CHAPTER 9.

State control of railroads. — Objections offered to the plan.-Answers to objections.-How State control can be exercised.-Valuation of roads.Net earnings to be restricted to a certain per cent. on value of road.-State to control railroad bookkeeping.— Disposition of surplus earnings.-Passes only to certain railroad employees. Special rates should be abolished.-Tickets should be good at any time after purchase.-Traffic, Passenger and Freight Associations should be abolished.-Number of general officers should be reduced.- Officers' salaries should be restricted to certain amounts. Scientific press on Texas Railroad Law.-Defects in Texas law.

If there are other and safer plans than Government ownership, by which the present evils of railroad management may be corrected, should they not be adopted? One of these plans is State control, another is State ownership of the roads, both of which are objected to by the advocates of both United States control and ownership. A number of reasons against United States ownership are stated in Chapter 8. The very fact that the corporations want Congress to have entire control of railroad legislation, ought to be a sufficient answer to the advocates of Federal control without ownership. Many writers and speakers on the railroad question, who are in favor of United States control, are opposed to State control in any manner, for the reason, they say, that the States could not be trusted to regulate the reciprocal rights and duties of the people and corporations within their jurisdiction. It is admitted that some who

crawl into State offices are corrupt, but the question arises, Should we get any better results from a combination of such patriots in Congress? If the people of the separate States cannot be trusted to regulate their domestic affairs, what section of the country is it that furnishes the honest, capable men for Congress, the Senate, and the Supreme and other Federal courts, that can be trusted by the corporations? Mr. Depew charges the people of the Western States with wanting to confiscate his employers' property. Would he be willing to trust the representatives and partners of Eastern stock-gamblers, monopolists, and the organizers of trusts and combines to do strict justice between their friends and partners and the Western farmers? The citizens of the States are also citizens of the United States. Is it probable that they would be more honest in their capacity of citizens of the United States than as citizens of the State? It is likely that the reason the corporations object to State legislation is because a visit to the State capital of a Western State during the term of the legislature by some of the corporations' most eloquent and persuasive after-dinner speakers, would be at once noticed and commented on, while the same flowery talkers might run over to Washington during the session of Congress, and make known to friendly Representatives and Senators the corporations' desires in certain matters, without attracting much attention, or being seen by any one except those they went to SEE.

Another objection offered to State control is, that no

two of the States would adopt the same laws, and that the just laws of one State on the subject of public transportation might not insure to its people full relief, by reason of the people of an adjoining State taking advantage of their low rates, and at the same time refusing to adopt similar laws, and that under State control the rates in no two of the States would be the same. The answer to the last objection is, that under Government control the rates could not be the same in all the States without being unjust to some of them. The value of railroads will differ somewhat in each State, from that in any other State. The rates should be based on the value of the road and the volume of business transacted by it, in order to insure just enough earnings to pay the expenses of operation and the interest on the value of the road. To argue that the people of some of the States would refuse to enact just laws for the control of the railroads, is to say that the people of those States would rather pay 12 than 6 per cent. interest. The danger would be in the opposite direction: each State would attempt to fix the lowest possible rates, and by so doing get them too low to pay the expenses of operation, and the interest on the value of the roads.

State control that would do full justice to the owners of the road and to the public, could be accomplished in the following manner:

The Legislature of each State should enact a law similar to that of the State of Texas, providing for the valuation of all the railroads in the State by the State Railroad

Commission; the value of the roads to be ascertained by the employment of expert engineers, giving the owners of the road the right to appear and object to the value so fixed by the Commission, and in case of such objection being made, to at once proceed by due process of law to settle the question of the value of the road. Each road should be valued at the full amount it would cost to duplicate or reproduce it at the time the valuation is placed on it. This would not be difficult for a skilled engineer to do; the excavations and embankments are there, and can be measured to a cubic yard; the bridges and trestles and tunnels and every physical feature of the road can be measured and its value ascertained; and if accurately reported, a dispute as to the amount would avail nothing to the corporation, the court could have it measured by an unprejudiced engineer. Everything necessary to the operation of the road should be given its full present value.

The actual value of the roads having been ascertained, the amount that may be earned as interest on that value besides paying operating expenses, should be fixed by law, and if the net earnings exceed the amount allowed as interest, the surplus should go into a sinking fund, the property of the State, to be used in a further reduction of rates, or for the purchase of the road, should that become necessary on the part of the State.

In order to know the exact cost of operating the roads, the law should require duplicate pay-rolls, and a monthly statement of all shipments and receipts of

freight; an account of all tickets sold and passes issued; of all moneys received and paid out on account of repairs, betterments, and supplies, or otherwise, to be made by all the roads to the State Railroad Commission. A failure to make such report should be punished by fine and imprisonment of the person required to make it.

No one should be allowed to ride on a pass except railroad employees whose employment requires them to go from one point to another on the line; the use of a pass by any other person should be made a misdemeanor, and in the case of a public officer, sufficient cause for removal from office.

Special rates should be abolished, except for the purpose of attending local celebrations, and in such cases. should be limited to a few days. All other special rates having been abolished, a regular ticket once bought and paid for should entitle any legal holder to ride on it at any time thereafter.

Taxes should be abolished on every kind of property owned by the company which is necessary to the maintenance and operation of the road and is kept solely for that purpose.

A liberal interest should be allowed on the value of the property as ascertained and fixed by law. When the United States asked for bids on $200,000,000 of 3-per-cent. bonds, bids amounting to the sum of $1,300,000,000 were received by the Secretary of the Treasury. This fact is strong evidence that capital is looking for permanent, safe investment at 3 per cent.