dangers of monopoly remained unknown to the American
people, legislation for the control of railroads and other public
carriers was both scarce and crude, and shrewd railroad men were not
slow in taking advantage of the situation. It is foreign to the design
of this treatise to give a complete history of railroad monopoly in the
United States. The author will therefore confine himself to showing that
transportation companies will, like the great commercial organizations
of the past, when left to follow their instincts, invariably use their
power to oppress the public by exacting excessive charges for their
services, or to discriminate against the many by extending special
privileges to the few. Hundreds of cases might be given to illustrate
the above rule, but a history of two of these corporations will suffice
to show to what extent corporate abuses can be carried, and to serve as
a warning against the adoption of any "_laissez faire_" policy in the
railroad legislation of the future. The corporations selected for this
purpose are the Camden and Amboy Railroad and the Standard Oil
Companies, both typical representatives of the Rob Roy policy which
organized wealth has pursued since the dawn of civilization, when not
prevented by the wisdom and strength of a good government.
THE CAMDEN AND AMBOY RAILROAD COMPANY.
For almost forty years the Camden and Amboy Railroad was the only direct
route between the cities of New York and Philadelphia. It is doubtful
whether previous to the war a more important or a more remunerative road
existed in the United States, for, besides connecting the two largest
cities in the Union, it formed part of the direct land route from the
East to the South.
The efforts to open a direct through route between New York and
Philadelphia date back to the year 1812, when the construction of a
canal between the Hudson and the Delaware was proposed, but an
ill-advised jealousy of the State of Pennsylvania delayed for many years
the realization of the project. When this obstacle was finally overcome,
a change of sentiment had taken place in New Jersey. Railroads had just
made their appearance in the United States, and a large number of the
people of New Jersey preferred a railroad to a canal.
The matter was finally compromised in the legislature of New Jersey,
which on the 4th of February, 1830, simultaneously granted charters to
the Delaware and Raritan Canal Company and the Camden and Amboy
Transportation Company, fixing the capital stock of each company at
$1,000,000, with the right to increase it to $1,500,000. The charter
further stipulated what taxes should be paid to the State, and also
contained the provision that within five miles of the starting-point and
within three miles of the terminus of each line no other railroad or
canal should be built. It was believed the existence of both a water and
a land route would be sufficient to maintain competition on this
important thoroughfare of interstate traffic. The construction of the
railroad, which had been surveyed in almost a straight line between its
termini, was at once commenced. A number of well-to-do and practical men
took hold of the enterprise, among them one John Stevens, who together
with his three sons took one-half of the capital stock. The canal
project did not do so well at first. At the middle of the year 1830 only
about one-twelfth of its capital stock had been sold, and there was
great danger that the company might forfeit its charter, as the time
allowed for the subscription of its stock was nearing its end. At this
juncture Robert Field Stockton, a young man of ability, enthusiasm and
wealth, came to the rescue of the canal company. He not only bought for
himself a goodly share of the canal stock, but also prevailed on his
rich father-in-law, Mr. John Porter, to invest $400,000 in the
enterprise. The financial difficulties of the company were thus removed.
At the next session of the legislature Mr. Stockton secured an amendment
to their charter which apparently only authorized the enlargement of the
canal, but in reality empowered the canal company to construct a second
railway.
It was from the beginning Mr. Stockton's object to share with the
railroad company the advantages which their line promised to give them.
The enlargement of his company's franchise placed him in a position to
dictate terms to the Camden and Amboy Transportation Company. The latter
was given the choice, to prepare for competition with a rival railroad
line, or to consolidate with the Delaware and Raritan Canal Company. It
chose the latter alternative, and on the 15th day of February, 1831, the
two companies became one. The consolidation still required the sanction
of the legislature. This was obtained in consideration of the transfer
of 2,000 shares of the capital stock of the company to the State. It was
further stipulated that the new company should pay to the State a tax of
10 cents for each passenger and of 15 cents for each ton of freight
carried over its line through the State, as well as an annual tax of
$30,000, and that the State in return should protect the company against
any and all competition in the direct passenger and freight traffic
between the cities of New York and Philadelphia. Serious doubts were at
the time entertained by many, whether the State of New Jersey under the
Federal Constitution possessed the right to thus create a monopoly in
transportation facilities, and to regulate arbitrarily the commerce
between sister States.
Five days after it had granted this charter to the Camden and Amboy
Company, the legislature granted another charter authorizing the
construction of a railroad from Jersey City to New Brunswick on the
Raritan River. On the 23d of February of the same year a charter had
been granted by the legislature of the State of Pennsylvania to a
company which had been formed for the purpose of constructing a railroad
from Philadelphia to Trenton. This company had likewise been authorized
by its charter to buy the right of way for a railroad from Trenton to
New York, which it proceeded at once to do. It was evident that as soon
as the two new roads would meet at New Brunswick, an understanding would
be reached between them, by which another through line would be created
between New York and Philadelphia, which would have the advantage over
the Camden and Amboy road that it touched the capital of New Jersey and
could thus make itself serviceable to members of the legislature,
officers of State and influential politicians.
The Camden and Amboy Freight Company soon arrived at the conclusion that
it could not permit such rivalry. It appealed to the legislature for
protection. Resolutions were passed in its favor, but the Philadelphia
and Trenton Railroad Company paid no attention to those resolutions, but
quietly continued to lay its track. Mr. Stockton and his friends did not
dare to invoke the aid of the courts, because a judicial investigation
might have resulted in the destruction of their own charter. The
situation was critical, but Mr. Stockton was equal to the occasion. He
bought quietly a sufficient number of shares to control the management
of the Philadelphia and Trenton road, and, in April, 1836, secured the
consolidation of the Philadelphia and Trenton and the Camden and Amboy
railroad companies.
The canal of the company was not completed until 1838. It had consumed a
sum of money largely in excess of the original estimate. To connect the
two lines of the consolidated company, a branch road was constructed
from Trenton to Bordentown. Later the road from Trenton to Brunswick was
completed and an agreement entered into with the Jersey City company for
a division of the traffic of the two roads. The large cost of these
improvements suggested to the company the advisability of increasing its
revenues and of decreasing its expenditures. Its charter provided for a
payment to the State of 10 cents for each through passenger. By an
artifice the company avoided the payment of this tax. It compelled its
through passengers to walk over the bridge at Trenton and then continue
their journey by rail via Bordentown to Jersey City.
The company's charter also stipulated, that the fare between New York
and Philadelphia should not exceed $3 per passenger. Its officers
interpreted this stipulation to apply only to the intermediate traffic
and proceeded to collect $2.50 for the trip from New York to Trenton,
and $1.50 from there to Philadelphia, thus increasing the fare for the
entire journey to $4.00, one dollar above the maximum allowed by law.
One Jacob Ridgway, who was the owner of a ferry-boat at Camden, saw here
an opportunity for starting a lucrative business. He bought a steamer
and carried passengers from Philadelphia to Trenton for one-third of the
fare demanded by the railroad. After the Camden and Amboy Company had
made several unsuccessful attempts to intimidate Mr. Ridgway and his
force, one of which even brought Mr. Stockton in contact with the
criminal courts, it purchased the boat with all terminal facilities at
Philadelphia and Trenton. The attention of the legislature of New
Jersey was repeatedly called to the company's failure to comply with the
provisions of its charter, but these appeals were on the whole of no
avail. In 1842, after a long discussion, a resolution was carried
declaring the charge of $4 for the through journey illegal, but the
company entirely ignored this legislative reminder and continued its old
tariff.
The company's charter also reserved for the State the right to acquire
the Camden and Amboy road under certain conditions upon the payment of a
reasonable compensation. In 1844, through Mr. Stockton's engineering,
the constitution of New Jersey was so amended as to practically deprive
the State of the power to acquire the company's property.
During the first few years of the existence of the Camden and Amboy
Transportation Company its business was managed in the interest of its
owners, but soon a few of its leading stockholders managed to turn its
enormous profits into their own pockets. The Stevens and Stockton
families, together with two other directors of the Camden and Amboy
Company, had come into possession of a line of steamers that plied on
the Raritan, between New Brunswick and New York. The enterprise, in
spite of its largely watered capital, had been made to pay dividends
ranging from 30 to 40 per cent. Its owners saw an opportunity for a
larger field of usefulness and larger dividends. In 1834 a majority of
the board of directors of the Camden and Amboy Company proposed that the
company rid itself of the responsibility connected with the
transportation business and lease its railroad and canal. Mr. Stevens,
as representative of the Camden and Amboy Company, then negotiated with
Mr. Stevens, the representative of the Napoleon Steamer Company, and the
negotiations soon resulted in an agreement between the two companies by
which the latter leased the railroad and canal lines of the former and
agreed to pay it a fixed toll of $7.64 per ton upon all freights carried
by rail, and one-quarter of all its revenues derived from the canal.
Soon afterward the Napoleon Company entered into a similar contract with
the Camden Ferry Company and now had a complete monopoly of the
transportation business between New York and Philadelphia. It at once
commenced to develop a system of organized plunder. Instead of the
maximum charter tariff of 8 cents per ton per mile, it charged 10, 12,
and even 15 cents. The through rates charged were several times as high
as those fixed by the charter. Canal rates were raised to such an extent
as to make them prohibitory and to compel the public to ship by rail. It
is difficult even to estimate the total annual profits of the
directorial syndicate. Their accounts, if any were kept, were not
accessible, and surmises can only be based upon such data as
occasionally found their way to the public. In 1845 the share of the
canal tolls paid to the company's stockholders was $359,000. The
directors' share under the terms of their lease is thus found not to
have been less than $1,077,000. Another item of $170,000, tolls
collected for the transportation of 27,000 tons of freight, was so
divided that the Camden Ferry Company, or its other self, the
directorial syndicate, received $32,000 for one mile, while the Camden
and Amboy Railroad Company received $63,000, or less than twice as much,
for ninety-two miles. The directors under their lease were entitled to
the remaining $75,000.
The service of the company was as bad as it was expensive; its trains
were slow and irregular, and its employes arrogant. The syndicate which
controlled the company defied its stockholders, the public and the
courts alike. When one of the stockholders, a Trenton merchant by the
name of Hagar, applied to the courts for an order to compel the
directors to produce their books and render an account, the syndicate
bought Mr. Hagar's shares, for which he had paid $125 a share, at the
price of $1,456 a share. The suit was then withdrawn and the matter
hushed up.
In 1848 a number of articles appeared in a paper published at
Burlington, Pa., which were signed by "A Citizen of Burlington" and
contained much surprising information concerning the Camden and Amboy
Transportation Company. It was charged that the directors had defrauded
both the State and the company's stockholders of large sums of money,
that they had grossly violated their charter by charging illegal and
extortionate rates, oppressive to both commerce and travel. It was shown
that while the average rate per ton per mile of thirty-five neighboring
roads was 2.85 cents, that of the Camden and Amboy Company was 4.54
cents. It was also shown that neither the stockholders nor the State had
received the share of the company's revenues to which they were
entitled. These articles were extensively reprinted and caused a great
commotion wherever they appeared. After the first storm had subsided the
directors issued an address to the people of New Jersey, in which they
bitterly complained of the people's loss of confidence in their
integrity, and declared that the charges preferred against them were
founded on falsehoods.
The "Citizen of Burlington" replied by accusing the directors of
defalcation and falsifying their books. He charged that from 1840 to
1847 no account had been rendered of the receipt of no less than
$5,266,431, on which $493,066 was due to the State. As soon as the
legislature convened, a resolution was introduced that a commission be
appointed to investigate the charges preferred against the Camden and
Amboy Transportation Company. The resolution was adopted, but it was
virtually left to the accused to select the members of the commission.
That the directors had a guilty conscience appeared from the fact that
the last annual report of the company, which had just been printed, was
withdrawn and destroyed. To silence their unknown accuser, they
threatened him with criminal prosecution. He now gave his name. It was
Henry C. Carey, the noted writer and authority on political economy. Mr.
Carey did not give up the contest. He proceeded to show how the policy
of the managers of the Camden and Amboy Transportation Company depressed
commerce, manufactures and agriculture alike. He showed how the company
as a public carrier discriminated in favor of industries which they
carried on as private individuals. He claimed that the company had
forfeited its charter, and that it was the duty of the State to
authorize the construction of another road. In the meantime, early in
1849, the legislative investigation committee submitted its report. It
was perhaps as shameless a document as was ever placed before a
legislative assembly. It lauded the directors, to whose influence the
members of the commission owed their selection, and whitewashed their
past management of the company's affairs.
But the people of New Jersey were far from being satisfied with this
report and demanded the appointment of another committee. Another
investigation was ordered, and this time the company, or rather its
directors, found it impossible to control the selection of its members.
Soon after their appointment the committee asked Mr. Carey to lend them
his assistance in their labors, and he readily consented. During the
summer of 1849 the members of the committee had occasion to go to
Bordentown, to inspect the company's books. From that time on a
wonderful change seemed to have come over the committee. They found they
could dispense with Mr. Carey's further services. What had previously
appeared to them a ring of rapacious monopolists seemed now an
association of worthy philanthropical gentlemen. In their report to the
legislature they completely exonerated the company's managers. They
admitted that the State had not been paid all that was due to it, but
they asserted that this difference in the company's accounts was due
solely to clerical errors, for which the management were in no wise
responsible. The report was accepted, although not even the annexed
testimony supported it, and thus the matter was dropped.
This was a great victory for Mr. Stockton and his friends. It
demonstrated the success of their methods of dealing with public
servants. Mr. Carey repeated his charges, but the directors failed to
prosecute him for libel as they had threatened. He asked that he be
permitted to inspect the company's books, but was met with a peremptory
refusal. Public opinion was defied, and the old methods were continued.
The extortionate and discriminating tariff of the only through route of
New Jersey affected seriously the agricultural as well as the commercial
interests of that State. The Camden and Amboy monopoly kept the State of
New Jersey for many years far behind the New England States in railroad
facilities. In 1860 New Jersey had only one mile of railroad for every
17.6 square miles of territory, while the proportion of miles of
railroad to square miles of territory for the same year was 1 to 7.9 in
Connecticut, 1 to 7.6 in Rhode Island, and 1 to 6 in Massachusetts. At
present New Jersey has one mile of railroad to every 3.79 square miles,
and therefore leads all the States in the Union in density of railroad
track.
The question may be asked how the Camden and Amboy Transportation
Company, or rather the syndicate which controlled it, contrived to
maintain its power for so many years, to the great detriment of industry
and commerce. The only answer that can be given is that the men for whom
the maintenance of the monopoly was a source of great wealth were
constantly using a part of this wealth for the corruption of those who
were in a position to influence public opinion or to direct the policy
of the State. Prominent politicians were favored with passes, attorneys
were retained by the company as local solicitors, corrupt and servile
legislators were bribed by money or the promise of lucrative positions,
and newspapers were given large subsidies. In addition to this public
men were constantly made to realize the political power of the company,
whose many employes had always been trained to do the bidding of their
masters. If the opposition, in spite of this, was ever successful at
legislative elections, the company's managers found it less expensive to
gain the good will of a few members of the legislature after election
than it would have been to gain the good will of their constituents
before election. Dissatisfied stockholders who threatened with judicial
investigation were quietly bought out or impressed with the danger of
inviting public discussion in regard to the validity of the company's
charter, as it might lead to its annihilation. The good people of New
Jersey made several attempts to rid the State of the despotism of the
company by making the question a political issue, but they were each
time defeated through the lavish and scandalous expenditure of the
company's money.
The original charter of the Camden and Amboy Railroad Company was
granted for a period of twenty years, and should have expired in 1853,
but its managers succeeded in having it extended to January 1, 1859. In
1854 another extension was asked for, and after a long and bitter debate
the company was again triumphant. An act was passed on the 16th of
March, 1854, making it illegal to build previous to the first day of
January, 1869, without the consent of the Camden and Amboy
Transportation Company, a railroad in the State of New Jersey for the
transportation of passengers and freight between New York and
Philadelphia. At the end of this period even a third extension was
granted, and the company, though after January 1, 1867, under a new
name, maintained its monopoly until it consolidated, in 1871, with the
Pennsylvania Railroad Company.
That the spirit of the past is still at work was shown by the recent act
of the legislature of New Jersey legalizing the consolidation of the
coal roads. The coal barons found the legislature as servile as the
managers of the Camden and Amboy Railroad Company had found them of
yore, and their well-planned scheme would probably have been successful
had it not been for Governor Abbot's courageous veto of the disgraceful
act, and it is more than probable that they will yet succeed. They have,
in fact, during the last year advanced the price of coal about one
dollar per ton.
THE STANDARD OIL MONOPOLY.
The Standard Oil monopoly may be said to be the crowning monument of
corporation conspiracy. It is, indeed, doubtful whether the combined
brotherhoods of mediæval knights ever were guilty of such acts of
plunder and oppression as the Standard Oil Company and its railroad
allies stand convicted of before the American people. The facts that
have been unearthed by official investigations show a frightful
prevalence of corporate lawlessness and official corruption, and there
can be no doubt that, could certain high railroad dignitaries have been
compelled to testify, and could the truth have been fathomed, it would
have been found that not only the public, but railroad stockholders as
well, were victimized by those transactions.
The founder of the Standard Oil monopoly was some twenty years ago part
owner of a petroleum refinery at Cleveland, Ohio. His fertile brain
conceived the thought that with the coöperation of the railroad
companies a few men of means could control the petroleum business of the
United States. With this end in view he approached the managers of the
New York Central, the Erie and the Pennsylvania Central railroad
companies, and on January 18, 1872, entered with them into a secret
compact by which they agreed to coöperate with the South Improvement
Company (an organization formed by that gentleman to aid in the
accomplishment of his designs) to grant to said companies certain
rebates and to secure it against loss or injury by competition. The
South Improvement Company, in consideration of these favors, guaranteed
to the railroad companies a fair division of its freights. The existence
of this contract soon became known and caused a violent protest among
the oil-producers. An indignation meeting was held and a committee was
appointed to wait on the railroad managers and demand fair treatment for
all.
The railroad companies yielded and promised to give equal rates to all
shippers and to grant to no person either rebates or any other advantage
whatever. New rates were fixed for the transportation of both crude and
refined oil, and it was agreed on the part of the railroad companies
that at least ninety days' notice should be given of any change that
might be made in the rates. Steps were also taken to have the charter of
the South Improvement Company canceled because it had been found that it
was neither the owner of a refinery nor of an oil well, and could
therefore not comply with the legal requirements concerning the
organization of stock companies. While the South Improvement Company
thus came to a sudden and rather inglorious end, its founders soon
contrived other means to carry out their ingenious plans. They bought a
refinery, reorganized by taking the prepossessing title of Standard Oil
Company, and were now prepared to resume their operations under the
guise of legal authority.
The railroad companies seemed to have relished their novel business
connections, for, without paying the least attention to the agreement
into which they had entered with the other producers and refiners of
oil, they extended the privileges of the defunct South Improvement
Company to its successors. The new company received secret rebates
ranging from 50 cents to $1.32 per barrel. The agreement also contained
the stipulation that if lower rates should ever be granted to their
competitors, an additional rebate should be given to the Standard Oil
Company. Endowed with these privileges, the favored company proceeded to
unite under its banner, by consolidation, purchase or lease, the
leading refineries of Cleveland.
The effect of the discriminations practiced against independent
refineries soon became apparent. In less than two years there were
closed in Pittsburgh twenty-one refineries, that represented an
aggregate capital of $2,000,000 and had given employment to over 3,000
people. A large number of the remaining refineries were forced to
consolidate with the Standard Oil Company.
The next step toward the entire suppression of competition was an attack
planned against the independent pipe lines. The Standard had early
secured control of the United Pipe Line. To exterminate competing lines,
they again appealed to the railroad companies, and on the 9th day of
September, 1874, J. H. Rutter, general freight agent of the New York
Central, issued a new oil tariff which discriminated greatly in favor of
the oil brought by the United Pipe Line to the refineries. Up to that
time this company had done from 25 to 30 per cent. of the total business
of the various pipe lines. Within one year after the adoption of the new
tariff it did fully 80 per cent. of the entire business. This forced the
independent lines either to sell out to the Standard or to suspend
business, for the latter's rebate was larger than their toll. The oil
tariff of the Pennsylvania Central compelled the independent Pittsburgh
refiners to ship their refined oil over that company's line, if they
would avail themselves of the rebate which it granted on the rates for
the transportation of crude oil to Pittsburgh. The evident purpose and
the effect of such a tariff was to prohibit oil shipments over the
Baltimore and Ohio. Had this road made ever so reasonable a tariff, the
combined charges for the transportation of the crude petroleum from the
oil regions to Pittsburgh by the Pennsylvania Central, and for that of
the refined oil to the sea coast by the Baltimore and Ohio, would still
have been prohibitive in competition with the special transit rates
granted to the Standard Oil Company. As a remedy it was proposed to
organize a new pipe line, it being believed that the crude oil could be
brought to Pittsburgh by that line, refined there, shipped to the
seaboard by the Baltimore and Ohio, and sold there at as good or even a
better profit than the product of the Standard, notwithstanding the
favors received by the latter from the allied trunk lines. This movement
resulted in the creation of the Columbia Conduit Company, which at once
proceeded to lay its pipes from the oil wells to Pittsburgh. Under the
laws of the State of Pennsylvania it became necessary for this company
to obtain the permission of property-holders to lay the pipes through
their lands. Consent was everywhere readily given, and the pipes were
laid without hindrance until the track of the Pennsylvania Railroad was
reached, within a few miles of the Pittsburgh refineries. This company
peremptorily refused to let the pipes be laid under its track. The pipe
line company after some delay contrived a way to obviate the difficulty.
It laid its pipes on each side of the road as close to the track as it
could without trespassing against the legal rights of the Pennsylvania
Central, and then conveyed the oil from one side of the track to the
other by means of large oil tanks on wheels, which could not be
prevented from passing over the railroad track at the public crossing.
After several months the railroad company allowed the pipes to be laid
under its track, but it soon appeared that another combination had been
effected to destroy the value of this concession. A railroad war had
given the three trunk lines an opportunity to force the Baltimore and
Ohio into the pool. A uniform rate of $1.15 was established for
shipments of refined petroleum from any point to the seaboard. While
this was in itself an unjust discrimination against Pittsburgh, which is
250 miles nearer tidewater than Cleveland, the railroads in addition
granted the Standard secret rebates which enabled it to sell its oil on
the coast for less than the sum of its first cost at the refineries and
the open rate of transportation to the points of export. The independent
refiners of Pittsburgh found themselves again cut off from the market,
but necessity soon made them discover another outlet. Shipping their oil
down the Ohio River to Huntington, W. Va., they had it taken by the
Chesapeake and Ohio Railroad to Richmond. In spite of the fact that this
route was more than twice as long as the direct line from Pittsburgh to
the seaboard, and in spite of the further fact that it necessitated an
expensive transfer, a rate equal to about two-thirds of the trunk line
rate for the direct shipment proved remunerative to the Chesapeake and
Ohio. The independent refiners kept up their competition for some time,
but the great disadvantage of river travel and the insufficient export
facilities of Richmond finally forced them to give up the contest.
Until the year 1877 the Standard Oil Company had worked hand in hand
with the railroads. It had obtained all its privileges by asking for
them and by holding out inducements to railroad managers to grant them.
It now commenced to dictate terms to refractory railroad companies.
The Pennsylvania road ventured to carry oil not the property of the
Standard on terms which that company did not approve. The latter ordered
the road to refuse to carry the product of their competitors. This the
railroad company declined to do, and the Standard at once withdrew its
custom. The Pennsylvania retaliated by carrying the oil of the
independent refineries at merely nominal rates and even went so far as
to make its rates dependent upon the profits realized by the shippers. A
fierce freight war was thus precipitated, in which the Erie and New York
Central supported the Standard Company. The Pennsylvania road was soon
forced to surrender and sign an ignominious treaty.
The Baltimore and Ohio, which had again commenced to carry the product
of those Pittsburgh refineries which received their crude oil through
the Columbia Conduit Company, was in a similar manner forced to reject
their freights. The pipe line, whose value was thus almost entirely
destroyed, was soon after sold to the Standard Oil Company. This company
had now an almost complete monopoly of the oil business of the United
States, and still it was not satisfied. It appears that some of the
producers of crude oil had been in the habit of shipping a part of their
product in spite of the advantages which the Standard had through its
rebates. To prevent even these shipments, or rather to exact another
tribute from railroad stockholders, the American Transfer Company, one
of the auxiliaries of the Standard Oil Trust, in 1878, demanded and
received from the Pennsylvania road a "commission" of 20 cents a barrel
on all shipments of petroleum _made by any_ shipper. It had been shown
to the satisfaction of the Pennsylvania Railroad Company that similar
commissions, ranging from 20 to 35 cents a barrel, were being paid by
the New York Central and Erie roads.
When, in 1879, an effort was made to establish a pipe line from the oil
regions to the seaboard, nothing was left undone by the trunk lines to
thwart the enterprise. The new company finally succeeded in making
connection with a railway which had no part in the pool, and there was
some hope that under this arrangement competition might at least be
maintained at some points. The Standard Company again appealed to the
trunk lines to protect it against injury by competition and obtained
from them a special rate of 20 cents per barrel, which rate was even
reduced to 15 cents per barrel two months later. Against such a rate it
was impossible to compete, and after a short struggle the new line found
itself compelled to sell its works to the Standard.
To crown its monopoly, the Standard Oil Company finally bought of the
New York Central and Erie roads their terminal facilities for the
transportation of oil, and thereby made it virtually impossible for them
to transport oil for any of its few remaining competitors. Mr. Josiah
Lombard, part owner of the New York refinery, stated in 1879 before the
investigating committee of the legislature of New York that in 1878 he
had requested the Erie Company to transport for him 100 cars of crude
oil from Carrollton to New York; that he had called upon Mr. Vilas, the
general freight agent of the company, in person, but had never been able
to obtain the cars, though the oil had been held in Carrollton three or
four months ready to be loaded. This gentleman also testified that he
had found it impossible to obtain cars from the New York Central, and
that the company's general freight agent had informed him that the road
did not own and could not furnish any oil cars.
After the Standard Oil Company had secured control of the various pipe
lines of the oil regions, it frequently lowered the price of crude oil
to such an extent as to make its production unprofitable. It even
refused to buy oil, basing its refusal upon the ground that the railroad
companies failed to furnish cars for its transportation. When the
well-owners had their tanks filled, they had the choice to let the oil
run away or to be at the expense of closing up their wells. In one
instance, however, when their ruse threatened to cause a riot, several
hundred cars were brought to the wells within a few hours.
The Standard Oil Trust, not satisfied with the monopoly of the wholesale
trade, even tried in places to control the retail trade by peddling oil
at private houses. This method of destroying competition was chiefly
resorted to where independent dealers obtained their supply by a water
route.
That many of the deeds of the Standard are dark is evident from the fact
that its members, when summoned by the Hepburn committee, declined to
testify, lest their testimony be used to convict them of crime.
Officials of the trust have bribed or attempted to bribe employes of
rival firms, for the purpose of ruining their business. By its peculiar
methods the company has been successful in courts of justice and
legislative halls, and has enjoyed an impunity for its conspiracy
against the public that is without precedent in America. It has
accumulated a capital of more than $100,000,000, and it is even claimed
that for years its annual dividends have exceeded in amount the capital
actually invested. This is not at all strange when it is considered that
they have levied upon the producers, consumers and transporters alike.
Mr. Cassat testified before the New York investigating committee that in
eighteen months the railroads had paid the Standard in rebates no less
than $10,000,000. And the very payment of these enormous rebates
enabled the Standard to decrease the price of oil to the producer and to
increase it to the consumer.
It is claimed by the defenders of the Standard monopoly that under the
trust the price of petroleum has been constantly decreased to the
consumer. That the price of kerosene is lower now than it was fifteen
years ago is undoubtedly true, but the reductions were brought about not
by the trust, but in spite of the trust. The price now maintained is an
unnatural one. The Standard Oil Company never lowered the price of its
oil except when compelled to do so by competition. The largely increased
output of crude oil, the improved methods of refining, the greatly
lowered cost of transportation would have lowered the price of coal oil
without the philanthropy of the Standard Oil Company. Iron, steel,
calico, woolen goods and a thousand other commodities have within almost
the same period suffered much larger reductions than coal oil. But even
if the Standard monopoly had voluntarily lowered the price of its
products, the American people could never approve of its methods. They
can never be made to believe that the end sanctifies the means,
especially when those means are railroad favors, secret combinations,
bribery, intimidation and lawless arrogance.
Many other interesting cases might be given. The Southern Pacific
Railway Company, for instance, owns nearly all of the railways of
California, and enjoys at the present time almost a complete monopoly of
the transportation business of that State and much more of the Pacific
Coast. Perhaps no set of managers would be more considerate of the
people's rights in the absence of legal restraint than those in charge
of this company, yet there is not a business man on the Pacific Coast
who comes in contact with this company who does not realize and feel
the power of its iron hand, unless it be those who for various reasons
are recipients of its special favors. It has become notorious that the
legislature, Board of Railroad Commissioners and some of the judges of
the courts of that State are as servile to the demands of this railway
company as are its own employes.
The railway company is a closely organized body of shrewd, active men,
while those who furnish business for it are not organized, and they will
never be able to properly protect their own interests until they control
the machinery of their State government.
CHAPTER V.
RAILROAD ABUSES.
As has already been shown, railroad enterprise met with comparatively
little opposition in the United States, for, as compared with the
interests certain to be benefited by the introduction of the new mode of
transportation, those likely to be injured by it were insignificant. It
is true, the innate conservatism of man even here recorded its
objections to the innovation. It viewed with distrust the new power
which threatened to revolutionize well-established systems of
transportation and time-honored customs and to force up
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