The Southern Railway 
 Belongs to the People 
 of the South 
 
 An Address 
 
 Before the Chamber of Commerce 
 of Chattanooga, Tennessee, January 20, 1914. 
 
 By 
 
 FAIRFAX HARRISON 
 
 President, Southern Railway Company . 
 
THE SOUTHERN RAILWAY BELONGS TO THE PEOPLE 
 
 OF THE SOUTH. 
 
 The Southern Railway System includes 10,000 miles of railroad on 
 which 59,000 officers and employees perform public services, in return 
 for which more than 100 millions of annual revenue is collected. These 
 are big figures and, in a country in which there has always been a pride 
 in big things, in which every community has been wont to boast of that 
 which it has which is the biggest, such a big thing as the Southern Rail- 
 way System should be, and I believe is, a source of pride to the South, 
 but exactly in proportion as it is big also in its public service and faith- 
 ful in its public trust. The administration of such a vast machine, 
 affecting, as it does, the comfort and well being of the people of a large 
 territory, is, therefore, itself a large public service. The time has 
 passed when it might be exploited for merely private and selfish ends. 
 The lawyers used to tell us that a railroad was a quasi public institu- 
 tion, but today, happily, it might better be described as a quasi private 
 institution. It is private still in the opportunity it presents for the exer- 
 cise of individual initiative and competitive service, but in practically 
 every other sense it is now recognized that it is public. 
 
 It is a matter of sincere regret to every railroad manager that rail- 
 road securities are not more generally held, directly and immediately, 
 in the communities which the railroads serve. The lack of such holding 
 deprives him of a powerful and sympathetic ally in the relation of pub- 
 lic opinion to his problems. The time was when the railroad stocks were 
 owned immediately at home, and by the people who were most influen- 
 tial in shaping public opinion, but today, while railroad stocks are gen- 
 erally held by the same kind of people — by those who. through the exer- 
 cise of prudence, industry and courage have laid by a competence, and 
 by the women and children for whom they worked — such investors now 
 do not as a class reside in the territories in which they have made their 
 investments. The explanation of this phenomenon — so well known to 
 us all, but still a phenomenon — is part of the financial history of the 
 United States, but the fact has given rise to a feeling among many of 
 those who use the railroads daily and come into immediate contact 
 with their managements, that the railroads belong to some mysterious, 
 
remote and foreign power, to irresponsible potentates, who bear, in 
 popular imagination, the generic name of “Wall Street.” We read in 
 magazines and newspapers of the romantic lives attributed to a few 
 individuals who are supposed to “control” the destinies of whole com- 
 munities by possession and exploitation of the instruments upon which 
 such communities depend for their necessary transportation, who “fix” 
 rates and arbitrarily determine conditions of service, and so “tax” the 
 people they ought to serve, withdrawing money earned in the sweat of 
 the brow from the communities where it is earned, to be dissipated at 
 a distance in extravagant follies. Such a vision is not the result of pure 
 imagination — it has had unfortunately its foundation of justification in 
 a few conspicuous instances, which leap to the lips of every one who 
 discusses our present-day industrial problems: but every intelligent man 
 knows that it is no longer, if it ever was, the rule. 
 
 In considering such lamentable individual cases, the public, when 
 forming its potent judgment on the present situation of the railway in- 
 dustry, must recognize them as the unhappy exceptions they are. To 
 him who insists that the railroads should be judged by their black sheep, 
 it is fair in answer to invite attention to many exemplars of high-minded 
 Integrity in the administration of railroad property. We in the South 
 can cite shining examples of such rectitude. I may be forgiven a proud 
 reference to my late chief, William Wilson Finley, whose opportunities 
 •were not less than those of any of the flagrant individuals to whom allu- 
 sion has been made, but who, after years of devotion to a public duty 
 and the practice of a large private charity, left an estate the amount of 
 which, as announced in the public press, is at once a certificate of candid 
 character and an illustration of just administration. One who knew 
 them can add to the same roll of honor two more executives of rail- 
 roads in the South who have recently gone to the grave — Thomas M. 
 Emerson and John W. Thomas, Jr. 
 
 Despite the holding of railroad stocks outside of the territories the 
 railroads serve, and despite the aberrations from integrity in the admin- 
 istration of some particular railroads, I believe that I am not claiming 
 too much when I assert that such has been the development of the recog- 
 nition in recent years of the public nature and responsibility of the ad- 
 ministration of the railroads, and such have been the practical conse- 
 quences of that recognition, that today in every essential a railroad be- 
 longs to the communities it serves. 
 
 In this aspect and in a very real sense the Southern Railway be- 
 
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iongs to the people of the South. It is not only their highway to mar- 
 ket, but its fiscal operations are part of the life of the communities along 
 its lines. 
 
 At some risk of trespass upon your attention, I venture to support 
 this claim with a brief argument from statistics. They record a condi- 
 tion which is astonishing and I confess astonished me when I saw how 
 far they go along the lines of a tendency which I knew to obtain. Of 
 the one hundred and three millions of annual revenue collected last year 
 by the railways included in the Southern Railway System, there was 
 immediately paid out again along its lines at least seventy-six millions, 
 an amount not far short of the total collections from the people of the 
 South : for approximately twenty-two millions of the total revenues were 
 collected from people outside of the Southeastern States — a fact not often 
 taken into consideration, the explanation of which is that an apprecia- 
 ble part of the passenger traffic of the system consists of the transpor- 
 tation of residents of other localities traveling in the South, and, fur- 
 thermore, that to a large extent freight charges on Southern products 
 shipped to other localities are paid by the consignees. 
 
 What then becomes of these great revenues collected in the South ? 
 Are they hurried away to some cavern in Wall Street? No. The fact 
 is that all the moneys collected in the South are deposited in Southern 
 banks which are drawn upon from time to time only as funds are needed 
 for proper fiscal purposes. The funds of the system thus become an 
 important factor in strengthening the banks of the territory, and so are 
 at all times at the service of the Southern people. 
 
 I have said that these funds are withdrawn from Southern banks 
 from time to time only as needed for proper fiscal purposes, but even 
 in that operation, to a large extent, the moneys collected for transpor- 
 tation service on our lines are not withdrawn at all from the South- 
 ern communities in which they are collected. This can be demonstrated 
 by an analysis of Southern Railway expenditures for the last fiscal 
 year. Such analysis shows that, of every dollar disbursed, 41.71 cents 
 went to the payment of wages, substantially all of which are paid along 
 the line of the road, and so remain in Southern banks, a disbursement 
 which, for the Southern Railway proper, averages about two million 
 dollars a month. The purchase of materials and supplies used 23.30 
 cents, and, under our policy of buying as far as practicable from South- 
 ern people, 19.12 cents of this was expended in the South and only 4.18 
 cents in other localities. Miscellaneous operating expenses required 6.09 
 
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cents, all spent in the South. Taxes, all paid in the South, required 
 3.65 cents. Interest, rentals and other miscellaneous payments accounted 
 for 20.83 cents, and the holders of the Company’s preferred stock re- 
 ceived 4.42 cents. It is unfortunately impracticable to determine the 
 proportion of interest and dividends paid to Southern owners of South- 
 ern Railway securities. I wish it was all paid to Southern people : but, 
 leaving these entirely out of account, it is seen that at least 70.57 
 cents out of every dollar expended by the Southern Railway remains in 
 or is brought into the South. It may be added that these figures do not 
 take account of expenditures for additions and betterments amounting 
 last year to three millions and a half and in ten years to twenty-seven 
 millions of which the major part, expended on roadway and structures, 
 was practically all paid out along the line of the road. We may then 
 take it as established that what the Southern people pay the Southern 
 Railway lines for transportation remains a part of the working capital of 
 the Southern people: but it is interesting to pursue the thought a step 
 further to a realization of what these disbursements by the Southern 
 Railway in the South mean in the life and growth of the Southern peo- 
 ple. Of the total of seventy-six millions paid out along the Southern 
 Railway lines last year approximately forty-three million dollars went to 
 the army of 59,000 employees and thus, on the conventional basis of 
 five to a family, directly supported about 295,000 Southern people, or 
 about six and one-half times the population of Chattanooga at the date 
 of the last census. 
 
 I have spoken of our preferred stockholders, but the real pre- 
 ferred stockholders of the Southern Railway System, in the matter of 
 priority of claim, are the political governments of the States, counties, 
 and cities along its lines. Their claim upon railroad revenues comes 
 ahead even of that of employees, and they took $3,743,704.39 in the last 
 fiscal year. It is hard to grasp the significance of figures as large as 
 this : what our tax payments really mean to the communities along our 
 lines can be better understood by an illustrative analysis of our pay- 
 ments on account of school taxes and road and bridge taxes in the 
 Southern States. In 1912, our school taxes in these States amounted 
 to something over $800,000, or an average of twenty-eight hundred dol- 
 lars for each county traversed by our lines. At the average annual 
 compensation of school teachers in the Southern States, as reported by 
 the United States Bureau of Education, this would more than pay for 
 ten teachers in each county. It represents $2.64 out of every $100 of 
 
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school taxes paid in these States and amounts to fifteen dollars for each 
 school building in the States traversed by our lines. Every dollar paid 
 to the Southern Railway for transportation charges thus includes a 
 substantial contribution to the maintenance of the system of public edu- 
 cation in the South. 
 
 Payments by the Southern Railway System in the same year of 
 taxes directly assessed for public roads and bridges amounted to $447,- 
 966.63, or an average of $1,571.81 for each county along our lines. 
 Every dollar paid to the Southern Railway for transportation charges 
 thus includes also a substantial contribution to the maintenance of the 
 public highways of the South and is an indirect but none the less real 
 public support of the progressive movement for good and better roads. 
 
 I have referred to the impracticability of determining the amounts 
 of interest and dividends paid to holders of securities living along the 
 line of the road. We know, however, that a large percentage of our 
 population have a very real though indirect personal interest in these 
 securities even though they may never have seen a railroad bond or 
 stock certificate. There are few families in the South who do not hold 
 an insurance policy of some sort : either an assurance on life or against 
 the risk of fire. The invested funds of the great insurance companies 
 are, therefore, matter of vital concern to the Southern people and, in 
 large measure, are their own assets held in trust for their benefit. We 
 find that the chief insurance companies report their holding of securi- 
 ties of the Southern Railway System, including terminal bonds on which 
 the Southern is a joint guarantor aggregating more than eighty million 
 dollars. In that great fund, the integrity of which depends upon the 
 continued solvency of the Southern Railway lines, the Southern people 
 have a vital proprietory interest; an interest which, as they realize it, 
 should be to them a constant spur to protect themselves by maintaining, 
 as they can and will, the basis of Southern Railway credit. 
 
 I assert with confidence that the facts to which I have called your 
 attention are full warrant for the claim that in a very real sense the 
 Southern Railway belor gs to the people of the South : so much so that 
 its annual reports mignt more properly be addressed “To the People 
 of the South” to advise you of the results of the management of your 
 property, for today it belongs more to you than it does to the stock- 
 holders. More than this, its management is and always has been devoted 
 to the interests of the South. Its officers are mostly Southern-born men 
 and those who were not born in the South have been here long enough 
 
to become identified with our interests, our peculiarities, our responsi- 
 bilities, our prejudices, and our aspirations as a people: they talk the 
 same language as the people of the South. I look forward to the time 
 when there may be more Southern men sitting on our Board of Direc- 
 tors, where I know that they will be welcome. 
 
 As an organization then, the Southern Railway, with full apprecia- 
 tion of, and acquiescence in, the present tendency of public sentiment as 
 to what a railway is and should be, stands pledged to the Southern peo- 
 ple, and is proud to declare itself one of their own institutions. As 
 such it invites the Southern people to help it to become more and more 
 their efficient servant and at the same time the object of their pride and 
 affection. They need have no fear of its future if it has their confi- 
 dence. 
 
 I trust you will permit me to take this occasion to say finally a 
 word of a personal nature: I believe in the South and our Southern 
 people with all my heart and soul. I have given most of the years of 
 my manhood to an earnest, though a subordinate, part in an effort to 
 realize a high purpose of promoting the regeneration, through industry, 
 of the prosperity of this our beloved motherland. I have not known in 
 my own experience the horrors either of the military conflict which 
 left our people prostrate, or of the drear years of political disability 
 and atrophied ambition which followed that great war between the 
 States, in one of the chief theaters of which we are tonight : but I know 
 the bitterness of these things in the tradition of my immediate family, 
 and I have learned from my parents that there can be no higher aspira- 
 tion than to be a part in the realization of the ideals of our Southern 
 people. Facing the future, I have then dedicated my life to that duty 
 and to identification with the Southern people. Many others have done 
 and are doing this and I am proud to be of the company which has ac- 
 complished, through co-operation and sustained effort, so much in the 
 last quarter of a century. 
 
 I am humbly grateful for the welcome the South has given me to 
 my new opportunity for its service. It has been such a welcome as you 
 have given me tonight, cordial and with every evidence of good will. 
 My hope is to justify this to those who allow me their confidence, who 
 are willing to believe that if we sometimes fail it will not be through 
 lack of good intention or desire to do our duty as we conceive it. I have 
 no sense of personal elation in the realization today of an ambition cher- 
 ished ever since I entered the service of the Southern Railway Company 
 
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seventeen years ago. I feel most a sobering sense of a heavy responsi- 
 bility, but I do not fear the event. I have served under two great men, 
 Samuel Spencer and William Wilson Finley, both men of action, eager 
 to accomplish, conscious always of the imperious summons of today, and 
 of the warning of Ecclesiastes : “Whatsoever thy hand findeth to do, 
 do it with thy might.” I have known that before all they were patriotic 
 men, faithful to the South, and with their example and their ideals be- 
 fore me my hope now is so to carry on their work as to gain the kind of 
 public esteem they earned and to aid in building for the future, as they 
 built, not only the Southern Railway but the South itself. In this high 
 endeavor I am one of you, my fellow countrymen, who are similarly 
 engaged, and I appeal to you as co-workers for aid and co-operation. 
 
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