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their equanimity for five minutes. Governor Swettenham's judgment had been affected by the shock and strain of the disaster, and he had acted in a tactless way. Everybody in England from the King to the humblest laborer appreciated the good will of the American navy, was sorry for Swettenham's seeming breach of courtesy, and nothing remained to be said. Meanwhile, at that very moment our distinguished Secretary of State was visiting the Governor-General and other high British and Dominion officials in Canada in the most amicable spirit. Moreover, the Liberal government was showing its good feeling by sending one of its most eminent members, the Right Hon. James Bryce, to be Ambassador at Washington. The talk of war under such circumstances would be criminal if it were not merely absurd.

Immigration and Illiteracy.

The effort to settle the Japanese question seems to have determined the fate of the pending measures at Washington on the subject of immigration. It is probably true that to apply the reading and writing test would considerably improve the average quality of immigrants. Such a test is far from being conclusive as respects individuals. Many of the illiterates are good, sturdy working-people, who come from disadvantaged neighborhoods, but who are not themselves necessarily of a degraded or objectionable type. Most people do not remember that in times when the tide of immigration runs high, as in the past two years, the numbers who arrive in the months favorable for migration are simply limited by the capacity of the steamships. At such times a more severe test would have a tendency to bring a better class of people rather than to cut down the whole number very radically. Yet the moment has not quite arrived, it seems to us, for the application of such a test. If there were no other reason for delay, it would be enough to say that American public opinion is not yet by any means convinced.

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one-quarter of them coming from Italy, another quarter from the races of Austria-Hungary, another quarter from Russia, and the remaining quarter from Germany, Scandinavia, the British Islands, and scattered sources.

exhaustive study and analysis. If these new The situation requires the most factors that make up the bulk of our immigration should be sifted or restricted in some radical fashion, public opinion will support Congress in legislation after the argument has been sustained by a showing of undeniable facts. At present the country is in great need of labor, and a good kind of immigration is welcome. run our industrial life itself, as well as our But in the long social and political institutions, must depend upon the character of American citizenship, and it would be a fearful mistake to bring here classes of people permanently undesirable in vast numbers merely to meet a temporary demand in the labor market.


To have quieted discussion about the Japanese issue and to have Congress. found a way to regulate labor passing the Immigration bill, must be looked conditions on the Pacific Coast, while also upon as a very important achievement. It was not possible as these pages were closing for the press to forecast precisely what pending measures would be enacted into law in the closing days of the Fifty-ninth Congress, and what subjects of importance would have to go over for fresh consideration at the hands of its successor. The 4th of March of alternate years is a date of immense sig

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great need of a method by which it can do business more efficiently. It is not a question of majority and minority parties, but a question of restraint upon individual whim or vagary or perverse will. With the changes about to be made in the make-up of the Senate, there will be sixty Republican members and thirty Democratic. If as many as seventy-five out of ninety members of the Senate. should be willing to fix a date when a vote could be taken on a given subject, the remaining fifteen ought not to be able to block business. The greater part of the session about to end has been taken up in the Senate with a fruitless, tiresome, and valueless debate of an academic sort on the power of the President to maintain discipline in the army apropos of the discharge of colored troops at Brownsville, Texas, last August. Everything of value that was said could have been put into a single day's debate; yet this farcical affair took six weeks of the time of the Senate in a short session when great matters of public business were pending. The Senate, meanwhile, was neglecting, to the serious detriment of public interests, several longpending treaties.


Reform of Land Laws.

Of all measures of far-reaching public policy that were before Congress last month, nothing could have been more important than Senator Nelson's bill, with other associated measures, representing the Administration's views of public-land reform. We publish elsewhere an article written by one who speaks with knowledge and authority concerning the significance of the recent order of the President reserving public coal lands from further sale. The extension of the forest policy, the plan of reserving and leasing coal and mineral lands, and the plan of reducing the vast grazing areas of the Government to some system and leasing what is called the "range" on fair terms to the cattle and sheep men, are in the line of reforms which should be promptly supported by Congress. The great work that has been achieved under the administration of the Interior Department by Secretary Hitchcock is set forth in another article appearing in this issue. The Secretary retires on March 4, and he deserves the praise of all thoughtful men for his courage and persistence as an administrator. Mr. James R. Garfield will bring vigor and trained ability to a continuation of Mr. Hitchcock's good work in the ever-growing business of the bureaus that make up the Department of the Interior.

The Money Question.

Secretary Shaw, who retires from the Treasury Department, has shown great skill and resource in obviating difficulties that arise from the lack of elasticity in the volume of our currency. He is almost unequaled as a terse and convincing expositor of monetary and financial questions, and he has done a great deal to educate the country up to the point of improved monetary legislation. While no comprehensive measure seemed likely to pass in the present session, it was probable last month that some minor changes in the currency and banking laws would be made, and that these would have a useful effect. One of these changes was meant to allow national banks to retire their circulating notes much more rapidly and freely; and this naturally would induce them to issue notes more freely in times of stringency. Another provision gives wide distribution to government deposits, and in still other ways a larger freedom is secured.


The Railroad Situation.

No new railroad legislation had been expected in the present term beyond Senator La Follette's bill regulating the hours of railroad employees, and some other matters of minor character. The great need of the country, as urged in these pages last month, is a higher efficiency of railroad management. The business of the country has outgrown single-track main lines, limited terminals, and existing equipment. The situation is a very practical one, and the best railroad men are seeing that the policy of President Roosevelt and the Administration in its endeavor to regulate railroad conditions on behalf of the public is one to be met in a frank and friendly spirit. Chairman Shonts, of the Panama Canal Commission, who is about to resign that position and to become president of the great amalgamated local transit system of New York City, expressed the sound and sane view of the railroad situation in a speech before the Iowa Society of New York on February 15. A few years ago, Mr. Shonts reminds us, railroads were struggling to secure traffic. "The struggle to-day," he declares, "is to provide facilities to properly handle the traffic proffered." In view of the large investments that will have to be made to put railroads into condition to do business, Mr. Shonts thinks that there should not be too much public pressure brought to bear on the rate question. He believes that railroad stockholders should be encouraged to hope for good returns.

Copyright, 1905, by C. M. Bell, Washington.

Mr. Shonts

on Rates

and Methods.


The following quotations from his speech seem to us so important at the present moment that we have no hesitation in presenting them as conspicuously as possible and at some length:

tration on the question of rates has not been to The attitude of the present national Adminissecure their reduction, but to prevent unjust discrimination in them. Railroad rates in the United States are lower than anywhere else in ditions, is better. It is astonishing that, with a the world, while the service, under normal condensity of population which does not approach, per mile of road, that of any European country. and in view of the further facts that we pay 50 for material and supplies, we are still able to per cent. higher wages to labor and higher prices and do sell our transportation for an average of one-fourth less than the prices charged in foreign countries.

cheaper transportation so much as it is de I do not think that the public is demanding manding safe, reliable, and adequate transportation. When we consider the number of casualties resulting from the operation of railroads required to safeguard more completely life and in the United States, and the amount of money property intrusted to them; when we consider the persistent demands of labor for higher wages and shorter hours, and the ever-advancing prices for material and supplies; when we

realize the congestion that exists everywhere in

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sary to provide adequate equipment and additional tracks and terminal facilities for its relief; when we still further contemplate the possibil ity of a complete change of motive power from steam to electricity in order to aid in solving the problem of traffic congestion, it is apparent that railroad rates must be maintained at certainly nothing below the present level. Personally, I am of the opinion that in some instances they are already below a profitable basis and should be advanced.

In the matter of improvements, the railroads of the country, almost without exception, have been pursuing a hand-to-mouth policy which has proved costly to themselves and irritating to the public. Costly to themselves because, before improvements necessary to relieve existing conditions have been completed, their capacity has been exceeded by the growth of traffic; irritating to the public, because at no time in recent years has the public been able to get free from the delays and annoyances of a continual state of congestion. The result is that to-day, when the railroads are confronted with conditions requiring more comprehensive improvements than ever before in their history, and consequently greater utilization of money than ever before, they are confronted also with a state of public mind extremely hostile to themselves. So that the raising of money to provide facilities so urgently needed is, under present conditions, well-nigh impossible, although many of the corporations have sought to do so at the risk of almost imperiling their credit.

The situation is a grave one. If the various States continue arbitrarily to reduce rates, as some of them are doing, and the various labor organizations continue to press their demands for increased wages and shorter hours, the next unprecedented crop harvested in this country

will be a record-breaking crop of receiverships.

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I am not here to say that the railroad corporations have not done a great deal to justify the hostile feeling which exists against them. Neither am I here to say that the violators of the law should not be punished by the law; but I do wish to say, and with all possible emphasis, that in my judgment the time has come for fair play to both sides of this controversy. In other words, the time has come for what the President calls a square deal," but we want it all around. There is no doubt that in the building up of these properties things have been done which, though legally right, were morally wrong, but because they were legally right and cannot be legally disturbed, what is the use of exploiting them when no doubt can be secured except to furnish material for the charlatan and the demagogue, and to intensify class bitterness? I believe that the time has come to "let by-gones be by-gones," and to start with a clean sheet, safeguarding as far as possible future issues of securities so as to prevent injustice to either the stockholder or the public.

In this connection it might be well to define what is meant by the term "stockholder." I am simply stating a fact we all know, but which some seem to forget, when I say that by "stockholders" is not meant the Goulds, the Harrimans, the Vanderbilts, and the Rockefellers, whose holdings, large as they may be, are infinitesimal as compared with the vast sums which the tens of thousands of our citizens, representing the savings of their lives, have invested in our industrial and railroad securities. These people have placed their savings in these securities in the belief that the Government will protect them in their rights as against demagogism on the one hand and financial piracy on the other. They can expect no other protection, for they are widely scattered and unorganized. If, therefore, any government, whether national, State or municipal, permits any injustice to be done to corporations simply because they are corporations, whether this injustice is the result of proper or improper motives, the real sufferer in the last analysis is the small investor. Aside from the principle, which is fundamental, that every government should, as an example to its citizens, carry out its contracts with corporations faithfully in both letter and spirit, it should also do it as a duty it owes to its citizens.

Again, there is no doubt the attitude of some railroad officials has had much to do with the present public hostility toward railroads. Not long ago some railroads were operated apparently for the sole benefit and convenience of those in charge of them. The idea that the owners had any rights the officers of these properties were bound to respect never occurred to the latter; and so far as the public having any appreciable interest in railroad problems was concerned, this was to them an undreamed “iridescent dream." The concentration of greater control in fewer hands, and the consequent assertion of power, has of late given the owners a much larger voice in corporate management, and the sentiment which President Roosevelt reflects, but which he did not create, is securing for the public the consideration and treatment that it deserves. In fact, it is becoming more and more apparent that those officials who best serve the

public best serve the stockholders they directly lic sentiment is the fountain-head of all things represent. American. If we cannot trust it we had better go out of business, or sooner or later it will put us out.


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This is a world of compromises. Humanity is a 'give-and-take proposition. The ideal has never actually been attained. Let us then compromise on the best available and the most practicable. Let the railroad managers lay aside all subterfuge, and come out in the open. Let there be a maximum of publicity and a minimum of legislation. Let eminent financiers and "captains of industry" co-operate with the President to bring about better corporate practices. Let them lay their cards on the table and say to the President, We will uphold your hands not only in enforcing existing laws, but in passing such others as are necessary to prevent wrongdoing, but you in return must protect us from the irresponsible agitator, wherever he may be." Let us convince the public that we will give it the best facilities American ingenuity can devise, and in my judgment the funds required will be forthcoming.


However, in order to accomplish these results all agitation which is not necessary for the enforcement of the law should cease. We should settle down to a basis where the railroad investor will not only feel sure of getting a fair return on the amount invested, but will also feel that his capital is safe. Let the owners of corporations make it their first duty to serve the public, and thereby best serve themselves. The American public is willing to pay reasonable rates, but it wants and is entitled to adequate returns. Nothing so appeals to it as good service. With public sentiment behind our securities they will be less speculative, but more stable. Get public sentiment behind the securities by supplying good service. The good-will of our people is the best and biggest asset any corporation can acquire, and personally I believe that if you treat the public fairly you will get its good-will and fair treatment in return. No stream can rise higher than its source, and pub

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The same principle applies to labor. Treat it fairly and it will meet you half way. No sane citizen or employee desires hard times, and if they realize what our latest statistics absolutely prove, that the margin between prosperity and bankruptcy is no broader than a 10 per cent. increase in the cost of transportation and a 10 per cent. decrease in the revenue received, they will join the conservative forces of the country in seeing that no steps are taken which will bring on the crisis.

What the Country Wants.

Mr. Shonts, though still a comparatively young man, has made his way in life as a practical transportation man, and when called by President Roosevelt to the chairmanship of the Canal Commission he was president of the so-called


Clover Leaf" Railroad system. In coming to New York he accepts the presidency of a combination that operates the rapid-transit subway lines, the elevated system, and all the electric surface lines, with great projects on foot for further financial and physical expansion. It is these facts that give especial weight and significance to Mr. Shonts' frank statements about the railroad situation. The country wants fair play, ample railroad service, a cessation of the Wall Street methods of railroading, and an energetic effort on the part of real railroad men to help the country carry on its great business. It will be difficult to find the necessary capital, but it will be forthcoming if the real railroad men of the country will free themselves from the bad influences that have endeavored to set them in array against the conservative policy of the President of the United States, and will serve their actual stockholders and the great shipping public as faithfully henceforth as they have, some of them, at least,-been drawn into the recent service of the speculators and manipulators of Wall Street.


Panama Canal Affairs.

With the retirement of Mr. Shonts, the chairmanship of the Panama Canal Commission will be assigned to Mr. John F. Stevens, the able engineer now in actual charge of the work. The Government has been carefully considering the question of letting a contract and turning the work over to a syndicate under the general form of an arrangement which we have already mentioned in previous numbers. But it was announced last month that ample time would be taken for the most care

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