Address of W. W. Finley, President, Southern Railway Company, before the Nashville Board of
Trade, at Nashville, Tenn., July 17, 1907.
, Mr. President and Genteemen :
Since I have been entrusted with the management of the Southern Railway Company, I have em¬
braced every proper opportunity to meet and become better acquainted with the people along its lines. I
have accepted invitations to visit and deliver addresses at many of the principal points in the South. I
have accepted no invitation with more pleasure than that asking me to come to your beautiful and thriv¬
ing city to address its Board of Trade, of which I have the honor to be a member, and I take this occasion .
to extend my thanks for this invitation to President Douglas, and, through him, to my fellow-members
of the Nashville Board of Trade.
Nashville is sharing splendidly in the wonderful prosperity that has come to the entire South in the
past few years as a result of the more systematic development of Southern resources. What I have seen
on this and other recent visits to your city convinces me that there is little, if any, exaggeration in the
estimates which credit you with a population of about 165,000, or more than double that shown by the
Census of 1900. The Census report on manufactures in 1905 shows that the total value of your manu¬
factures increased from $15,301,096 in 1900 to $23,109,601 in 1905, an increase for the five years of fifty-
one per cent. This report shows that your manufactures exceed in value those of any other city in Ten¬
nessee, and that the actu .1 Dcrease in value during the five years was greater than for any other city of
the Str.'.e, while the rate of increase was exceeded only by Knoxville. The statistics gathered by the Board
of Trade show that you have not been standing still since 1905, but that your manufactures and your
business of all kinds have continued to grow in the past two years.
Your phenomenal growth has been due to the industry and energy of your people, supplemented by
the advantages of your geographical location and your transportation facilities. Not the least of your
geographical advantages has been the Cumberland River, flowing through your city and carrying your
traffic 325 miles upstream, or down to the Ohio and thence to the Mississippi and to all the navigable
streams tributary to it. The State of Tennessee, in its great rivers—the Mississippi, on its western boundary,
and the Cumberland and Tennessee flowing through its interior—has natural transportation facilities of
inestimable value, which should be made the most of by improvement to their highest possible state of
efficiency, thus assuring to Nashville and other cities of the State low water rates on a large proportion
of their traffic and the influence of water competition in regulating railway charges. I favor the most
comprehensive policies for the improvement of the rivers and harbors of the Southern States, as I
recognize the importance of such policies to the general prosperity of our section. I should be as reluc¬
tant to see the railways arrayed in opposition to the improvement of the waterways as I should be to
see all other interests united in opposition to the railways. If our section is to enjoy the fullest measure
of prosperity, all our business interests must recognize their interdependence and the identity of their in¬
terests and all must advance together.
Nashville is situated in the heart of one of the richest agricultural regions of the world, with coal,
iron, and other minerals close at hand, and with abundant supplies of valuable hardwoods which are con¬
stantly increasing in value. In the factories and workshops of your city or within easy reach of its
markets everything that is necessary for sustaining human life in comfort, and a large proportion of the
luxuries of modern civilization, can be produced. Few localities can be made so nearly self-supporting
and at the same time have a large surplus of a great variety of products for shipment to the markets
of the world.
One of your most important resources of wealth and prosperity is your proximity to the principal
hardwood forests of the South. Until within the past few years the timber supply of the United States
was generally looked upon as being practically inexhaustible. It has not been many years since, here,
in the center of the Southern hardwood region, timber that would now be very valuable was burned to
get it oft the ground. As a result of the methods formerly pursued, the forests have practically disap¬
peared in many parts of the country and timber and all articles manufactured from wood must be shipped
from distant points. Nashville and other points in the South are now benefiting from this condition. No
scarcity of timber has yet been experienced here, but it is beginning to be more and more apparent that
if present advantages are to be handed down to future generations a more conservative policy of forestry
management must be adopted and the Southern hardwood forests must be so used as to make them yield
the greatest present profit consistent with their constant reproduction and their preservation for the future.
If this is to be done effectively, there must be uniformity of forest management throughout a large region,
and with the adoption of such a policy of forest preservation, there is no reason why Nashville should not
develop a great and permanent industry, embracing the manufacture of furniture and of articles of all
kinds for which the woods of this section are suited.
Your city is known throughout the United States as an industrial and commercial center of growing
importance; but it is as widely known as an educational center. From the earliest days of its history,
when the sister of General Robertson established a school on board the boat which Colonel John Donelson
brought to the site of Nashville, until the present time, it has been a center from which culture has radia¬
ted through the Southern States. The young men and women who go out from your universities, col¬
leges, and seminaries are equipped with an education that exerts a powerful influence on the social business,
and industrial life, not only of Tennessee, but of the entire South. The future of the South is very largely
in the hands of the young people, who are annually sent forth from the educational institutions of Nash¬
ville, and those who are charged with the duty of their education and of inculcating in their minds ideas
that will govern them in future life have a high privilege and a grave responsibility. If I should be charged
with the instruction of the students of the Nashville schools I should paraphrase Horace Greeley and say:
"Stay South, young man, and grow up with the country." I should endeavor to inculcate in the minds of
the rising generation an adequate idea of the variety and richness of Southern resources and of the tremen¬
dous possibilities of development in practically every locality in this entire section. I should endeavor to
teach them to appreciate the importance to the future social and material progress of the South of the
adoption of sound economic policies that would encourage industrial and commercial progress and open
up to them opportunities for the fullest exercise of their talents. I know of no section of the country that
offers opportunities to the young man who is not afraid of work, equal to those that can be found in the
South today, and that will be opened up in the future, if Southern development is not hampered by the
adoption of unwise and restrictive legislative policies. I should like to impress, with especial emphasis,
upon the rising generation, the importance of transportation to all modern social and material development
and the impossibility of any community attaining that measure of material prosperity to which its natural
resources and the energy and industry of its people entitle it, unless it is adequately supplied with means
for carrying its products to market. We men of the older generation owe it to our children not to handi¬
cap them by putting into effect legislation that will restrict the development of their highways and limit their
opportunities for the profitable use of the natural resources of our section of the country.
This is a matter that interests not only the rising generation, but the men of the present as well.
It is a self-evident truth that the profitableness of production depends upon ability to sell the com¬
modities produced. It is equally self-evident that no community can produce, profitably, more than can
he sent to market, and that the limit of the capacity of its carriers, therefore, limits its capacity for profit¬
able production.
The truth of this is recognized in the policy of the general government in improving the rivers and
harbors of the country and in the policies of the States, counties, and municipalities in taxing their citizens
for the provision of wagon roads. Is there any sound reason why it should not be as fully recognized in
public policies dealing with railways? Would the citizens of Nashville tolerate, for a moment, a proposi¬
tion to deliberately obstruct the navigation of the Cumberland River? If not, should they tolerate propo¬
sitions for the enactment of legislation that would operate to cripple the ability of their railway lines to
increase and improve their facilities? The policy of obstructing the water highways or the wagon roads,
or of retarding or preventing their improvement would be just as logical as would be a policy that would
tend to cripple the railways or to prevent or delay improvements that must be made, if they are to be
able to increase their service so as to keep pace with the increasing demands made upon them. This is
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a practical matter that concerns every business man and every individual in every locality dependent,
in whole or in part, on rail transportation for the carriage of its products to market.
The question of supplying additional rail facilities is not one that concerns the indefinite future.
It is an urgent, present question. As practical business men, each one of you knows that the railways
of the United States, and especially those of the Southern States, have been taxed almost to their utmost
capacity by the increased traffic they have been called upon to haul within the past few years. The
rate of this increase may be illustrated by citing the increase in the production of manufactures in the
State of Tennessee in the five years from 1900 to 1905. This increase for the entire State amounted to
48.7 per cent. Taking into consideration, not only the carriage of this increased tonnage of manu¬
factures to market, but the transportation of the raw materials to the factories, the transportation of
the fuel required for the generation of power, the transportation of the increased quantities of supplies
required by the large increase in the number of people employed, and the incidental increase in passen¬
ger traffic, it will be seen that the demands upon the railways of the State for transportation have in¬
creased much more rapidly than the increase in the output of manufactured products. The practical ques¬
tion that confronts, not only the managers of the railways of the State, but every man engaged in any
kind of business within its territory, is, how can the increased transportation facilities be provided that
will be needed if this rate of increase in railway tonnage is to be maintained for even a few years more.
This question is giving the managers of every railway in the Southern States a great deal of concern. It
should give concern to every resident of this section.
I may illustrate this by pointing out the several ways in which increased rail facilities benefit a
single class in the community—the farmer. Here, in this fertile Cumberland valley, the natural condi¬
tions for diversified farming are probably as favorable as can be found in any part of the United States.
All the staple farm crops of the Temperate Zone can be produced in abundance. Here flourish fruits
and vegetables of all kinds that do not require a tropical climate. Conditions for the raising of live
stock and for dairy farming are ideal. Yet, what would these advantages profit the farmer without trans¬
portation? A sparse population might eke out a precarious existence, but there would be none of the
magnificent farms, with their splendid barns, their well-kept fields, gardens, and orchards, their fine herds
of blooded stock, and their comfortable and even luxurious residences, now to be seen in any direction
about Nashville. Without transportation the farmer could produce profitably only what his family could
consume and what he could sell in the restricted local market. He must depend on transportation bv
water or by rail, and principally by rail, for the ability to sell his surplus products in distant markets,
and ample facilities for prompt and rapid movement are necessary to enable him to take advantage of
the most favorable market conditions and to increase the range of his markets for perishable products.
The development of a thriving industrial and commercial city, like Nashville, within reach by wagon or
by rail, is of great benefit to the farmer. It encourages diversification of farming by supplying a home
market for a large variety of products, especially those perishable products that do not well stand trans¬
portation for long distances. But such a local market can not exist without transportation. Adequate
highways are as essential to the building up of a manufacturing or distributing center as are fertile fields
from which the urban population can draw its food supplies. Nashville depends upon the farmer: the
farmer depends on Nashville; both depend upon the railways, and the railways depend on both.
I know that the farmers of Tennessee realize the importance to them of sound public policies that will
not place unnecessary obstacles in the way of providing the transportation facilities upon which their con¬
tinued and increased prosperity must depend. This was shown by the action of your last legislature, for.
nothwithstanding the rapid growth of cities and towns in this State, the agricultural interests still predom¬
inate and can shape the policy of all your legislation.
As I have frequently pointed out. the agitation initiated to secure the correction of railway abuses
has accomplished that result, and is now being carried to the point of endangering railway credit and
crippling the power of the railwavs to increase their facilities and improve their service. This extreme
agitation, hurtful alike to the railways and to the true interests of the public served by them, owes some
of its present vitality to persitent error, inculcating a popular belief in the present prevalence of past
abuses that have been effectively, and, T think, permanently cured. Believing that this is a time for a frank
recognition of the advance that has been made in business ethics, have we not a right to expect wise and
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helpful advice as to the framing" of constructive policies for the future, rather than denunciation, based
on error or misrepresentation as to the facts?
Among the most persistent misrepresentations that have been made are those as to the alleged over¬
capitalization of the railways of the United States, and as to the effects of this alleged overcapitalization
on transportation charges. In spite of the statements of President Roosevelt, Chairman Knapp, of the
Interstate Commerce Commission, and other students of transportation questions of the highest standing,
as to the exaggeration of popular estimates in regard to the overcapitalization of railways, and the testi¬
mony of Chairman Knapp and other high authorities that railway charges do not depend on capitaliza¬
tion, it is still asserted that, but for the fact that they are earning dividends on large amounts of watered
stock, the railways could reduce their rates and improve their service.
That rates are fixed by economic conditions beyond the control of railway managers and not by
capitalization, and that they can not be adjusted arbitrarily, has long been recognized by practical rail¬
way men and students of transportation problems. President Uadlev, of Yale University, one of the
most profound students of this entire subject, in his book on "Railroad Transportation," shows that even
Prince Bismarck, the Iron Chancellor of the German Empire, with all the autocratic power of the Em¬
pire behind him and with the government-owned railways under his control, was unable to override eco¬
nomic laws in the fixing of charges. He attempted to abolish low through rates from Austria into Prussia,
on the theory that they would operate as a discrimination against Prussian manufacturers. President
Iladley shows that the only result was to drive the traffic from the Prussian railways and thus deprive
them of the revenue derived therefrom, while it still continued to move, at the old rates, over the water¬
ways of Prussia in connection with the Austrian railways, and he savs:
"It is clear that, even with the whole power of the European governments, the laws of trade
have proved too strong for any arbitrary attempt at railroad regulation to succeed."
By the adoption of legislation in some of the states which reduces the revenues of the carriers far
below the point of confiscation, the railway manager is confronted with a serious problem.
The Constitution of the country, which is the supreme law, and which should be recognized as the
supreme expression of the people's will, says that this shall not be done in the same solemn terms that
it declares that no individual shall be deprived of his property or his liberty without just compensation
or without due process of law. If a law were passed by the legislature, contrary to the Constitution,
depriving a man of his liberty, there would be no one, thus deprived, who would not ask the protection
of the Constitution—the supreme law—for his liberty, and all men who are lovers of liberty and justice
would applaud his action. Likewise, if a law were passed by the legislature, contrary to the Constitu¬
tion, taking from a man his home,.or interfering with his lawful enjoyment of it, there is no one of
our fellow-citizens, thus deprived, who would not ask, through the courts, the protection of the Constitu¬
tion for his lawful rights, and in this case, too, every good man would applaud his action and would up¬
hold his hand. If, however, there is legislation enacted, contrary to the Constitution, taking from a rail¬
way company its property or interfering with its lawful enjoyment of it, and an effort is made by those
charged with the responsibility for the property to obtain for it in the courts constitutional protection,
there are those who declare that this is a defiance of the popular will. It is called, in some quarters, an
arrogant refusal to accept a popular verdict, and instead of a firm and determined insistence on constitu¬
tional protection for these interests, the railway manager is confronted, as I say, in some quarters, with
denunciation, with obstruction, with threats of reprisals, and with efforts at intimidation. Some people
do not hesitate to say that the public will make reprisals upon the property because of this effort to obtain
constitutional protection.
I submit to you, my fellow-citizens, that a legislative enactment, which is contrary to the Constitu¬
tion, is not the expression of the popular will. Under our system of government, the popular will can¬
not, and ought not to, express itself, except by constitutional methods. Otherwise it would be the mere
temporary caprice of the people—the undigested result of successful agitation—that would be our law
in the place of our Constitution. The great voice of the American people insists that the Constitution shall
be preserved, and what the Constitution declares to be a right, either of person or property, is the real
expression of the popular will. No man should be subject to censure for accepting the Constitution as a
declaration of the potential voice of the people and as the expression of their real will and purpose, and
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no man and no interest should be denounced for asking at the hands of the courts of the country the pro¬
tection to which the Constitution entitles them. Those who applaud an individual for insisting on his
constitutional rights and denounce a railway company for doing the same, must seek to justify them¬
selves upon the principle that those of our fellow-citizens who invest their means in providing transporta¬
tion for the country must, for some reason, be deprived of the measure of protection for their investment
which other people have. If this be accepted by the country as a sound principle, who would be willing
to invest his means in a business which is outside of the protection of the Constitution and the valid laws
of the country. Let me ask you seriously to consider where the means to provide the commerce of the
country with proper and adequate facilities is to come from. Would you be willing to invest your money,
unless your investment is entitled to legal protection? If not, can you expect others to do so? In a very
high and a very important sense it is necessary for the railway manager to insist on this constitutional
protection for the interests entrusted to his care. It is incumbent upon him, not only in the interest of
the owners of the property, but in the interest of the public, to see that this great system of transportation
is made useful and efficient; and he cannot accomplish this high duty unless the company is protected as
other forms of investments are, and is permitted to earn an amount sufficient to maintain its credit and to
sustain and extend its usefulness.
We want the public, whose servants, in an important sense, we are, to understand the motive and pur¬
pose which was controlling us in seeking for the property entrusted to our care constitutional protection. In
taking this course, we are actuated by a profound appreciation of our responsibilities and a profound sense
of our duties, not only to the owners of the property, but to the public at large, and we think that we have
a right to ask that our efforts, in this direction, shall be upheld and that we shall be accorded the cooperative
and influential aid of a just public sentiment.
There can be no difference of opinion as to the propriety of legislation for the proper regulation of
railways. I want to make my own attitude toward such legislation so clear that it cannot possibly be mis¬
understood or misrepresented, and I believe I voice the views of practically every responsible railway man¬
ager in the United States. 1 do not justify or defend any railway practices that are wrong, or any railway
policies that are hurtful. Such legislation as is necessary for the full protection of the buyers of trans¬
portation in all their rights—for the prevention of unreasonable or exorbitant charges, and for the preven¬
tion of undue discrimination between shippers or travelers—should be enacted and should be scrupulously
obeyed by every railway manager. As I have said before, on the ethical side of railway management, it
is entirely reasonable and proper to legislate, but on the economic side, legislative enactments should be
avoided. The object should be restraint from wrong, rather than the management of a business in which
private individuals assume all the risk.
As a result of the awakening of the public conscience and of the corporate conscience as well, a great
deal has been accomplished on the ethical side of railway management. Many of the faults of railway man¬
agement that were justly causes of complaint have been made to appear in their true light and have been
corrected. The grounds of just public complaint against the railways have been substantially removed.
The rights of the public are safeguarded by statute law and by the corrective power of enlightened public
opinion.
The railway problem of the present day is not altogether that of the protection, in a narrow sense,
of the immediate interests of the buyers of transportation. It is also that of the protection of the rights of
the railways and the preservation, in the interest of the public, of the carriers' power to perform their
proper function as common carriers and to increase their efficiency. It is the right and duty of the gov¬
ernment to protect the buyers of transportation from oppression and wrong. ■ It is no less the right and
duty of the government to protect the railways from oppression and wrong and to safeguard the prop¬
erty of those who invest their money in railway property as jealously as the farmer, the miner, or the man¬
ufacturer is protected in his property. When the government has assured the full protection of the rights
of all buyers of transportation, the limit of the right of governmental regulation of privately-owned railways
has been reached. Any further, restrictive legislation is an invasion of the property rights of the railway.
The right of governmental regulation does not extend to the point of requiring any service to be performed
bv a railway for less than a reasonable and fairly compensatory charge for that specific service, and while
buyers of transportation and the general public have a right to demand that the charges of the carriers shall
be reasonable and that discrimination, which would place individuals, localities, or commodities at an unjust
5
commercial disadvantage, shall he avoided, they have no right to demand or expect that any service will
be rendered for less than fair and reasonable compensation.
When the carrier has complied fully with the requirements that its charges must not be unreasonable
or unjustly discriminatory, it lias fulfilled every legal obligation with respect to them, and whatever re¬
mains to it as compensation for its service, be it much or little, is its private property, which is entitled to
the same protection by the law and by public opinion as is freely accorded to property acquired in other
forms of business. To deprive the carrier of any of its rights in connection with its property thus acquired
would be clearly confiscatory and in violation of its constitutional rights. I believe that when- this sub¬
ject is thoroughly understood, and the rights of the carriers, as well as the interests of the public, are fully
appreciated, we will have no reason to fear legislation in the Southern States that will invade the consti¬
tutional rights of the railways and tend to make them less efficient agencies for the building up of Southern
prosperity.
It is a high and honorable ambition for any man to aspire to represent his fellow-citizens in the Con¬
gress of the United States, or in the Legislature of his State. His election is evidence of the confidence
of his constituents. It confers high honors and imposes grave responsibilities. The duty of defining right
and wrong and of prescribing rules of conduct for his fellow-citizens is one which no thinking man can dis¬
charge lightly, or without a keen appreciation of the responsibilities which it involves. At this moment the
grave responsibility of determining whether the present splendid prosperity of the country is to continue
and increase, or is to be checked and decline, rests, in no small measure, upon our State and National
lawgivers.
In his recent address before the Virginia Bankers' Association, Mr. Frank A. Vanderlip, Vice-Presi¬
dent of the National City Bank of New York, than whom there is probably no one who possesses a clearer
insight into American business and financial tendencies, directed attention to the uncertainty of the out¬
look for the future. That the period just ahead will be one of some recession in business Mr. Vanderlip
believes to be inevitable. Whether it is to be a mere temporary and unimportant dip, or a prolonged and
disastrous depression, he believes depends on the public mind and temper. He sees no inherent reason
in business conditions for further disturbances and depression, but a thousand influences that should
lead toward continued prosperity. He said:
"The business of the country will turn into one of these roads, solely as the result of whether
or not the public and the public's legislative representatives, are wise and patient, or are hasty
and inconsiderate. If the intricate problem of railway regulation is worked out in a spirit of
fairness and intelligence, if the vastness of the problem is recognized, if the involved relation¬
ships encountered are taken into account, and the far-reaching effects of paternal regulations,
when applied to so great and complicated a network are reckoned with, and if an intelligent
understanding of the complications will lead to a patient attitude toward results, then I believe
we will resume the road toward further prosperity. The moment that investors have become con¬
vinced that the problem is to have fair and patient consideration in its solution, we will start
on that road again with full measured pace.
"But if we are to have legislation based upon political advantage, if we are to adopt social¬
istic theories which will amount to the confiscation of property rights, if we are to have reprisal
for past wrongs, no matter how real, if action is the one thing wanted first, and the considera¬
tion of the intelligence and fairness of such action is to come afterward, then I believe it is possible
that the whole business structure may be facing a danger, the proportion of which will be meas¬
ured by the same vast figures as have been the totals that have marked the extent of our pros¬
perity."
Such is the responsibility that, in the opinion of one of the clearest-headed business men of the country,
rests upon our legislators. They have it in their power to insure the continuance of American prosperity,
or to endanger its collapse. Which will they do? That is for you and the members of similar business
organizations throughout the country, for the farmer, the miner, the manufacturer, the professional man,
and the laborer to determine.
I do not take a pessimistic view of the future of our section. As a Southern man, identified with
Southern interests, and familiar with Southern needs and Southern aspirations, I have unbounded con¬
fidence in our Southern people. I know their high sense of honor and of justice and their zeal in sup¬
port of every policy tending to advance the development and to increase the prosperity of the South.
6
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Our section is now progressing industrially and commercially at relatively a more rapid rate than any
other part of the country. Personal talks and correspondence with men in all walks of life in the Southern
States convince me that there is a great and growing appreciation of the fact that if our section is not
to lag behind in the race for industrial and commercial supremacy, transportation facilities must be in¬
creased and improved to keep pace with the rapid increase in Southern traffic. The adoption of public
policies that will sustain railway credit, without which increased facilities cannot be provided, is a matter
that interests personally and vitally every individual. If each one who appreciates the importance of
such policies, to himself and to his section, will contribute in every way in his power to the development
of a public sentiment favorable to legislation based on sound economic principles, there will be no ques¬
tion as to an advance to higher prosperity, in which our own Southland will lead the way.
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