ARGUMENT OP SIMON STERNE, Esq., Delivered at Albany, March 7th, 1878, BEFORE THE Committee on Railroads, on “Bill to create a Board of Railroad Com¬ missioners , and to Regulate their Powers. ” Mr. Chairman and Gentlemen of the Committee ■: I had hoped that Mr. Gilbert would have relieved me of the necessity to explain in detail, the provisions of this bill. He introduced it. He was the chairman of the Railroad Committee who heard last year the arguments upon this subject, and became, as 1 be¬ lieve, so thoroughly persuaded of the necessity for the appointment of a commission such as is con¬ templated to be raised by this Act, that he this year introduced a bill, which is in many particulars an improvement on the one of last year, and of the passage of which I believe him to be an earnest and intelligent advocate. This bill provides that there shall be a Board of Railroad Commissioners for the State of New York, to be composed of three persons, to be appointed by the Governor respectively for two, three, and four years, who shall have power to appoint their clerk and assistants, which Commissioners shall receive each a salary of $7,500 a year. 2 The powers which are proposed to be given to this Commission are, in the first place, to act as an advisory board to the Bail road Committees of the Senate, and of the House, and as an advisory railway board to the Governor of the State. How, you gentlemen must have felt—those who are old as well as your committee, and those who are new to work—how utterly unsatisfactory to your¬ selves the character of that work is. However zeal¬ ous and honest and earnest you may be in trying to sift the truth of statements made as to any particular proposition that may be before you in a contest upon a proposed law, the very nature of the organization of your committee prevents you from getting at the bottom of the question whether or not a bill shall be converted into a statute. It is utterly impossible, with the other legis¬ lative work that is on your hands, to arrive at anything like a judicial determination ; and hence it is that in other countries, and in other places, and in other States, they have found it abso¬ lutely necessary to raise some sort of a tribunal—call it what you will—by which the committees of the Legislature may be advised as to the feasibility, as to the practicability, as to the wisdom of passing any proposed railway measure. In England, ever since 1845, the Board of Trade has acted as such a standing committee. It has a railway depart¬ ment, In that department it has experts, just as familiar with the affairs of the railways of the United Kingdom as our Mr. Kink and Mr. Adams are with reference to the affairs of the railways of tins country, or as is Mr. Nimrao, the head of the department of Internal Commerce or as M, Vanderbilt is himself. Indeed, its bule" 3 and, until quite recently, tlie sole business of that branch of the Board of Trade, is to keep itself thoroughly advised on the whole question of the passenger and freight traffic of railways, and of the course of amalgamation—called here, consolidation— of lines, upon the matter of leasing lines, and upon the intricate questions arising out of any effort properly to adjust the relation of the railways to the public, and the relntion of railways towards the stockholders. Recently, they have gone much farther in England, as I shall show you presently— very much farther than we contemplate going in this bill. One of the sections of the bill provides, that the Board of Railway Commissioners shall be charged with the duty to recommend to, and draft for, the Legislature such bills, as will more adequately repre¬ sent in the boards of direction, the proprietary in¬ terests of the bond and stock holders of such railway corporations ; and likewise; from time to time, recommend to, and draft for the Legislature such bills as will, in tbeir judgment, protect the people’s interests in, to, and upon the railways of this State- And it is likewise made the duty of such Commis¬ sioners to take testimony upon, and have hearings for, and against, any proposed change of the law re¬ lating to any railway or railways, or proposed change of the general law in relation to railways, if re¬ quested so to do by either committee, or both com¬ mittees on railroads of the Senate or Assembly, or by the Governor ; and thereupon such Commission¬ ers shall report their conclusions, in writing, to such committee, committees, or Governor from whom the request to act emanated. You will observe that this provision contemplates 4 some change in the law by which the proprietary interests of railways may be more adequately r epre¬ sented in their boards of direction. At present those who obtain a majority of the votes at any election get the exclusive management of the rail¬ way in their hands. This gives to the managers of railways an advantage so great as to amount to an abuse, as they alone know where the stock is all placed ; so that it becomes a movement well nigh rising to the dignity of a revolution to change the management. The management therefore becomes a close corporation within the corporation, scarcely moved or controlled by the fact that it is elective, because the election machinery is in its own hands, and it elects always the whole of the management at one time. I have always believed it to be wise and expedient to apply to the great railway corporations of this State some system of minority representation in the boards of direction, so “that the management shall represent the whole of the stock instead of part thereof, and to make it impossible to form rings. To illustrate my meaning. Assuming the stock of the Erie Bail way to be 40,000 shares, and that there are twenty directors to be elected, instead of giving the whole direction to the twenty thousand plus one of the shares, you should give to each 2,000 shares one director, so that the tweuty directors shall represent the whole 40,000 shares instead of buthalf of the stock. There probably would be considerable difference of opinion as to the form of such a law. Instead of suggesting it directly to the Legislature, I believe it to be expedient that it should come through such a Board of Commissioners as this bill contemplates. 5 At some other time and place I may dwell more at length upon the importance of this reform alone.* It must not be forgotten that there is no power given to this Commission to do more than investigate, to hear charges, to sit as a Court of inquiry, to make reports to the Legislature, to suggest laws ; and no¬ where in this Act can anything be found by which the Commission can make or enforce any decree of its own. This is considered a defect by many, but the measure is intended to be tentative, and to offend vested interests as little as possible. We have been so long in the dark on this subject, that we must ac¬ custom our eyes to the light but gradually. The other provisions of the bill clothe the Commissioners with power to investigate the affairs of railways by seeing copies of contracts, &c.; this is not the power, and it is not contemplated to give to them the power, to regulate either the pas¬ senger or the freight traffic of railways—to regulate it in the sense that we understand the word regu¬ lation as it comes to us through Granger legislation and pro rata freight bills, such as come before the !New York Legislature almost from year to year. * Since making this argument, the Albany Law Journal, March 25, p. 218, says : “A law has been passed in California adopting the cumulative plan of voting in elections in private corporations. A stockholder for each share of stock may cast one vote for each di¬ rector or manager to be elected, or may give as many votes as there are directors for one person, or may distribute the votes among several. The object of this law is to prevent the entire control of a corporation passing into the hands of a few men who may temporarily hold the stock or proxies to vote thereon. As a means of securing minority representation, and thus protecting the interests of small shareholders, it seems to ba well fitted, and we trust that a similar measure may sometime be tried here. It is also applicable to corpo¬ rations having no capital stock.” 6 Those who are foremost in the advocacy of this bill (the Chamber of Commerce and the Board of Trade and Transportation, which I here represent) are as far removed from having any strong pre- delictions for Granger legislation as the gentlemen who represent the railway interests of the State can be. This is the fourth year that I have come here be¬ fore a railway committee of our Legislature on this mission. I have explained the provisions of bills substantially like the one before me four successive times. Yet, as this is a new committee, it is necessary for me to say a few additional words explanatory of this bill. It provides that the Railway Commissioners who are thereby created shall have the power to prescribe and insist upon the keeping of a uniform system of accounts on the part of the railways of the State, and to prepare forms by which their returns shall be made, and such returns which have been heretofore made to the State Engineer and Surveyor shall be made to this Railway Board, and that whenever they ^ ave reason to be dissatisfied with the fullness of the return or with the completeness of the return or have reason to believe that it is untruthful^ they shall have power to call for the books and papers and to examine such books and papers. There not be'uspfi 1 ^ 6 pi?0 J isiori ^ ere s °that that power shall used m a burdensome manner. The Com¬ missioners shall be compelled to go to the cTv pto o?rk cipal t h fflce ° f ,he c ° mpany is - f ° r 1 T) fi k g thei r examination there. ofTetlll ri iSi0nS f the Ma matters n . . ^ h rovi de a system by which these Commissioners can investigate aceide^X ^ 7 complaints as to the improper freight discrimina¬ tions against towns and cities may be heard before them and be reported upon, and that these Commis¬ sioners shall then from year to year recommend the passage of such laws, with the reasons therefor, as they see fit to recommend, and to report upon the whole of the railway system of the State—the evils, the benefits thereof—the changes that should be made therein from year to year, to the Legislature. Now", it seems to me, and it should seem to all of us, at first blush, that this is not a measure which the railways themselves, unless they have something to hide, should oppose. It simply pro¬ poses to put in the glare of day their management, precisely as the great banking interest of the State and the great insurance interest of the State are subjected to the glare of day. There is a banking department, there is an insurance department; there is no outcry on the part of any of the great banking or insurance corporations, or of any of the great interests they regulate, that the existence of such departments of State Govern¬ ment is a grievous infringement upon their preroga¬ tives. From the time that the free banking law has been on our statute books, and from the time of the organization of the insurance companies under the general law, we have had departments of Govern¬ ment whose business it is to investigate these great interests, and we have hitherto failed to or¬ ganize a department of the Government whose business it shall be to investigate a still larger and a very much greater interest, and one which has in¬ finitely deeper relations with the very prosperity of the community than both those combined—the rail¬ way interest of the State. 8 Now, that this is not an exaggeration is evidenced by the fact that, according to the last report—no, a report not yet issued—according to information which I have derived within the last few days from the State Engineer’s office, the railway corporations of this State received fifty-five millions of dollars in the year 1877 for freight charges, and $35,000,000 for passen¬ ger traffic—therefore an absorption of capital in this State of $90,000,000 in one year. An interest so large ought to be, from its mere size, from its mere extent, from its mere growth, subjected to some sort of scrutiny and supervision on the part of the State. But when we take into consideration that it is an interest that has control of the highways, that it is the wholesale carrier of freight and passengers in the State, compared with which the Erie Canal, the Hudson River, our great national waterways, our seaport—all—are mere petty retailers; as, of the vast amount of freight that comes to and departs from the city of New York, upwards of 80 per cent, goes by rail, and 20 per cent, by waterways. When we take into consideration that all the natural highways ot this State are of little moment when compared with this improved artificial system of highways, there is double and triple reason why that great organization which permeates and enters to a considerable degree as a factor in the value of every other property interest of our community, should be subjected to some degree of Common¬ wealth supervision and control. That is the opinion of the comnlercial classes of the city of New York—that this opinion has grown upon them, is indicated by two very significant facts. 9 When this bill was first drawn some four years ago, the Journal of Commerce and the organizations in which commercial men in the city of New York meet, like the Chamber of Commerce and kindred bodies, such as Produce Exchange, Grocers’ Exchange, &c., supposed it to be some sort of an interference with free trade notions, and looked at it askance—they regarded the railway as a private interest, inter¬ ference with which was attempted by means of this bill. To show how very thoroughly they have come around to our views, the Journal of Commerce of two days ago—certainly a conservative journal, one that is not likely to recommend Granger legislation, or anything that injuriously affects the real welfare of the citizens of the city of New York or of the great interests of the State of New York—says of this particular bill : “The Journal op Commerce, ) “ Tuesday Morning , March 5, 1878. j t “The proposed Railroad Commission. “That which the Chamber of Commerce has neglected to do, for the protection and promotion of our local trade, individual effort has again taken up. The friends of the Railroad Commission Bill, which makes its fifth annual appearance in the Legislature this year, will have a hearing before a Committee next Thursday. With this bill, prepared by Mr. Simon Sterne at the request of the cheap transportation people in 1873, our readers are already familiar. The version for 1878 has been amended and improved in some respects, to meet friendly criticisms and suggestions. Mr. Charles Francis Adams, Jr., President of the Massachusetts Railroad Commision, is reported to have called it ‘the best of the laws either pro¬ posed or enacted upon this subject.’ If it errs, its leanings are not towards radicalism. It is quite a,conservative measure from the railroad point of view. The Commissioners proposed would not have power to fix freights or passenger rates, or add to the rolling stock, or change stations, or provide terminal facilities. They can only recommend such things to the railroad company, and report on them annually to the Legislature. Just here the scheme is weak. Companies notified to make improvements will do as they please. The Legislature will not interfere if the railroads exert their usual influence at Albany. The Commissioner 10 if anybody, should have full swing in these matters. Then we could rely on something being done—not merely talked about in annual reports which no one reads, and which, by the way, the bill provides for the needlessly large edition of 3,200 copies, in cloth. We have no faith in the efficacy of these reports. They will only be wordy substitutes for action that is wanted. “There is the same objection to the provision about accidents. The Commissioners are empowered to ‘ investigate ’ accidents, and do what else? Nothing but to dish up their conclusions in the annual report, rendered months or a whole year afterward, when the disasters and their morals are completely forgotten. Here again the Commissioners should be authorized to do something besides sitting down and venting their curatives in a report which may not see the light of a year. “ Section .1 contains a good clause giving the Commissioners power to examine the books and affairs of companies at any time, and compel the production of evidence and the attendance of witnesses. With honest men supervising the roads in this way, there would be much less of that falsifying aud cheating in statements and accounts which many com¬ panies have practiced in the past. This part of the bill will be approved by all persons save those railroad managers who have nefarious designs on stockholders and the public. “ What this bill lacks in strength and directness it may be said to make up in availability. A stronger measure would encounter greater opposi¬ tion than this one will meet. Except for the fact that they will be ex¬ pected to pay the salaries and expenses under the bill, the companies have no great reason to dislike it. It probably stands a better chance of accept¬ ance before the Legislature than one which would satisfy our views more i ully. As the best present hope of relief, it deserves encouragement." I do not think that this Legislature, nor that this Committee, can be oblivious of the fact that New Fork City requires relief, and requires it instantly, requires it just as fast as the Legislature can give it, it New York City as a commercial entrepot is not to be completely wiped out. The railway discrimination now against New York, as reported by a committee ot the Chamber of Commerce to that body, within the last two weeks, shows conclusively that even Chicago and St. Louis, with reference to through freights from Liverpool, can compete with New York. In other words, cities which are removed from a harbor a thousand miles and twelve hundred miles, can successfully compete with the great natu- 11 ral advantages of New York City, with reference to freight; and for the purpose of putting that before yon in figures, so that there can be no question nor any mistake about it at all, they append to their report a schedule in which there is completely set forth a detailed statement. They say: “ From early January, 1877, until September 30 of the same year, through freights from Liverpool to the West, on fourth-class and heavy goods, were car¬ ried at 12s. 6d. net per ton (= 13£ cents per 100 lbs.) to Chicago, and 14s. to 15s. net (= 15£ to 16^ cents per 100 lbs.) to St. Louis; while, at the same time, ocean freight rates to New York alone from Liver¬ pool were 12s. 6d. and 10 per cent, primage for the same goods per ton.” And then they say that the lower grade of goods can be laid down in Chicago and in St. Louis at a lower rate from Liverpool than they can be laid down in the City of New York. Therefore it is that every merchant in the city of New York, who has been doing a prosperous busi¬ ness by importing goods, finds that his business is gradually driven away from him; that the centres of commerce are growing up in the interior of our Western States; and that that must be and is mainly due to the discriminations which are made against us by our own railways, is shown by the fact that these very railways will pro rate with the foreign steamers at a rate which enables such foreign steamers to carry profitably to the port of New York, and trans-ship to Chicago, at as low a rate as they can carry to the city of New York on that line. Now, we have no control, and cannot have any con¬ trol of the business methods of the foreign lines of 12 steamers that enter the harbor of Yew York. What we can control is the railway interest in the State of Yew York. The Chamber of Commerce Committee further say : “ Since the middle of last November, through freights have been quoted from Li verpool to Chicago on fourth-class freights,at as lowas20 and25 shillings per ton, via Boston and Grand Trunk, and 27s. 6d. to St. Louis, while, until the middle of February, the very lowest railroad freight from Yew York direct to the same destination was 40 and 45 cents per 100 pounds—equivalent to 36s. 2d. and 40s. 8d. per ton —to Chicago, and 52 and 60 cents to St. Louis- equivalent to 47s. and 54s. 3d. per ton.” Yow, you will see, therefore, that taking all the schedules of freight straight through, that the rate at which goods are laid down in the interior distrib¬ uting points of the United States, is lower than they can be laid down in the city of Yew York. The answer that may be made by the railways is, “ We cannot control this diversion. A great part of those goods go to Boston, and go over the Grand Trunk Line, ‘which runs wild,’ and which runs at any rate it sees fit to charge—it pays it to run at any rate, except running its cars empty, that no solvent road can attempt to compete with the Grand Trunk Line, and that the railways which pay their dividends regularly must charge higher rates of freight,” Well, perhaps they must. It is our business, however, to see to it that New York City shall not be wiped out as a great com- mercial centre, in order that the Y. Y. Central B. B. shall be able to pay eight per cent, dividends on its stock. 13 Mr. Depew : The steamers to Boston carry this heavy fourth-class freight as ballast. Mr. Sterne : That is a very remarkable statement. Why should it be profitable for steamers to carry freight to Boston as ballast, and not to New York f Mr. Depew: Because to New York you have a return cargo. Mr Sterne: It is quite apparent that these ocean steamers that run to Boston with ballast instead of freight would go to New York to avoid having simply ballast. It is simply inconceivable to me how the lines that-run would continue to run if they didn’t carry profitable freight. It is no answer that they can carry freight from Boston to Liverpool at a higher rate than from New York to Liverpool, to compensate for carrying ballast from Liverpool to Boston. The steamship rates from Boston to Liverpool are lower than from New York. That does not seem to me to be an answer which is reasonable, because it is not, in the nature of things, possible that these Boston steamship lines would be continued if the terms on which they do business would be so unprofitable as Mr. Depew would have us believe. Independent, also, of this ocean Boston freight traffic, we know that Canada has recently completed its Welland Canal. That gives it a great water¬ way to (he West—gives it a very large advantage over our Erie Canal—over all our water-ways ; in¬ deed an enormous advantage. A considerable pro¬ portion of our grain trade is being diverted to Montreal year after year. When we examine the statistics given by Mr. Nirnmo, it will be seen that year after year since 1871, the relative proportion of 14 freight carried to Montreal is very much larger than the relative proportion of freight carried to New York. Now, in addition to that, there is an enormous diverting of trade to the city of Baltimore, and an enormous diverting of trade to the city of Boston and to the city of Philadelphia ; so that if you take the tables which Mr. Nimmo gives, which are to be handed to you in a more definite form than I can state them here, yon will find that the relative im¬ portance of those various cities, at the expense of New York, is constantly and gradually being in¬ creased. Now, let us look what this Chamber of Commerce report (and it is a very instructive one in my judg¬ ment) says with reference to our railway problem in other respects. Mr. Depew attempted an answer as to the for¬ eign trade. What answer has he to make with refer¬ ence to the fact that during the first week of Feb¬ ruary, 1878, the rates from Boston to Chicago, first- class, were from 35 to 40 cents per hundred-weight. From Philadelphia to Chicago they were 70 cents for first-class .freight, and that during the same period the rates from New York were never lower than 45 cents for the very lowest rate ? Therefore a port 180 odd miles farther from Chicago than New York City, has a rate of freight ten cents per hundred lower than New York City, and in consequence of that a leading shipper was compelled recently, for the purpose of competing with the Boston market, to send several car-loads of salt to Boston, and have them trans-shipped from Boston to Chicago, it being utterly impossible for him to send his salt from New York to Chicago and 15 compete with the Boston shipper. Thus, for the purpose of competing’ with the Boston shipper at all, he was compelled first to place himself upon an equality with the Boston shipper, by imposing upon himself the whole expense of sending his goods from New York to Boston—an expense which he could not transfer to anybody else—and then having it shipped from Boston to Chicago. Now the explanation that is offered of this fact, is that there is a pooling system, by which the great four trunk lines pool their earnings and charge a uniform rate of freight'; and they cannot get the Grand Trunk Railroad into this pool, and that there¬ fore they must compete with the Grand Trunk Line at Boston at lower rates than they combinedly agree to carry from the city of New York. Now, what does that mean ? Let us look at it carefully. It means simply this: that they can afford to carry (because they wouldn’t compete if it would not pay them to carry—everybody competes solely under those circumstances and on those conditions), that they can afford to carry from Boston 4th class freight at 35 and 40 cents a hundred, and that they charge the New York shipper 45 cents a hundred, in consequence of a pool or combination arrangement that the lines make with each other against the New York public. Upon this question Mr. Miller just hands me an editorial from a Boston paper, entitled “Boston’s In¬ dependence of New York,” clipped from the Boston Journal: BOSTON’S INDEPENDENCE OF NEW YORK. To-day we have through lines of fast freight cars starting from the depot of the New York and New England Railroad, running over that road, and connecting at New York with the Pennsylvania 16 Central Railroad and its great system of roads running throughout the South and West, giving us rates from Boston at same rates as from New York. The same may he said of our connections by way of the Erie Railway and its numerous connections. The Boston and Albany Railroad has been changed into one of the most important railroads in the country, and is an essential part of the New York Central system of railroads, which, with their many thousand cars comprised in the well kn own color lines of through transportation companies and the Merchants’ Despatch Line, offer to Boston equal facilities as to time and cost that the merchants of New York have to send goods to all portions of the West. Another connection with the West has in past times proved of great value to Boston, and bids fair in the future to be of still greater value. We refer to the Grand Trunk Railroad. It seems that, as one of the recent compromises of the railway magnates, this road is to be allowed to take Western freights at a rate ten per centum less than the other roads. As long as this continues Boston merchants can quote rates west ten per centum lower than from New York city. To foreign ports, while formerly we had only the Cunard Line, with its high freight rates, we have now three weekly lines from Liverpool, which, with other steamships from Hull, &c., gives us rates from those ports cheaper than from the same ports to New York. We are promised other lines to Glasgow, London, &c. Beside this, the lines we have by arrangements made with other English lines give our merchants through rates upon merchandise, both to and from all the prominent ports of the world reached by the numerous steam fleets running from Liverpool, London and Hull. It has been only for a few months that our merchants have had these advantages, and that they are availing themselves of them the increase of twenty-five per centum in the imports of Boston last year goes far to prove. The hold which our merchants have upon the boot and shoe trade, the wool trade, the success of the great auction sales of rubber goods, and the great development of our sugar refineries, &c., abundantly prove the abilities of Boston to compete successfully with New York for these important branches of business. Nothing would add so much to Boston’s future pros¬ perity as the closing up of the numerous branches of our commission houses now sustained at great cost in New York. The entire character of the trade has changed within a few years. Chicago and other western cities are gradually absorbing the jobbing trade that New York has enjoyed in the past. Would it not be a good policy, if branches are to be sustained, to remove the New York branches to Chicago, concentrating the headquarters of the dry goods business here in Boston. Therefore the advantages of New York, both as to its harbor and its proximity to the western distribut- 17 ing points, have been to a considerable extent wiped out by the monopoly of our railways. In other words, the charges for 100 miles greater distance, to the interior distributing points, are at the same rates, or lower rates, than from New York, placing Boston therefore upon an absolute equality with New York as to the great mass of freights, and as to the lowest class of freights at a very considerable advantage as compared with New York—the natural advantage of vicinage for a seemingly permanent prosperity which we once had is thus by our own corporations wiped out. These schedules are all presented in the report, the grievances are stated, and not one word has been suggested that they are not truthful, and that the grievances do not exist. But the answer Mr. Depew will probably make will be, that of the roads running to Boston, some of them are insolvent, others are capitalized at a very low rate, and they can compete with us at more advantageous terms compared with what we can do here in the city and State of New York. Let us examine fully into the conditions to which New York was subjected by the so-called capitaliza¬ tions of its roads. The New York system of railways throughout the State of New York was built anterior to any system of railways throughout the United States. They were built at the cheapest possible rate. They were built under the most advantageous circumstances, and when the New York Central system of railroad was consolidated in 1869, the capital stock of the New York Central represented a par of $28,000,000; its bonds were represented at a par of $12,000,000; being a total of $40,000,000. The Hudson Biver 18 R. R. at that time had a share capital of $7,000,000 and a bonded debt of $7,000,000, being $14,000,000, making the combined capital in stocks of those two roads $35,000,000, and bonds $19,000,000; total $54,000,000. Now, we all of ns know, that 1867, 1868 and 1869 were the years of the highest prices of every commodity, land included, that this country has ever seen. It was a period of extreme inflation. It was a period when property in the City of New York had risen three times its value; when every pound of iron was worth three dollars to one of what it is now; when every car was worth two dollars to one of what it is now. At that period of time it got into the heads of the owners of the New York Central R. R and of the Hudson River R. R. that they would take that cheap united road of these several corpora¬ tions, costing $54,000,000, and capitalize it then and there upon an entirely different basis—that of the then valuation of its property and franchises. And what did they do ? They declared upon the Hudson River R. R. a scrip dividend of 50 per cent., and at the time of consolidation another divi¬ dend of 85 per cent, on the then outstanding stock of $16,000,000, making an issue of $13,000,000. And the New York Central, in 1868, made a stock dividend of 80 per cent., being $23,000,000, followed by one of 27 per cent., making $7,000,000 in addi¬ tion at the time of the consolidation. Therefore, it may be said in all truth that these roads, these combined roads were then capitalized at double their value even as represented by stocks and bonds, and it is a violent assumption that those roads cost anything like what those stocks and bonds represent. We know enough of the building of 19 railroads, and how they are constructed, what sort of schemes enter into their construction, to know perfectly well that the stock and bonds represent an amount largely in excess of that of the cost. What was done in 1869 was to capitalize that great united road at double the computed cost as represented by the stocks and bonds. What became of that capitalization? It went into the pockets of one family and the friends of that family—Mr. Vanderbilt and his friends; and I do not say that to their detriment or to their disad¬ vantage in the slightest, degree—they perhaps thought it right to get ahead of the State; proba¬ bly did not think that the State had anything to do with it; and if the people of the State of Hew York see lit to suffer such a thing to be done, the Van¬ derbilts, in this demoralized age, are not to be too severely criticised for the deed. What, however, is the consequence? That the law of 1850, which authorizes the Legislature to step in whenever the dividends of a railway rise above 10 per cent, on the actual cost of the road, and declare what shall be done with the surplus, has been, by this process of capitalization, made absolutely nuga¬ tory, because the dividend of the railway since 1869 and until 1878 has been, on the actual cost of the road, something above 16 per cent.—in all probability something above 20 per cent. In other words, that provision of the law which was inserted in the Gen¬ eral Railway Act, for the purpose of giving the State some control over its railways, that they shall not absorb all the prosperity of the community—which says that when the dividend shall exceed 10 per cent, upon the actual cost, the Legislature shall dis¬ pose of the surplus, has been absolutely nullified by our great-main system of railways. 20 Because these roads were capitalized at $80,000,- 000, they insist that they must pay the interest on that sum, when it is notorious that their cost does not represent $80,000,000; that it represents less than $40,000,000,—the other $40,000,000 represent no more labor than it took to print the scrip dividends. Had, by some arbitrary act, the debt of the cities of New York been increased to the extent of about $50,000,000, upon which the people of these cities would be compelled to pay an interest of 6 per cent., precisely the same result would have been brought about as this fictitious capitalization of its great artery of commerce; because it does not make any difference to the cities of the State of New York whether they pay taxes to the New York Central Railway, or whether they pay a like amount into the Chamberlain’s or County Treas¬ urer’s office. If the New York Central Railway, holding as it does the cheapest line of rail to the West, can by a combination persist in getting 8 per cent, upon its watered capital, it gets a tax out of the People of the city of New York, and out of the people of the State of New York, precisely in the same way and with the same effect as though the debts of the counties of this State and the debt of the city of New York had been improperly increased $50,000,000. I draw your attention to this, not from any feel¬ ing of asperity, but to state facts. It is not the fault of the New York Central Railroad that it is a monopoly, and it is but natural that the directors will do the best they can for their road and them selves. Does it not illustrate, however, how blind 21 the people of the State have been as to their true interest—how utterly negligent the Legislature has been in looking after the interests of the State which they have in charge, to allow such a thing to be done without a single protest or inquiry ? The report to which I have to-day so often referred during this argument, coming as it does from the Chamber of Commerce, speaks moderately when it says: that the trade of New York is being diverted; that it is utterly impossible for its merchants any longer to compete with the cities which they have regarded with comparative contempt; and that, under such circumstances, it becomes the duty of the Legislature to make some inquiry whether or not some relief may be had from this state of affairs. Now, it is quite wide of the mark to be told by Mr. Depew or by anybody else, that the railway system of the State of New York is a private business, like the manufacture of boots and shoes, and that if you interfere with it it is the same sort of interference as if you would take loaves of bread from a baker’s establishment and sell such bread at your, not his, price, or like an interference with Mr. Hilton’s dry- goods establishment of New York in regulating- prices for his silks. There is no analogy at all between the railway system and other business. Other countries and other communities have awakened to this fact, and have acted upon it. England carries her free-trade notions farther than any country on the face of the globe, very much further than we ever did; but we have a marvellous faculty for taking hold of correct principles at the blade instead of by the handle. England for a time 22 believed that a railway was a matter entirely of pri¬ vate enterprise, so believed until 1844, when her statesmen suddenly awakened to the fact that the railway corporations had become so powerful that they dictated terms. And yet even they did not con¬ sider the railways so much matter of private enter¬ prise that they did not regulate with great accuracy and great care all their traffic, the rates that they shall charge for passenger traffic, and to regulate the rates even which shall be charged for freight traffic. You will find in every bill organizing a line of railway in England from 1826 to 1833, a carefully prepared schedule of rates for both its passenger and freight traffic. But from 1833 until 1845 England allowed the rail¬ way system to begin to take control out of the hands of Parliament, and to regulate its own passenger and freight traffic. Then, about 1844-5 Parliament awakened to the fact that certain communities could be made prosperous, and other communities could be depressed in its business enterprises and its busi¬ ness relations by this railway interest. And yet the waterways of England are far more effectual means of competition than any we have in this country. In the first place, the competition by sea is very much more effectual. That tight little sea-girt island has boats plying around it from every part of it, and, indented as it is with harbors, it has a great advan¬ tage over us. Then there are great highways that run throughout England, built before the canal system came in vogue, and its canal system was in¬ deed more ramified and better developed than our own waterways ever were. Therefore they had, both in their canal system 23 and sea-ways, means of competition against this new system of transportation which we lack here. But in 1845 they awakened to the fact that it was necessary to subject these great highways to some control, and Parliament was reminded that Stephen¬ son said very early in the history of railways, that where combination was possible competition was im¬ possible, and he was followed by the Duke of Wel¬ lington, who said to the people of England in 1843, u Gentlemen, in legislating on railways, y<$u must not forget the English idea of the highway”—that the public has an interest in the road, and that it is not therefore a private matter. But entirely obliv¬ ious of these statements, they went on until 1845, as I have said, on the supposition that this was mainly a private matter and of private concern. In 1845 a Boyal Commission was appointed for the purpose of examining the whole system, and they reported that it was not a matter of private concern at all. Mr. Gladstone was the president of that commission, and in a very learned report he asked for the passage of a general railway bill. In this report he states that the Private Bills Committee of the House of Commons is not competent to deal with the questions coming before it, and that some organized tribunal should be called into being for the purpose of dealing with so important a problem. A perpetual, constant commission, sitting as a court for the purpose of determining railway ques¬ tions of the nature of the one that occupied your attention to-day — u whether a particular railway does not charge too much for milk traffic”—to sit, to take testimony, to hear arguments, and to sift by some method known to law the truth from con¬ flicting and interested statements. You, gentlemen, 24 are not incapable of performing this task, but you have not the time to perform it. Consequent upon this Gladstone report, the whole subject was remitted to another organization known as the Board of Trade. Now you, gentlemen, prob¬ ably know that the Board of Trade is a responsible department of the English Government; that it has several bureaux, of which one is the Eailway depart¬ ment, which, from 1845 until 1853, was charged with the duty of standing between the public and the railway system. In 1853 the Board of Trade, in consequence of the enormous growth of the railway power and its ten¬ dency to amalgamation and consolidation, reported that they either must organize in some different method the railway department, or to give to the Board of Trade additional powers, because the busi¬ ness that was thrown upon the Board of Trade was too great for it to handle ; and the consequence was that a bill was passed by which some of the ques¬ tions theretofore determined by it could be heard in a court of justice. The Court of Common Pleas was instituted a tribunal by which all questions between the railroad companies on the one hand and the public on the other could be heard and determined. Lord Campbell, on the passage of the bdl, said that this would not and could not work well, and the scheme did not in practice succeed, and the question was once more sub¬ mitted to a commission composed of three per¬ sons appointed by the Crown and five members of each house of Parliament. They came to the con- elusion that nothing short of raising a commission would answer the purpose. But nothing was done under that report, and in 1872 a joint committee of 25 the houses of Parliament was appointed, under the presidency of Chichester Fortescue, and such men as Lord Belper, Lord Derby, Mr. Cave, the Marquis of Salisbury, and some of the leading English railway men of England were made members of that joint committee. This committee was composed of twelve foremost men, and when it was appointed it received, by universal acclaim, the credit of being the best appointed and equipped committee for its work that had been constituted in England on this subject. The committee for a year and a half took evidence, which is contained in upwards of a thousand pages of one of the huge English Blue-books, and after having examined before them almost every leading- railway officer and expert in England, they united in a report, in which they join in the conclusions recom¬ mending the appointment of Railway Commissioners. They say that “committees and commissions carefully chosen, have, for the last thirty years, clung to one form of competition after another; that it has, nevertheless, become more and more evident that competition must fail to do for the railway what it does for ordinary trade; ” and that the railways combine by leasing lines and buying each other’s stock, and control each other in one way or another. And then the committee—the most carefully chosen committee that had ever been appointed in England—says that the only relief that the English people can have or can get from this monopoly, which this improved highway has created, is the constituting of a commission, wielding powers vastly greater than is proposed to be given by the bill now under consideration. Such a Commission was or¬ ganized by the law of 1873, and it has power to hear testimony upon the subject of the in- 26 justice of any particular freight or passenger traffic, and to remedy it by decree. They do not need to go to the Legislature; they prescribe the rules by which the roads shall be run ; they prescribe the rates at which they shall be run; they can tell any particular railway, “ You shall not charge any more for freight than your neighbor,” and can say what that rate of freight shall be. Those 3,000 items that Mr. Depew spoke of, which compose a railway tariff, are all under their control. Indeed, the English railways have a corporation of corporations to con¬ trol them—which corporation is the State. I would not, I confess, give to any commission in this country such power over so vast an interest as the railway. I use the English example in preference to conti¬ nental railway legislation, because it shows to you the experience of the most practical nation on the face of the globe—the one from which we derive our institutions, and from which we have copied until recently almost every legislative and judicial reform —that even that nation has gone farther, aye, very much farther, than we propose to do here in the State of New York in controlling the railway interest and making it subserve the public welfare, and that this was not done under the suspicion that the com¬ mercial and financial interests vested in London were being absolutely destroyed, as the commercial inter¬ ests of New York City are in process of being wasted, frittered away, and its trade diverted, by the unjust and improper discriminations on the part of the'un¬ controlled railway power of the State. England saw that that great monopoly must be controlled by a stronger and more active power, so as to keep it in check, and hence it organized a commission to do 27 that which railway committees in Parliament could not accomplish, and which their Board of Trade was found powerless to do. In Prance, Germany, Italy, and Austria, the railways are in great part owned by the State, and those that are not so owned are, as to all their contracts, freight and passenger charges, under the strictest State surveillance. In this country any suggestion to control the rail¬ way interest is looked upon with considerable dis¬ favor because, unfortunately, when our Western farmers felt the pressure of railway mismanagement, or the pressure of taxation resulting from bonding their counties and taking their property in invitum by the railway interest, they struck boldly but blindly at it—struck foolishly, if you please—by enacting what we call Granger legislation—legis¬ lation which, as Mr. Pink says, attempted arbitrarily to “ guess at freights,” and guessed wrongly. Of course an effort of this futile character would throw discredit in non-discriminating minds upon all con¬ trol. All we can truthfully say, however, is, that some kind of control has been unjustly and foolishly attempted, and failed. Because the Banking law or the Insurance law had been found wanting, because they were inade¬ quate to protect theinterests they should serve, scarce¬ ly any one would be foolish enough to say that there shall be no State control over these interests what¬ ever. Should we not rather see to it that the control should be in some way improved, or so regulated that such institutions as are rotten may go out of existence sooner than they do now, and that the management be looked after with greater rigor, and the departments be clothed with more power ? When we find that a particular management has 28 operated badly, we generally try to make that management more effective and competent. But the system of control that our Western States have attempted, is one which we do not desire to copy, and which we have no wish to try, and which they now themselves admit to be defective. With all Granger legislation our bill has nothing in common. It must also not be forgotten that the Western ' States attempted this interference with the railway interest at a most unfortunate time. They started in 1871, ’72 and ’73; their system didn’t go into effect until 1873 and 187-1, immediately alter the crisis, and was followed by a financial depression which has been general throughout the United States, and indeed, general throughout the world, a depression which has affected the railway interests precisely as it has other interests. Yet the railways have not hesitated to charge that this depression was mainly due to the Potter legislation; was due to that particular dis¬ criminating legislation against them, and that it is mainly responsible for the misfortune which has taken place in this country in the way of general commercial and financial distress. We know that this is a gross exaggeration, but it is a lie so well stuck to that many are misled, and I have heard even intelligent merchants talk of the Potter law as though it were the source of our whole financial troubles. See the necessity for such a commission. You hear arguments on these railway questions, and possibly, at times, go down to New York City and take testimony in a hurried way for a week or so, and make a report on insufficient data, which the railways will readily s0 prove. When we 29 want an investigation we desire to have it carried on by a standing commission of the State of New York, containing expert and trained minds, who shall regulate, not the railway freights or pas¬ senger traffic, but who shall regulate the system of keeping’ accounts, by means of which we shall be informed what the railways cost, what they earn, what they do, and what they can afford to do for tbe State of New York. Is that unreasonable ? Ask yourselves whether it is unreasonable that organizations that have been called into being by the exercise of the right of emi¬ nent domain, to which the great State of New York has loaned its sovereign powers to expropriate land,—is it unreasonable, I ask,—that that sov¬ ereign power should from time to time inquire in what manner that trust has been managed, and with what degree of fairness it has been exercised in the interests of the people of this State 1 Mr. Vanderbilt answered the merchants of New York a few days ago, when they called upon him, to lay their grievances before him and other rail¬ road chiefs: “ Gentlemen, my interest is tied up with yours. I cannot injure the city of New York with¬ out injuring myself.” And he thinks that we must consider that as an answer. A very great difference of opinion may exist as to the division of that prosperity of the commu¬ nity between Mr. Vanderbilt and the public. Sup¬ pose that you put down the prosperity of the com¬ munity in figures, say 8, and Mr. Vanderbilt takes 7, and the rest of the community gets 1, why, it is perfectly reasonable under those circumstances that the other worthy merchants, bankers, tradesmen, 30 and manufacturers of the community should say and feel that this is an unfair division whereby his railways are permitted to take seven-eighths and leave the rest of the community one-eighth of the general prosperity. It is not an answer to the community, when the people find fault with oppression, to say, My pros¬ perity is tied up with yours. It is precisely in the same way as the prosperity of a tax-gatherer— farmers-general—in France anterior to the Revolu¬ tion of 1789 was tied up with that of the department from which he gathered taxes. In the same way was the prosperity of the slave-owner tied up with the prosperity of his slaves. It was only the divi¬ sion of the prosperity that was unfair; the one had champagne suppers at Saratoga, the other, bacon and corn-dodgers in the rice field. The tax-gatherer, even, would not tax the peasants so hard that they could not pay the taxes the following year ! He would let them preserve grain enough for seed. Likewise, the slave-owner would feed his slaves suffi¬ ciently to enable them to coutinue to work for him. In the same sense only that the prosperity of the French tax-gatherer was tied up with the prosperity of the people he taxed, or the prosperity of the slave-owner was tied up with the prosperity of the slave—in that sense is the prosperity of the Railway King, unchecked and uncontrolled, tied up with the prosperity of the cities and States tributary to his road. Therefore this identity of interest between railway managers and the people, is not true in a general sense, and in this special case is not true in a special sense. Of the 100 per cent, of the freight traffic which goes by the New York Central Rail¬ road, 60 per cent, of it goes to Boston. Mr Van- 31 derbilt is more largely interested in the traffic of Boston than he is in the traffic of New York. If anybody had proposed, anterior to the existence of the railway system, that the great natural water¬ ways of New York, or that the one great waterway of the Hudson Biver, should be placed into the hands of a private corporation, everybody would have said : “ This is our great natural highway ; we must not place that in the hands of a private corpora¬ tion, because the men who control such a corporation will then have the prosperity of New York in the hollow of their hands.” Of course they would, and they of course would levy taxes from the city of New York to enrich themselves. They would stop short only where the city of New York would else be so crippled that it could no longer pay tribute. Such a monopoly would make such a division as it saw tit of the property of New York between its corporation and the citizens. Now, the great waterways of this country have become of comparatively little importance to the community. As the bridle-paths were to the turn¬ pike, so has the turnpike become to the canal, and the canal, in turn, to the railway. From 80 to 85 per cent, of all the traffic of the city of New York that comes in and goes out, goes and comes by way of the railway. Therefore, these artificial improved highways have superseded the natural ways upon the management and operation of which the prosperity of New York depends. Therefore, if we are to follow, not the words, but the reason of all those rules of law which have come down to us from Anglo-Saxon times, that the great 32 waterways of the community belong to the com¬ munity, and cannot become private property exclu¬ sively, we must apply such rules to the railway; this, although an artificial way, is one of infinitely greater importance than those natural ways, highways and waterways, which have been from the settlement of the country of such great importance to its prosperity, and to which this wise rule of State control has in the past been applied, because they were the means of trade and intercourse between the people of a State. It is certainly wide of the mark to say that the railway has added to the prosperity of the com¬ munity. I do not think it is denied that it has done for us a thousand things more than I can enumerate. Of course it has. It has built up modern civiliza¬ tion. But—and here comes a formidable but—it was not a Vanderbilt who did all this. It was Stephenson’s genius that did it. The men who now have control of the railway system did not do it; they have gone into it as a business of a profitable and formidable character, which in the taking control of all our leading highways, puts it in their power to choke off any community, or to advance any other community, precisely as they see fit; and they are doing that to an extent which is utterly destructive to certain districts and persons of the interior of the State. Ihe report, made by the Chamber of Commerce, says that they make special rates with special houses m Syracuse and in Utica, and that they build up certain businesses to the detriment of other busi¬ nesses, and that they build up certain towns to the detriment of others. And you may talk as you will about taxation be¬ ing general, about taxation pressing equally upon 33 the whole community, and that any taxation which is not general, and does not press equally, is destruc¬ tive of a community, and have our Courts declare such taxation to be unconstitutional ; yet if you allow this system of taxatiou to continue, that a railway can impose upon a community, on the general supposition that the interests will be found to be identical—the interests of the managers of the railway, and the interests of the community—you will find that certain parts of your State will be made a desert, and certain other parts built up, precisely in accordance with the railway interest: No, not even with the true railway interest, but in accordance with the interest of the managers of the railway. Eight here I must draw a line of demarcation be¬ tween what is the interest of the railway and the interest of the managers of the railway. We know that frequently the interests of the managers of the railway differ very materially from the true inter¬ ests of the railway. The managers of the railway cried out in dismay when the bill was passed which gave the English railway into the hands of a commission, and they said it would be destructive to them. So it was. It was destructive to the interests of the managers of the railways. The railway property —the property of the stock and debenture holder —in England has, however, increased from 1872 to 1878—a period of depression—upwards of £100,000,000 in its market, the sign of its intrinsic value. Why ? The management has become less reckless; it has become truer to the interests of the railway shareholders ; it has become truer to the interests of the debenture holders—and 34 the general value of railway property in England has risen as against the interests of the railway manager. Let me recall your mind right here to one provision of this bill, which provides that there shall be a uniform system of railway accounts, as a step in the direction of protecting the shareholder as well as the public. The absolute necessity of such a provision is best indicated by the fact that the former State Engineer told me but a few weeks ago that he is entirely powerless with reference to what he has to print. He has a set of forms provided under the Act of 1850, long before our railway in¬ terest had grown to its present dimensions; and he sends to the railways these forms, and they put into them whatever they see fit to put there, and he is compelled to print whatever they shove into his basket. Mr. Gould, before a commission of the Legislature, ' j said that the Erie Road carried its annual legislative expenses, amounting to a million dollars or more—a legislative corruption fund—to the India Rubber account, and it would thus appear as part of the assets of the corporation. And thus the amount that those bold and wicked men who had control of that road expended for bribing the Legislature- bribing constituencies to send their tools here to Albany money paid for lobbyists, for employing special counsel to argue questions before com¬ mittees, and to others for getting acts through or preventing others from going through, went into u rubber” account. There it is in these annual re¬ ports of our State Engineer as assets of the corpora¬ tion. That this is possible is due to the prevailing- system of keeping railroad accounts, which is utterly defective. This is so as to almost all railroad cor- 35 porations, as is indicated also by the fact that the President of the New Jersey Central, who had the books of that road under his direct control, who was certainly interested more than any other man in its stock—he had a million and a quarter of dollars in it—supposed, from the faulty manner in which these accounts were kept, that the road was on the eve of declaring a dividend of 6 per cent.; and he promised in his annual report of 1876, that it would continue to declare a dividend, when even then it was on the very verge of bankruptcy. Mr. Johnston and numerous other stockholders of the road lost their money because of the keeping- of a system of railway accounts by which railways in¬ tend to mislead other roads and other corporations, and by which they intend to mislead the State, and by which they in the end mislead themselves; and this very railway investor was induced to leave a million and a quarter in a road of which he him¬ self was president, and of which he would have known the condition if a false system of book-keeping had not deceived him, which was so utterly rotten— a rottenness that he could not see until it was appar¬ ent to all the world—that his money as well as that of many others was irretrievably lost. I,-of course, do not claim that he is to be pitied any more than others who had their money in the concern, but I say that a system of railway accounts is utterly vicious when the very officers of the corporation cannot know where it stands. Independent of other considerations already re¬ ferred to, there is one of a general nature to which I now desire to draw your attention, after which I shall close. No community can prosper that allows any organization in its midst more powerful than itself; which, allows a power behind the throne to grow up, which controls its legislation, which dictates its policy, and which, in point of fact, governs without having the responsibility of government. Don’t we know that the railway interest of the United States has captured in detail every one of these States; that it holds it by holding the State organizations ? Yet it has no responsibility of govern¬ ment. It is an entirely irresponsible body, but is the real government. It owns or controls the leading intellects of the various counties through which it passes; the lead¬ ing lawyers are retained by it to defend and prose¬ cute its cases, and their political or forensic am¬ bitions are tied up with the interest of the railway. The railways are the largest advertisers, and they thus directly and indirectly control public opinion through the press. Under these circumstances, it behooves the people of every State to see to it that that power shall be curtailed and cut down as a political power, and that whatever it does be done in the glare of day. The only reason why the English Government is not to-day in the condition of the nations of South¬ ern Europe, is that it has not a power behind the government more powerful than itself. Whenever and wherever such a power made headway, or grew up, it promptly throttled it The fight between Henry VIII. and the Church wasnot man ha , f s ° , uuch ()fa fl htbetween Protestant,sn. and Catholicism as it was a fight for power a fight between the kingship as a political Ctocfown b d 0hUrChas a Political power ; as the Church owned upwards of one-half ot tlm lands . 37 of England, and as Henry saw that it was not pos¬ sible to carry on a government in England with a government in it more powerful than the throne it¬ self,—he crushed that power. The East India Company, down to 1850, was an organization threatening to become more powerful than the State itself, and the Government in conse¬ quence absorbed that great monopoly, and made its great domain, with its teeming millions, directly subject to the English Crown and Government—be¬ cause English statesmen began t© see that the or¬ ganization which controlled the enormous property of India was fast becoming more powerful than the State itself. The reason why an imperium in im- perio is dangerous to the common weal, is because it severs power from corresponding responsibility. We know that in our own country here, we have in our railway organizations in every State an orga¬ nization more powerful than the State itself. I was recently in one of our Western States —one of our newest Western States—in which I suggested to the president of one of its rail¬ ways, that it would be wise to pass an act pre¬ venting the defacement of natural scenery, and he said to me: “ Draw your bill, and I will have it passed,” with the same calm assurance of success that Napoleon III. might have shown in 1864, in answer to a suggestion for a law which met with his approval, that his Senate and Corps Legislatif would pass it. I do not think that any community can prosper that allows such a state of affairs to continue, and, indeed, no community deserves to prosper which suffers it to continue. I had intended—but it is very late—I had in- 38 tended, for the purpose of answering the suggestion, nay, sneer, which is constantly made by our adver¬ saries, that we do not understand this subject, that we are not “ practical railway men,” to read to you from the report of Mr. Nimmo, who is the special commissioner on internal commerce of this coun¬ try, his views of the question as corroborative o those I presented. I had intended to read to you a letter from Mr. Adams, in which,he speaks of this bill as a better one than the law of his State. I had intended to draw your attention to what has been done in other States in the direction of our meas¬ ure. Suffice it however to say, that a Board of Rail¬ road Commissioners in Massachusetts, actively in operation for the last eight years, has, according to Mr. Fink’s statement, done excellent work, and Mr. Fink certainly understands the railway problem, probably better than any other man in this country. That the railways think so, is indicated by the fact that the great Trunk Lines have made him their general railway manager for freights, under the pooling arrangements. There is a railway com¬ mission in Connecticut, in Maine, in Illinois, in Ohio, in Minnesota, in Missouri. They have one in almost all the larger Western States. New York State is comparatively alone in its neglect of duty in this particular, although it has the largest railway interest of all. It stands quite alone among the larger States of the United States in not hav¬ ing even attempted some control, or through some such organization as this bill provides, subject to the light of day the management of these corpora¬ tions, subject them to public scrutiny, and make them subservient to the public welfare. The so-called practical men will make the sugges- 39 tion, that the commission which we herein propose to organize is simply one additional State machinery which the railways will feel called upon to.corrupt. In other words, that the commissioners will in a very short time be in the pay of the railways, aud that then we are as badly off as we were before. If I were compelled to concede this to he true, it would not be an argument against the commission. Corruption would be concentrated then upon the commission, instead of affecting the whole Legisla¬ ture to such a degree that it brings under the taint, of its suspicion even the purest and best of its mem¬ bers. When certain men are charged by the State with the performance of a specific duty, they may be paid not to do it; but their refusal to perform their duty then becomes so conspicuous and mani¬ fest that in the eyes of the world they must confess themselves to be corrupt. Whether from motives pure or corrupt, the excuse the Legislature now gives for the non-performance of its duty'with reference to the railway interest is, that it has not the time. And we know, as a matter of fact, that it cannot thoroughly investigate any subject. For this specific purpose, the machinery of legislation is wholly inadequate. Investigation necessitates some organization analogous to a court for the purpose of sifting and arriving at truth. This a commission can do, having no other business but the railway interest to examine and report upon. And I venture to say that even a corrupt commission would be compelled to give some relief when so clear a case is made out as the Chamber of Commerce made out in the report from which I have read, and when the plaintiff in such a case is the People of the City of New York, or the 40 Chamber of Commerce, or the Board of Trade and Transportation, or some other great representative body of merchants having large interests to protect, and determined to see to it that they are well pro¬ tected. The corruptions in our courts of justice were not permitted to last long; and a corrupt commission would not be permitted to last long, but the cor¬ ruption would be exhibted and other commissioners appointed less open to sinister influences. The argument that the commission may prove corrupt, and therefore it ought not to be instituted, proves too much; for a like reason we might be called upon to do away with our courts of justice ; on the same ground abolish our police administration, because at times a policeman is in league with the burglar; and, if sound, would be a valid argu¬ ment to do away with every other governmental organization intended for the protection of society, and forever prevent the adoption of new and addi¬ tional safeguards to the general public weal.