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to the bona fide stockholder it is a burden and a loss, and the discovery comes with something of a shock that so much new money must be spent to enable the railroad to do its work.
in the South.
It is not so much a surprise that the Southern Railway system, which has absorbed a great number of old lines cheaply and poorly built many years ago, should have to spend vast sums of new money in order to provide for present traffic demands. Mr. W. W. Finley, who has succeeded the late Samuel Spencer as president of the Southern, has made frank and open declaration of the desperate condition in which the road now stands as respects its unfitness for the public service demanded of it. The South is in a more rapid process of industrial transformation than any other part of the country, and there is more excuse for the insufficiency of railroads in that section than elsewhere in the North or West.
Copyright by Clinedinst.
it is making out of surplus earnings.
The installation of Mr. James Vastness of Corporation McCrea as the president of the Interests. Pennsylvania system, in consequence of the death of Mr. Cassatt, is followed by the announcement of further great issues of securities, partly for the work of this, with many other great improvements, physical reconstruction and partly, it may be supposed, in pursuance of the Pennsylvania's policy of acquisition of additional lines and feeders. The Pennsylvania has now become the most highly capitalized corporation in this country or in the world, except the United States Steel Corporation, although the Standard Oil Company, with all of its subordinate corporations, would probably at the market value of its shares represent a larger volume of capital. These and other great corporations have become too large and powerful to be controlled in a mysterious way by a small group of men. In their future conduct and control there must be far greater publicity than in the past. It is not to be forgotten that the Steel Corporation has set a good example in this respect, although as it grows every year more solid and more powerful, the public will justly demand an even more extensive knowledge of its conduct and affairs. The needs of the railroads are naturally beneficial to the Steel Corporation. It has just come through its most prosperous year. It is spending $75,000,000 at Gary, on the Indiana shore of Lake Michigan, not very far from Chicago, in the construction of a new plant; and
Its experimental period seems now to be ended, and the dangers of its original over-capitalization seem to be disappearing through the plan of using the surplus earnings of prosperous years to build up the property. On a less conspicuous scale, it may be said of a number of the so-called industrial trusts, formed some years ago, that they have been pursuing a similar policy. The stock market has adjusted itself to the essential facts, and it has taken its own method of squeezing out the water. Meanwhile, the companies have ceased to try to pay dividends improperly and are protecting their solvency by improving their properties. In this sound and thrifty policy there is great need of constant publicity, because otherwise the inside group of directors and chief officers would fall into the old besetting sins of the railroad magnates, and conduct the business for their private advantage, to the harm of the stockholders. The trust question, like the railroad question, has its changing phases from time to time; but one thing becomes constantly more clear, and that is that all the large
corporations of this country must be managed openly in the interest of the sharehold ers and the consuming public, and that government oversight and control must be exercised with increasing energy.
The demoralized condition of the to Slovenly railroad service of the country is Management. chiefly responsible for the great number of railroad accidents, the worst of which are so appalling that they cannot be kept out of the newspapers, while the lesser ones of daily occurrence escape public notice. It has been asserted by high railroad authority that it has become habitual to disregard the cardinal principle of the block system which many roads have installed for purposes of safety, and to this fact must be attributed some of the recent disasters. But the root of the trouble goes much deeper than the recklessness of engineers or the mistakes of signalmen. It lies in the bad management that overworks the train crews, dispatchers, and men on duty in signal towers; that makes regularity in train-running the extreme exception; and that has brought American railroading into the position of being the most slovenly of all our great business organizations, whereas it ought to be the most precise, methodical, and alert. All sorts of business undertakings nowadays have a tendency
to become elaborate, specialized, and highly organized. There was a time when railroad men could carry an air of mystery and treat the public with a certain condescension, as meaning well but not capable of understanding so difficult and so technical a business as operating railroads. But that period is past and gone forever. The veil of mystery has been ruthlessly torn away, and the gentlemen of the railroad world are now in a position where they must put in a decade of hard work in trying to "make good." Meanwhile, there cannot be too many public investigations, and there is no danger of any harm to the traveling public or the shipping public from the doctrine that railroads exist principally for the convenience and the service of the people, and that the people are entitled to have a good railroad system safely and well operated.
UNCLE SAM: "These railroad mergers are getting to be monotonous."
From the Herald (New York).
grades has within a very short time gone up in the market, without seeming cause or reason, to an astonishing extent. Within a brief period the average price of lumber has more than doubled, and some kinds of lumber have advanced fourfold in the market. It is charged that this condition is due simply and solely to the creation of a practical monopoly. Senator Kittredge's resolution calling upon the Department of Commerce and Labor to make an investigation of the lumber question was promptly passed by the Senate. It is grati fying to feel that the Government now has
the means to make such investigations, that it has the energy and ability to do the work promptly, and that it has the confidence and support of the public in such undertakings. Not so very long ago vast tracts of the forest area of this country still belonged to the Government and people of the United States. Through lamentable defects in the land laws, and through criminal connivance and equally criminal neglect in the administration of the laws, the best of these great forests have been passed over from public ownership and control to the ownership of the very group of men forming the lumber trust that Senator Kittredge proposes to investigate.
The Forests and the Public.
At very small expense a few years ago the national and State governments could have held or acquired enough of the remaining timber belts of the country, not only to protect river sources and mitigate floods, but also to protect the public in its lumber supply and prevent the formation of a monopoly control of so needful an article of general use. The Roosevelt Administration has exerted itself strenuously to create forest reserves and stop the further encroachment of the lumber trust upon the national domain. It has constantly demanded a reform of the land laws, in order to better protect the public interest. Its chief enemy in all this attempt to save the domain of the people from the land thieves. and timber thieves has been Congress itself. It is to be hoped that the investigation now invoked by the Senate will be thorough, and that it will shield no public men who have aided and abetted the process of turning the forest lands of the country over to the lumber kings. Whatever may be the objection to the public ownership and operation of practical business enterprises like railroads, there can be no sound argument against the retention by the public of the great forest areas of the upland and mountain regions of the country. The Government itself now possesses far more knowledge of practical forestry than do the lumber people, and by a judicious system of leasing it could supply the lumbermen with merchantable timber without destroying the forests. Great mischief has been done, but the situation is not altogether hopeless; and the proposed investigation will doubtless be of great value. Even where great areas have been devastated by the lumber trust and the wood pulp trust, the nation or the respective States can
President Roosevelt's views on Administration these subjects are well known.
Mr. Hitchcock, as Secretary of the Interior, has stood like a rock for the protection of the public interests. Mr. Garfield, as chief inquisitor of the Department of Commerce and Labor, will succeed Mr. Hitchcock a month hence in charge of the department of which the General Land Office is one of the bureaus. Last month a new Commissioner of the General Land Office was appointed by the President in the person of Mr. Richard A. Ballinger, of Seattle, of which city he has been mayor. Mr. Ballinger is a lawyer and was a classmate of Secretary Garfield in Williams College. Mr. Ballinger will have a great work on his hands, and it is to be hoped that he will prove the right man in the right place. Mr. Garfield's position as chief of the Bureau of Corporations in the Commerce Department is to be filled by the promotion of his assistant, Mr. Herbert Knox Smith. Secretary Straus, at the head of the Commerce Department, is a business man of broad views and a public man of fearless devotion to the general interest as against
private greed. There will be no lack, therefore, of intelligence, skill, courage, and energy on the part of the Administration forces in studying the lumber trust and the questions of timber lands and transportation that are intimately connected with that great conspiracy against the consuming public. It is time for Congress to show as much energy, courage, and intelligence as the Administration shows in preserving the public domain and in abating the evils of trusts and monopolies. The forest reserves that have already been made are a magnificent gift to posterity, and the proposed Appalachian and White Mountain reserves should be promptly authorized by Congress.
It is to be borne in mind that the Supply and the monopolizing of the lumber supGovernment. ply to the public detriment has been following the analogy of the monopolizing of the coal supply. The price of anthracite coal to Eastern consumers is permanently doubled through the simple fact that the coal lands of eastern Pennsylvania have been acquired by a group of railroad companies and of men connected with railroad companies, who have combined to control the output of coal, its transportation, and its market price. The enforcement of law will probably compel them to separate their coal business from their railroad business, in formal organization. But it will be very difficult to break up a monopoly that is so profitable, and to bring coal back to its normal price. Similar tendencies have manifested themselves in the great bituminous fields. It is a question to what extent the fearful coal famine that has prevailed for some weeks past in the Northwest, through an almost unprecedented period of extreme cold and heavy snow, has been due to this monopolizing tendency in the coal trade, for which railroad men are chiefly responsible. There are strong assertions and equally strong denials. The inquiries of the Interstate Commerce Commission, when completed, will throw some valuable light upon the subject. Meanwhile, it is dawning upon the public imagination that probably the most statesmanlike act of the year 1906 was the absolute withdrawal from further sale or private disposition of all the coal lands remaining upon the national domain. What this probably signifies as respects the extent and value of the coal lands thus reserved we shall endeavor to show in an article from the pen of a competent authority next month.
Canada and the United States.
The visit of Secretary Root to Lord Grey, Governor-General of Canada, last month, was properly looked upon as a matter of public interest. It came, furthermore, at a highly opportune moment. The Canadians have justly felt that their relations with the United States were of so great importance that the questions concerned require a closer and more intimate diplomatic relationship between the Washington and Ottawa governments than has ever yet existed. They have thought and declared, often, that their interests, in the very nature of things, could not be fully represented at Washington by a British Ambassador who had never lived in Canada, and who naturally looked upon Canadian questions from the British and imperial standpoint rather than from the standpoint of the Dominion. The change of ambassadors at Washington has afforded an occasion for rather emphatic expression of these views in the Canadian newspapers. This went so far as a demand that the British Ambassador at Washington should be a Canadian statesman. A more moderate demand took the form of a suggestion that a Canadian should be attached to the embassy at Washington.
The appointment of a great British statesman to the ambassadorship has been satisfactory to the Canadians, as it has also been to the people of the United States. Mr. James Bryce has all the qualifications that the most able and accomplished professional diplomat possesses, in addition to which he has many other qualifications, and he comes to Washington as by far the most distinguished and competent public man who has ever represented any foreign government in the United States. Secretary Root, since his entrance upon the work of the State Department, has desired to clear away all outstanding questions of difference that might make future trouble between this country and Canada. The Canadians have great confidence in Mr. Bryce, but they wish to be directly consulted. They know Mr. Root as a man of business and not merely a man of ceremony, and they could rightly feel that his visit to Ottawa was to be taken as an expression on the part of our Government of a desire to have their direct and friendly cooperation in the clearing away of all differences, for the sake of the joint welfare of the neighborly and closely related peoples who are engaged in building up North America. It was, therefore, a timely trip.
A few days before Mr. Root ting Canadian lumber and wood pulp under on the went to Canada a great gather- conditions that would baffle the American Tariff. ing of business men and public trusts. The ideal thing would be absolute men from various States met in Washington commercial union between Canada and the under the auspices of the New York Board United States, and this would be tremendof Trade and Transportation, to confer upon ously beneficial to both countries. But if the best way to promote the foreign com- we cannot have so desirable a thing as full merce of the United States. The President freedom of internal commerce in North Amerand the members of the cabinet participated ica, we ought to have reciprocity with Canin the work of the conference. Mr. Root ada on very broad and generous lines. One himself made a speech in which he advocated thing is certain, and that is that we are apthe adoption by this country of the French proaching a reopening of the tariff question and German plan of a maximum and mini- in this country under circumstances which mum tariff arrangement. Canada has prac- are likely to take it to a great extent out of tically this arrangement, giving the benefit of the old-fashioned field of party controversy. the minimum to England and enforcing the maximum against us. There is certainly a great deal to be said in favor of the doubletariff plan, but its application would seem best to meet the conditions of our trade with European countries. Our trade with our immediate neighbors is of a very different character. It partakes naturally of the conditions of domestic rather than of foreign trade. A number of our large cities are so situated that portions of Canada are naturally tributary to them in a commercial sense. Of all possible questions between the United States and Canada at the present time the tariff is the most important. Those very conditions of the American lumber trade to which we have referred in a previous paragraph demand-the removal of the tariff on Canadian forest products. Our consumers ought to be get
THE PRESIDENT HAS RESERVED ALL COAL LANDS ON
From the Post-Intelligencer (Seattle).
It is evident that we are also approaching a tremendous revival of interest in the improvement of our internal waterways. The present session of Congress will pass a River and Harbor bill, carrying appropriations of about $75,o00,000. Until very recently the great railroad chieftains have not merely been opposed to the policy of governmental improvement of waterways, but have succeeded in convincing a majority of intelligent people that river and canal transportation was hopelessly out of date, and that railroads should be the sole reliance for all kinds of traffic. Even the friends of waterway improvements had fallen into the habit of using chiefly the argument that waterways could be made to regulate rates. But the railroad Sauls are now among the waterway prophets. The philosophical railroad man now sees that if during the past 25 years there had been a large development of waterways, as in France and Germany, the present pitiable failure of the railroads to meet the demands created by sheer volume of traffic might have been avoided. The heavier and less profitable freight could have gone by water, and the railroads would have had all they could do. in hauling the more profitable kinds of merchandise.
Two or three years ago the projProgress of Erie Canal ect adopted by the State of New Work. York for enlarging the Erie Canal was regarded by representatives of the New York Central and other railroad interests, and by many able and sincere newspapers, as statesmanship degenerated to the plane of idiocy. But in a very interesting report made the other day to the War Department by a distinguished engineering officer of the army, Colonel Symons, it was de