JVIINNESÖtÄ
and the
RAIbROADS
GOVERNOR JOHN A ' JOHNSON
Declares Gross Inequalities
Exist in Railroad Rates
in the State.
Shows that Freight Rates in Minnesota
are Approximately Fifty Per-Cent
Higher than in Iowa or Canada.
Speech Delivered by Minnesota's Governor Before the State
Municipal League at St. Paul, Minn., January 10, 1906.
aOVERNOR JOHNSON'S ADi^ESS
Gentlemen of the Municipal League; J ,
As Governor of the State of Minnesota, it affcrfs me grea,f pleasure
to congratulate you upon the work accomplished by your, splgjiclid organ-
i^ation. I believe that every citizen of Minnesota has just occasion to feel
a pride in this, his state by birth or adoption. Ours is truly a great com¬
monwealth. Compared with the states east or west of us, Minnesota
stands out in bold relief as one of thé greatest of them all. No western
state has more fertile valleys, better homes, or more prosperity. We
produce more mineral wealth in a single county than the first mineral
state of the west. On every hand, from Canada to Iowa, from Wisconsin
t(* the Dakotas, there are evidences of prosperity, culture and content¬
ment. Leading other states in agriculture, in manufactures, in mines, the
state is still in the beginning of its development. You represent the
smaller cities and the villages of the commonwealth. Each is related
to the other. Each has its proper and just relation to the state and to
its varied interests. Some of you are from the south, some from the
north, some from the east, and some from the west. Each section of the
state has its peculiar conditions. The southern portion, older in its settle¬
ment, differs in its interests from the northern part.
Favors Drainage for Northern Minnesota.
We who have lived in the southern portion do not appreciate the pe¬
culiar necessities of the northern part. We have not realized that millions
of acres of land must be drained to make that section as resourceful and
as inviting as the southern portion of the state. We are coming to un¬
derstand, however, that the claims made by our northern brethren for
the reclamation of swamp lands are just claims. We are coming to appre¬
ciate that it is a good business proposition for the state to spend a por¬
tion of its funds to enhance the value of its own property, and rather than
oppose the proposition of drainage in the northern part of the state, we of
southern Minnesota should join in a proper encouragement of these proj¬
ects, which will make northern Minnesota blossom forth and compare in
every way with any other portion of this great empire.
Hitherto we have paid altogether too little attention to our mutual
interests. The forests of the state have been denuded. Much timber prop¬
erty has been taken from the state without proper compensation. Al¬
most too late the state is awakening to its interests in the matter and
now is protecting its possessions. People who have preyed upon the com¬
monwealth are being brought to justice.
There are various matters which might with profit and propriety be
considered by this Municipal League,—matters in which your Association
might co-operate in many ways with the state government to bring about
a more healthful condition.
Work of the State Departments.
For instance, the Dairy and.Food Department of this state has under¬
taken a war for the extermination of illegal and noxious foods. Fre¬
quently in the line of their duty state inspectors have been obliged to
prosecute the business men of your several communities, because of the
presence of foods for sale contrary to the law. Certainly the Food De¬
partment of the state has no wish and no desire to interfere with the
legitimate business of any merchant in the state of Minnesota. It is the
desire and the purpose of the Department to co-operate and build up your
interests rather' than to destroy and tear them down. There are several
ways in which your co-operation can be of splendid service. There is
one instance in which you can be of great assistance and at the same time
work great advantage and material benefit to your own people. This De-
• partment is waging a consistent war upon the box-car merchant, who prays
upon the several communities and interferes with the legitimate business
of the taxpayer of the state and the village, and in the war against these
Arab meretente -your co-operation is essential and is desired.
The Wsi^nci Department of the state is closely allied and closely
affiliated with your ^eyçra)^ ijiterests. It is the purpose of the Insurance
'CDApartîrféût;'!:© 'i)r{)fccj,îthé; insured. At no time in the history of our
.'ïôuntry Jià^'Jbçie Jfâeîi Iso.mîuch attention given to this particular line of
'cbm'riierce as^ during. Jhe, past year. The country is aroused by reason of
the disclpiures.I^í'íbíée Show that a large portion of the savings and the
earnings/of-:jîeCi0l£,I placed with the great insurance companies for
their present and future protection, have been wasted and frittered away
by those in authority. Our own state has taken the initiative in bringing
about a proper reform and in placing life insurance upon a safe foundation
and a sensible basis. Companies doing business contrary to law have been
halted in their reckless administration, and in order that a better condition
of insurance protection be realized permanently there should be co-
operjition upon the part of all those interested. In fact the past year has
been a fruitful one. Progress has been made in the several departments
of the state government.
The Inheritance Tax Decision.
The public has won a gloribus and splendid victory in the recent de¬
cision of the supreme court of our state, which holds that the inheritance
tax law passed by the legislature is in accord with the Constitution of our
state. I believe that this decision marks a new era for Minnesota in tax
legislation. It certainly has demonstrated to our people and those who
look to us that our judiciary can be trusted to interpret the laws without
bias and without that prejudice which is frequently felt by courts subject
to the argument of those opposed to popular interests. This decision in
itself paves the way for greater progress in the field of taxation, a sub¬
ject always of vital interest and of more direct importance to the people
than any other with which we have to deal. Our presênt system is very
unsatisfactory. Under past constitutional limitations there was little, if
any, opportunity for change in the situation. Under the decision of the
supreme court in the inheritance tax case, with the added gross earn¬
ings of railways and other sources of income, I am of the belief that a
few years at best will find the revenues of the state provided for by in¬
comes along the lines suggested. When that time comes, if it should
come, there will be no necessity for boards of equalization and each local¬
ity will be afforded, and ought to be afforded, an opportunity for self
government, allowing each county and municipality to establish its own
form of assessment.
The people will be called upon at the next general election to vote
upon a proposed amendment to the Constitution giving the legislature
wider latitude in tax legislation and I hope you will eadh do your share
to secure the adoption of this amendment.
I have no desire to discuss these several questions in detail. Many
of them are abstract, but there are a few questions, however, which ought
to be discussed perhaps at greater length and more in detail.
Municipal Ownership Favored.
The question of municipal ownership is one which is spreading oyer
the country as a prairie fire. The wisdom of municipalities controlling
their own public service utilities is certainly one of direct and vital con¬
cern to you and to your people.
I cannot let this opportunity pass without the remark that the people
of a municipality are entitled to their water, their light, and kindred other
service, at the cost of that service.
A city controlling the streets and other highvyays, which has the right
to confer a chartered privilege upon private individuals to control these
utilities, ought to bear in mind that, as a purely business proposition, it is
wise and prudent that they control their own public service utilities. Stu¬
dents of economics have proved conclusively that the service to the peo¬
ple is always better and supplied at a lesser cost when supplied by the
city direct than when supplied by private individuals under a chartered or
corporation right, and every city should think well before it parts with
these great privileges. , , , , u
As a Municipal League, composed of delegates representing the smaller
cities of our great state, I take it that no function could be more impor-
3
tant or sacred to you than to consider the problerii of transportation and
to devise means whereby your communities and the citizens represented
- by you should be fairly treated by the great common carriers upon which
you largely depend for convenience and for prosperity.
The remedy for many evils is the ballot, properly and effectively used—
not with the blindness of party spirit or to promote the interests of in¬
dividuals—but used with the broader idea of promoting the general wel¬
fare and securing a more perfect civilization, based, as it must be, on
the principles of justice, equality and fairness.
We are coming to understand that the claims made by our northern
brethren for the reclamation of swamp lands, are just claims. We of
southern Minnesota should join in a proper encouragement of these
drainage projects, which will make northern Minnesota blossom forth
and compare in every way with any other portion of this great empire.
Railroad Question Paramount.
One of the greatest problems of the present time, and one of the
most vital concern to the people represented by you, is that of railway
transportation and the regulation, or rather the securing of proper tariff
rates for the same. The nation is astir today and the eyes of all the
people are centered upon the Congress of the United States, waiting with
breathless interest to see whether the great representative of the people
shall have the hearty support and concurrence of the Congress of the
United States in his laudable effort to secure the right of the people to
regulate the rates of transportation. On every hand we hear the com¬
mon cry that there is no remedy in the law. On every hand we hear the
cry that it is not a proper function of government to control and regulate
common carriers. On every hand we hear the cry that the sacred right
of contract cannot be impaired. We are met constantly with the claim
that the vested and chartered right of the corporation cannot be assailed,
regulated or abridged. Fortunately the United States Supreme Court has
rendered a decision that "the superintending power over the highways
and the charges upon the public for their use always remain in the gov¬
ernment. This is not only its indefeasible right, but is necessary for the
protection of the people against extortion and abuse. These positions we
deem to be incontrovertible. Indeed, they are adjudged the law in the
decisions of this court. Railroads and railroad corporations are in this
category." If this decision of the court be true, certainly the government
which has the right to confer a charter, which has the right to dispose of
the public domain, which has the right to confer great privileges upon
a corporation, must have the right to regulate and control that corporation
in its operations.
A few weeks ago I listened to strange and remarkable language from
one of the members of the Interstate Commerce Commission. In the
language of the pessimist who sees no hope, in the language of one who
feels nothing but despair, he gives voice to the opinion and to the belief
that there is and will be no relief in the law. He says: "The men who
serve in the cabinet, on the bench, and even upon the Interstate Com¬
merce Commission, are generally lawyers who have received in their pro¬
fessional life the retainers of corporations. They cannot be expected to
change their prejudices and habits of thought on coming into place and
power. No government machinery will regulate monopoly. When men
worship the almighty dollar, it will rule them."
Inflation the Great Curse.
I think that all appreciate that these are peculiar times. We know
and realize that at no time in the history of the world have a few men
become so powerful because of their great possession of wealth. We are
told by the statistician that 5,000 men own one-third of the property of
the United States. We are told by the statistician that if the same ratio
of increase continue, in less than half a century these same men will own
practically all the property of the country. Owning one-third of the prop¬
erty of the country today, they positively control the affairs of the coun¬
try. They fix the price of transportation, they arbitrarily fix the price
of things that we buy, and they arbitrarily fix the price of the things we
produce and sell.
Mr. Rockefeller, of Staitdard Oil fame, is the most potential force in
4
transportation affairs the world has ever known. Mr. Morgan, of equal
notoriety, is the most potential force m industrials the world has ever
known. The country is at the mercy of this class of people. We live
today in a paper age, where fiat property has become an established fact.
The great curse of the country today is in the fictitious valuations
placed upon property and the fact that the American people must by their
energy and economy pay tribute to this kind of genius by paying a rate of
interest and profit on property which has no existence.
Illustrations have been numerous where a man or syndicate of men
have taken a million dollars' worth of property and, by writing new certifi¬
cates, have converted it into five millions of dollars worth of property;
where one hundred million dollars' worth of industrials have been com¬
bined into one enterprise, and by the issuance of certificates have been en¬
hanced in value 400 per cent. And the American people pay a reasonable
rate of interest and profit on the stocks and bonds of the watered stock of
the corporation.
What has been true in the industrial world has been equally true in
the world of transportation. Combinations have been made and new
shares of stock have been issued far iti excess of the actual value of the
property. 1 believe in corporations. I believe the American people ought
to pay a reasonable rate of interest and a fair profit on all legitimate
classes of property. I believe, however, that the American people ought
to pay only upon the actual value of the property and not upon the
inflation.
Roosevelt's Great Fight.
During the past decade we have been shown by illustration after illus¬
tration that the American people, absolutely within the power of a few
individuals, have been compelled to pay, both in the matter of transporta¬
tion and upon industrial products, a rate of profit altogether out of har¬
mony with natural and just conditions. And this condition has become
so exaggerated and the financial autocrat has exercised his tyranny to
such an extent that those in authority have been forced to undertake the
cause of the people. Today the President of the United States, disregard¬
ing all other issues, is concentrating his energies to secure the power for
the people to fix and establish just rates of transportation upon all com¬
mon carriers.
We are told that these things are impossible under the law. A half
century ago the people were told that the sovereign right of a state could
not be interfered with. They were also told that human chattels were
property, the right to hold which could not be interfered with. And yet,
by the single stroke of his pen a man destroyed three thousand million dol¬
lars' worth of property and created three millions of free citizens of this
Republic.
I believe in the obligation of contract. I believe that it should not
and ought not to be impaired. But I believe that when the chartered cor¬
poration, going beyond its chartered rights, refuses to abide by the laws
under which it has its existence and receives protection, can be regulated
and. if n'ecessary. can be secured to the people who have given it life.
People May Rise in Their Wrath.
There are vast numbers of people in this country today who believe
that the government of the country should own and operate its common
carriers. Certainly the time is not ripe today for government ownership,
hut 1 want to say now that if the right of the governmerit to regulate and
control common carriers in the exercise of their functions is too stub¬
bornly resisted by those who control the corporations, the pendulum will
finally become loosed and when it swings it is apt to pass by the central
point and fly as far to the other side.
1 cannot believe that the chartered right of a corporation is greater
than the constitutional right of the citizen, and I do not think it is
American in policy to tax the American people into poverty in order that
great dividends can be paid to the English and- German capitalists who
have invested in the stocks and bonds of the securities of this country. It
is a settled principle of the common law of the country that all railroad
rates shall be just and reasonable.
No uliiform rule has yet been adopted, and in my judgment no rule
5'
will be adopted until the power is given by the government to fix rates
that are reasonable and to establish those rates and maintain them until
a court of justice has declared that the rate is unreasonable.
Railroad operators claim that in the operation of railways railroad men
should be allowed to fix their own rates of transportation, because the
matter of railroad rate making is such an intricate and complex subject
that the ordinary individual does not understand it. Perhaps he does nO't
understand it, but the ordinary individual does understand that between
human beings, between the citizens of the state, between capital and labor,
between the business man and the man who works, there should be a
community of interest which makes the rights of one citizen as sacred and
important as the rights of the other—that there should be between us all
that fairness which is absolutely necessary and imperative in order to pre¬
serve domestic tranquility.
Power of Railroads Unfairly Used.
You, my friends, have more than a political interest in this great ques¬
tion. It is a question coming with a force and interest that ought to ap¬
peal to you as does no other question now before the American people.
It is within the power of a railroad corporation to build up one city and
tear down another city. It is within the power of railroad companies and
railroad systems to favor one community at the expense of another com¬
munity. It seems to be the function and the desire of railroad corporations
to build up the great centers of population from which thej- radiate. No
great center of population can flourish and thrive except it flourishes and
thrives upon the smaller municipalities and upon the agricultural com¬
munities. The railroads of our own state and of the Northwest have not
shown to the rural communities the consideration to which they are justly
entitled. Corporations doing business in this great state have grown pros¬
perous and have thrived upon the common people. It has been argued that
these arteries of commerce have done much for the development of this
great state. That certainly is true, but it must also be remembered that
without the agricultural regions, without the rural communities and the
smaller municipalities, the railroad could not have thrived. And as they
have grown great and strong, it seems to me they have grown less fair
to those upon whom they depend for their success and prosperity. As a
matter of fact, today the Canadian farmer transports his produce 600 miles
for the same price of transportation charged the Minnesota producer and
shipper to transport his wares qod miles. To the south of us a great em¬
pire state has provided by law a system by which rates of transportation
are controlled. Suffering by a comparison with Canada, we also suffer
by contrast with Iowa, and lying between these two, it seems to me that
there should be no discrimination against our own fair state and the vil¬
lages and cities which in part comprise it.
Unlawful Discriminations Exist.
A very noticeable discrimination between localities is the very marked
difference in rates on the transportation of coal. For instance. Red Wing,
41 miles from St. Paul, pays a rate from Duluth of $2 for hard coal and
$1.40 for soft coal; Farmington, which is only 29 miles from St. Paul, pays <
$1.75 for hard coal and $1.40 for soft coal; Mankato, 81 miles from St. Paul,
pays $2.25 per ton for hard coal and $1.50 per ton for soft coal; Austin, 103
miles from St. Paul, pays the same rate on hard coal which Mankato pays
and 10 cents less per ton on soft coal than Mankato; Glencoe, only 51
miles from Minneapolis, pays $2.10 from Duluth on hard coal and $1.75
per ton for soft coal, paying more than Austin pays, 103 miles from the
Twin Cities, and 25 cents per ton more than Mankato, which is 30 miles
further removed from the Twin Cities.
Hutchinson, 58 miles from Minneapolis, pays $2.25 per ton from Du¬
luth by way of Minneapolis or St. Paul for hard coal and $i.go per ton
for soft coal; paying more than either Austin or Mankato, which are 103
and 81 miles respectively from the Twin Cities.
Bird Island, 90 miles from the Twin Cities, pays the same price, or
$2,25 per ton, for hard coal and $2.10 for its soft coal; paying 70 cents
more per ton than Austin, which is 13 miles further removed and 60 cents
more than Mankato, but 9 miles nearer the Twin Cities
As' another illustration of discrimination, St, Cloud, on the Great
6
Northern Railway, pays $1.50 per ton for its soft coal, the same rate paid
by Mankato, and pays $1.50 per ton for hard coal, while Mankato pays $2.25
per ton from Duluth.
A comparison of figures between stations on the Great Northern and
the Milwaukee systems reveals the fact, that to Litchfield, Bemidji, Morris,
Crookston, Benson, Willmar and St. Cloud on the Great Northern road, the
price for hard and soft coal is identically the same, while to a like number
of stations, notably Red Wing, Farmington, Mankato, Austin, Glencoe,
Hutchinson, Bird Island and Renville, there is a difference, all the way from
15 cents to 85 cents between the charge on hard and soft coal. A com¬
parison of these tariffs with the Iowa tariffs reveals the fact also that,
excluding Minneapolis and St. Paul, which have a very low rate, the rates
on soft coal from Duluth to nine other stations on the Great Northern
Railway, shown in a table from which these figures are taken, are 46 per
cent higher than would be allowed under the Iowa law. Is there any valid
reason why a man living 28 miles from St. Paul should pay as much for the
transportation of his fuel as a man living 103 miles from St. Paul? If the
Great Northern road can haul hard coal for the same price it hauls soft
coal, is there any good reason why a citizen of Austin should pay 85 cents
per ton more for hauling his hard coal than his neighbor pays for hauling
soft coal?
.■Xnother illustration of the unfairness to Minnesota shippers, com¬
pared with the people who have the privilege and good fortune to be gov¬
erned by the Iowa laws, is shown in the following:
Minnesota vs. Iowa Rates.
Between St. Paul and Minneapolis and the following stations: Austin,
Winona, Wabasha, Faribault, Mankato, Glencoe, Renville, Montevideo, and
Wheaton, all these being on the Chicago, Milwaukee & St. Paul Railway,
the total of class rates, by applying the Iowa maximum distance tariff, ag¬
gregates 1,078.88, while the total class rates between St. Paul or Minne¬
apolis and the stations named under our schedules is 1,559. To make the
matter clearer, the tabulated rates on classes i, 2, 3 and 4, for merchandise
in less than carloads, and class 5, a, b, c, d and e, in carloads, show that
where the Iowa shipper pays $1,107.88 to move a given quantity of freight
a certain distance, the Âlinnesota citizen, to move the same freight the
same distance, pays $1,559. This, it is understood, is on distributive and
terminal tariff rates. If he were obliged to move the same freight the
same distance as in Iowa, under distance tariff rates, he would pay a still
larger sum. Under the most favorable conditions of shipment in Minne¬
sota, the rates are 50 per cent higher than the rate in Iowa for the same
distance. Minnesota cattle rates are 10 per cent higher under the most
favorable circumstances as compared with the most adverse conditions in
Iowa. On hogs the Minnesota farmer pays 22 per cent more than the Iowa
farmer. Lumber is 50 per cent higher and in the illustration given, it will
be noticed that the list includes Winona and Wabasha, which are river
towns and subject to river competition, and in these two towns the rate is
lower than in other and neighboring towns. A careful comparison of the
published tariff schedules of the railways of Southern Minnesota indicates
that Minnesota wheat rates are nearly 25 per cent higher than the rate
permitted under the Iowa law. and that on other grains the rate averages
about 35 per cent more than the Iowa distance tariff.
Going into the northern part of the state the condition is even more
unfavorable. Taking a number of illustrations, we find that the total of
class rates for 16 stations on the Great Northern Railway, by applying
the Iowa maximum distance tariff, to be 2,242.76, The total of class rates
between the same points and St. Paul and Minneapolis, with the distributive
or terminal rate now effective, would be 3,543. In other words, where it
now costs the Minnesota producer $3,543 to move a given quantity of
freight a given distance, if the Iowa tariff laws were effective in Minnesota
today, the price charged for moving these commodities the same distance
would be $2,242.76; a difference of $1,300, or more than 58 per cent. Then,
too, the cattle rates of the Northern Minnesota farmer are 10 per cent
higher than in Iowa. The rate for hauling hogs is 39 per cent higher; the
rate for hauling lumber is 50 per cent higher, and grain rates, including
wheat, between the same stations, are 25 per cent higher. The stations
here lised for the computation are Delano, Hutchinson, Milaca, St. Cloud,
Litchfield, Grove City, Willmar, Sauk Center, Benson, Long Prairie, Alex¬
andria, Fergus Falls, Park Rapids, Breckenridge, Moorhead and Crookston.
The same comparison was made between the Iowa maximum, distance
tariff rate and the distributive or terminal tariff rates on the Soo Line, the
following stations being used: Rockford, Buffalo, Annandale, Eden Valley,
Paynesville, Brooten, Glenwood, Elbow Lake, Alexandria, Henning, Detroit,
Tenney and Thief River Falls. Applying the Iowa maximum distance tariff
on the same class of commodities heretofore named, the total number of
units is 1,826.97. Applying the class rates between these points and St.
Paul and Minneapolis under the published schedule of distributive or
terminal tariff now effective, the total number of units is 2,847. Again, the
shipper living along the Soo Line, to move a given quantity of freight a
given distance, pays $2,847. If the Iowa rate were applied along the Soo
Line the shipper there, in order to move the same quantity and kind of
freight the same distance, would pay $1,826.97. Minnesota rates between
these stations to St. Paul and Minneapolis are 55 per cent higher than are
permitted for the same distance in the state of Iowa under the Iowa tariff
law. Comparative tables show the cattle rate to be six and seven per cent
higher .in Minnesota. The rate on hogs is 39 per cent higher in Minne¬
sota, the rate on lumber 48 per cent higher, and the rate on grains average
22 per cent higher.
Thus far the distributive or terminal tariff rate has been used in mak¬
ing the computation. This rate obtains between St. Paul and Minneap¬
olis and the smaller cities. There are a few other favored communities
which have the terminal or distributive tariff, but between the great ma¬
jority, particularly for local traffic, the distance tariff applies, and
for all distances up to and including that of 350 miles, a comparison of the
Great Northern and the Soo Line distance tariff applying in Minnesota with
the Iowa maximum distance tariff shows the Great Northern and Soo
Line tariffs to be 65 per cent higher.
This refers particularly to merchandise in classes i, 2, 3 and 4, in less
than carload lots, and class 5, a, b, c, d and e, in carloads, and is the tariff
ordinarily used for shipments between station and station where the dis¬
tributive or terminal tariff rates do not apply.
Strange as this situation appears to be, there is still another proposi¬
tion which is more singular, indeed, tljan any illustration yet given. It is
fair to presume that a carload of merchandise loaded for consignment at
Chicago for Breckenridge, Graceville, Moorhead, Wahpeton, Glenwood,
Morris, Wadena, Fergus Falls, Glj'ndon, New York Mills and other points,
would have a through tariff rate less than the two local rates from Chicago
to the Twin Cities and thence to their destination. The reverse, however,
is true on some commodities. For instance, on wire, woven fence, nails,
etc., the local from Chicago to St, Paul is I2j4c for 410 miles, while the
local from St. Paul to Breckenridge is 24c for 204 miles, making a total
local rate of 36l^c; the through rate, however, being 39c.
To Graceville the through rate is 37c. The local rate from Chicago to
"St. Paul or Minneapolis is I2j4c for 410 miles, while the local to Grace¬
ville is 22c per cwt. for 174 miles. To Moorhead, with the local from Chi¬
cago the same as above for the 410 miles, the rate is 27c per cwt. for 232
miles, while the through rate is 42c, or \2]/2C. more than the combined two
local rates.
To Wadena the two local rates are 3214c, while the through rate from
Chicago to Wadena is 39c, or 6;4c more than the combined two local rates.
Fergus Falls, paying I2l4c from Chicago to St. Paul, pays 22c from St. Paul
to Fergus Falls. It pays a through rate of 39c, or 4;4c more than the total
local rate between the two cities. Appleton pays 3Sc for a through rate,
and paying I2!4c for 410 miles, pays 20c for 144 miles, 2}4c more for the
through rate from Chicago to Appleton than it would pay under the double
local rate from Chicago to St. Paul and "thence to Appleton.
Practically the same condition applies to Hutchinson, Sacred Heart,
Granite Falls, Montevideo, and probably a hundred other stations in the
state of Minnesota? How many shippers have paid the through rate when,
if their interests had been properly conserved and cared for, they would
certainly not have paid more than the total of the two local rates? I know
personally of instances where shippers who have paid the through rate,
after a stubborn contest with the railway and warehouse commission, have
finally secured a refund, bringing their freight rates down to the double
local charge.
7
8
Through Rates Higher Than Combined Local Rates.
This matter of interstate commerce presents a peculiar condition. Why
should a man at Fergus Falls pay 22c, or nearly twice as much, to have his
wire or nails hauled 178 miles from the Twin Cities, as the Twin City
shipper pays to have it hauled 410 miles to St. Paul or Minneapolis?
We have heard much of the long and the short haul, but under our
new system of hgures and our present unfavorable system of transportation,
the railway companies have shown us that the science of railroading is to
make a larger charge for a long haul than for two shorter hauls of the
same distance. In other words, it now costs more in the cases stated to
have a shipment billed directly through from Chicago or eastern points to
a Minnesota destination without a stop, than it does to have it billed to St.
Paul or Minneapolis, set out there, and then re-billed to its destination.
It seems to me that there has been a lack of administration upon the part
of some one. 1 am creditably informed that the attention of the proper
authorities was called to this most appalling condition more than six months
ago, and yet the published tariff schedules today are no different; and there
has been absolutely no change.
It seems to me that the shipper and producer, and the citizen generally,
have an interest in the regulation of railway rates, and more than ever,
from a somewhat limited study of the situation, am I convinced that the
only remedy to the citizen of this great state lies in giving the railroad and
warehouse commission the unquestioned power to establish, fix and deter¬
mine the rates of transportation and put the burden of proof to show the
unfairness of such a rate upon the power which now controls and estab¬
lishes the rate. Certainly the Municipal League, gathered as you are from
all portions of the state, from Breckenridge and Austin, from Luverne,
perhaps, and Fergus Falls, from Glenwood and from Wabasha, have an
interest in this great, living, vital question, and that interest combines to
impose a duty upon this Municipal League to so exert its influence and
to so direct its labor that there shall come, through your influence exerted
upon the legislators or executive bodies, a fair distribution of rates which
will not discriminate against individuals or against localities. In the matter
of transportation, I believe it to be a scientific fact that the common carriers
of the country do have a right, and.should have a right, to discriminate be¬
tween commodities, but it should not have the right or the power to dis¬
criminate between individuals, between localities, or between communities.
Railroad Operators Not of One Mind.
I am satisfied that this view of the situation is entertained by at least
some of the railway operators of the country. A year ago at Chicago I
addressed similar views to those presented here to a body of men in which
there were not less than a score of railway magnates. At the close of the
address one railway president informed me that he concurred in the general
proposition of governmental regulation; that the rebate and other evils
worked a decided hardship to the railways themselves, these hardships
growing out of the severe demands made by large shippers' who backed
their demands by threats of a discontinuance of business unless they were
met.
Remedy Is In the Ballot.
If there be abuses of the laws of transportation, if there be discrimina¬
tions against some localities in favor of others, if individuals suffer that
others may be favored, wherein lies the remedy? Certainly proper and
complete regulation will afford relief. This can be secured over two routes,
viz: Proper legislation, conferring the right of regulation, and then proper
administration of the law. In a village in Southern Minnesota last autumn,
a great railway genius advised the farmer to elect men to legislative posi¬
tions who would he true to the agricultural interests. Is not the advice
given on that occasion pertinent to this? The remedy for many evils is the
ballot, properly and effectively used—not with blindness of party spirit or
to promote the interests of individuals, but used with the broader idea of
promoting the general welfare and securing a more perfect civilization,
based, as it must be, on the principles of justice, equality and fairness.
PITHY POINTS FROM GOVERNOR JOHNSON'S MUNICIPAL
LEAGUE SPEECH.
* * *
"A city controlling the streets and other highways, which has
the right to confer a chartered privilege on private individuals, ought
to bear in mind that, as a purely business proposition, it is wise
and prudent that it control its o^n public service utilities "
"No great center of population can flourish and thrive except it
flourishes and thrives upon the smaller municipalities and upon the
agricultural communities."
"I believe that when the chartered corporation, going beyond its
chartered rights, refuse to abide by the laws under which it has its
existence and has its being, can be regulated and, if necessary, can
be secured to the people which has given it life."
"At the south of us a great empire state has provided by law a
system by which the rates of transportation are controlled. Suffering
by a comparison with Canada, we also suffer by comparison with
Iowa, and lying between these two, it seems to me that there should
be no discrimination against our own fair state and the villages and
cities which in part comprise it."
"Minnesota cattle rates are lo per cent higher under the most
favorable circumstances as compared with the most adverse circum¬
stances in Iowa. On hogs the Minnesota farmer pays 22 per cent
more than the Iowa farmer on the same commodity. Lumber is 50
per cent higher."
"It seems to me that the shipper and producer and the citizen gen¬
erally have an interest in the regulation of railway rates, and more
than ever, from a somewhat limited study of the situation, am I
convinced that the only remedy to the citizen of this great state lies
in the positive power of the railroad and warehouse commission to
establish, fix and determine the rates of transportation and put the
burden of proof on showing the unfairness of such a rate upon the
power which now controls and establishes the rates."
"Is there any good, valid reason why a man living twenty-eight
miles from the city of St. Paul should pay as much for the trans¬
portation of his fuel as a man living 103 miles from the city of St.
Paul?"
"Mr. Pockefeller, of Standard Oil fame, is the most potential force
in matters of transportation the world has ever known. Mr. Morgan,
of equal notoriety, is the most potential force in industrials the world
has ever known. The country is at the mercy of this class of people.
We live today in a paper age where flat property has become an es¬
tablished fact."
"The great curse of the country today is in the fictitious valuations
placed upon property, and the fact that the American people must
by their energy and economy pay tribute to this class of genius by
paying a rate of interest and profit on property which has no exist¬
ence."
"The public has won a glorious and splendid victory in the recent
decision of the supreme court of our state, which holds that the in¬
heritance tax law passed by the legislature is in accord with the con¬
stitution of our state. I believe that this decision marks a new era
in tax legislation for Minnesota."
"The Dairy and Food department is waging a constant war upon
the box-car merchant. * ♦ ♦ and in the war against these Arab
merchants your co-operation is essential and is desired."
"Our own state has taken the initiative in bringing about a proper
reform and in placing life insurance upon a safe foundation and a
sensible basis."
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