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Arthur Edward Stilwell, Railroad Entrepreneur and Visionary

 

Bankers' Magazine              October,  1910

THE RAILROADS AND THE GOVERNMENT

PUT IT IN THE SPECIFICATIONS

By Arthur E. Stilwell, President Kansas City, Mexico and Orient Railway

The voters of the United States will some day demand stable conditions, such as are needed to conduct legitimate business with safety.  They will know that some of the existing conditions are unjust and will investigate and analyze present financial conditions, for it is clearly apparent that the regulations imposed on the railroads are neither logical nor do they evince business sense.  

Since these regulations annually grow more burdensome and complicated the expense of complying with them is becoming a greater tax on the railroads and on the nation.

With remedied conditions, prosperity and progress would arise on every side and remain with us for years; they are easy to attain -- ours when we demand them.  The railroads of the United States now represent an investment of $13,700,000; they are run by the railroad commissions of the forty-six different states and by the Interstate Commerce Commission.  Admit that all the commissioners are good men, (and no doubt they are), still they are human.  Even were they divine could their task be accomplished?

It is just bull-luck that financial conditions are not worse than they are.

Railroads develop the country; they give the nation twenty-five times more revenue than the railroad stockholders ever draw out of their investments.

If it is such a snap to build railroads, why do not some of the states construct railroads, since they dug canals?

Here are the conditions and they are getting worse all the time.  When the railroad commissioners were first appointed in each state, there was not in the air such radicalism as now exists; to hit big investments required nerve and they had no striking examples of how to strike capital down and the people did not demand it. 

Capital was regarded as a sacred trust and was looked on as a blessing -- as it was.

The railroad commissioners approached their job, gingerly, as a man for the first time goes near an electric dynamo; but at last they got up nerve (realizing that the voters were looking for antagonistic results), and inaugurated requirements, which, at first, did not impose heavy burdens on the roads.  But each incoming board of commissioners found so many restrictions exacted by its predecessors, that to show results, it inflicted requirements that did hurt, and that did impose burdens.  Now all these conditions were exacted, by states which had no investment in the railroads; through men with no financial interest in the  properties they undertook to run, -- men, whom the capital which built the road would never have selected for the job of managing it.

Must the railroads meekly accept unfair conditions for the sake of peace, or fight all the time for their lives?  The injustices practiced upon them have become habitual and are silently borne, but how on earth can it be right that people with no interest in the enterprise shall impose forty-seven different kinds upon nearly Fourteen Billion Dollars of invested capital?  I firmly believe that the unfairness of this deal is the cause of the panics and depressions of the last ten years.

A Fixed Policy.

I am in favor of controlling railroads by a fixed policy, making the requirements everywhere the same, and as simple as can be framed in order to execute the laws and guard public safety.  We have standard fire insurance policies which embody fair conditions.  Why cannot the United States and the railroads agree on a fair contract between the roads and the states and govern all by the same requirements?

Why cannot specifications, as for building, be mutually agreed upon so that, when capital makes up its mind to build a railroad, it may read the rules governing the investment and if it does not like them, --may invest in some other enterprise, or go to Mexico or Argentina or Canada, where the building of railroads is cordially invited and heartily encouraged?

If electric head-lights are a requisite, insert it in the specifications; then you will not buy acetylene head-lights on all your new engines one day and the next have to change them for electric lights.  If you must run three passenger trains daily, even though there is not enough business for two, put it in the specifications!  If you will not be permitted to place advertising matter in the stations, put it in the specifications!  If you must manicure the cattle's hoofs and braid pink ribbons in their tails, in transit, put it in the specifications!  If a brakeman is needed at the front while trains are running through cities, put it in the specifications!  There are hundreds of surprising, similar requirements, lately imposed, which I could mention.  Let's find or create a correct, state standard and then adopt it for all the roads throughout the Union.

When Mexico wanted to make new railroad laws, it invited all nations to forward their laws; then a committee of Mexicans who understood the business, selected the best, from all the regulations of all nations, and framed the excellent railway laws of Mexico.  As a result, railroad builders in Mexico understand, in advance, just what they may do or may not do, and the fixed standard is a relief for the railways and for the nation.

I do not say that in all cases, imposed traffic rates are fair or unfair, but there are hundreds of instances, where the state requirements, as to conditions, are more unfair than the rates.

Panics and hard times may be averted only when the leading enterprises of the country are permitted to prosper through fair and fixed regulations.

A PLAN.

This could be brought about if the different states would agree to appointment of an arbitration committee comprising ten or twelve of the representative business minds of the United States; this committee to draft a simple railway law that would be uniform in its requirements.  Such board would understand how to cut out the driftwood of complications and simplify the law.  Then let each state accept it for a ten or fifteen year period.

This plan would bring great prosperity; the following influx of foreign money would be as great as though a Klondike had been discovered in the heart of the United States.

If the requirements now demanded of the railroads in New York State are proper, then, they would be right in Colorado; and if they are wrong in Texas they are wrong in Connecticut.

Make the law so just, that it will tease capital to furnish all the money needed for railroad building; that capital may realize that railroad investments will hereafter be governed by safe and sane laws, all over the country, and that it may make investments which no radical demagogues can oppress, grind down and ruin.  Each operating road would then understand what it must do through its set specifications and if it does not approve the restrictions would refrain from building.  The greatest question before the American people, is to simply solve the railroad problem and to do it quickly, -- the quicker, the better!

 

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