MINORITY REPORT 
 
 OF I'HE 
 
 COMMITTEE OX RAILWAYS 
 
 IN RELATION TO 
 
 THE HOOSAC TUNNEL 
 
 AND THE 
 
 RAILROADS EEADENG THERETO, 
 
 * WITH 
 
 A. BILL 
 
 TO INCORPORATE THE STATE BOARD OF TRUSTEES 
 OF THE HOOSAC TUNNEL RAILROAD; 
 
 ALSO THE 
 
 SPEECH DELIVERED BY 
 
 * Hon. E. P. CARPENTER, 
 
 Senate of Jlfassaohusetts; June 2, 1873, 
 
 In Support of the Same. 
 
 BOSTON: 
 
 & POTTER, STATE PRINTERS, 
 No. 19 Province Street. 
 
 WRIGHT 
 
\ T\ 0 1 Schrj^ V4 
 
 v 
 
 u 
 
 Cammonfocaltfj of lltassarfwsttts. 
 
 House of Representatives, April 23, 1873. 
 
 » 
 
 The undersigned, members of the Committee on Railways, 
 to whom was referred " An Act to provide for the Con¬ 
 solidation of the Hoosac Tunnel line of Railroads from 
 Boston to Troy,” and the petition of the Boston and 
 Lowell Railroad Company for amendment of the charter 
 of the Great Northern Railroad, and many petitions and 
 remonstrances relative to the disposal of the Troy and 
 Greenfield Railroad and Hoosac Tunnel, respectfully 
 submit a 
 
 MINOBITY KEPOKT: 
 
 The Committee, after public notice to all parties in 
 interest, commenced its hearings upon the subject-matter 
 of these petitions on the twenty-ninth day of January, 
 and finally closed them on the twenty-first day of March. 
 Under the authority granted by the legislature, a reporter 
 was employed by the Committee, by whom a verbatim 
 report was made of all the testimony and arguments sub¬ 
 mitted to the Committee. This has been printed for the 
 use of the Committee and of the legislature, and is now 
 accessible to members. 
 
 Many parties were represented by counsel, and various 
 plans were presented. 
 
 
4 
 
 The first proposal was that of the Troy and Boston, 
 and Vermont and Massachusetts Railroad Companies, for 
 a consolidation under one corporation of the direct line 
 between Boston and Troy. 
 
 The second, for a consolidation of the Boston and 
 Lowell and Fitchburg Railroad Companies, with authority 
 to lease or purchase the lines to the tunnel and to Ogdens- 
 burg, placing under the control of one corporation about 
 fifteen hundred miles of railroad. 
 
 Third, the proposition was urged upon the Committee 
 to provide for the acquisition by the State of the Tunnel 
 Line. 
 
 The attendance before the Committee was not limited 
 to the representatives of corporations directly or indirectly 
 interested in the result. Committees of the Board of 
 Trade and other commercial associations, and many private 
 citizens to some extent represented the public interests; 
 while the larger audiences in attendance upon the sessions 
 of the Committee attested the deep interest of the business 
 community in the subject-matter under discussion. 
 
 The problem before the Committee was to determine 
 how the people of this Commonwealth could derive the 
 greatest benefit from the construction of the tunnel which 
 has involved so large a .public expenditure. 
 
 The relations of the State to this enterprise have greatly 
 changed since its commencement. The tunnel was pro¬ 
 jected as a private enterprise, which was first aided by the 
 State by a loan of its credit. 
 
 It was doubtless then intended that the tunnel when 
 completed should form a part of the through line over the 
 Fitchburg, Vermont and Massachusetts, Troy and Green¬ 
 field, and Troy and Boston Railroads, to be owned and 
 controlled by these corporations like the rest of the line. 
 This project failed. The Troy and Greenfield Railroad 
 Company was unable with the state loan to complete the 
 tunnel, and after great delays and difficulties, surrendered 
 
5 
 
 its railroad and the incomplete tunnel to the Common¬ 
 wealth, which has since carried on the work at the public 
 charge. Its completion within the current year may be 
 expected, and the total expenditure from the treasury of 
 the State will amount, including interest, to about $12,- 
 000,000. This expenditure is a charge upon the people 
 and the property of the whole State. 
 
 It seems improbable that any disposition can be made 
 of the tunnel which can return to the treasury the whole 
 sum expended, and it is for the legislature to determine 
 how far a return can be'made to the people of the State 
 from this great public expenditure, in increased means of 
 transportation and a reduction of rates which ffre now a 
 burden upon the whole community. Since the tunnel was 
 projected, new lines of railroad have been built which give 
 to nearly every portion of the State direct access to the 
 tunnel and through it to the great West. 
 
 In the progress of the hearing certain points were 
 made tolerably clear. 
 
 First , That the tunnel itself should be so far held and . 
 controlled by the State as to insure its use on equal terms 
 by all parties. 
 
 Second , That some consolidation of the line or lines 
 working through the tunnel was essential to secure effi- 
 ciency of action, and to provide for the great business 
 awaiting the completion of the tunnel. 
 
 Third , That to provide equipment and terminal facili¬ 
 ties for such a business, the weak and disjointed separate 
 corporations were inadequate, and that it was particularly 
 desirable that some action should be taken at the present 
 session of the legislature. 
 
 The policy of direct state ownership was strongly 
 pressed upon the Committee by the railroad commissioners 
 aitd other parties. The address of Mr. Adams, in behalf 
 of the commissioners, upon this subject, is contained in 
 the printed report, and is a clear and able statement in 
 
6 
 
 behalf of this policy. While the experiment has been 
 tried in other States, and under other circumstances has 
 failed, we do not think it is to be condemned for this 
 reason. These experiments were tried before the develop¬ 
 ment of the railroad system, and generally in thinly- 
 peopled States, where state construction of railroads was 
 a political necessity to supplement private capital that 
 could see no inducement for investment. 
 
 In the days when state management failed, corpora¬ 
 tion management failed to quite as great an extent. 
 
 The statement of Mr. Adams, in regard to the results 
 of the system in Belgium, are very striking, and in 
 England The current seems to be settling in favor of the 
 assumption of the railroads by the government. 
 
 To any careful observer of the railroad development of 
 the past twenty-five years, there can be little doubt of a 
 like progressive increase in this business in the future. 
 
 If the benefit of this increase in business can be secured 
 to the people who furnish the traffic, instead of to the 
 • corporations who provide the capital, an immense public 
 benefit will follow. The most valuable experiment to be 
 tried at the present day is to ascertain how cheaply rail¬ 
 road transportation can be afforded. Corporations formed 
 to make money for their stockholders, can hardly be ex¬ 
 pected to fairly try this experiment. The greatest need 
 of this Commonwealth is cheap transportation. To secure 
 this the Hoosac Tunnel has been constructed at a cost of 
 $12,000,000 of public money. 
 
 We are fully convinced that to secure to the people the 
 full advantages to be derived from the construction of 
 this new avenue to the West, and to secure equal rights to 
 all parties desiring to use it, the State must not part with 
 the control of the tunnel. We are equally convinced that 
 to secure efficiency in the lines working through the tun¬ 
 nel, consolidation is necessary, and that the tunnel itself 
 
7 
 
 must be worked and managed for all parties using it, by 
 one head. 
 
 It would follow that the State, retaining the tunnel, 
 should operate it, and should also own or control one line 
 of road between Boston and the West, at the same time 
 giving to all parties, without discrimination, equal advan¬ 
 tages to the tunnel. The state management cannot afford 
 to be unjust or to discriminate. 
 
 No private corporation can be trusted when its own in¬ 
 terests may conflict with the interests of other and perhaps 
 rival corporations, to establish or to enforce rules for the 
 transaction of such business. We therefore report and 
 recommend the passage of the accompanying fUll: " To 
 incorporate the State Board of Trustees of the Hoosac * 
 Tunnel Railroad.” 
 
 Its purpose is to form a corporation for the management 
 of the Troy and Greenfield Railroad and Hoosac Tunnel, 
 with all the powers of a railroad corporation. It is to be 
 composed of five trustees, to be appointed by the governor 
 and council, each to hold office for five years, and one of 
 whom shall be appointed annually. To these five state 
 trustees are to be added not exceeding three, one by each 
 of the railroad corporations whose property may be ac¬ 
 quired or managed under the terms of the Act. 
 
 Instead of directly purchasing the railroads constituting 
 the direct line, provision is made for leasing these rail¬ 
 roads by the new corporation upon terms which are fair 
 and equitable for all parties. The returns to the railroad 
 commissioners show that the average expense of operating 
 the railroads of this State is seventy-five per cent, of the 
 gross income. We therefore propose to set apart for the 
 benefit of each of these corporations twenty-five per cent, 
 of the gross income of its railroad, out of which shall be 
 paid a yearly rental; and that they may not in any event 
 be losers by the experiment, it is proposed to guarantee 
 to them an amount sufficient to pay to their stockholders 
 
8 
 
 the dividends they are now paying, with liberty to increase 
 to the maximum which law or custom permits our railroad 
 corporations to pay. 
 
 That such a lease would receive the assent of the com¬ 
 panies interested, we have strong reasons to believe. 
 
 It secures to the stockholders the dividends they are 
 now receiving. It secures also to them the benefit of any 
 increase of business likely to accrue from the completion of 
 the tunnel, to as full an extent as they can hope to benefit 
 by it. No railroad corporation ought ever to pay more 
 than ten per cent, dividends, and the legislature would 
 undoubtedly, under its power to regulate tolls, interfere 
 to prevent greater dividends. 
 
 While these corporations are thus interested in the 
 earnings of the roads, the bill provides that they should 
 be represented in their management. We shall thus 
 secure the services of persons familiar with the local busi¬ 
 ness and history of the separate roads, and although form¬ 
 ing only a minority of the board of management, they must 
 have an important influence in the direction of its affairs. 
 
 The benefits to be gained by the State by this arrange¬ 
 ment are obvious and manifold. 
 
 It retains state ownership and management of the tunnel'. 
 
 It secures to all corporations desiring to use the tunnel 
 equal rights. 
 
 It secures to the Commonwealth the full value of its in¬ 
 vestment, whatever future developments of business shall 
 prove that value to be. 
 
 It assumes the establishment of a strong corporation, 
 able to provide all equipment and terminal facilities which 
 any future increase of business may render necessary or 
 advisable. 
 
 It meets all the presumed advantages of state acquisition 
 of the railroads, without that disturbance and removal of 
 capital which must follow the purchase of the railroads 
 by the State. 
 
9 
 
 It can furnish capital for the improvement of the line at 
 a cheaper rate than any consolidated company can procure 
 it; and cheap capital in disinterested hands secures cheap 
 transportation. 
 
 It enables the State to try fairly and fully the experi¬ 
 ment of cheap transportation. 
 
 It creates a corporation which cannot combine with other 
 corporations, nor can its stock be purchased or in any way 
 controlled by outside parties, and is strong enough to com¬ 
 pete successfully with the powerful corporations of neigh¬ 
 boring States. 
 
 Such a management we believe would be efficient and 
 reliable beyond that of ordinary railroad corporations. It 
 would combine to a great degree the advantages of state 
 and corporate management. The governor and council 
 could be depended upon to appoint suitable persons as 
 trustees. The railroad corporations would naturally ap¬ 
 point their most efficient agents as trustees. Such a board 
 •could find no difficulty in securing the services of the ablest 
 railroad officeis to direct and aid in the management. 
 
 It remains to refer briefly to the other propositions be¬ 
 fore the Committee. 
 
 First, to that of the Boston and Lowell Kailroad Com¬ 
 pany to unite with the Fitchburg. This is a proposal to 
 unite two lines in some degree rival and competing. They 
 are rival lines to some extent for local business. They 
 form parts of rival lines for distant business with the 
 North and West. It is a new proposition in this Com¬ 
 monwealth to unite rival and competing lines. This com¬ 
 petition will be increased with the opening of the tunnel 
 line. The Lowell is the natural terminus of the Northern 
 line, and the Fitchburg is the natural terminus of the tun¬ 
 nel line. Whatever advantages may accrue to the corpo¬ 
 rations themselves from such a consolidation, the public 
 results will be unmitigated evil. Not one witness uneon- 
 2 
 
10 
 
 nected with the interested corporations appeared before 
 the Committee to testify in favor of such a consolidation. 
 The evidence against it was strong and conclusive. The 
 Northern line by way of the Lowell and Vermont Central 
 was shown to be of great value to Boston and to Massa¬ 
 chusetts. It is now in a measure consolidated under con¬ 
 tracts having twenty years to run, and it is surely bad 
 policy for the Commonwealth, having expended $12,- 
 000,000 to create a new line, to commence its operations 
 with the destruction of one in full and vigorous existence. 
 Moreover, such a consolidation threatens more than any¬ 
 thing else state control of the tunnel itself. A powerful 
 corporation, owning the whole line except the tunnel, 
 would soon compel the transfer of that, and until such 
 transfer, would throw upon the State as the owner of the 
 tunnel the responsibility for all the sins and omissions 
 of the line. 
 
 The important question of an interchange of depots and 
 tracks by the railroads entering Boston on the north has 
 been somewhat involved in this hearing. 
 
 The avoidance of railroad crossings is undoubtedly of 
 great importance, but it has no proper connection with the 
 disposal of the tunnel. The Eastern Railroad Company 
 and Boston and Maine Railroad are agreed what changes 
 can and should be made to avoid these crossings. All 
 that is essential to secure this end is to remove the pas¬ 
 senger station of the Fitchburg Railroad west of the 
 Lowell, where it properly belongs. The legislature has 
 full power in the premises. It can, independently of any 
 consolidation, require the Fitchburg Railroad Company to 
 provide passenger accommodations west of the Lowell 
 station, and thus leave its present station on Causeway 
 Street free for the use of the Eastern Railroad Company. 
 
 If the State acquires the Fitchburg Railroad under this 
 Act, it can easily provide for the change. The whole 
 question of interchange of depots is independent of the 
 
11 
 
 far more important question of the disposition of the tun¬ 
 nel, and should not control it. If the Lowell Railroad 
 can provide for the wants of the Fitchburg Railroad Com- 
 
 S any in its passenger station after consolidation, it can 
 o so without consolidation. 
 
 Respectfully submitted by 
 
 E. P. CARPENTER, 
 
 J. K. BAKER, 
 
 T. W. WELLINGTON, 
 WILLIAM BAKER, 
 
 Members of the Committee on Hallways. 
 
12 
 
 % 
 
 Commonfocaltlj of jfffassaxfrusetts. 
 
 In the Year One Thousand Eight Hundred and Seventy-Three. 
 
 AN ACT 
 
 To incorporate the State Board of Trustees of 
 the Hoosac Tunnel Railroad. 
 
 Be it enacted by the Senate and House of Representa¬ 
 tives , in General Court assembled , and by the authority of 
 the same , as folloios: 
 
 Sect. 1 . The governor, with the advice and 
 consent of the council, shall, as soon after the 
 passage of this act as may be convenient, appoint 
 five persons, citizens of this Commonwealth, who 
 shall, on or before the first day of July next, take 
 the interest of the Commonwealth in the Troy and 
 Greenfield Railroad, and the Hoosac Tunnel when 
 it shall be completed by the contractors, and all 
 the property and interest of' the Commonwealth 
 in the Southern Vermont Railroad Company, and 
 hold the same in trust for the purposes herein¬ 
 after named, one of whom shall hold his office for 
 five years, one for four years, one for three years, 
 one for two years and one for one year, from the 
 day of . Before the 
 
13 
 
 first clay of July in each year, one such trustee 
 shall be appointed for the term of five years; upon 
 the occurrence of a vacancy before the expiration of 
 a term, an appointment shall be made for the re¬ 
 mainder of such term. 
 
 Sect. 2. Said trustees are hereby created a 
 railroad corporation under the name of the State 
 Board of Trustees of the Iloosac Tunnel Railroad, 
 and shall have all the. powers and privileges, and 
 be subject to the duties, restrictions and liabilities 
 set forth in the general laws relating to railroads, 
 so far as the same may be applicable and not in¬ 
 consistent with the provisions of this act. 
 
 Sect. 3. Before entering upon their duties, 
 said trustees shall be sworn to the faithful perform¬ 
 ance of the same. They shall organize by the 
 election of a president, who shall be one of said 
 trustees, a clerk and such other officers as shall 
 be necessary, and they shall prepare by-laws in 
 accordance with which their meetings shall be held. 
 
 Sect. 4. Said board of trustees shall have sole 
 charge, direction and control, subject to the pro¬ 
 visions of this act, of the Troy and Greenfield 
 Railroad and of the Iloosac Tunnel, when said 
 tunnel shall be completed by the contractors of 
 the Southern Vermont Railroad, and of such 
 other railroads as may be leased or acquired 
 under the provisions of this act. They shall 
 appoint a treasurer, a general manager, whenever 
 they deem such an officer necessary, one or more 
 superintendents and such other agents as may be 
 required for the operation of said railroads and 
 tunnel, and they shall define the duties and fix the 
 
14 
 
 compensation of such officers and agents. They 
 shall establish rates for the transportation of pas¬ 
 sengers and merchandise, and make contracts and 
 arrangements with connecting roads in relation to 
 joint rates and joint business, and they may do all 
 other things, not inconsistent with the provisions 
 of this act and the general laws in relation to rail¬ 
 roads, which may be necessary for the efficient and 
 economical operation of said railroads and tunnel. 
 
 Sect. 5. Said board of trustees shall hold in 
 trust all moneys received from the operating of 
 said railroads and tunnel, and all moneys which may 
 be appropriated by the Commonwealth for the 
 completion, extension and improvement of said 
 railroads and tunnel and for the equipment 
 thereof, and shall faithfully apply the same. They 
 shall annually pay into the treasury of the Common¬ 
 wealth the net income received from said roads 
 and tunnel after the payment of the expenses; 
 and the same shall be set apart, under the direction 
 of the governor and council, and applied in such 
 manner and at such times as they shall direct to 
 either or all of the following purposes: the extinc¬ 
 tion of any indebtedness, or payment of interest 
 thereon, which the Commonwealth may at any time 
 incur to carry out the purposes of this act, or any 
 act in addition to or amendment thereof; the 
 extinction of the indebtedness, or payment of in¬ 
 terest thereon, which has been or may be incurred in 
 4 the construction of the Hoosac Tunnel; and the 
 purchase of stock in any company which shall lease 
 its franchises, railroad and property in perpetuity 
 to the corporation herein before created. 
 
15 
 
 Sect. 6. Said board of trustees shall make a 
 semi-annual report to the governor and council 
 of their doings during the six months next pre¬ 
 ceding, and of their receipts and expenditures, 
 and shall make an annual report to the board of 
 railroad commissioners in the manner and form and 
 at the time prescribed for railroad corporations. 
 
 Sect. 7. Said trustees shall receive, in full com¬ 
 pensation for their services as such, the sum of 
 five thousand dollars each per annum, except the 
 president of the board, who shall receive eight 
 thousand dollars, which sums shall be charged to 
 operating expenses. No trustee shall be appointed 
 to any office in the employ of said board of trus¬ 
 tees, except the president, but the general manager, 
 when such officer shall be appointed, shall be ex 
 officio a member of the said board. 
 
 Sect. 8 . Said board of trustees is hereby au¬ 
 thorized to re-locate, where necessary, the tracks 
 of said Troy and Greenfield Railroad, taking land 
 therefor in the method prescribed by law in case 
 of land taken for depot or station purposes, and to 
 complete, extend and improve the construction 
 and equipment of said railroad and tunnel, and to 
 prepare the same in all respects for the reception 
 of the traffic of a through line. 
 
 Sect. 9. The sum of five million dollars is 
 hereby appropriated, to be expended under the 
 direction of said board of trustees in carrying out 
 the provisions of this act, to be paid to them from 
 time to time as the -same may be required and 
 called for, by a two-thirds vote of said board of 
 trustees, on the warrant of the governor. And 
 
16 
 
 for the purpose of providing for said appropriation 
 the treasurer of the Commonwealth is hereby au¬ 
 thorized to issue scrip or certificates of debt in the 
 name and on behalf of the Commonwealth to an 
 amount not exceeding five million dollars, to be 
 sold or disposed of in such manner, and at such 
 times, and in such amounts, as the governor and 
 council shall direct. Such serif) shall be redeem¬ 
 able in not less than twenty nor more than forty 
 years from the date thereof, shall bear interest not 
 exceeding six per cent, per annum, payable 
 semi-annually, and shall be known as the " Hoosac 
 Tunnel Railroad Loan”; and the property of the 
 Commonwealth in the Troy and Greenfield Rail¬ 
 road is hereby set apart and pledged to the redemp¬ 
 tion of said scrip. 
 
 Sect. 10. Said board of trustees is hereby 
 authorized and directed to lease in perpetuity, 
 or for such term of years as the governor 
 and council may approve, the franchises and 
 property, and thereafter to maintain, improve 
 and operate the railroad, with its branches, of 
 the Vermont and Massachusetts Railroad Com¬ 
 pany, on the terms following: twenty-five per 
 cent, of the gross earnings of said leased rail¬ 
 road and property shall be reserved annually by 
 said board of trustees as a specific fund out of 
 which they shall pay to said company, first, a sum 
 sufficient to pay the interest on the indebtedness 
 of said company, at the date of said lease, as said 
 interest becomes due, and, second, a yearly rental 
 equal to ten per cent, on the present capital stock 
 of said company, free of all taxes upon the stock- 
 
17 
 
 holders or said company (and on any additional 
 stock, when the same shall be issued for existing 
 convertible bonds), or such a proportion of said 
 rental, not exceeding said ten per cent, and said 
 taxes as said reserved fund shall be sufficient to 
 pay: provided , however , that in no year shall there 
 be paid to said company a rental of less than four 
 per cent, on said capital stock, and said taxes 
 together with the amount of said interest; and to 
 the payment of such minimum rental and interest 
 said board of trustees is authorized to pledge the 
 faith of the Commonwealth. Said board of trus¬ 
 tees is also authorized to assume and make pro¬ 
 vision in said lease for the payment of the prin¬ 
 cipal of said indebtedness. The surplus of said 
 reserved fund shall be annually passed by said 
 board of trustees to the account of earnings. 
 "When said lease shall have been executed, and 
 while the same continues in force, said Vermont 
 and Massachusetts Railroad Company may elect, 
 from time to time, for a term not exceeding five 
 years, one trustee, who shall be added to said 
 board of trustees, and, upon being sworn to the 
 faithful performance of his duties, shall become an 
 incorporated member of the State Board of Trustees 
 of the Hoosac Tunnel Railroad; and said company 
 may fill vacancies for the remainder of the term. 
 
 Sect. 11. Said board of trustees is hereby 
 authorized and directed to lease in perpetuity, or 
 for such term of years as the governor and council 
 may approve, the franchises and property, and 
 thereafter to maintain, improve and operate the 
 railroad, with its branches, of the Fitchburg Rail- 
 
 3 
 
18 
 
 road Company, on the terms following : twenty- 
 five per cent, of the gross earnings of said leased 
 railroad and property shall be reserved annually 
 by said board of trustees as a specific fund, out 
 of which they shall pay to said company a yearly 
 rental equal to ten per cent, on the present capital 
 stock of said company, free of all taxes upon the 
 stockholders or said company, and also on an 
 additional capital stock of one hundred thousand 
 dollars, which said company is hereby authorized 
 to issue and hold for its own benefit, or such a 
 proportion of said rental, not exceeding said ten 
 per cent, and said taxes, as said reserved fund 
 shall be sufficient to pay: provided , however , that 
 in no year shall there' be paid to said company a 
 rental of less than eight per cent, on said capital 
 stock and said taxes; and to the payment of such 
 minimum rental, said board of trustees is author¬ 
 ized to pledge the faith of the Commonwealth. 
 The surplus of said reserved fund shall be an¬ 
 nually passed to the account of earnings. When 
 said lease shall have been executed, and while the 
 same continues in force, said Fitchburg Railroad 
 Company may elect, from time to time, for a term 
 not exceeding five years, one trustee, who shall be 
 added to said board of trustees, and, upon being 
 sworn to the faithful performance of his duties, 
 shall become an incorporated member of the State 
 Board of Trustees of the Hoosac Tunnel Railroad; 
 and said company may fill vacancies for the re¬ 
 mainder of the term. 
 
 Sect. 12. Said board of trustees is hereby 
 authorized and directed to lease the franchises 
 
19 
 
 and property, and thereafter to maintain, improve 
 and operate the railroad, with its branches, of the 
 Troy and Boston Railroad Company, and shall pay 
 therefor an annual rental equal to twenty-five per 
 cent, of the gross earnings of said leased railroad 
 and property. "When said lease shall have been 
 executed, and while the same continues in force, 
 said Troy and Boston Railroad Company may 
 elect, from time to time, for a term not exceeding 
 five years, one trustee, who shall be added to said 
 board of trustees, and upon being sworn to the 
 faithful performance of his duties, shall become an 
 incorporated member of the State Board of Trus¬ 
 tees of the Hoosac Tunnel Railroad; and said 
 company may fill vacancies for the remainder of 
 the term. 
 
 Sect. 13. In estimating what shall constitute 
 the said twenty-five per cent, of the gross earn¬ 
 ings of said several leased railroads, out of which 
 their rentals are to be paid, there shall be first 
 deducted from twenty-five per cent, of their re¬ 
 spective gross earnings, six per cent, per annum 
 on all amounts expended by said board of trustees 
 for the permanent improvement of said railroads 
 respectively. 
 
 Sect. 14. Said Vermont and Massachusetts, 
 Fitchburg, and Troy and Boston Railroad Com- 
 canies are severally authorized to lease their fran¬ 
 chises and property to said board of trustees. 
 
 Sect. 15. Said board of trustees is further 
 authorized, with the approval of the governor and 
 council, to lease or purchase necessary terminal 
 facilities, and also to lease any railroad now built, 
 
20 
 
 or that hereafter may be built, lying in the tunnel 
 route between Boston and Lake Ontario. 
 
 Sect. 16. In the carriage of through passen¬ 
 gers and merchandise, the rates of transportation 
 shall be estimated pro rata per mile, and the 
 Hoosac Tunnel shall be estimated at such length in 
 miles, not exceeding fifty, as shall seem equitable 
 to the trustees. 
 
 Sect. 17. In the management of such railroads 
 as shall come under the operation of said board of 
 trustees, there shall be no unequal discriminations 
 in freights, fares or facilities in favor of or against 
 different persons, places or connecting railroads. 
 
 Sect. 18. In case of the lease of the Fitch¬ 
 burg Railroad under 4 the terms of this act, the 
 said board of trustees is authorized and directed 
 to purchase terminal facilities in Boston, westerly 
 of the freight station of the Boston and Maine 
 Railroad and to arrange with the Eastern Railroad 
 Company for an interchange of stations in Boston 
 in such manner as to obviate the necessity of pas¬ 
 senger trains on the Eastern Railroad, Boston and 
 Maine Railroad and Fitchburg Railroad crossing 
 the tracks of the other, and the Eastern Railroad 
 Company is hereby authorized, with the assent of 
 said trustees, to take or purchase all the land, de¬ 
 pot property and buildings of the Fitchburg Rail¬ 
 road Company, situated in Boston south of the 
 channel or passage-way for vessels through the 
 Fitchburg Railroad bridge over Charles River, 
 said property to include all the draws and draw¬ 
 bridges over the passage-way for vessels. 
 
 Also all the property, land and buildings situ- 
 
21 
 
 ated on the south-westerly side of the following 
 line, to wit: beginning at a point on the northerly 
 side of the above-mentioned passage-way for ves¬ 
 sels twenty-two feet nine inches east of the east¬ 
 erly line of the roadway draw over said passage¬ 
 way, and running northerly at right angles to said 
 passage-way, one hundred and three feet five inches, 
 to a point where said line intersects with the north¬ 
 easterly line of said Fitchburg Railroad bridge 
 over Charles River; thence northerly, following 
 and coinciding with said north-easterly line of 
 bridge, eight hundred and forty-eight feet; thence 
 turning and running westerly to a point in the 
 north rail of the north passenger track of the 
 Fitchburg Railroad, distant’four hundred and six¬ 
 teen feet seven inches from the south-easterly line 
 of Austin Street, measured on said north rail of 
 the north track. Said point is also distant twenty- 
 nine feet four inches at right angles from the 
 southerly side of the wooden freight house (meas¬ 
 ured from a point sixty feet distant from the west¬ 
 erly end) belonging to the Fitchburg Railroad 
 Company, on Front Street; thence southerly, 
 crossing the Fitchburg passenger tracks at right 
 angles to a point four feet distant south of the 
 south rail of south passenger track; thence west¬ 
 erly on a curved line parallel with the south rail of 
 the south passenger track, and four feet distant 
 therefrom to the south-easterly line of Austin 
 Street in Charlestown. And if the Eastern Rail¬ 
 road Company shall so take the said property of 
 the Fitchburg Railroad Company, then the Fitch¬ 
 burg Railroad Company shall take or purchase all 
 
22 
 
 the like property of the Eastern Railroad Com¬ 
 pany lying between the crossing of the Eastern 
 and Fitchburg Railroads and Causeway Street in 
 Boston, except the parcel of land to be taken by 
 the Boston and Maine Railroad, as hereinafter 
 provided; and in case of the taking or exchange 
 of the tracks and property herein before described, 
 or any part thereof, the said Fitchburg Railroad 
 Company shall locate and construct such tracks 
 and bridge structures on the westerly side of the 
 present line of the Eastern Railroad as may be 
 necessary to connect its railroad and tracks with 
 the tracks and property so purchased or taken by 
 it; and shall not thereafter cross either said East¬ 
 ern Railroad or said Boston and Maine Railroad 
 except for freight purposes. 
 
 And the Eastern Railroad Company shall locate 
 and construct such tracks and bridge structures as 
 shall be required to connect its present tracks 
 northerly of its crossing with the Boston and 
 Maine Railroad with the tracks and property so 
 purchased or taken by it, keeping at all times east 
 of a line drawn from a point on the easterly side 
 of its present location, distant southerly three 
 hundred and fifty feet, measured on said line from 
 its intersection with the southerly side of Cam¬ 
 bridge Street to the point of intersection of the 
 northerly line of the state prison wharf with the 
 easterly line of the location of the Boston and 
 Maine Railroad, and thence keeping east of said 
 easterly line of said location; and shall not there¬ 
 after cross the tracks of the Boston and Maine 
 Railroad. 
 
23 
 
 
 And the Eastern Railroad Company shall take 
 any lands now belonging to the Boston and Maine 
 Railroad in Charlestown or Somerville lying east¬ 
 erly of such new location; and the Boston and 
 Maine Railroad shall take all the road-bed, land 
 and property of the Eastern Railroad Company 
 lying between the line above described for the 
 westerly limitation of said new location of the 
 Eastern Railroad and the westerly line of the old 
 location of the Eastern Railroad, and the present 
 northerly line of the Fitchburg Railroad: pro¬ 
 vided , however , that in case of the aforesaid 
 taking and exchange of property by and between 
 the Eastern and Fitchburg Railroads, the Boston 
 and Maine Railroad shall release the Eastern Rail¬ 
 road Company from all damages for its taking and 
 occupation thereof and take from the said Eastern 
 Railroad Company so much of the premises de¬ 
 scribed in the first section of the three hundred and 
 fifty-sixth chapter of the acts of the year eighteen 
 hundred and seventy-two, as was taken from the 
 said Boston and Maine Railroad by said Eastern 
 Railroad Company under the provisions of that 
 act; and said Eastern Railroad Company shall, 
 without other compensation therefor, release to 
 said Boston and Maine Railroad all their rights in 
 said premises acquired by them, taking the same 
 under said act; and provided , further , that any 
 exchange of land made under the provisions of 
 this section shall take effect simultaneously. 
 
 All general laws relating to the taking of land 
 for railroad purposes and to the location and con¬ 
 struction of railroads, shall be applicable to and 
 
24 
 
 9 
 
 govern the proceedings in the taking and ex¬ 
 change of lands and property, and in the making 
 of any new locations under the provisions of the 
 foregoing sections, except that instead of the 
 county commissioners three disinterested persons 
 shall be appointed by the supreme judicial court 
 for the county of Suffolk as a board of commis¬ 
 sioners to determine the values of the lands and 
 property so taken and exchanged or over which 
 any such location may be made, and to adjudicate 
 the damages to be paid by any of the others upon 
 the taking, exchange or locations aforesaid, from 
 whose decision an appeal shall he to a jury in be¬ 
 half of either party, as provided by law in the 
 case of lands taken Tor railroad purposes. 
 
 Any sum of money received by the Fitchburg 
 Railroad in said interchange of stations and tracks 
 above the expense of necessary alterations shall 
 be applied to procuring new terminal facilities and 
 making improvements on said road or may be ap¬ 
 plied to the reduction of the capital stock of the 
 Fitchburg Railroad Company in such manner as 
 may he agreed between the Fitchburg Railroad 
 Company and said hoard of trustees. 
 
 Sect. 19. This act shall take effect upon its 
 passage. 
 
25 
 
 SPEECH. 
 
 Mr. President : 
 
 I am deeply impressed with the great importance 
 of the question now before us for consideration. It 
 is not local, not sectional, nor political, but a ques¬ 
 tion that affects more or less directly the industrial, 
 the mercantile, the manufacturing, and the commer¬ 
 cial interests of the whole Commonwealth. The 
 proper solution of this great problem rests with us, 
 as the representatives of the people; and it is a 
 responsibility of no ordinary importance, and one 
 that should control our serious and earnest atten¬ 
 tion and our candid and best judgment, unbiased 
 by any local or personal interest, with a solemn 
 regard to our oaths to support and maintain the 
 constitutional rights of the people of the Common¬ 
 wealth. 
 
 Stern convictions of duty alone induce me to 
 address this honorable body on this occasion—duty* 
 that I feel incumbent upon me, Mr. President, from 
 the honored position that I received at your hands. 
 It is well known that I neither have or make any 
 
 4 
 
26 
 
 claims as a public speaker, and I must ask your 
 indulgence for being somewhat dependent upon 
 my notes in presenting to you an honest statement 
 of my own convictions of this great question, hav¬ 
 ing no other interest to serve but the State and her 
 people. 
 
 This important subject involves directly the whole 
 question of the railroad policy of this Common¬ 
 wealth; and here in Massachusetts the proper di¬ 
 rection of the railroad policy is even more import¬ 
 ant than at the West, where it now engages the 
 public attention almost to the exclusion of other 
 interests. 
 
 Within the last fifty years this Commonwealth 
 has almost entirely changed its industrial position. 
 Half a century ago, agriculture, the fisheries, and 
 commerce were the leading interests. Now, manu¬ 
 factures engross the attention of our people, and 
 have made all other interests subordinate. They 
 have not excluded other interests, but in a measure 
 supplemented them. Our agriculture has changed 
 and now finds its chief support in providing sup¬ 
 plies for the manufacturing towns which have 
 grown up in every part of the Commonwealth. 
 Our commerce, both internal and external, is 
 largely engaged in bringing to our doors the 
 raw material for our laborers, and in spreading 
 throughout the world the products of our manu¬ 
 facturing industry. 
 
27 
 
 We can raise but a small proportion of the food 
 necessary to feed the people of the State; under 
 such circumstances the transportation must weigh 
 heavily upon our industry. We feel it in the in¬ 
 creased cost of living, which increases the cost of 
 every article we produce. We feel it in the in¬ 
 creased cost of the raw materials of our manufac¬ 
 tures, which makes us less able to compete suc¬ 
 cessfully with more favored locations. We feel it 
 finally in the increased cost of marketing our goods. 
 This position has been so well stated by the Rail¬ 
 road Commissioners in their report of 1870, page 
 39, that I may repeat it here:— 
 
 "It may safely be asserted that there is no branch of 
 Massachusetts industry which is not carried on against 
 competition more advantageously located. The State has 
 very few natural advantages ; but everything with her de¬ 
 pends on the intelligence of her people, and the cost of 
 transportation. The West, in producing cereals, has at 
 least a soil of unsurpassed fertility : Pennsylvania in man¬ 
 ufacturing iron has the ore and the coal in close proximity 
 to the furnace. The English mill-owner has his power 
 and his labor in cheap profusion. Almost every article, 
 however, which enters into the industries of Massachusetts 
 has to be brought within her limits from a distance. Her 
 very water powers are subject to inclement winters and 
 dry summers, while she has to make her ingenuity supply 
 a deficiency in labor. Her food is brought from the North- 
 West : her wool and her leather from South America, Tex¬ 
 as, California and the Central States : her cotton from the 
 South: her ores from the Adirondacks : her coal from 
 Pennsylvania; her copper from Superior,—and the list 
 
28 
 
 would admit of infinite extension. Massachusetts is thus 
 merely an artificial point of meeting for all kinds and 
 descriptions of raw material which is here worked up, 
 and then sent abroad again to find a customer. At every 
 point, coming and going, and in process of manufacture, it 
 has to be transported, and it has to bear all costs of trans¬ 
 portation in competition with articles of the same descrip¬ 
 tion produced elsewhere and by others. Every reduction 
 of the transportation tax acts then as a direct encourage¬ 
 ment to the industry of Massachusetts, just as much so as 
 if it were a bounty or bonus : it is just so much weight 
 taken off in the race of competition.” 
 
 No words of mine can add any force to this plain 
 statement of facts; but yet we are told that trans¬ 
 portation is only one element in the cost and price 
 of goods, and frequently not that of the greatest 
 consequence, but the importance of this one element 
 is fourfold, and often more, to the Massachusetts 
 manufacturer, making the transportation of more 
 importance in many cases than the cost of materials 
 transported. This transportation tax is the very 
 element that is to build up a competition in these 
 favored localities that will either extinguish or 
 transfer many classes of our industrial interests 
 that we can ill afford to lose. 
 
 It is only necessary for one to travel "West and 
 South and observe the great development and suc¬ 
 cess of the manufacturing interest in these sections 
 to be convinced that New England cannot long 
 hold the prestige as the "workshop” of the country 
 
29 
 
 with so heavy a transportation tax imposed upon 
 her industrial productions. 
 
 The importance of this one element will be more 
 fully realized by the Eastern manufacturer when he 
 finds that his Southern and Western rivals save it 
 altogether by having the raw material at hand, and 
 a home market with all the other elements (save 
 skilled labor which can be transported) that make 
 manufacturing industry profitable at a much less 
 cost. 
 
 A combination of our manufacturers to establish 
 cheap transportation, and the sale of their goods 
 upon a home market, would be far more to their 
 interest and profit than the exaction of an extra 
 hour’s labor and would confer a great blessing 
 upon their overtasked employes. 
 
 EFFORTS TO REDUCE THE TRANSPORTATION TAX. 
 
 Since the railroad system was inaugurated in 
 1831, the statutes of this Commonwealth bear 
 yearly evidence of the persistent and liberal policy 
 pursued by the legislature toward the railroads. 
 
 It would be tedious to enumerate the many acts 
 which have been passed loaning the credit of the 
 State to aid the struggling corporations in estab¬ 
 lishing and completing their lines. 
 
 Almost all the leading lines in the State sought 
 and obtained this aid, without which there must 
 have been a great delay, if not failure in accom- 
 
30 
 
 plishing these enterprises; and here let me say, that 
 with the exception of the Hartford and Erie loan, 
 and the losses arising from the repayment by the 
 Eastern, and Norwich and Worcester railroads in 
 legal tender instead of gold, there has never been 
 a dollar lost by the railroad loans of the State. The 
 result has been to build up a system of railroads, 
 centering in the city of Boston, having no superior, 
 if equal, for completeness on this continent. Massa¬ 
 chusetts has more miles of railroad in proportion to 
 population and territory than any similar extent of 
 territory in America. 
 
 And there can be no question that the pros¬ 
 perity of the State has grown more from its rail¬ 
 road facilities, than from all other causes combined. 
 
 There is another class of legislation to which we 
 cannot look with equal satisfaction. Every rail¬ 
 road charter contains provisions for the regulation 
 of fares and freights; and yet since the railroads 
 were established, no single act has been passed 
 directly for this regulation.* 
 
 The question has involved so great difficulties 
 that no legislature has yet ventured to grapple 
 with it. The tendency of legislation in that direc¬ 
 tion is obvious. Commissioners have been ap- 
 
 % 
 
 pointed to consider the subject and no result has 
 followed. A Board of Railroad Commissioners has 
 been formed, which has been productive of great 
 
31 
 
 good both to the railroad corporations, and to the 
 people. 
 
 This board has been directed to fully consider 
 and report some plan of regulating fares and 
 freights; and has reported that it cannot recom¬ 
 mend any means of reducing this transportation 
 tax, by direct legislation, but strongly advises the 
 trial of State ownership, as the only means of 
 attaining the desired end. 
 
 THE EFFECT IN OUR EXISTING SYSTEM. 
 
 While it may be said that under the present 
 system of railroads, the Commonwealth has been 
 prosperous, there are drawbacks and defects 
 which need careful examination, and if possible a 
 remedy. To those who are familiar with the con¬ 
 dition of our manufactures, the most striking want 
 is the failure of our home market for our produc¬ 
 tions. 
 
 We are tributary to New York in many ways. 
 The great sale of our manufactured goods is made 
 in New York, and goes to build up a rival city. 
 Our great commission houses have been compelled 
 to establish branches in New York, which in a 
 short time have surpassed in business and in 
 importance the home establishments. 
 
 If we could have kept at home the sale of our 
 manufactured goods—have retained here in Boston 
 the great houses through which the exchanges are 
 
32 
 
 made—could have brought to New England the 
 purchasers from the West and South, it would 
 have vastly increased the prosperity of Boston and 
 of New England. 
 
 Business can be done cheaper in Boston than 
 in New York; and yet New York has drawn away 
 from us a large proportion of our legitimate busi¬ 
 ness,—the sale of our manufactured goods; and 
 this loss can be directly attributed to a defect in 
 our railroad system, which can and should be 
 remedied. I say defect, but, more properly, the 
 want of a strong and independent line of railroad 
 through to the West, controlled in the interest of 
 Massachusetts. Why, Mr. President, if we could 
 withdraw from New York the firms and business 
 that represent the sale of Massachusetts goods, it 
 would more than cover the burnt district of this 
 city, and double the business of Boston; and 
 New York would feel that her loss was much 
 greater than the ‘Boston fire. And why is it that 
 our goods are sent -to New York to be sold? 
 Simply because New York has three great trunk 
 routes to the West, which control the transporta¬ 
 tion of the Southern and Western productions, and 
 the owners, who are the merchants, follow their 
 goods, and are the customers who purchase our 
 manufactured goods of New York houses, and ship 
 them in return over these same trunk lin^s, giving 
 them a large and profitable business; which 
 
33 
 
 should be and can be controlled, by proper man¬ 
 agement, in the interest and for the benefit of a 
 through line or lines from Boston to the West. 
 
 To-day Boston is without a through and inde¬ 
 pendent line to the West, and while we are ship¬ 
 ping our goods to New York to be sold, to be 
 transported over the great lines leading South and 
 West, our own Western road, so called, in 1872, 
 according to the annual report of the directors, 
 carried through from Boston to Albany 112,071 
 tons of freight, and from Albany to Boston 556,- 
 202 tons—more than four times as much from the 
 West than is carried to the West; which state of 
 things would be reversed if the sale of our goods 
 was made here instead of New York; but this 
 can only be accomplished by a through line West, 
 controlled in the interests of Massachusetts, and 
 not in the interest of New York. 
 
 A line to the Lakes in competition,—not with the 
 Boston and Albany Railroad, as that is dependent 
 upon the New York Central Railroad in a great 
 measure for its Western freights,—but an indepen¬ 
 dent line, so organized as to guard against any 
 combination, that will force by competition the 
 New York lines to give to the Boston and Albany 
 and the Boston, Hartford and Erie Railroads less 
 rates, making Boston a competing point, thus 
 securing the advantages of four competing West¬ 
 ern lines, including the great Northern line, which 
 
 5 
 
34 
 
 must bring’ to our seaboard the products of the 
 great West, and thus secure rn exchange of trade 
 that will increase the growth, and prosperity of 
 Massachusetts, that will equal the prophecies of 
 those who are called visionary theorists. It was 
 by competition of the three great trunk lines run¬ 
 ning to New York—discriminating against Boston 
 —that forced the removal of the sale of Massachu¬ 
 setts productions to that city; and it is estimated 
 
 these sales amount o m re than two hundred and 
 
 * 
 
 fifty millions of dollars per annum at the present 
 time; and the golden opportunity is now at hand 
 to restore in a great measure the advantages lost 
 by not having a strong and efficient line of railroad 
 leading to the great West, in the interest of the 
 State. 
 
 THE RELATIVE ADVANTAGES OF BOSTON AND 
 NEW YORK. 
 
 The great advantages of New York arise from 
 the fact that it is a great emporium of exportation 
 and importation. A very large proportion of the 
 exports o" the country have been made from New 
 York. She has gained control of the export trade 
 —and the export trade governs the import trade. 
 Ships go where they can find a return cargo, and 
 merchants follow their goods. The possession of 
 the great bulk of the export trade, has given to 
 New York the great bulk of importations, and 
 
35 
 
 equally the control of the domestic trade. How 
 can we, in Boston and Massachusetts, get our fair 
 share of the importing and domestic trade of the 
 country? There is but one way—by reducing the 
 transportation tax. In many respects Boston has 
 great advantages for the export trade. The chief 
 exports of the country are to Europe. We are 
 two hundred miles nearer Europe than any of the 
 other of the great seaboard cities. We have a 
 harbor unrivalled on the American coast for easy 
 entrance—for depth of water—for protection from 
 storms. 
 
 Its great water-front, at wdiich vessels of burden 
 may lie to an extent (as is stated by the Harbor 
 Commissioners) of fifty miles—every foot of which 
 is, or may be directly connected with our railroads. 
 There is not a wharf along the whole circuit which 
 may not, without great* expense, be made available 
 for the export of the productions of the country, 
 brought by the railroad car to the side of the ship, 
 which shall convey it to the freight market. If we 
 can secure to Boston a fair share of the export 
 trade of the country, the import and domestic 
 trade will follow, and we ensure the building of a 
 city witfiin the limits of my friend’s annexation 
 project, that will equal the greatest city of the 
 continent. 
 
36 
 
 THE EFFECT OK THE STATE OF MAKING- BOSTON 
 AN EXPORTING CITY. 
 
 It is hardly necessary to allude to the close con¬ 
 nection which Boston holds to Massachusetts. 
 
 One-third of the population of the State and one- 
 
 % 
 
 half its valuation are combined within a circle of 
 five miles from this building. The prosperity of 
 Boston is inseparable from the prosperity of Mas¬ 
 sachusetts. The recent calamity of Boston was 
 felt throughout the limits of the State. But the 
 great benefit to the State from making Boston an 
 exporting city is not the prosperity of the city 
 itself. It grows out of the condition which alone 
 can make Boston a city of export for the produc¬ 
 tions of the country. 
 
 This can only result from a reduction in the 
 transportation tax which will make such produc¬ 
 tions relatively cheaper in Boston than in New 
 York. In the profits of such a result the remotest 
 corner of the State will directly share. Trans¬ 
 portation cannot be reduced to Boston without a 
 corresponding reduction upon every line of rail¬ 
 road leading to or from this city. It was with a 
 hope of such a result that the State entered upon 
 the project of building the Hoosac Tunnel, and it 
 rests with us to say, now that this great enterprise 
 is so near completion, whether this hope can be 
 realized. 
 
37 
 
 THE HOOSAC TUNNEL. 
 
 It is needless to explain at any length what the 
 Hoosac Tunnel is. There can he no member of 
 this hoard who does not know" that we in Massa¬ 
 chusetts are separated from the West by a moun¬ 
 tain barrier extending from near Long Island 
 Sound to near the Canada line. This barrier 
 must be passed to bring us into connection with 
 the West. 
 
 It has been turned on the north by the Vermont 
 Central, on the south by the Hartford and Erie. 
 It has been passed over steep grades by the Bos¬ 
 ton and Albany. At !North Adams it is com¬ 
 pressed into narrow limits in the Hoosac Mountain, 
 and the bold conception was formed to pierce 
 directly through it at this point. First, the effort 
 was made to accomplish the great undertaking by 
 private capital, aided by a state loan. The diffi¬ 
 culties were underrated and the plan failed. Fi¬ 
 nally, the State assumed the enterprise and has 
 since, with varying fortunes but unfaltering energy, 
 prosecuted it to a successful result. Within the 
 current year there can be little doubt of the com¬ 
 pletion of the work. The Tunnel will be opened 
 for traffic and a new line formed between Boston 
 and the West; shorter by eleven miles than any 
 existing route; with easy grades, which, making 
 the usual allowance for the obstruction caused by 
 
heavy grades to railroad traffic—will render it 
 constructively shorter than any route by at least 
 twenty miles, or ten per cent., between Boston and 
 Albany. 
 
 Its cost to the State, including the Troy and 
 Greenfield Railroad, will be at least twelve mil¬ 
 lions, raised by loans, on which the interest is paid 
 by taxation. Since the plan of the Tunnel was 
 formed new lines of road have been projected and 
 built, connecting it with every part of the State, 
 and there is scarcely a town from Berkshire to 
 Provincetown, which does not to-day stand in 
 position to reap its share of the benefit expected to 
 follow the completion of this great public enter¬ 
 prise. 
 
 Having expended so large a sum on the Tunnel, 
 the question arises, How shall we use it to derive 
 the greatest good to the whole people? The State 
 now holds, as owner substantially, the Troy and 
 Greenfield Railroad and the Tunnel, at a cost of 
 about twelve millions. Its value depends wholly 
 upon the future development of business, but its 
 relations are such to other railroad interests, that I 
 have no doubt that, if the State desires to sell the 
 Tunnel, notwithstanding its great cost, nego¬ 
 tiations could be made to dispose of it at a price 
 that would return to the State the moneys ex¬ 
 pended, but it would be at the risk of sacrificing 
 the prosperity of its own industrial interests. 
 
39 
 
 There are various and conflicting opinions ex¬ 
 pressed in regard to the business that may be 
 done. Some parties who appeared before the 
 committee declared that the completion of the 
 Tunnel could only be compared to the removal of a 
 dam, to be followed by a flood of business beyond 
 our power to properly care for; while others were 
 equally confident that the traffic now flowing 
 through other channels would be diverted to the 
 new one only through the influence of time and 
 energetic labor. All, however, agreed in the 
 opinion that, under proper management it was 
 destined to become, at no very distant day, perhaps, 
 the great avenue for trade between the East and 
 West. The eagerness wi h which various rail¬ 
 road corporations S3ek its control by "ways and 
 means” if honest, should be convincing proof 
 of the great importance of the Tunnel to the pub¬ 
 lic, and if not honest, it should merit the con¬ 
 demnation of every honest man in the community. 
 
 POSITION OP THE COMMITTEE. 
 
 On certain points the committee were unan¬ 
 imous. First: That the State should own and 
 control the Tunnel in such manner as to secure to 
 the whole State the ultimate benefit to be derived 
 from its construction, and to secure to all persons 
 and corporations seeking to use it, equal rights. 
 Second: That to attain the highest benefit to be' 
 
40 
 
 derived from this new line, a corporation strong 
 enough to provide sufficient equipment and ter¬ 
 minal facilities should he formed, able to command 
 connections with roads outside of the State and 
 to compete with a fair share of success with the 
 existing corporations. How best to attain these 
 ends with a view to cheapness of transportation 
 and efficiency of action the members of the com¬ 
 mittee* differ. The majority reported a bill pro¬ 
 viding for the. consolidation of the Boston and 
 Lowell Railroad Company, the Fitchburg Railroad 
 Company, the Vermont and Massachusetts Railroad 
 Company, the Commonwealth and the Troy and 
 Boston Railroad Company into one corporation, 
 with authority to purchase or lease certain other 
 roads, which will make a capital of not less than 
 twenty-five to thirty millions and give control to 
 about five hundred miles of railroad. 
 
 From this plan the minority have dissented and 
 reported a plan which will place the direct line 
 from Boston to Troy substantially under one di¬ 
 rection, and subject it not to state management 
 but to state control . 
 
 THE BILL OF THE MAJORITY. 
 
 To the bill reported by the majority of the com¬ 
 mittee we have the strongest objections. 
 
 First .—It sanctions an enormous inflation of 
 
41 
 
 capital. It authorizes a consolidation upon the 
 basis of an appraisal of the value of the several 
 properties to be made by the parties themselves. 
 The railroads of this Commonwealth are prohibited 
 by law from making stock dividends, and yet here 
 . stock dividends are allowed to such extent as the 
 parties think proper. One of the greatest imposi¬ 
 tions ever practised upon the public, from which 
 the people of this Commonwealth now suffer, is the 
 watered stock of the railroads between Albany and 
 Chicago. The amount of stock in the’se roads 
 issued without any equivalent, upon which our 
 traffic is now taxed, is variously estimated at from 
 forty-four millions to one hundred and five mil¬ 
 lions. The annual tax levied is from three millions 
 * to six millions, of which we pay a large share. 
 The majority bill provides for just such a water¬ 
 ing of stock, to the extent of perhaps ten millions, 
 according to the appraisal by the parties in inter¬ 
 est. We believe this to be all wrong, and should 
 not be sanctioned by the Commonwealth. 
 
 Second .—We utterly dissent from the opinion of 
 the majority in allowing the Boston and Lowell 
 Railroad to come into such a consolidation. The 
 Boston and Lowell forms no part of the Tunnel 
 line. Every witness before the committee, ex¬ 
 cept the agents of the corporations themselves, 
 
 was emphatic against such a consolidation. 
 
 6 
 
42 
 
 See Governor Claflin’s testimony, 7th Hearing, page 26. 
 
 i i 
 
 J. T. Joy 
 
 
 11 
 
 < i 
 
 “ 37. 
 
 i i 
 
 C. F. Adams, Jr., 
 
 < i 
 
 
 (( 
 
 t i 
 
 i i 
 
 N. C. Nash 
 
 t i 
 
 9th 
 
 ( i 
 
 a 4 . 
 
 t i 
 
 Q. A. Vinal 
 
 i i 
 
 14th 
 
 i i 
 
 “ 10 . 
 
 ( i 
 
 Col. Faulkner 
 
 i ( 
 
 i ( 
 
 i t 
 
 “ 12 . 
 
 i 6 
 
 J. W. Brooks 
 
 (( 
 
 17 th 
 
 it 
 
 “ 13. 
 
 The Northern line has been of very great value 
 to the business of Boston and Massachusetts; more 
 than any other it has effected that reduction of 
 rates which has returned to Boston within the past 
 few years a portion of the export trade. It forms 
 the shortest line at present existing between Bos¬ 
 ton and the Lakes, and while lake navigation is 
 open substantially controls the rates over the other 
 lines. Mr. Nathaniel C. Nash says (9th hearing, * 
 page 6), "We have derived more advantage from 
 that line than from any other source.” (See Bail- 
 road Commissioners’ Beport of 1870, page 36.) 
 While the Lowell railroad provided the terminus 
 and the representation in this Commonwealth, the 
 other railroads in the line have cooperated in pro¬ 
 ducing this result. It has cheapened food to the 
 people of this Commonwealth, and of all New 
 England. The Lowell Bailroad is bound by con¬ 
 tracts to continue in this Northern line for twenty 
 years to come. Although some of the corpora¬ 
 tions are under financial difficulties, this does not 
 affect the operations of the line. The railroads 
 
43 
 
 still exist and must continue to do business, and 
 so far as the advantage of the traffic extends, it 
 matters little who owns or operates the railroads. 
 So impressed are the majority of the committee 
 with the importance of maintaining the northern 
 line that they impose upon the Lowell Railroad 
 Company, as they say, the conditions of withdraw¬ 
 ing from the Northern line, and make provision 
 for transfer of the business to another line—the. 
 Boston and Maine. They propose to do this in a 
 manner which seems to us weak and futile. The 
 majority bill provides for repeal of the charter of 
 the Great Northern Railroad Company, passed in 
 1869, which authorized the Boston and Lowell 
 Railroad Company to consolidate with certain com¬ 
 panies in New Hampshire, with authority to lease 
 or purchase other railroads leading to Ogdensburg 
 and other points in the North and West, and lines 
 of boats on the lakes. As all the other companies 
 in this consolidated line are in New Hampshire this 
 charter was ineffective without the cooperation of 
 New Hampshire, and to this bill New Hampshire 
 has never assented—not from any hostility to 
 through lines, but because it contained objection¬ 
 able features, such as the consolidation of compet¬ 
 ing lines, the creation of a monstrous corporation 
 with power to combine in one gigantic monopoly 
 all the railroads within her borders. This charter 
 is mere waste paper, and its repeal would have no 
 
44 
 
 more effect than the burning of waste paper. The 
 Lowell Railroad remains bound by contracts to the 
 Northern line, and the majority bill effectually 
 places the Northern and Tunnel lines under one 
 control. The proposal to transfer the Northern 
 line and northern business to the Boston and 
 Maine Railroad seems to us an absurdity. The 
 Boston and Maine is practically an Eastern line; 
 of its whole length, one hundred and twelve miles, 
 only twenty-six could be used in connection with 
 the Northern line. It never could or would give 
 that exclusive attention to the business necessary 
 to make such a line successful. Its only means of 
 connection is over the Manchester and Lawrence 
 Railroad, the grades of which are too heavy for a 
 successful freight business with the West. 
 
 The Boston and Lowell Railroad is the natural 
 terminus of this Northern line, and no legislation 
 can remove it from this position. Moreover the 
 majority bill, placing the Boston and Lowell Rail¬ 
 road and the Fitchburg in the same control, and 
 authorizing a lease of the Cheshire, gives the con¬ 
 solidated company such a substantial control of the 
 whole northern business that its transfer to the 
 Boston and Maine would necessarily be followed 
 by such disastrous competition as to preclude such 
 a connection. It must inevitably result in a con¬ 
 solidation of the Tunnel and the Northern line 
 
45 
 
 
 under one management. In creating a new line 
 we destroy one which already exists. 
 
 Our true policy is to maintain unimpaired our 
 four routes to the West, and under whatever man¬ 
 agement they may be, at all events maintain that 
 they shall be independent of each other. If a con¬ 
 solidation is to be made of the Tunnel line we are 
 clearly of the opinion that it should be of the direct 
 line only between Boston and Troy, including the 
 Fitchburg, Vermont and Massachusetts, Troy and 
 Greenfield, and Troy and Boston, and the Massa¬ 
 chusetts Central if it desires to form part of such 
 a line. The Boston and Lowell Railroad, and 
 Nashua Railroad should be studiously kept apart 
 from such a line, because it forms no natural part, 
 and does form a natural part of another line. It is 
 urged that the possession of terminal facilities in 
 Boston should be allowed a controlling influence in 
 this matter; that the Boston and Lowell Railroad 
 has obtained the only convenient terminus in Bos¬ 
 ton for a great Western line—more than is needed 
 for its own business, or the business of the North¬ 
 ern line, and therefore that the railroad policy of 
 the Commonwealth should be compelled to yield to 
 its position. To this there are two answers. 
 
 First .—That these facilities were obtained for 
 the Northern line, and by urgent representations 
 of its necessities, and if they are not needed for 
 
46 
 
 
 that business they should be transferred to other 
 corporations that do need them. 
 
 The Commonwealth has full power in the case, 
 and it is only necessary to invoke the same power 
 which the majority bill gives the consolidation 
 company to take property from the Fitchburg, to 
 take from the Lowell Railroad Company the prop¬ 
 erty which it now represents as not needed for its 
 business which, it has obtained under the repre¬ 
 sentation of a public necessity. 
 
 Secondly .—The question of terminal facilities is 
 too unimportant in itself to be permitted to deter¬ 
 mine in the least degree the decision of a great 
 State policy; other facilities can be obtained as 
 good as the Lowell. 
 
 Finally .—We object to the plan of the majority 
 because it continues the policy of placing our last 
 remaining line to the West under the control and 
 management of a stock corporation. 
 
 It cannot be denied that there is great and wide¬ 
 spread dissatisfaction with our present railroad 
 system, and its management. We have tried in 
 vain to control by special legislation, and it may 
 well be acknowledged that the trial has not been 
 very successful. 
 
 REGULATION BY SPECIAL LEGISLATION. 
 
 No system has ever been devised better calcu¬ 
 lated to introduce corruption into our state gov- 
 
47 
 
 f 
 
 ernment than the present method of regulating 
 railroads by special laws. Every senator knows 
 what influences Sire brought to bear to promote 
 and defeat the various projects of special legislation. 
 No! Mr. President, I have over-stated—I am sure 
 that no senator at this board does know all the 
 w ways and means ” that are used to influence mem¬ 
 bers to secure votes for the passage of various bills 
 in the interest of railroads. Every senator is aware 
 how powerful and wdde-spread is the pressure 
 when public railroad legislation is under consider¬ 
 ation. If these influences wene confined to the 
 questions of special or general railroad legislation, 
 great as the evil is, it would not be irreparable. 
 But unhappily the evil does not stop here. Hardly 
 a question of special or general legislation is de¬ 
 cided by either branch of the legislature without 
 being affected in a greater or less degree by these 
 railroad questions. It prolongs our sessions and 
 fills our lobbies with the advocates of private cor¬ 
 porations, and these special guardians of the rights 
 of the people in the service and pay of railroad 
 corporations astonish the members from the rural 
 districts by their disinterestedness in their " labors 
 of love ” and benevolence—making their stay at the 
 capital so pleasant and agreeable without money, 
 but not without price—as to create a strong desire 
 to serve the " dear people ” another term, and obli¬ 
 gations are exchanged that demand the presence 
 
48 
 
 
 and service of these men. No! not men alone, but 
 men and women at our town caucuses and con¬ 
 ventions, that favors granted may be reciprocated 
 in securing the nomination, and thereby the elec¬ 
 tion of the men who are willing to be run by rail¬ 
 road interests. 
 
 If this state of things does not corrupt legisla¬ 
 tors, it is because legislators are incorruptible. 
 
 We know its results in other States, and we may 
 well fear it here. Special legislation has totally 
 failed in securing the results intended, and left 
 behind a train of unmitigated evils which must 
 increase with the increased magnitude of the rail¬ 
 road interest, and the growth of railroad corpora¬ 
 tions. The establishment of such a corporation as 
 is provided for in the majority bill may well be 
 dreaded. The creature will be more powerful than 
 its creator. 
 
 CONTROL OF THE TUNNEL. 
 
 The committee were clear and unanimous in the 
 opinion that the State should under no circumstan¬ 
 ces part with the absolute control of the Tunnel to 
 a private corporation. 
 
 The majority bill is the first step in giving up 
 the control $f the Tunnel to a private corporation. 
 It gives to that corporation control of the whole 
 line, except the Tunnel; and entrusts it with the 
 operators of the Tunnel itself. 
 
49 
 
 
 The pressure upon the State to part with the 
 Tunnel will grow with the increase of business; the 
 whole power and usefulness of the line must rest 
 in the hands of the corporation which owns the 
 railroad entering the Tunnel on either side. I am 
 not old in railroad tactics—but, Mr. President— 
 with the bill reported by the majority of the 
 committee, I think I should have no difficulty— 
 with less than one-half of the amount of the money 
 expended in the efforts to pass the bill—to capture 
 the Tunnel from the State in three years, and it 
 would be accomplished in such a manner through 
 the representatives of the people, that no one 
 would presume to question my honesty. 
 
 The Commonwealth, owning the Tunnel,—the 
 most valuable portion of the line, the ~key to the 
 whole line,—has no voice in its management except 
 a minority in the board of direction; no voice in 
 fixing rates, no influence in its operations. This is 
 all placed in the hands of a private corporation, 
 governed by stockholders, whose stock is at all 
 times in the market, and may be purchased at any 
 time by any parties who deem it for their interest 
 to control the line. The corporation may at any 
 time combine with existing corporations to fix 
 rates, and thus the main object sought by the 
 State in constructing the Tunnel—an independent 
 and competing line—be defeated. 
 
 7 
 
50 
 
 THE PURPOSES OF THE MINORITY. 
 
 The minority of the committee in the plan which 
 they propose to the legislature, have had two 
 purposes in view. First: Absolute and perpetual 
 control of the Tunnel, built with the public money 
 for the benefit of the people of the whole Common¬ 
 wealth; and second: state control of the Tunnel 
 line. I use the words state control designedly, as 
 distinguished from state ownership, or state man¬ 
 agement. 
 
 State ownership of a railroad without state man- 
 agement is useless. State management may sink 
 into political management which might be disas¬ 
 trous to the public, and to the railroad. But 
 state control is a very different thing; precisely 
 what legislatures have sought in vain to attain. 
 We have endeavored to give it by special legisla¬ 
 tion, but all in vain; and yet just this is what we 
 want. 
 
 The idea is too firmly fixed in the public 
 mind to be eradicated without a fair and con¬ 
 clusive trial, that fares and freights are now 
 ‘too high—that cheap transportation is necessary, 
 and can be furnished without interfering with a 
 fair returi for the capital invested. You cannot 
 expect private corporations whose whole object is 
 to make money for stockolders, to try this experi¬ 
 ment fairly, and ascertain how cheaply transporta- 
 
51 
 
 tion can be afforded. Railroad corporations do 
 sometimes compete, but the sole object and pur¬ 
 pose of such competition is eventual combination, 
 and in that combination, the public must suffer. 
 We want to establish a corporation which shall 
 compete to increase its business without any ulte¬ 
 rior view of combination to raise rates, and such a 
 corporation is found under the plan presented by 
 the minority of the committee. 
 
 THE MINORITY BILL. 
 
 This bill proposes first that the Troy and Green¬ 
 field Railroad and Tunnel shall remain the prop¬ 
 erty of the State. 
 
 Second. That the State shall obtain by lease 
 the control of the railroads forming the direct 
 Tunnel line. We have reason to believe that this 
 can be effected. We have assurances that the 
 Fitchburg Railroad Company will assent to the 
 terms of this bill. If the only result of this bill is 
 to secure the control of the Fitchburg Railroad it 
 will be worth the trial. The Fitchburg Railroad 
 with its connection with the Tunnel, has a com¬ 
 manding position with reference to the railroads 
 of the State. What we want to secure is a free 
 system of competition, without the po^er of com¬ 
 bination, which is now the bane of our railroad 
 system, in the hands of private corporations. 
 
52 
 
 Rates are now fixed to a remarkable extent by 
 combination, and not by competition. Every 
 business man knows that the freight rates between 
 important points are fixed at meetings of freight 
 agents, who consider not what is a fair price for 
 rendering the service, but what will best pay the 
 corporations which control the business. 
 
 The great need of the business community of 
 Boston and Massachusetts, is a line to the West, 
 making the nearest connection with the Lakes, 
 which will do the business at fair and uniform 
 rates, and which shall be managed in the interest 
 of the public, and not of stockholders. Such a 
 line can be secured under the provisions of the 
 minority bill, which will establish a through line 
 with power to connect with Lake navigation at 
 Oswego, on Lake Ontario, and be substantially 
 under state control. The necessity of extending 
 the line to Oswego, to some point on the Lake is 
 obvious, because every other railroad communicat¬ 
 ing with the West, except the Great Northern 
 route, is now under the control of New York. 
 At any Lake port navigation is open for seven or 
 ^jght months in the year, and gives a direct com¬ 
 munication with the great centres of Western 
 commerce. i 
 
 The Tunnel line ending at Troy can give little 
 advantage over the present Western line—the 
 Boston and Albany Railroad. 
 
53 
 
 THE EFFECT OF STATE CONTROL OF THE TUNNEL 
 
 LINE. 
 
 One great purpose of controlling one important 
 line, is the effect upon other lines. Our system of 
 railroads is so interwoven that all our railroads are 
 to some extent competing, and the operation of 
 one railroad by a corporation in the interest of the 
 public will to a great extent control the whole 
 railroad system of the State. The direct Tunnel 
 line probably now occupies the most important 
 controlling position of any in the State. It can be 
 made a regulator of the Western business of the 
 State. It can by its connections with the Ches¬ 
 hire and other Vermont and Massachusetts rail¬ 
 roads, largely control the northern lines. 
 
 It will, by its many connections, bring the whole 
 State in direct connection with the North and 
 West. The great success of the so-called Bel¬ 
 gium system is founded on this principle,—the 
 control of the whole by the direct operation 
 of a small portion. The position of our Massa¬ 
 chusetts railroads is, in this respect, not unlike 
 that of Belgium. Our railroads are so closely con-"* 
 nected together that the state control of one road 
 will be felt throughout the whole system. 
 
54 
 
 THE POPULAR FEELING IN EAVOR OF STATE 
 CONTROL. 
 
 It cannot be denied that the popular feeling has 
 been steadily growing in favor of state operation 
 of railroads in spite of all that has been said of the 
 danger of corruption and of the inefficiency of 
 state management. The people, confident in their 
 own integrity and their own power, have not indis¬ 
 tinctly shown their desire to fairly try the experi¬ 
 ment, and the circumstances are more favorable 
 for such an experiment than will probably again 
 occur. The State now owns the important part 
 of the line,—that part which is necessary to change 
 the line from a disconnected local line of railroads 
 to a great through line. It has been built at great 
 cost. Its opening gives great value to the con¬ 
 necting roads. If it was worth the cost of con¬ 
 struction, this value can only be shown by a 
 development of business which will require a 
 series of years, and will be attended with corre¬ 
 sponding advantages to all connecting roads. This 
 development of business can hardly be expected 
 "without substantially giving up the control of the 
 Tunnel to the line which operates it. The major¬ 
 ity bill does give such a control. We deem it the 
 best way for the State retaining the Tunnel to 
 obtain upon fair terms the control of the connect¬ 
 ing roads, and fairly try the experiment of oper- 
 
55 
 
 ating a railroad to ascertain how cheaply trans¬ 
 portation can be furnished, and yet return a fair 
 remuneration for the capital employed. The pub¬ 
 lic demands such an experiment to be tried, and a 
 better opportunity to try can never exist. 
 
 SAFETY OF THE EXPERIMENT. 
 
 Of this there can be no reasonable doubt, for a 
 corporation formed under the provisions of the 
 minority bill possesses all the advantages that can 
 be obtained by consolidation under one private 
 corporation, as authorized by the majority bill, 
 and the additional advantages of state and corpo¬ 
 rate management combined, which would be 
 efficient and reliable, beyond that of ordinary rail¬ 
 road corporations, inasmuch as their acts would 
 be most carefully watched and criticised by others 
 than stockholders, and the honor of securing a 
 successful result to so great an experiment and 
 enterprise in the interests of the people, would be 
 a far greater incentive to even political ambition, 
 than the compensation received; for” great deeds 
 foreshadow great men,” and the people are not 
 slow in their rewards to those who are honest and 
 earnest in their service. 
 
 Why, Mr. President, if I had the ability to man¬ 
 age this enterprise, I should hold the honor of 
 making this enterprise in the interest of the State 
 a success of more importance than the honor of 
 
56 
 
 being the governor of Massachusetts. And when 
 a man’s reputation is thus at stake, he cannot afford 
 to cheat himself by withholding from the State 
 his best talents and energies. It has another and 
 still greater advantage,—the endorsement of the 
 Commonwealth of Massachusetts, which furnishes 
 power and capital for terminal facilities, equipment 
 and the improvement of the line at a cheaper rate 
 than any consolidated company can procure it; and 
 cheap capital in disinterested hands secures cheap 
 transportation. 
 
 Can there be any doubt that a corporation thus 
 formed and managed will prove a financial success? 
 If not a success, then we have great reason to dis¬ 
 trust a private corporation; with far less advan¬ 
 tages, and a larger capital, for doing the same 
 business must prove a financial failure. 
 
 To demonstrate this point in a more practical 
 manner, we will assume a proposition and verify 
 this proposition by figures. 
 
 Judging from the present local business now 
 done on the several roads—forming what is antic¬ 
 ipated as the Tunnel line, and the testimony of 
 eminent railroad men of the business that is sure 
 to come to this great through route to the West— 
 it is fair to assume that the whole will do a busi¬ 
 ness that will average six millions a year for 
 the first five years; twenty-five per cent, of the 
 gross earnings of the leased roads, and property 
 
57 
 
 are reserved to provide for settlement of the con¬ 
 ditions of the said leases; and as they are not 
 guaranteed the payment of any amount beyond 
 what their present business pays, can there be 
 any doubt but what the twenty-five per cent, on 
 the increased business will pay the six per cent, 
 interest on the capital loaned to increase the facil¬ 
 ities for extending the business over the line? 
 
 The Railroad Commissioners report that the 
 average expenses of all the railroads of the Com¬ 
 monwealth is seventy-five per cent, of their gross 
 earnings; but there is no doubt but what it can be 
 proved that it cost less than seventy per cent, on 
 the great trunk lines, and one of the oldest and 
 most successful railroad managers assured me that 
 this Tunnel line could be run for sixty per cent., 
 but we will call it seventy per cent., which makes 
 with the twenty-five per cent, ninety-five per cent., 
 leaving five per cent, for net profit on the whole 
 business of six millions, which is $300,000. What 
 next? We have for the credit of the corporation 
 or State, twenty-five per cent, of the gross earn¬ 
 ings of the business done on the Troy and Green¬ 
 field Railroad and through the Tunnel. Calling 
 the Tunnel twenty-three miles in length,—which it 
 is conceded it should be called for what it saves in 
 distance and grades,—and with the Troy and Green¬ 
 field Railroad, which is forty-four miles, we have 
 one-third of the whole distance, and it is the judg- 
 
 8 A 
 
58 
 
 ment of practical railroad men that out of the six mil¬ 
 lions of business, two millions would pass over this 
 division and through the Tunnel; and twenty-five 
 per cent, on two millions is $500,000 income, which, 
 added to the $300,000, gives a net income of $800,- 
 000 to the State, which is nearly six per cent, on 
 thirteen and one-half millions, the cost of the Tun¬ 
 nel and Troy and Greenfield Railroad, with an ad¬ 
 ditional expenditure of one and one-half millions 
 needed to make this division of the route what it 
 should be as a part of the great through line. In 
 proportion as the business increases, in that same 
 proportion will the profits increase, and when the 
 business shall amount to ten millions, which I have 
 no doubt it will in less than ten years, you create a 
 fund over and above the interest on the whole cost 
 that can be used for extinguishing the debt, pur¬ 
 chasing the stock of the leased roads, as the value 
 is fixed by the terms of the lease, of for the reduc¬ 
 tion of rates of fares and freights. If this prop¬ 
 osition will not bear investigation, pray tell me how 
 the stockholders of the consolidated corporations 
 are to receive dividends on their watered stock, 
 w r ith increased cost of improvements of the line, 
 and equipment for doing the same business. 
 
 THE ALLEGED DANGER OF POLITICAL CORRUPTION. 
 
 A chief argument against the system proposed 
 is the danger of political corruption likely to follow 
 
59 
 
 the employment of a large number of men in pub¬ 
 lic business. 
 
 Second .—It is alleged that the public manage¬ 
 ment of any great public service is less efficient 
 than private management. 
 
 The purpose of the minority of the Committee in 
 proposing their plan, was to provide a corporate 
 body removed as far as possible from political 
 influence. 
 
 The State Trustees are appointed by the Gov¬ 
 ernor and Council. They are appointed for five 
 years. A single vacancy occurs each year. They 
 hold nearly the same position in regard to the 
 operatives employed in the operation of the cor¬ 
 poration, as directors of corporations, and no one 
 ever heard of directors exerting any great politi¬ 
 cal influence, particularly State directors. I doubt 
 if any director of any railroad corporation in the 
 State ever knew or thought to influence the politi¬ 
 cal vote of an operative. 
 
 If they choose, the managers of any private cor¬ 
 poration could exert a greater and more injurious 
 political influence than these State trustees. 
 
 If the power is dangerous in State trustees, 
 who must be selected by your Governor, it is far 
 more dangerous in the hands of persons elected by 
 stockholders of a private, money-making corpora¬ 
 tion, whose interests are in direct antagonism to 
 the interests of the public. 
 
60 
 
 This argument applies to corporate management 
 only with a much greater force. Let corporate 
 management he unmasked and it would make 
 State management hide its face with shame. (See 
 extract ]STew York State Committee on Erie.) 
 
 "If the principle is to be established that a few inter¬ 
 ested parties of stock-jobbers, having no permanent inter¬ 
 est, can, by the corrupt use of money or by violence, take 
 and hold possession of a great railroad corporation, and 
 reimburse themselves out of its treasury, it is time the 
 matter was understood by the public. As to the payment 
 of money to influence legislation connected with said com¬ 
 pany, or other irregularities, the testimony was enough to 
 show that the railroad companies have been in the habit 
 of expending large sums from year to year, either to 
 secure or defeat the passage of bills. It appears conclu¬ 
 sive that a large amount, reported by one witness at 
 $100,000, was appropriated for legislative purposes by 
 the railroad interest in 1872, and that $30,000 was 
 the Erie’s portion. In this connection the committee 
 denounce the lobby roundly. It is further in evidence 
 that it has been the custom of the managers of the Erie 
 Railroad from year to year in the past to expend large 
 sums to control elections and to influence legislation. In 
 1868 more than one million dollers was disbursed from 
 the treasury for 'extra and legal services.’ What the 
 Erie has done, other great corporations are doubtless 
 doing from year to year. We have here simply an ac¬ 
 knowledgment of the fact. Combined as they are, the 
 power of the great moneyed corporations of this country 
 are a standing menace to the liberties of the people. The 
 railroad lobby flaunts its ill-gotton gains in the faces of 
 our legislators, and in all our politics the debasing eflect 
 of its influence is felt.” 
 
61 
 
 This cry of political corruption against State 
 management is but the resurrection of the old party 
 ghost which has always been retained in the serv¬ 
 ice of all political parties to frighten people that 
 are naturally timid and conservative; and this ter¬ 
 rible spectre has often been the means of delaying 
 and defeating enterprises that were for the best 
 interests of the people. 
 
 I remember, Mr. President, when this ghost was 
 exhibited by the Democratic party in every town 
 in this State; and the people were made to believe 
 that the loan made by the State to the Boston and 
 Albany (Western) Railroad would ruin the State; 
 that every man’s farm was mortgaged at nine dol¬ 
 lars per acre; and men believed it, for that was in 
 times when the people followed party leaders 
 through faith; when it was said that the true test 
 of the political faith of a ~New Hampshire Demo¬ 
 crat was to wake him up with the inquiry, "Who 
 made you?” and if he answered promptly, "Isaac 
 
 a 
 
 Hill, sir,” he was to be trusted as one of the faith¬ 
 ful. 
 
 The effect of this great outcry was to destroy 
 confidence in the enterprise and the stock at one 
 time could not be given away for fear of assess¬ 
 ments. And if the people at that time could have 
 been guaranteed that the loss of the State should 
 not exceed the four million loaned, they would 
 have gladly given another million as a guarantee. 
 
62 
 
 But they could not rid themselves of the supposed 
 burden, and the result has been the development 
 of a great enterprise in the interests of the State in 
 spite of their fears. This was in a measure to the 
 credit of State management. 
 
 As to the efficiency of the plan, it remains to be 
 tried; but in the language of the minority report 
 we believe such a management would be efficient 
 and reliable beyound that of ordinary railroad cor¬ 
 porations. It combines State control with corpor¬ 
 ate management. 
 
 The Governor and Council could be depended 
 upon to appoint suitable persons as trustees. The 
 railroad corporations would naturally appoint their 
 most efficient agents as trustees. Such a board 
 could find no difficulty in securing the services of 
 the ablest railroad officers to direct and aid in the 
 management. 
 
 As the plan has no precedent it cannot be judged 
 from the record, and the prejudice existing against 
 State management cannot fairly apply to this plan; 
 but if it could have a fair trial we have no doubt of 
 its efficiency and success; and we are not alone in 
 this opinion, for this j)lan has received the full 
 endorsement of eminent railroad managers, suc¬ 
 cessful and prominent manufacturers and mer¬ 
 chants, and the Chairman of the Railroad Com¬ 
 missioners, together with many of our most enter¬ 
 prising and conservative citizens. 
 
63 
 
 STATE PENSIONERS. 
 
 It is urged that the plan proposed creates a large 
 class of state pensioners to whom the revenues of 
 the treasury are pledged. They are State pen¬ 
 sioners in the same sense as any individual who 
 leases property to the State for a fixed rent, is a 
 State pensioner. Every railroad charter contains a 
 provision for the acquisition of the corporate prop¬ 
 erty by the State, by payment of its presumed 
 
 value. As well say that all these charters are 
 * 
 
 pension bills. 
 
 The minority bill simply provides that stock¬ 
 holders yielding their property to the State, shall 
 have a remuneration for the property surrendered. 
 
 It makes little difference to the individual whether 
 his compensation comes in the form of the pay¬ 
 ment of a fixed sum or of an annual annuity. It 
 does make some difference to the State, whether it . 
 increases a debt to pay off these stockholders at 
 once, or pays such interest as the property ac¬ 
 quired may be fairly presumed to earn. The guar¬ 
 antee does not exceed the dividends which the 
 property may be expected to earn, and the advan¬ 
 tage which a lease gives over a purchase by avoid¬ 
 ing the transfer and changing of capital should not 
 be overlooked. 
 
 In a word, these stockholders are pensioners 
 only in the sense that they become entitled to 
 
64 
 
 secure annuities from the State for which they pay 
 beforehand a full equivalent into the treasury. 
 
 THE BENEFITS OF THE PROPOSED PLAN. 
 
 It makes absolutely certain the perpetual control 
 of the Tunnel for the benefit of the people of the 
 whole State. 
 
 It secures to the people by whose money it has 
 been built, the ultimate value of the enterprise, 
 whatever that value may prove to be. 
 
 It secures to the people an independent Western 
 line, to be managed for the benefit of the people, 
 free from any danger of combinations by which 
 rates are fixed. 
 
 It secures to all corporations desiring to use the 
 Tunnel, equal rights. 
 
 It secures a line stronger than any other, amply 
 able to provide equipment and facilities, and to 
 compete with powerful corporations in neighboring 
 States. 
 
 It fixes the capital of the corporation without 
 danger of inflation, and without risk of speculative 
 control. 
 
 It enables the people to try fairly the experi¬ 
 ment of cheap transportation. 
 
 It provides equally with the plan of the majority 
 for the interchange of depots, by which the cross¬ 
 ings at the north side of the city may be avoided. 
 
 If only one-half of these advantages can be 
 
65 
 
 gained the experiment is worth trying. If it suc¬ 
 ceeds and our expectations are fully realized, it 
 will confer upon the people the greatest boon since 
 the introduction of railroads. 
 
 Senators will bear me witness that I have never 
 solicited their vote on any personal consideration, 
 and in the decision of this great question, I can 
 only appeal to you as legislators to record your 
 votes in accordance with your convictions of duty 
 to the people of this Commonwealth, and for the 
 protection of her six hundred millions of industrial 
 interests; unbiased by any local or personal 
 interest, keeping in mind that there is no power 
 but that of the State that is safe to trust in the 
 great exigency that now exists. 
 
 9