i 
 
 THE 
 
 COMMERCIAL INTERESTS 
 
 OF NEW YORK. 
 
 AS RELATED TO OUE SYSTEM OF 
 
 TRANSPORTATION. 
 
 IVo. -2. 
 
r 
 
 J 
 
TO THE MEKCHANTS 
 
 01 
 
 NEW YORK CITY. 
 
 In the President's last message we find these words: 
 
 The attention of Congress will be called at its present session to enterprises for 
 the more certain and cheaper transportation of the constantly increasing surplus of 
 the Western and Southern products to the Atlantic seaboard. The subject is one 
 that will force itself upon the legislative branch of the Government sooner or later, 
 and I suggest that immediate steps be taken to gain all available information to 
 inevitable aDd just legislation regarding a route to connect the Mississippi valley 
 with the Atlantic. 
 
 That production increases more rapidly than the means of transportation in our 
 country, has been demonstrated by past experience. 
 
 The rapid growth in population and products of the whole country will require 
 additional facilities, cheaper means for the more bulky articles of commerce to 
 reach tide-water, and that a market will be demanded in the near future is equally 
 demonstratable. 
 
 I would therefore suggest either a committee or commission to be authorized to 
 consider this whole question, and to report to Congress at some future day for its 
 better guidance in legislating on the important subject. The railroads of the 
 country have been rapidly extended during the last few years to meet the growing 
 demands of producers, and reflect much credit upon the capitalists and managers 
 engaged in their construction. 
 
 In addition to these a project to facilitate commerce by the building of a ship 
 canai around Niagara Falls, on the United States side, which has been agitated for 
 many years, will no doubt be called to your attention this session. 
 
 Looking to the great future of the country, and the increasing demands of com- 
 merce, it mignt be well, while on this subject, not only to have examined and re- 
 ported upon the various practicable routes for connecting the Mississippi with the 
 
AA 
 
 ^7 
 N4T(» 
 
 J Cll 
 
 •<5e-water of the Atlantic* btit the feasibility of *n «hsw§t continuous !an<5-locke4 
 
 navigation lrom Maine to the Gulf of Mexico. 
 
 And the truth and wisdom of the above has become more evident 
 each day that has elapsed since it was written. In accordance 
 with the above suggestion the Senate appointed a Committee, of 
 which Senator Windom, of Minnesota, is Chairman, to make inves] 
 tigation daring the recess and report at next session of Congress, 
 The Committee are now at work, and will probably occupy the 
 entire fummer in gathering information and material for their re- 
 port. In a late report of the Chicago Board of Trade we find the 
 following : 
 
 The means and cost of transportation have probably engrossed a larger share ©f 
 public attention during several years past than any other question of public con- 
 cern, and the proper remedies lor the evils under which this country is laboring do 
 not £>v,yn to have as yet been devised. Certainly it is a subject worthy of the most 
 earnest consideration, for upon its issue depends the prosperity of the whole coun- 
 try, especially that portion of it largely devoted to agricultural pursuits. When, as 
 now, it costs the farmer in many cases from one-half to three-quarters of the value 
 of his crop to transport it to market, the question of that cost present itself to his 
 mind, justly, as one of vital importance. Waiving any discussion in this place in 
 regard to the efforts that have been made looking to some degree of control over 
 the railway charges in this and other States, and of the results thus far attained in 
 that direction, the subject of transportation eastward may properly be alluded to. 
 That the rates current for the past year or two must, if possible, and by some 
 means, be reduced, is apparent to all. Enlarged facilities and increased competi- 
 tion by rail will, it is hoped, at an early day, at least partially relieve the West from 
 its embarrassment, and various proects are suggested looking to this end. No en- 
 tirely new lines from Chicago to the seaboard have been opened for about fifteen 
 years, during which time the Northwest has more than doubled in population and 
 production; true, facilities have been greatly increased, and new competition over parts 
 of the route has been established, but wholly independent lines are now no more 
 numerous than then, nor is there any immediate prospjet of r Jief in this direction, 
 ^That the National Government is in duty bound to adopt some measure for the 
 relief of the most important interest in the country seems to be largely conceded, 
 and projects looking to this end are numerous, the friends of each pressing it with 
 a vigor worthy of the importance of the subject. It must be conceded that the most 
 effectual competition is that furnished by an unrestricted and free water route. 
 No better illustration of this can be afforded than the fact that the business of 
 grain carrying from Chicago to Buffalo by lake is profitable at six cents per bushel, 
 while railroad companies claim it is not remunerative from Chicago eastward an 
 equal number of miles, at less than from three to five times that sum. Assuming 
 that there is at least a large difference in the two modes of transportation in favor 
 Of that by water, it would then seem that the first duty of the government would 
 </se to exert its influence to open up all possible facilities in that direction. 
 
 9 The report of the Detroit Board of Trade says : 
 
 The fact is forced upon the attention of all interested in the welfare of the great 
 grain-prolucing centers, that something must be done immediately to reduce the 
 
s 
 
 eost of moving onr leading cereals to the seaboard, and to fh# great centers of eea» 
 ■umption in Europe. Corn at 6-5 cents and oats at 43@48 cents at the seaboard will 
 not pay the cost of marketing in many parts of Southern Illinois, Iowa and con- 
 tiguous States, saying, nothing of the cost of production. The great question of 
 cheap transportation demands attention and solution, and cannot longer be dfe- 
 ferred. 
 
 That the words of the last two lines are true is evident from the 
 fact that the producers of the West have begun organizing on this 
 issue ; and, although it is but a few months since the first association 
 known as a' : Grange " was formed in Illinois, thej have already 
 spread over nine States, with a voting membership of nearly four 
 hundred thousand. 
 
 THE CAUSES 
 
 which have led to this great movement are the abuses which haTfr 
 grown up with our system of transportation, although, doubtless* tks 
 great increase of the producing capacity of the country may kfiVfc 
 had something to do with it . The abuses, however, form the largest 
 portion of the burden which have borne so heavily upon the produc- 
 ers of the West, and which are now " the old man of the sea " upon, 
 the shoulders of the commerce of the whole country. Our commerce- 
 is taxed with rates of freight designed to pay dividends upon a tre- 
 mendous nominal or fictitious capital. There is, nominally, about 
 five thousand millions of capital invested in railways in the United 
 States, and it has been estimated by experts that not more than two 
 thousand millions have been actually expended in building them. 
 Roads have been built upon mortgage b'onds, and the stock divided 
 among the projectors without equivalent; and yet the public are. 
 taxed to pay both interest upon bonds and dividends upon the ctock^ 
 In many instances, dividends have V.-en so large that the stock had 
 to be watered lest the enormous dividends should attract attention 
 and awaken public indignation. A favorite method of late, to rob 
 the public, has been to " capitalize surplus earnings or, in other 
 words, to first extort money from the public by exorbitant char ges, 
 then issue stock representing it, then increase the tariff of freight 
 charges so that dividends may be declared upon it — in fact, making 
 tre people pay interest upon the money which had been stolen from 
 them. 
 
 Every road has its " Credit Mobilier " fast freight line, the officers 
 of which are also officers of the railway, and grant special privileges 
 to the<ie lines who take the cream of the business and charge what 
 they please. The spectacle is often seen at the West of a shipper 
 
4 
 
 applying at the railway offices for cars and is told they have none, 
 but he can get them across the street at the office of the Blue or 
 Green or Red or White line, as the case may be. It is notorious 
 that the " fast freight lines " are under heavy expenses for offices, 
 agents, and officers, and yet declare tremendous dividends upon their 
 stock. Many railroad m3n can be pointed out who, five years since, 
 were penniless, and who to-day are millionaires ; and this, bear in 
 mind, happens during five years of a general shrinkage in values and 
 retrenchment. Is it any wonder that legitimate business should lan- 
 guish and the labor of producers prove unremunerative when they 
 are overtaxed as above stated ? 
 
 Thus we see that two distinct sets of stockholders subsist and 
 flourish upon the commerce *>e country — the stockholders of the 
 railways and the stockholders or the last freight lines — both of whom 
 keep up expensive organizations for which the people have to pay. 
 In investigating still further, we find rings in the management of 
 nearly all the roads which charge the companies two or three prices 
 for all their supplies, and with the best managed companies, lavish 
 expenditure and extravagance is the rule rather than the exception. 
 
 I& is a notorious fact that the greater part of the corruption to be 
 found in our halls of legislation proceeds from the great corporations 
 while seeking legislation opposed to the interests of the public. As 
 an evidence of the great amounts annually worse than squandered 
 in this way, the following extract from the report of the legislative 
 committee, which recently made the investigation into the manage- 
 ment of the Erie Railway, may be interesting and instructive : 
 
 It is further in evidence that it has be9n the custom of the managers of the Erie 
 Jiailway, from year to year in the past, to spend large sums to control elections and 
 to influence legislation. In the year 1868, more than $1,000,000 was disbursed 
 from the treasury for *• extra and legal services." For interesting items see Mr. 
 Watsona's testimony, pages 336 and 337. 
 
 Mr. Gould, when last on the stand and examined in relation to various vouchers 
 shown him, admitted the payment, during the three years prior to 1872, of large 
 Bums to Barber, Tweed, and others, and also large sums drawn by himself, which 
 might have been employed to influence legislation or elections; these amounts were 
 charged in the India rubber account." The memory of this witness was very de' 
 fective as to details, and he could only remember large transactions; but could dis- 
 tinctly recall that he had been in the habit of sending money into the numerous 
 districts all over the State, either to control nominations or elections for senators 
 and members of assembly. Considered that, as a rule, such investments paid better 
 than to wait till the men got to Albany, and added the significant remark, in reply 
 to a question, that it would be as impossible to specify the numerous instances, as it 
 would to recall to mind the number of freight cars sent over the Erie road from, day 
 to day. '*(See testimcoy, p. 556.) 
 
5 
 
 It is not reasonable to suppose that the Erie railway has been alone in ' le corrupt 
 use of money for the purposes named; but the sudden revolution in the V rection of 
 this company has laid bare a chapter in the secret history of railroad m^iagement, 
 such as has not been permitted before. It exposes the reckless and prodv,?al use of 
 money, wrung from the people to purchase the election of the people's represent- 
 atives, and to bribe them when in office. According to Mr. Gould, his operations 
 extended into four diffeient States. It was his custom to contribute monej to influ- 
 ence both nominations and elections. 
 
 What the Erie has done, other great' corporations are doubtless doing fi >m year 
 to year. We have here, simply an acknowledgment of the fact. Combined* as they 
 are, the power of the great moneyed corporations of this country are a standing 
 menace to tha liberties of the people. 
 
 The railroad lobby flaunts its ill-gotten gains in the faces of our legisla- 
 tors, and in all our politics the debasing effect of its influence is felt. 
 
 The report further says : 
 
 This vast interest has grown up mostly within the last twenty-five years. And 
 the railroad system, in its material aspects, is, to-day, a proud monument to the in- 
 dustry, enterprise, and progress of the country and of the age, and should receive 
 generous treatment. But in this free growth there is danger. Restrictions which 
 seemed ample when these*enterprises were in their infancy, and when the country 
 was struggling for internal development, are now quite inadequate. At the time of 
 the formation of our governments, State and national, and for many years afterward, 
 the water routes were the great channels of internal commerce; no one dreamed 
 that they could ever be controlled by a few men. But railroads have revolutionized 
 traffic; and the danger that was not then imagined is now an existing calamity. 
 These franchises, which were granted to subserve public uses, and to wkich private 
 interests were compelled to yield, have been, in many cases, perverted to specula- 
 tive purposes, and the establishment of practical and grinding monopolies, reducing 
 to a moiety the income of the producer, and increasing to exorbitance the prices of 
 the necessaries ot life to the consumer. 
 4 Corporate wealth has gone on increasing to an alarming extent, vast private for- 
 tunes have been accumulated by the men who control and operate our railways, and 
 these advantages they are not quick to relinquish. The business interests of the 
 country are demoralized by the mania of stock gambling rendered hazardous by the 
 constant watering of stocks, by which a fictitious value is imparted to railroad 
 securities, which would otherwise be stable, and traffic is hence unduly taxed to 
 secure them a value. Another evil is the indiscriminate bonding of towns and 
 municipalities for railroad construction. Withal come rivalries and the continual I 
 reaching out for additional advantages through legislation. 
 
 The evil is deeply seated, and no superficial remedy will be adequate for its cor- 
 rection. No law that the committee can recommend at this late day of the session 
 will reach the entire case, but they will take the liberty to suggest that, in their 
 opinion, the relief, will be found in some enlightened system of general railway legis- 
 lation, regulating the rate of transportation, prohibiting the issue of fictitious stocks, ' 
 and punishing with heavy penalties the misappropriation of the funds of the com- 
 pany by the managers thereof, whether to their personal uses or to corruptly influ- 
 ence legislation affecting their interests. 
 
 *Tbere should also be enacted some uniform system for the keeping of railroad 
 accounts and the manner of declaring dividends, so that, while on the oce hand the 
 
6 
 
 stockholder may share in the actual profits, on the other, the obligations of com- 
 panies shall not be increased from year to year by loans to make good fictitious 
 'Statements of net earnings. On one subject, at least, your committee believe that 
 legislation should be had without delay. There is now under existing statute abso- 
 lutely no security to stockholders in regard to the leasing of one roa d by another. A 
 siAjority of the board of directors may, without consent of their stockholders, lease 
 Cors-ach a period of years, and upon such terms as would be equivalent to a consoli- 
 <&ation of interests. 
 
 STour committee believe that lome proper restriction is necessary rot only to pro- 
 tect the public, but the railroad interest itself, and the law should apply not to one 
 company alone, but should be general in its scope. They have therefore prepared, 
 ita.4 presented in connection with their report, a bill regulating leases of connecting 
 •loads, and prohibiting the leasing of competing parallel lines. 
 
 In conclusion, your committee have endeavored to discharge the duty delegated 
 $o them so far as time and circumstance would allow, with a desire to deal justly by 
 «JtI parties, and herewith submit the evidence taken, with their conclusions thereon, 
 <3f«tpectivel> for the consideration of the House. 
 
 ISAAC fl. BABCOOK, 
 C. S. LINCOLN, 
 AMHERST WRIGHT, Jr., 
 CHARLES CRARY, 
 JACOB B. CARPENTER, 
 May l&th, 1873. Select Committee. 
 
 The following extract is from the speech of J. H. Rowell, made 
 before the Farmers' Convention held at Bloomington, 111., Ia8t Jan- 
 uary. Speaking of our railway system, Mr. Rowell said: 
 
 It has been a magnificent advance towards greater physical comfort and 
 higher moral and mental culture for all the people. And so the 
 «a&way system has become a permanence. We cannot abandon it if we would, 
 ought not if W9 could. It is a part of the world's wealth; like a great truth, it 
 "5s «Yerj body's right to have and enjoy. But truth, sometimes, affords a splendid 
 '©orer far falsehood. The more valuable a thing is, the mot* dangerous it becomes 
 'W&.en its use is perverted. I know of nothing of which this can be said with more 
 trath than of the railway system. Needed, imperatively demanded, we were so 
 <OT©rjoyed at its ooming that we neglected to shut the gate against its attendant evils, 
 and these are crowding in so fast that our attempts to arrest them have thus far 
 &ten attended with slight success. We have no quarrel with well regulated rail- 
 roads. There ought to be no antagonism between us. They are the People's high- 
 way; by their aid we are all neighbors. Our war is with abuses. Let us examine 
 -*obm of them. There are in this State nominally $254,000,000 invested in railroad 
 property; no other single interest represents snch an aggregate of wealth. All this 
 immense sum is capable of being controlled and directed by a few individuals. 
 Xia all questions where railroad interests conflict with the interest of the public, 
 the influence of this wealth is a unit against the people. It is the organized, dis- 
 ciplined, and well equipped army, against the unorganized, unarmed, and unofficered 
 militia. % It employes great armies of men in operating the various lines of road. 
 Xt u the best customer to the press; it controls the telegraph lines; has the readiest 
 $03688 to the public ear, and is the all-powerful abettor or the terrible foe to politi- 
 aspirations; it pays the best price and calls to its aid the best financial ability of 
 
7 
 
 the country; in every, county town where a railroad line is located, it keeps in its 
 •employ the best legal ability. By means of its extensive connections, its reports, 
 its perfect and systematic organization, it obtains more accurate information about 
 the condition of the country than can be secured by any other interest. A railroad 
 corporation is soulless, and yet immortal. Wiser than philosophy, it has found in a 
 perpetual charter the elixir of life. When our fathers abolished the law of primo- 
 geniture they supposed tha country was secured against the evils of vast individual 
 wealta accumulating from' generation to generation, because the certainty of death 
 would bring certainty of destruction. But a perpetual charter, granted without 
 oonsideration, has become a spindle to twist the gossamer thread across the chasm 
 of death. All this vast and constantly augmenting wealth is under irresponsible 
 control. A corporation can neither be hung nor sent to the penitentiary; that is to 
 say, there is an entire absence of individual responsibility. Vigorous, alert, all- 
 powerful and perpetual, it only needs unscrupulous managers to become a worse 
 tyrant than Nero— a mora dangerous master than Robespierre. Need I say to this 
 Convention, that it i-s in the power of the Railroad Corporations unrestrained by 
 law, to bankrupt the Northwest in less than three years. 
 
 The commerce of the country has already felt the evils of the 
 concentration ""of wealth alluded to above. Throughout the year, 
 but more especially at the season when the crops are moved, combi- 
 nations are made by our railway autocrats which create an artificial 
 stringency in our money markets which enables them to wring still 
 another tax from the pockets of the commercial classes, and which 
 in turn reacts upon producers and consumers throughout the land. 
 Hon. Josiah Quincy, of Boston, in a speech made at the convention 
 of Western producers, held in this city May 6th and 7th, filly com- 
 pared our railway kings to the robber barons of the middle ages, 
 who took toll from all who passed their castles ; but added, that "it 
 was reserved for private citizens of the nineteenth century to devise 
 a plan by which all the people of the country, far and near, whether 
 they travelled or not, were compelled to pay tribute." 
 
 The foregoing are some of the causes which have brought this 
 question so abruptly and prominently before the country and started 
 the great movement at the West, which has already assumed so 
 much prominence. That the West is fully aroused to the importance 
 of the question is shown by the visit of delegates from their associa- 
 tions to this city for the purpose of forming a National organization 
 and arousing the East to action. At that meeting, which wa3 held 
 at the Astor House May 6th and 7th, delegates were present from 
 nine Western States. Many of these men had never seen each other, 
 and it was evident that they did not know with whom to communi- 
 cate to advance the interests of the cause in New York ; but there 
 was an earnestness about their every action ft Inch told of their de- 
 
termination to do something, and, as a result, a creditable Vational 
 organization was effected as a nucleus for further work. 
 
 Letters were received from Gov. John A. Dix, Gov. James IL 
 Smith, of Georgia ; Gov. C. C. Carpenter, of Iowa ; Hon. William 
 Windom, United States Senator from Minnesota ; Hon. D. M, Du- 
 boise, Georgia ; J. B. Hawley, Illinois ; A. H. Buckner, Missouri ; 
 B. W. Frobel, Georgia ; John A. Kasson, Iowa ; Charles Francis 
 Adams; Hon. John Davis, President Farmers' Co-operative Union, 
 Kansas ; Geo. M. Stevens, Secretary of the Farmers' Association, 
 Illinois ; Hon. S. E. Moore, Illinois ; Geo. W. Peek, Wisconsin ; A. 
 M. McKeel, Fairfax Grange Patrons' Husbandry, Iowa ; N. F. 
 Graves, Kansas, and others. Numerous telegrams were received 
 from commercial, industrial, and manufacturing associations from all 
 parts of the country approving of the call for the Convention and 
 bidding it godspeed. 
 
 The following officers were elected for the ensuing year: 
 
 President — Hon. Josiah Quincy, Boston, Mass. 
 
 Secretary — R. H. Ferguson, Troy, New York. 
 
 Treasurer — F. B. Thurber, New York City. 
 
 Vice-Presidents — Lewis A. Thomas, Iowa; Henry Branson, Kan- 
 sas; Gen. West, Wisconsin; W. M. Burwell, Louisiana; Gov. Smith, 
 Georgia; J. A. Thomson, West Virginia; Adelbert Ames, Mississippi; 
 George J. Post, New York; J. B. Phinney, Illinois; W. S. Wood, 
 Ohio; E. 0, Stannard, Missouri; J. H. Gray, District of Columbia; 
 J. E. Stetson, New Jersey; F. C. Johnson, Indiana; A. Morrison, 
 Minnesota; A. G. Dodge, Vermont; E. Wakeley, Nebraska; ex-Gov^ 
 Paddleford, Rhode Island; Gen. T. C. Hersey, Maine; J. B. Sargent, 
 Connecticut; M. D. Wilbur, Michigan; J. M. McArthur, Kentucky; 
 Daniel Pratt, Alabama; Henry G. Hall, North Carolina; Colonel 
 Palmer, South Carolina. 
 
 A constitution and by-laws were reported and adopted. The con- 
 stitution provides that the organization shall be known as the " The 
 American Cheap Transportation Association," whose object shall be- 
 the cheapening and equalization of railroad transportation rates 
 throughout the United States. It provides for a subordinate associ- 
 ation in each State, and regulates minor matters for the guidance and 
 government of the National and State Associations. 
 
 The Committee on Resolutions reported the following, which were 
 adopted: 
 
 W hereas, The productive industries of the States plantation and farm, mine and 
 
9 
 
 factory, commercial and mercantile — are not only the sources of all our national 
 and individual wealth, but also the elements on which our very national and indi- 
 vidual existence depends ; and 
 
 Whereas, All material products are the fruits of labor and capital, and as neither 
 labor nor capital will continue actively employed without an equivalent measurably 
 just ; and 
 
 Whereas, Great national industries are only sustained and prospered by the inter- 
 change of the products of one section of country for those of another; and 
 
 Whereas, The existing rates of transportation for the varied products of the 
 Union, from one part of the country to another, and to foreign countries, as well as 
 the transit cost of the commodities required in exchange, are, in many instance* 
 injurious, and to certain interests absolutely destructive, arising, in part, at least, 
 from an insufficiency of avenues; and 
 
 Whereas, The great material want of the nation to-day is relief from the present 
 rates of transit on American products; therefore, 
 
 Resolved, That the duty of the hour and the mission of this association is to obtain 
 from Congress and the several State Legislature such legislation as may be necessary 
 to control and limit by law, within proper constitutional and legitimate limits, the 
 rates and charges of existing lines of transportation ; to increase, where practic- 
 able, the capacity of our present waterways, and to add such new avenues, both 
 water and rail, as our immensely increased internal commerce demands; so that the 
 producer may be fairly rewarded for his honest toil, the consumer have cheap pro- 
 ducts, and our almost limitless supplies hnd foreign markets at rates to compete 
 with the world. 
 
 Resolved, That the cheap trarsportation, both of persons and property, being 
 most conducive to the free movement of the people, and the widest interchange and 
 consumption of the products of the different parts of the Union, is essential to the 
 welfare and prosperity of the country. 
 
 Resolved, That the constant and frequent association of the inhabitants of re- 
 mote parts of the United States is not only desirable but necessary for the main- 
 tenance of a homogeneous and harmonious population within the vast area of our 
 territory. 
 
 Resolved, That the best interests of the different parts of the country also demand 
 the freest possible interchange of the industrial products of the varied climates and 
 industries of the United States, so that breadstuffs, textile fabrics, coal, lumber, 
 iron sugar and various products, local in their production, but general in their 
 consumption, may all reach the consumer at the least practicable cost of transpor- 
 tation; and that an arbitrary and unnecessary tax, levied by the transporter, over 
 and above a fair remuneration for the investment, is a burden upon the producer 
 and consumer that it is the part of wise statesmanship to remove. 
 
 Resolved, That certain leading railway corporations of the country, although 
 chartered to subserve the public welfare, and endowed with the right of eminent 
 domain, solely for that reason, have proved themselves practically monopolies, and 
 become the tools of avaricious and unscrupulous capitalists, to be used to plunder 
 the public, enrich themselves, and impoverish the country through which they 
 run. 
 
 Resolved, That many of the railway corporations of the United States have not 
 only disregarded the public convenience and property, but have oppressed the 
 citizens, bribed our legislators, and defied our executives and judges; and stand to- 
 day the most menaciog danger to American liberty and to Republican govern- 
 ment. 
 
10 
 
 Brsolved, That the present system of railway management having failed to meet 
 the just expectations and demands of a long-suffering people, must be radically 
 reformed and controlled by the strong hand of law, both State and national, and 
 railway corporations compelled to perform their proper functions as the servants 
 and not the masters of the people. 
 
 Resolved, That to this end we invoke the aid of all fair-minded men in all States 
 of the Union in expelling and excluding from the halls of legislation, from our 
 executive offices, and from the Bench such railway officials, railway attorneys, 
 or other hirelings as prostitute public office to the base uses of private gain. 
 
 Resolved, That leaving different section and interests that desire cheap transpor- 
 tation to work out the problem in such a manner as they may deem best, we earn- 
 eastly invoke their careful consideration, their energetic action, and their resolute 
 will in regulating and controlling the rates of transportation and^ giving remunera- 
 tive wages to the producer and cheap products to the consumer untaxed by unearned 
 charges for their carriage. 
 
 Resolved, That we invite the people of the various States to organize subsidiary 
 associations — State, county and town- to co-operate with the national association; 
 that the power to accomplish the purposes desired rests absolutely with the suffer- 
 ing millions; that relief is in their reach and control by united action, and the 
 near future will give, as certain as its need for all time and the good of all, the true 
 solution of the problem of cheap transportation. 
 
 THE OBJECT OP SUCH AN ASSOCIATION. 
 
 In pursuance of the spirit of the last resolution, it is proposed to 
 organize in this city an auxiliary association from among the substan- 
 tial merchants, who represent so large a portion of the commerce of 
 the nation. When we reflect upon the immense sums paid, by our 
 merchants and their customers for transportation, and how insepar- 
 ably our business interests are linked with this question, it is a matter 
 of wonder that busines? men have not before formed an association 
 to protect their interests against the compactly organized combina- 
 tions which the railways have made, in order that they might dictate 
 terms to shippers and receivers of freight. 
 
 We will premise that the general prosperity of the whole country 
 means the prosperity of the great commercial city of New York, 
 and when from any cause the producers of t'his country are unable 
 to buy and pay for the articles we manufacture, import, or deal in, 
 it means stagnation in trade and commerce, and a decline in the 
 prosperity of our city. The same is true of ourselves when other 
 cities of the seaboard can offer to interior merchants and consumers 
 goods of equal quality and price, which by virtue of cheaper trans- 
 portation facilities, can be delivered to remote sections of our great 
 country for less money than the same goods would cost if purchased 
 in New York; and that the latter is the case many of our merchants 
 
1 
 
 11 
 
 know to their cost. Therefore we state the object of our asso- 
 ciation to be to advocate such principles and projects in connection 
 with the subject of transportation as will tend in our judgment to* 
 wards the prosperity of our country and city. 
 
 WHAT such;an association can accomplish. 
 
 Our country is so vast and our system of transportation so im- 
 mense, the abuses so many and so well intrenched, that any local asso- 
 ciation, even such a one as would represent the majority of the com- 
 mercial wealth and influence of New York, would be powerless to ac- 
 complish a general reform. A majority of our legislators at this 
 time are thought to be in the interest of the present monopolies, who 
 rest secure in their ability to control legislation such as they may de- 
 sire. But in this country the people are the fountainhead of power, 
 and no abuse or system of abuses can withstand the organized power 
 of a mnjority of the people to abate them. Probably nine tenths of 
 the people of the United States are in some way producers or con- 
 sumers, and their interests are antagonistic to the abuses of our 
 present railway system. They have been quiet under these evils so 
 long as they have, because the great natural resources of the country 
 and her general prosperity enabled them to subsist without diffi- 
 culty; but they have now awoke to the fact that when they granted 
 sweeping privileges to railway corporations they opened the door to 
 abuses which have grown so that to effectually abate them through- 
 out the whole country will require the exercise of their united 
 strength. 
 
 The result, however, will not be thought doubtful by any one who 
 has noted the rapidity with which the work of organization through- 
 out the country has progressed during the past few months, and it 
 seems almost certain that Congress at its next session will be called 
 V r^or> to pass a general railway law designed to remedy the more 
 fla.g:ant abuses of the present system; and also the Government will 
 undoubtedly be obliged to undertake a system of public works de- 
 signed to furnish greater facilities for transportation between the 
 East and the West. 
 
 THE QUESTION OP WHAT PROJECTS WILL BE UNDERTAKEN 
 
 is of great interest to every merchant, manufacturer, or real estate 
 owner in this city. The Southwest is pushing the project of an 
 improvement in the navigation of the Mississippi River, thus obtain- 
 ing an outlet via New Orleans; a Congressional excursion party has 
 
12 
 
 recently inspected this route, under the auspices of the city of St. Lonis. 
 A convention ot Governors has been held at Atlanta to consider 
 the advisability of a canal through Georgia to the port of Brunswick 
 or Savannah. The middle section of the Western States are advo- 
 cating a canal through Virginia uniling the waters of the Kanawha 
 and James Rivers, while the Northwest is pushing a system of im- 
 provements, prominent among which are the Michigan Ship Canal 
 and a canal around Niagara Falls. The project of a new canal 
 through our own State, uniting the waters of Lake Champlain and 
 the Hudson, was put forward in our last Legislature, but as it had 
 not been sufficiently studied and considered was postponed until next 
 session. All the above mentioned schemes are as yet only on paper, 
 but Canada, in pursuance of a law passed by the last Dominion Par- 
 liament, is at work enlarging the Welland Canal, which as soon as 
 completed will undoubtedly add largely to the considerable amount 
 of trade she has already diverted from New York. 
 
 All of the above contemplate transportation by canal, but there 
 are many practical and shrewd men who think that the reliel we seek 
 must come from developing and improving 
 
 OUR SYSTEM OF RAILWAYS. 
 
 As at present conducted, freight is carried over passenger roads, 
 and all our calculations of the capacity of railways for freight pur- 
 poses and the cost of such transportation have been based upon the 
 result of such mixed traffic. When we reflect that freight trains are 
 obliged to keep out of the way of passenger trains, and under favor- 
 able conditions cannot run more than one quarter of the time, we can 
 see under wF at a disadvantage we labor. With a double track road 
 
 o 
 
 exclusively for freight, goods can be laid down in Chicago, Cincin- 
 nati or St. Louis from New York in about three days, while the 
 average time at present is about ten days, the saving in interest alone 
 upon the immense value of goods constantly in transit would in a 
 few years go far towards paying the cost of constructing such a road, 
 to say nothing of the saving in the expense, estimated by good judges 
 at one-half the present rates. If the delays, uncertainties and 
 expense of the present system were thus modified, New York mer- 
 chants could increase their business relations with the West to an 
 almost unlimited extent ; Western merchants could carry smaller 
 stocks and do business upon less capital, and, indeed, such a road 
 would be a financial safety valve to the whole country, because g: ain 
 and other produce could be forwarded to the East at all seasons 
 
13 
 
 instead of accumulating at the principal Western shipping ports 
 during the Winter as it now does, tying up vast amounts of capital 
 which, if liberated, could be kept in motion supplying the West with 
 the manufactures of the East, and the East with the produce of the 
 West. Our wise financiers who think there is a radical wrong in 
 our present system of finance would do well to consider how far our 
 transportation system is responsible for the stringencies and 
 fluctuations in our money market. Every business man knows that a 
 small capital often turned will do as much business as one double the 
 size turned half as often. 
 
 In connection with this question the following estimate of tne 
 relative capacity of canals and railways devoted exclusively to 
 freight, made by Hon. Josiah Quincy and published in a communica- 
 tion to the Boston Advertiser, may be of interest: 
 
 As you state in a recent editorial, I advocate the purchase of one line of railroad 
 by the State for the purpose of reducing by competition the price of freights, even 
 if it should lessen the profits of existing railroads. Without alluding to the partic- 
 ular case now before the Legislature, I wish to consider the question in a broad 
 national point of view. There are between Boston and Chicago about seventy 
 millions of watered stock, for which the shareholders never paid a cent, but on 
 which they levy a tax of millions on the public in the shape of exorbitant fares. I 
 do not believe that this state of things can be permanent, and think it the duty of 
 our statesmen to endeavor to find a peaceful remedy. My remedy is the owning and 
 control of one or more of the great thoroughfares of the country, either by the 
 State or the United States. 
 
 Th« first great objection is the danger that corrupt men will influence our legis- 
 lators for their own profit. Instead of an argument, I will take the case of the 
 Erie Canal. Here is a thoroughfare, built, owned and managed by New York. By 
 the constitution of the State, it can neither be sold or leased, but must be forever open 
 to free use of any one who puts a boat upon it and pays the regular toll. What has 
 been the corruption resulting from State ownership and management of this great 
 property, when compared with what has resulted from the owners and managers of 
 private incorporated railroads ? Let the venal legislators of New York answer. As 
 * a financial operation it has been attended with complete success, the main Erie hav- 
 ing paid *br itself many times over. Governor Fenton, in one of his messages 
 states: 
 
 " The Erie Canal has now, and has had since 1860, a tonnage-carrying capacity of 
 four millions of tons in each direction, east and west, during an ordinary season of 
 navigation of seven and one-half months. In arriving at these results I have 
 assumed that this thoroughfare was, at all times, during the season of navigation, in 
 proper order, the locks in good condition, constantly in a working state and 
 promptly and efficiently attended by an adequate number of men. The above esti- 
 mate is based on continuous work day and night, and employing the whole ceven 
 days in the week, according to the custom on that canal. Upon th9 same basis, but 
 running through the whole twelve months, the railways would have the following 
 capacity as compared with the Erie Canal, viz: 
 
14 
 
 " Erie Canal, one and a half miles per hour, tonnage, 4,000,0)0 tons each way 
 otal tonnage capacity, 8,000,000. 
 
 "Railway, eight miles per hour and two miles spacs between the trains, 7,008,000 
 tons each way; total tonnage capacity, 14,016,000. 
 
 "Railway, ten miles per hour; spice, two miles between trains, 8,760,000 tons 
 each way: total tonnage capacity, 17,520,000. 
 
 " Railway, ten miles per hour; space, one mile between trains; 17,520,030 tons 
 each way; total tonnage capacity, 35,040,000. 
 
 "Railway, eight miles per hour; space, one mile between trains; 14,016,000 tons 
 each way; total tonnage capacity, 28,032,000. 
 
 "Railway, eight miles per hour; space, half mile between trains; 28,032,000 tons 
 each way; total tonnage capacity, 56,064,000. 
 
 "Railway, ten miles per hour; space, half mile between trains; 35,040,000 tons 
 eacb way; total tonnage capacity, 70,080,000. 
 
 " It is not difficult to perceive tnat on a rate of eight miles per hour, the speed at 
 which lateral friction nearly ceases, a freight capacity four times that of the Erie 
 canal can be achieved with entire success. It only remains to take care of the 
 economic arrangements to accomplish the redaction of freights in an inverse ratio, 
 somewhat corresponding to the increased capacity of the road." 
 
 So much for the comparative cheapness and facility of transportation by railways 
 and canals. My own opinion is, that ultimately the United States, acting under the 
 same authority by which they constructed the Cumberland road, will own the road- 
 beds and stations of freight roads on all the great lines, and, like the Erie canal, 
 throw them open under regulations as regards regular and moderate speed, to any 
 person who wishes to put cars and locomotives upon them, paying, as on the canal, 
 regular and fixed tolls for their use. With a double track there would be, on such 
 roads, under suoh regulations (supplemented as they would be by the telegraphs) no 
 danger of collisions, and as the cars would not have to go upon sidings to wait for 
 express trains, their speed would be greater and the hour oi their arrival more 
 certain than a f , present, and there would be an end of complaints of shortages 
 or excessive tariffs, as individuals and not corporations would be responsible. 
 
 This is a subject of vital importance to the people in every section of our country, 
 and the people in my opinion will Dever consent permanently to pay dividends on 
 millions of watered stock when they can, by paying interest on the actual cost of a 
 road-bed, have the reduction of freights that must result from competition and from 
 a free use of the facilities it affords. Josiah Quin-ct. 
 
 No matter how much we improve and increase our facilities for 
 canal transportation, a large portion of the produce of the West, 
 such as live stock, <fec, as well as much of the manufactures ot the 
 East, must always be moved by rail, and it would seem that roads 
 exclusively for freight are now a necessity. It is said that the New 
 York Central, and also the Pennsylvania Railroad, are preparing to 
 lay down a double track exclusively for freight; doubtless this 
 would greatly increase their capacity, but it is also, probable that 
 Messrs. Yanderbilt and Scott will pocket most of the increased 
 earnings, and that the people will get but a very slight abatement 
 
 the charges now current on those roads. A freight road to be of 
 
much benefit to the people must be built and owned (but not 
 operated) by the Government. 
 
 Such a road built and owned bv the National Government could 
 sot be forced into combination with the present monopolies as every 
 private line has been which has promised competition and been built 
 for that purpose, and when such a line had demonstrated at what 
 price freight could actually be carried at a fair profit, the private mo- 
 nopolies would have to approximate their charges to those »of the 
 Government road. This road should be free to any corporation who 
 would put rolling stock on it and operate it under a general railway 
 law, charging rates not over 7 per cent on the actual capital invested. 
 Under such a system New York merchants could have a line of their 
 own; Boston, Philadelphia, Baltimore, Cincinnati. Chicago, St. Louis 
 and all other principal cities and sections of country, whose interests 
 justified, could without trouble, stock a transportation company and 
 have their freight carried for cost. We were recently assured by the 
 President of a company whose business is to build and let railway 
 rolling stock to various railways and through freight lines, that such 
 a road would be covered with rolling stock within a year from the 
 time of its construction, and that additional roads would have to be 
 built north and south to accommodate the increase of traffic. Rail- 
 ways are in accordance with the spirit of the times, and the quickness 
 with which they can be built and the facilitv with which thev are 
 operated is improving every year. , 
 
 An association such as the merchants of New York propose to form 
 can, in connection with a constituency throughout the country, have 
 much to say in regard to what projects shall be undertaken and so guide 
 the movement, that unwise and unprofitable schemes will not be un- 
 dertaken by Government, and the commercial interests of New York 
 mav be looked after and fostered. 
 
 It is the abuses of the present railway system, the inside ' ; rings," 
 the swindling management, the " Credit Mobilier " freisrht lines, and 
 the watering of stock which make it necessary for railway companies 
 to charge the price of four bushels of corn at the place of production 
 to get one oushel to market, and we would here ask, what is the dif- 
 ference to the producer whether he loses three-quarters of the pro- 
 duct of his labor by a failure in the crop, or whether it is absorbed 
 by the above abuses ? And of the commercial men of New York we 
 would ask this question, what is the difference to you whether the 
 crops fail so that you have none to export, or whether these abuses 
 
raise the price at the seaooard so that the world cannot afford to 
 buy them? In either case you do not do the business, but. in the 
 latter case some other city may — by providing facilities and avoid- 
 ing the above-named evils— secure the commerce which you lose. 
 Importing merchants, however, may say that the question does not 
 interest them, because they do not export any produce, but we maintain 
 that it does interest them, because if the producer does notfget any- 
 thing for his produce he will not be able to buy and pay for imported 
 goods, be they ever so desirable and necessary. 
 
 It is not intended that this movement shall be a political one, any 
 further than the present monopolies compel it to be. If our present 
 legislators are controlled by the corporations to so great an extent 
 that we cannot obtain relief, then we intend to have a voting con- 
 stituency strong enough, so that corrupt legislators may be retired to 
 private life and men put in their places, a majority of whom cannot 
 be bribed to betray the interests of the people. It is essentially a 
 people's movement, for it promises increased facilities for commerce, 
 cheaper food for the people, a reform in public morals, and is a prac- 
 tical step towards civil service reform. 
 
 THE MORE IMMEDIATE RESULTS 
 
 Which an association of New York merchants can accomplish and 
 which alone are of great value, are as follows: At present New York 
 is competing for the Trade of the West, at a disadvantage, with 
 Baltimore, Philadelphia and Boston, and the average rate from those 
 cities to principal points West is from 15 to 25c. per 100 lbs. cheaper 
 than from New York The reason for this may be found in the fact 
 that in Baltimore the Baltimore and Ohio Road is largely owned by 
 Baltimore merchants and is operated in the interest of that city. In 
 Philadelphia the same may be said of the Pennsylvania Central Rail- 
 road. In Boston the same is true in regard to the New England and 
 Grand Trunk roads, while in New York, the great metropolis of the 
 natioL, the trunk lines to the West are owned by a clique of stock 
 jobbers who have no possible interest in the commerce of the city' 
 beyond squeezing the largest possible amount from it that can be ob- 
 tained, regardless of the fable of the G oose and the (Golden Egg. It 
 is a well known fact that during the past year large quantities of 
 goods have been shipped from New York to the West via Boston. 
 Such a state of things is anomolous,unjust and reflects but little credit 
 upon the ability and enterprise of the merchants of New York. 
 Tbe combined influence of 500 or 1,000 prominent New York 
 
17 
 
 houses can doubtless remedy the matter, and if no redress 
 can be obtained in. this way we ought, without difficulty, to control 
 capital when combined with our Western connections to build a 
 Merchants' Boad to competing points West. It is not probable, 
 however, that such a contingency will arise, because when we show 
 our power we can obtain redress. The transportation companies- 
 have always had a combination, co-operating with each other for 
 their mutual profit. Why should not the merchants do the same 
 thing ? 
 
 Such an association could also deal with the minor abuses, such as 
 classifications, shortage, breakage, stealage, and the sudden and 
 unlooked-for changes in freight tariffs which operate to prevent buy- 
 ers from coming to this market, because his freight may be advanced 
 fifty per cent in a single day. Careful attention to this part of 
 our business will develop many advantages which are not at present 
 noticed, but the great benefit to be derived will be in building up and 
 holding our trade against other cities which have been diverting it. 
 
 New York has become a very expensive port of entry for import- 
 ing merchants to bring their goods to. Our quarantine charges 
 cooperage, lighterage, cartage, storage and labor are all higher than 
 they should be, and it comes directly within the province of such an 
 association as we propose to form, to deal with and modify or re- 
 move them. 
 
 GENERAL REFLECTIONS. 
 
 The question of transportation is one of great moment and must 
 engross the attention of Statesmen, political economists and mer- 
 chants for some time to come, and it is certainly worthy the attention 
 of the best minds of our country. There are many important ques- 
 tions nearly allied to it such as the Tariff and the Labor question, both 
 of which are likely to come to the front in the approaching contest. 
 To deal with them judiciously, needs careful attention and considera- 
 tion. To do this requires organization, and there is no time to lose 
 in setting about it. It must not be left to the care of committees in 
 existing trade bodies, but there must be an organization formed for 
 that special object; it should combine the greater part of our mer- 
 cantile wealth, character and ability, in an association commensurate 
 with the magnitude and importance of the subject with which it is 
 intended to grapple. That this can be done, and will be done as 
 soon as our merchants glance at the situation seems a certainty. 
 
 » 
 
lEx ICtbrta 
 
 SEYMOUR DURST 
 
 FORT NEW AMSTERDAM. 
 
 (new york) , 1651. 
 
 When you leave, please leave this hook 
 
 Because it has heen said 
 "Ever'thing comes t' him who waits 
 
 Except a loaned book." 
 
 Avery Architectural and Fine Arts Library 
 Gift of Seymour B. Durst Old York Library