The railroads have become the express companies, not in legal fiction, but in transportational fact. The railroads largely own the express companies, entirely control the express companies, and, to all intents and purposes, are the express companies. We, the highly intelligent American people, simply don’t know these facts. Never has it seemed to occur to us that, since Benjamin Harrison was President and John Wanamaker was in his cabinet, the express grafters may have devised improved ways of working the express graft. Therefore, in this parcels post matter, we don’t know who is pushing the knife that we feel between our ribs. We accuse the express companies. A man who was being murdered might as well accuse the shadow of his murderer.Perhaps the facts that follow will show you who are behind the shadows of the express companies. I quote from Senate Document No. 278, Sixtieth Congress:Stock held by railways in express companies$20,668,000Railway securities owned by express companies34,542,950Holdings of express companies in the stock of other express companies11,618,125Since this article was written (Mr. Benson adds in a footnote) the Interstate Commerce Commission has issued a report in which railroad holdings in express stock are given at $14,124,000. The same report says the “total book value of property and equipment of 13 express companies is $22,313,575.53.” The figures furnished by the express companies are evidently somewhat bewildering to the commission, which, having found the total value of the express companies’assets to be $186,221,380.54, remarks: “It is evident that the capital stock of these companies bears no relation to the amount invested in the express business.” On the face of the Interstate Commerce Commission’s report, the railroads have disposed of more than $6,000,000 worth of express stock since the United States Senate investigated the matter during the life of the Sixtieth Congress. Yet there is no mention of such a transaction, and it seems exceedingly unlikely that the railroads have suddenly reversed their policies and become sellers instead of buyers of express stock. What seems more likely is that both the railroads and the express companies are continuing the policy to use figures to conceal facts. Gentlemen who can give $186,000,000 worth of assets a “book value” of $22,000,000 might have no difficulty in compelling figures to turn flip-flaps upon almost any occasion.Please notice that railroad companies—not railroad men, railroad companies—own more than $20,000,000 of stock in express companies. The express companies are capitalized at only $48,000,000. Railroad companies therefore own almost half of the stock of the express companies. Railroad men like Mr. Gould, the Vanderbilts and Mr. Morgan also own stock in express companies. Railroad men presumably do not vote their private holdings of express stock in opposition to the manner in which they vote the express stock owned by the railways they control. But, even if railway men owned no express stock, the ownership by railways of a solid block of more than $20,000,000 of express stock would enable the railways to control the express companies. Mr. Morgan controls many corporations in which he holds only a minority interest. It is the way of big men to control more than they own.…Let us assume that you attach no significance to the ownership by the railways of almost half of the stock of the express companies. You don’t believe the railroads would take the trouble to get control of $3,500,000 more stock and thus control the companies. You want to be shown.All right. You don’t mind using your common sense? Good.Wouldn’t railroad companies be incorporated fools if they didn’t control the express companies? Couldn’t the railroad companies, if they cared to, control the express companies, even though the railroad companies owned not a share of stock in any of the express companies? What is an express company?An express company is a corporation that is engaged in transportation. Not a single express company owns a foot of railway track, a locomotive, a roundhouse or a water tank. Not a single express company employs an engineer, a fireman, a train dispatcher, or a section hand. Not a single express company could carry a bar of soap from New York to Albany without using all of the mentioned instruments of transportation, besides many others. In other words, an express company is an institution engaged in transportation without owning any of the means of transportation. It exists only by sufferance. So long as railroad companies are willing to haul the cars of an express company, the express company may do business—but no longer. An express company, if ill-treated, has no other place to go. It cannot hire a department store company tohaul its cars, nor a dry-goods firm, nor a manufacturer of hats. An express company must go to railroads for its transportation facilities, accept the best terms it can get, or go out of business.Is it not so? How comes it, then, that you never hear of rows between express companies and railroad companies? How comes it that the same railroads that are always trying to squeeze you on freight rates apparently never try to squeeze the express companies on rates for hauling cars? The express companies are exceedingly fat birds. They are absolutely in the power of the railroad companies. If you owned the only vacant house in the world and a wanderer must rent from you or die in the street, you would not have him more completely in your power than the railroad companies have the express companies.Yet the railroad companies are frying the express companies to a frazzle. The New York Central Railroad Company takes 40 per cent of the gross receipts of the express company that operates over its lines. But the frying is entirely friendly, and therefore the express companies do not cry out against it. A station agent does not complain because the railroad company for which he works takes from him the money for the tickets he has sold. He expects to give up the money. The officers of express companies expect to give up the money they take in. That is what they are there for. If they were otherwise disposed they would not be there. The $20,000,000 block of express stock held by railroads would keep them out. Can you imagine an express company giving 40 per cent of its gross receipts to a railway company if the directors of the express company were not controlled by the railway company?Please get the full meaning of that New York Central arrangement. It is not a mere matter of 40 per cent. It is a matter of 40 per cent of the gross receipts and then perhaps 50 per cent of what is left. In other words, the railroad company first takes, as a carrier, four-tenths of the express company’s receipts. As a stockholder in the express company, the railroad next takes almost half of the net profits.…In both surveying the Canadian express situation and giving the order to reduce rates, Judge Mabee, chairman of the commission, said:“Cut short of all the trimmings, the situation is that the shipper by express makes a contract with the railway company through the express company. The whole business could go just as it now does without the existence of any express company at all by simply substituting railway employees and letting the railways take the whole of the toll in the first instance.”
The railroads have become the express companies, not in legal fiction, but in transportational fact. The railroads largely own the express companies, entirely control the express companies, and, to all intents and purposes, are the express companies. We, the highly intelligent American people, simply don’t know these facts. Never has it seemed to occur to us that, since Benjamin Harrison was President and John Wanamaker was in his cabinet, the express grafters may have devised improved ways of working the express graft. Therefore, in this parcels post matter, we don’t know who is pushing the knife that we feel between our ribs. We accuse the express companies. A man who was being murdered might as well accuse the shadow of his murderer.
Perhaps the facts that follow will show you who are behind the shadows of the express companies. I quote from Senate Document No. 278, Sixtieth Congress:
Since this article was written (Mr. Benson adds in a footnote) the Interstate Commerce Commission has issued a report in which railroad holdings in express stock are given at $14,124,000. The same report says the “total book value of property and equipment of 13 express companies is $22,313,575.53.” The figures furnished by the express companies are evidently somewhat bewildering to the commission, which, having found the total value of the express companies’assets to be $186,221,380.54, remarks: “It is evident that the capital stock of these companies bears no relation to the amount invested in the express business.” On the face of the Interstate Commerce Commission’s report, the railroads have disposed of more than $6,000,000 worth of express stock since the United States Senate investigated the matter during the life of the Sixtieth Congress. Yet there is no mention of such a transaction, and it seems exceedingly unlikely that the railroads have suddenly reversed their policies and become sellers instead of buyers of express stock. What seems more likely is that both the railroads and the express companies are continuing the policy to use figures to conceal facts. Gentlemen who can give $186,000,000 worth of assets a “book value” of $22,000,000 might have no difficulty in compelling figures to turn flip-flaps upon almost any occasion.
Please notice that railroad companies—not railroad men, railroad companies—own more than $20,000,000 of stock in express companies. The express companies are capitalized at only $48,000,000. Railroad companies therefore own almost half of the stock of the express companies. Railroad men like Mr. Gould, the Vanderbilts and Mr. Morgan also own stock in express companies. Railroad men presumably do not vote their private holdings of express stock in opposition to the manner in which they vote the express stock owned by the railways they control. But, even if railway men owned no express stock, the ownership by railways of a solid block of more than $20,000,000 of express stock would enable the railways to control the express companies. Mr. Morgan controls many corporations in which he holds only a minority interest. It is the way of big men to control more than they own.
…
Let us assume that you attach no significance to the ownership by the railways of almost half of the stock of the express companies. You don’t believe the railroads would take the trouble to get control of $3,500,000 more stock and thus control the companies. You want to be shown.
All right. You don’t mind using your common sense? Good.
Wouldn’t railroad companies be incorporated fools if they didn’t control the express companies? Couldn’t the railroad companies, if they cared to, control the express companies, even though the railroad companies owned not a share of stock in any of the express companies? What is an express company?
An express company is a corporation that is engaged in transportation. Not a single express company owns a foot of railway track, a locomotive, a roundhouse or a water tank. Not a single express company employs an engineer, a fireman, a train dispatcher, or a section hand. Not a single express company could carry a bar of soap from New York to Albany without using all of the mentioned instruments of transportation, besides many others. In other words, an express company is an institution engaged in transportation without owning any of the means of transportation. It exists only by sufferance. So long as railroad companies are willing to haul the cars of an express company, the express company may do business—but no longer. An express company, if ill-treated, has no other place to go. It cannot hire a department store company tohaul its cars, nor a dry-goods firm, nor a manufacturer of hats. An express company must go to railroads for its transportation facilities, accept the best terms it can get, or go out of business.
Is it not so? How comes it, then, that you never hear of rows between express companies and railroad companies? How comes it that the same railroads that are always trying to squeeze you on freight rates apparently never try to squeeze the express companies on rates for hauling cars? The express companies are exceedingly fat birds. They are absolutely in the power of the railroad companies. If you owned the only vacant house in the world and a wanderer must rent from you or die in the street, you would not have him more completely in your power than the railroad companies have the express companies.
Yet the railroad companies are frying the express companies to a frazzle. The New York Central Railroad Company takes 40 per cent of the gross receipts of the express company that operates over its lines. But the frying is entirely friendly, and therefore the express companies do not cry out against it. A station agent does not complain because the railroad company for which he works takes from him the money for the tickets he has sold. He expects to give up the money. The officers of express companies expect to give up the money they take in. That is what they are there for. If they were otherwise disposed they would not be there. The $20,000,000 block of express stock held by railroads would keep them out. Can you imagine an express company giving 40 per cent of its gross receipts to a railway company if the directors of the express company were not controlled by the railway company?
Please get the full meaning of that New York Central arrangement. It is not a mere matter of 40 per cent. It is a matter of 40 per cent of the gross receipts and then perhaps 50 per cent of what is left. In other words, the railroad company first takes, as a carrier, four-tenths of the express company’s receipts. As a stockholder in the express company, the railroad next takes almost half of the net profits.
…
In both surveying the Canadian express situation and giving the order to reduce rates, Judge Mabee, chairman of the commission, said:
“Cut short of all the trimmings, the situation is that the shipper by express makes a contract with the railway company through the express company. The whole business could go just as it now does without the existence of any express company at all by simply substituting railway employees and letting the railways take the whole of the toll in the first instance.”
As showing how freight tariffs are manipulated by the railroads to force the people to make light shipments by express and pay the looting rates the express companies charge, the following by Mr. Benson should be read:
In what essential particular does the conduct of the American express business differ from the conduct of the Canadian express business? The Canadianexpress companies collect money from the public and hand it over to the railroads. What do our express companies do?At this point, some gentlemen may be moved to ask. Why is an express company? At first glance, it does seem rather strange that the railroads should bother to do business through express companies if the railroads not only haul the express cars, but get the money the public pays. Yet there is nothing strange about it, as we shall see when we consider what the express business is.Part of the express business is an effort to commit a crime for pay. The rest of the express business is an effort to perform a service at an exorbitant rate of compensation. In other words, part of the express business is the carrying of “packets” that should be sent only by mail, and the carrying of which by a private person or corporation is a crime, and the rest of the business is the carrying of light freight that should go by fast freight at a rate much below the express rate.The express business, like every other business that has thriven, was based upon a public need. The public need was for a fast freight service for light freight. The railroad managers of forty years ago were not disposed to give the service, but they were willing to haul cars for an express company that wanted to carry fast freight at a high rate.In this small, timid way the express business began. The crime of carrying mail in competition with the government had never been considered. When shippers offered mailable packages for transmission, they were accepted, but postage stamps were affixed to comply with the law. Even the volume of light freight was relatively small. The railroads themselves kept all of the light freight traffic they could. It was not until the railroads invested heavily in and obtained control of the express companies that deliberate efforts were made to compel the public to send light freight by express.Let me explain precisely what I mean by this. The minimum freight rate from Chicago to North Platte, Neb., is $1.10. Whether a package weighs five pounds or 100 pounds, the charge is the same.Suppose you want to send a ten-pound package. A dollar and ten cents seems an exorbitant charge, especially when the fact is considered that a ten-pound package, sent by freight, probably would not reach its destination in less than ten days. You look up express rates and find that you can send the package for 55 cents, with a certainty of delivery within forty-eight hours. Of course you send the package by express.What has happened? Apparently, the express company has saved you 55 cents. Actually, the railroad company has clubbed you into the clutches of the express company. The railroad company never expected you to pay $1.10 for the transmission of a ten-pound package. In the good old days when the express companies were not owned by the railroad companies, and the railroad companies were not controlled by a little group of men in Wall Street, the freight rates for ten-pound and hundred-pound packages were not the same. The railroads wanted to carry small packages and made rates that brought them in. But theexpress companies showed the possibility of collecting a higher rate for quick delivery. For this reason, a certain amount of business naturally came to the express companies. But after the railroads obtained control of the express companies, resort was had to artificial means to drive business over to the high-priced express companies. The freight rate for 100 pounds was establishedas the minimum ratefor all lighter packages. No one is expected to pay this exorbitant rate, but it is there for everyone to look at.Slow freight delivery is also apparently employed by the railroads to compel the public to ship by express. If one have a full hundred pounds to send a short distance, he will find the minimum freight rate lower than the express rate. But he will also have reason to believe that freight trains are drawn by snails. The Pennsylvania Railroad and the New York Central recently struggled ten days to bring a hundred-pound package forty miles to me. An express company would have performed the same service over-night. If the railroads had wanted the business, they would have required no more than two days.
In what essential particular does the conduct of the American express business differ from the conduct of the Canadian express business? The Canadianexpress companies collect money from the public and hand it over to the railroads. What do our express companies do?
At this point, some gentlemen may be moved to ask. Why is an express company? At first glance, it does seem rather strange that the railroads should bother to do business through express companies if the railroads not only haul the express cars, but get the money the public pays. Yet there is nothing strange about it, as we shall see when we consider what the express business is.
Part of the express business is an effort to commit a crime for pay. The rest of the express business is an effort to perform a service at an exorbitant rate of compensation. In other words, part of the express business is the carrying of “packets” that should be sent only by mail, and the carrying of which by a private person or corporation is a crime, and the rest of the business is the carrying of light freight that should go by fast freight at a rate much below the express rate.
The express business, like every other business that has thriven, was based upon a public need. The public need was for a fast freight service for light freight. The railroad managers of forty years ago were not disposed to give the service, but they were willing to haul cars for an express company that wanted to carry fast freight at a high rate.
In this small, timid way the express business began. The crime of carrying mail in competition with the government had never been considered. When shippers offered mailable packages for transmission, they were accepted, but postage stamps were affixed to comply with the law. Even the volume of light freight was relatively small. The railroads themselves kept all of the light freight traffic they could. It was not until the railroads invested heavily in and obtained control of the express companies that deliberate efforts were made to compel the public to send light freight by express.
Let me explain precisely what I mean by this. The minimum freight rate from Chicago to North Platte, Neb., is $1.10. Whether a package weighs five pounds or 100 pounds, the charge is the same.
Suppose you want to send a ten-pound package. A dollar and ten cents seems an exorbitant charge, especially when the fact is considered that a ten-pound package, sent by freight, probably would not reach its destination in less than ten days. You look up express rates and find that you can send the package for 55 cents, with a certainty of delivery within forty-eight hours. Of course you send the package by express.
What has happened? Apparently, the express company has saved you 55 cents. Actually, the railroad company has clubbed you into the clutches of the express company. The railroad company never expected you to pay $1.10 for the transmission of a ten-pound package. In the good old days when the express companies were not owned by the railroad companies, and the railroad companies were not controlled by a little group of men in Wall Street, the freight rates for ten-pound and hundred-pound packages were not the same. The railroads wanted to carry small packages and made rates that brought them in. But theexpress companies showed the possibility of collecting a higher rate for quick delivery. For this reason, a certain amount of business naturally came to the express companies. But after the railroads obtained control of the express companies, resort was had to artificial means to drive business over to the high-priced express companies. The freight rate for 100 pounds was establishedas the minimum ratefor all lighter packages. No one is expected to pay this exorbitant rate, but it is there for everyone to look at.
Slow freight delivery is also apparently employed by the railroads to compel the public to ship by express. If one have a full hundred pounds to send a short distance, he will find the minimum freight rate lower than the express rate. But he will also have reason to believe that freight trains are drawn by snails. The Pennsylvania Railroad and the New York Central recently struggled ten days to bring a hundred-pound package forty miles to me. An express company would have performed the same service over-night. If the railroads had wanted the business, they would have required no more than two days.
Now, I have quoted extendedly from both Mr. Atwood and Mr. Benson. I have done so, because they wrote not only what I have quoted but much more that I would like to quote, and each of them has handled his subjects pointedly and forcefully conclusive. The call for “copy” by my publisher, will, I trust, argue my excuse with the publishers of Pearson’s and The American magazines for having drawn so largely upon their columns without first asking and securing their permission to do so.
But it seems to me I can hear some barker for the interests barking “Yellow writers! Yellow magazines!”
A few years since, the fling of that appellation “yellow” may have had some influence—probably did have some influence among the thoughtless. But millions of the then indifferent and thoughtless people have become serious and thoughtful recently. To such there is no opprobrium in the word “yellow” as the barkers fling it at newspapers and magazines which attack and tell the truth about the interests for which the barkers bark. In fact, the word has become an appellation of honor rather than of discredit—of repute rather than of disrepute.
Here is another quotation—two of them. They are from an article in Pearson’s Magazine, February, 1912, issue. Get the magazine and read the whole article. The article is captioned “The Railroad Game.” It will richly compensate you:
I chanced to meet a man who is now president of one of the great Western railroad systems. He chided me good-naturedly about my antagonism to therailroads. Finally he said: … “You are too big a man to be fighting the railroads. Come get into the game with us. It isn’t how much money we make, but how much we can conceal that counts in the railroad business.”…These figures do not take into consideration at all the operations of the numerous express companies which impose upon the people a burden approximating $125,000,000 a year while their actual investment for all purposes does not exceed $6,000,000 a year. These companies all earn prodigiously. All pay big dividends. All have big surplus funds, and frequently have big melon cuttings. In one of these a few years ago $24,000,000 were distributed among the stockholders of a single company. And after all, these companies amount in actual service to the people to no more than a parcels post which the government should have established long ago. With government control of the railroads this pernicious form of extortion would end. In European countries express companies do not exist. There the parcels post is supreme, satisfactory to the people and remunerative to the governments.
I chanced to meet a man who is now president of one of the great Western railroad systems. He chided me good-naturedly about my antagonism to therailroads. Finally he said: … “You are too big a man to be fighting the railroads. Come get into the game with us. It isn’t how much money we make, but how much we can conceal that counts in the railroad business.”
…
These figures do not take into consideration at all the operations of the numerous express companies which impose upon the people a burden approximating $125,000,000 a year while their actual investment for all purposes does not exceed $6,000,000 a year. These companies all earn prodigiously. All pay big dividends. All have big surplus funds, and frequently have big melon cuttings. In one of these a few years ago $24,000,000 were distributed among the stockholders of a single company. And after all, these companies amount in actual service to the people to no more than a parcels post which the government should have established long ago. With government control of the railroads this pernicious form of extortion would end. In European countries express companies do not exist. There the parcels post is supreme, satisfactory to the people and remunerative to the governments.
Of course, the writer of the above when he mentions $6,000,000 as the “actual investment for all purposes” means all the actual investment for all express service purposes. In that statement he is entirely correct.
But who is the writer? Well, the man who made the statements just quoted is Mr. O. C. Barber, the American “Match King.” Certainly no one—not even the most courageous and venturesome hired liar of the raiding combinations—will call Mr. Barber “yellow.”
“Why?” Well, Mr. Barber has a lot of real long-headed and hard-headed sense. He also hasmoney. He has awhole lotof money. That makes Mr. Barber a “strong” man, as Mr. Benson puts it, in the calculating eyes and minds of public bubblers. Not only has Mr. Barber money, but, as Pearson’s editor points out, “he is a man of affairs.” He has been a man of affairs for fifty years. He is an officer or director in companies which have a capital of fifty million dollars. Their combined freight shipments are from 150,000 to 200,000 cars per year, and go to all parts of the world.
No, there is nothing of the yapped “yellow” about Mr. Barber. When the barkers bark of him, the trajectory of their language will carry it scarcely beyond the walls or to the banqueters. In most cases the barker’s voice, when adversely criticising Mr. Barber, will take that humble, pendant expression so universally characteristic of the tail of a scared dog.
Mr. Barber is “strong.” If you don’t know it get the February,1912, Pearson’s and read his article on “The Railroad Game.” You will know it then.
The clackers who clack for those who profit by the outrageous parcels post service in this country now, will tell you, of course, that Germany, France and some other countries can “afford” to give their citizens lower postal carriage rates, “because the governments own the railroads and have their mails carried free.”
It is sufficient to say in answer to such clack that if we can have a cheap, efficient parcels post serviceonly by owning the railroads, then let us own them.
Why not? A good, cheap parcels post service is worth it—worth it to you, to me, to every man, woman and child of the country, both to those living and to the generations yet unborn.
Yes, sirs, such a parcels post service is worthmore to our people than our railroads cost to build, or would cost to rebuild or to buy. Why do I say that? I say itbecauseit is afact—a fact that needs but a line or two to evidence.
1. Such a parcels post service would save our peoplemorethan $300,000,000 every year.
2. At 2 per cent (a rate at which the government can borrow all the money it wants), three hundred million dollars would pay the interest on $15,000,000,000.
3. Fifteen billions of dollars ismorethan either the “book” or the “market” value ofallthe railroads in this country—“water” included. It is more thantwicetheir tangible, or construction, value.
So, if we can have cheap, reliable parcels post service only when the “government own the railroads,” then let’s get busy.
One of the muchwornobjections to a cheap parcels post service is that it cannot be established andprofitablyoperated, as it has been in those countries whichownthe mail-carrying roads and pay muchlower salariesto the operators of the service.
In reply, I will say that in neither Great Britain, nor inany country of continental Europeareallthe rail-mail roadsownedby the government. But those countries docontrolall their railroads—and that is exactly what this government must soon door the railroads will control it.
To tellhowthese governments got controland keep controlof their railroads is another story. In fact, it is a story for each of thecountries. Suffice it to say here that theydocontrol them. One element of that controlcompelsthe railroads to carry alarge portion of the mails free of charge.
In Great Britain, all regular trains carry at least one mail car free, or at a mere nominal charge, and the trunk line roads are required to turn out extra mail trains of ten cars each on demand of the postoffice authorities. For such a train the road can chargeno morefor the run than theaverage cost of an average passenger train.
France guarantees and, I believe,paysthe interest on a 70,000,000 franc railway bond issues. That is equivalent to $14,000,000. At 3 per cent the interest amounts to $420,000 a year. For that sum the railroads carry all theregularmails free—carry themunder government direction and stipulation. Last year we paid our railroads $49,330,638.24 for carrying our mails. The French roads also carry the officials, the soldiery, and all military suppliesfree.
That, in brief, is about what the French governmentcompelsthe railroads of France to do.
And those roads are all paying fair returns on the money invested in them!
It was only a few brief years since the railroads of the German Empire wereallin the hands of private owners—of “frenzied financiers” who robbed both the government and the people in outrageous mail, freight and passenger rates. Germans will not stand for such conditions long. The people shouted aloud their grievances and demanded redress—demanded a remedy.
The German government heard and heeded the demands of its people.It usually does. When it started to give its people relief it was met on every hand with just the same sort of talk as has been heard in this country for a quarter of a century.
“You can’t cut down the rates, for the roads are now earning barely enough to pay fair interest on the investment.”
“You can’t trespass upon the ‘sacred rights’ of property.”
“You can’t think of taking such action! Why, it would create a financial upheaval—a panic—causing widespread disaster and bankrupting the railway companies.”
“You cannot possibly be so inconsiderate as to endanger the savings of the hundreds of thousands of widows and orphans who have invested in our stocks and bonds”—and a lot more of like junk.
But the Chancellor of the Exchequer was a clear-headed,clean-minded old German, with therugged honestyfor which his race is justly noted. Well, this Chancellor listened with courteous dignity to all their “you can’t do this,” “You can’t do that,” etc., until it was made quite clear to his mind that frenzied financiers and railroad grafters in his country weredictating as to the powers and policies of his government.
What happened then? Why, as Creelman put in writing of the incident, when this grand old Von heard enough of those “you can’ts” to make their object and purpose clear to him, he jumped to his feet and turned loose a few yards of forceful German language which, translated, summarized and anglicized, would sound something like this:
“I can’t! Well, you just watch me!”
“Did he give ’em anything worth looking at?” Oh, but didn’t he? The honest old Von sat quietly into theirowngame, played with their ownmarked cardsand “beat ’em to a frazzle,” as our strenuous ex-President would put it. Did he buy up the roads, paying for all theaqua purathey had tanked up?
Well, hardly! It wascontrolVon wanted, andownershipwas neither immediately nor particularly sought,beyond the point necessary to that control.
As I remember the story, he quietly put some agents on the floor of the Berlin stock bourse and before the gentlemen who had handed him that miscellaneous assortment of “can’ts” knew what had happened,Von had control of one or two of the German trunk lines. Then the way he made those friends of the “poor widows and orphans”seethings was profoundly and, for a few weeks, almostexclusivelyawful. He did not buy the road for his government. He merely boughtcontrol.
His government having control, he next slashed all the silk and frillsout of rail rates on the road or roads controlled.
“What was the result?” Why, the “can’t” venders were on their knees to him in six months. In a year the German governmentcontrolledits railroads and there was not a railway patriot in the Empire who was not busy telling the Chancellor how manymore thingshe could do, if he wanted to and, in fact,urginghim to do some of them.
And the “widows and orphans,” or otherlegitimateinvestors in the securities of the German roads,lost not one cent of earned incomein the passing ofcontrolfrom private to government hands. As a result, the German government is making money from itsownedrailroads. The net revenues of the German Government from its railroads is now annually about $250,000,000. From 1887 to 1906, the roads paid into the government’s exchequer about $1,400,000,000. It has saved money from itscontrolledroads and is furnishing its peoplea cheap and most serviceableparcels post. So much for the cheap foreign mail-carriage andthe way the “cheap foreigners” got it.
Now, as to salaries paid. Mail carriers and clerks in this country are paid something under $1,000 a year. Railway mail clerks are paid an average of $1,165—and the latter work only one-half the time for full pay. I have no information at hand as to the pay of mail carriers and clerks in foreign countries, but I have the figures for the pay of railway mail clerks in Great Britain, Germany and France. So, we will make comparison of the pay in that class of service. They stand as follows:
There, now, you see the shocking disparity in the veryworstandallof its enormity—the way it is usually presented by “farmers” in Congress who arecultivatingexpress company crops. But let us look into those figures a little further.
Information carefully collected and collated, both by official and private agents, among the former being the Department of Commerce and Labor of our own government, hasconclusivelyshown thatlivingin England and in the countries of Continental Europe isfrom thirty to forty per cent cheaper than in this country.
Let us take 30 per cent—the lowest reported estimate of the difference in the cost of living—subsistence, clothing, housing, schooling, amusements, etc.—and see how the figures look in comparison as to pay of railway mail clerks:
Theenormityof the difference, you will observe, is not so shockingly enormous as it appears inheeler’sfigures first shown. But even the last set of figures does not afford a just comparison. Here is why:
The English railway clerk is allowed $160 a year as “travel pay.” The German rail man is providedfreea house that is worth an annual rental of $135in Germany. Here, it would rent for from $240 to $360. In addition to his “salary” the French railway mail clerk is allowed $180 “travel pay” and is also providedfreewith a house of a rental value of $80 per year—a house that would rent here at from $160 to $300 per year. Making these little additions to the actual servicepayof those “cheap foreigners,” let’s see how they compare with our “high salaried” railway mail clerks. We will figure the “travel pay” allowances at its purchasing powerin buying a livingand for the rent allowances we will add the lowest equivalent given above of corresponding housing in this country.
On that basis the stack-up is as follows:
Those “cheap foreigners,”who are efficiently operating a cheap parcels post, you see, come out of the wash in pretty fair shape after all, when compared with our “high salaried” postal service men.
But even the last table does not present the whole truth as to thelieso often yapped about by thetoolsof the private interests in this country that are opposing the betterment andcheapeningof our parcels post service.
The railway mail clerks of England, Germany and France not only get full pay while laid up from temporary injury, the same as do our rail postal men, but their governments pay those “cheap foreigners”a pensionwhen they get old or are permanently injured—pay it for the remaining years those “cheap” mail handlers live!
Among the mostbrazen, yet most frequently used, objections to a cheap and serviceable parcels post is that it would “benefit but very few people in the country’s vast population,” or other vocalized breath of similar purport andpurpose.
Objectors who use this argument belong to one of two classes: They are either fools or thinkyouare, or they are men whose sense of the right and wrong of things, commonly designated as conscience, got lost in their transit from diapers to dress suits.
The “argument” is not worth a line of consideration were it not so frequently used by objectors of the two classes just indicated. A man—a full-sized man—who can give it more than a smile ought to hire a janitor and a couple of scrub women to clean up his garret and dust off its furnishings.
But, seriously speaking, let’s think a moment about “the few” people who would be benefited by a cheap parcels post service.
There are 95,000,000 or more folks in this country.
There are about 36,000,000 of that number engaged in farming, farm labor, stock-raising and other agricultural occupations, counting the dependent families.
Counting the dependent families. Those “few” would be benefited, would they not?
Counting wives and babies, there are somewhere around 22,000,000 of our folks engaged in the mechanical trades and manufacturing.
Those “few” would be benefited, would they not?
Among our folks are, counting families as before, not less than 16,000,000 domestic servants, saloon, hotel and restaurant people, policemen, firemen, soldiers, sailors and laborers “not elsewhere specified.”
Those “few” would be benefited, would they not?
Next, we have around 12,000,000 of bookkeepers, clerks, agents, operators, teamsters, etc., “engaged in trade and transportation,” again counting “the little ones at home” butnotcounting the “retail merchants” nor therailway manipulators.
Those “few” would be benefited, would they not?
Next, we may enumerate among our people, doctors, lawyers, teachers and otherprofessional folks, counting their folks at home the same as before, some 7,000,000.
Those “few” would be benefited, would they not.
Next we have—
But we have already found aboutninety-one millionsof the “few people” among our folks whowould be benefitedby a cheap, serviceableparcels post. That leaves somewheres around four millions to be accounted for.
Again, including dependent families not less than 3,000,000 of that number can be classed as retail merchants. Half of that 3,000,000 are merchants, dealers, manufacturers, etc., in the “larger cities,” whom even the opponents of the parcels post have agreed would bebenefitedby its service. At any rate it has beendemonstratedby organizations of merchants in the large cities that parcel deliveries within a radius of thirty or forty miles of their stores, which had cost fromeight to fifty cents, can be made at an average costnot exceeding four cents.
That leaves the country merchants, the jobbers, the railroad and express company raiders and their hired opinion molders to account for. Of these, the country merchant is by far the most numerous, likewise the most deserving of consideration.
On a previous page I made it fairly clear, I think, that a good, cheap parcels post service would be of great service to him. He has the respect and the confidence of his customers. He knows the worth of goods. He can sell the goods—any line or make—at the advertised or catalogued price andstill make a good profit, as I have previously shown.
The parcels carriage charge, either by mail or express, is now so high he is compelled to order in quantities to keep “laid-down-prices” low enough to meet competition. A cheap parcels post service would put him in position to meet the competition of the larger merchants ofthe cities. A line of samples, showing the latest patterns, makes and grades, could take the place of fullyhalf the shelf stock he now carries, aside from the staples. He could take the order of his customer and have the goods delivered by parcels post either to his store or, if in a rural delivery district, to the home of his customer for a few cents—have it delivered as cheaply as the big city merchant, manufacturer or mail order house can have it delivered.
Do not overlook that last point, Mr. Country Merchant, whenhiredyappers are coaching you to oppose a good parcels post service. The government will not pay “rebates” nor allow “differentials” in its parcels carriage. You can put your packages through the mails at aslow a chargeas that paid by a merchantwith millions of capital invested in stocks of goods.
Of all the objections now urged against adomestic parcelspost in this country, the dangers lurking in themail order houseis the most industriously worked. “It would be a fine thing for the eastern merchant to have a parcels post system whereby he could supply the people throughout the country,” said a Mr. Louis M. Boswell, a few years since when speaking to the National Association of Merchants and Travelers, convened in Chicago.
And who, pray you, is or was Mr. Boswell? Why, Mr. Boswell was one of the main cogs at that time, in theWestern freight traffic wheels. Mr. Boswelltalked for his personal interests, and for those interests only. To make his anti-parcels post talkcatchhis auditors—the Western merchants—he even told thetruthabout the express companies.
Freight should be transported as such byrailroads in freight cars, and not by the government in mail cars.… I have long regarded the express companies asunnecessary middlemen.…Millions of dollars would be saved annuallyto the public if the express companies were done away with, and I do not believe therevenues of the railroads would be decreased.“And what are you on earth for,” wrote a self-serving trade journal editor in 1900, “if not to look afteryour own interests? A parcels post … willknock your business silly. You are the one entitled to the trade in your town and neighborhood.”
Freight should be transported as such byrailroads in freight cars, and not by the government in mail cars.… I have long regarded the express companies asunnecessary middlemen.…Millions of dollars would be saved annuallyto the public if the express companies were done away with, and I do not believe therevenues of the railroads would be decreased.
“And what are you on earth for,” wrote a self-serving trade journal editor in 1900, “if not to look afteryour own interests? A parcels post … willknock your business silly. You are the one entitled to the trade in your town and neighborhood.”
I present the above quotations asfair samplesof the “argument”—its method and itssource—against a domestic parcels post. Let it be noticed that these two quoted statements—as is the case with most of the other promotion talk against a parcels post—is talked or addressed tocountry, village, town and one-night-stand city merchants.
Themail order houses“will knock your business silly!”
Now, of course, it must be admitted that, in this day of super-heated service ofself, a man’spersonalinterests must receive hisfirstconsideration. But I cannot for the life of me see why these “Western merchants and travelers” take the talk handed them by “traffic” cappers, express company agents andspace muddlers—take it in such largeslugs—and apparently overlook the fact that these talking and writing bubblersare serving special interests. Can you understand it, Mr. “Storekeeper” of Rubenville? Or you, Mr. “Merchant” of Swelltown? Or you Mr. “Shipper” of Cornshock or Feedersville?
Mr. Benson in his March article in Pearson’s, says something anent the great hue and cry which the raiders, aided in this particularcase by merchandise jobbers and some of the larger department store retailers, are trying to raise among country merchants and rural residents about what a great “menace and danger” the mail order houses would be if a cheap, serviceable parcels post was put into operation. I hope my readers will carefully peruse what he has said. Here it is in part only:
The railroads, in fighting the parcels post through the country merchants, are playing the old game. The old game is to work upon the fears of a minority, create what appears to be a difference of opinion among the people, and thus give Congress an opportunity to say that as sentiment seems to be divided, it would perhaps be better to do nothing until the public can thrash the matter out and discover what it wants. In the present instance we see great firms like Marshall Field & Company combined in an organization to spread among country merchants fear of a parcels post. Such an association was recently formed in Chicago with a membership of 300.…There is only one country merchant, perhaps, to every 500 country customers, and the country customers are all in favor of a parcels post. All other things being equal, Congress always moves in the direction of the greatest number of votes. But in this matter, as in many others, things are not equal. Great financial interests and a few country merchants are regarded by Congress as a majority.…
The railroads, in fighting the parcels post through the country merchants, are playing the old game. The old game is to work upon the fears of a minority, create what appears to be a difference of opinion among the people, and thus give Congress an opportunity to say that as sentiment seems to be divided, it would perhaps be better to do nothing until the public can thrash the matter out and discover what it wants. In the present instance we see great firms like Marshall Field & Company combined in an organization to spread among country merchants fear of a parcels post. Such an association was recently formed in Chicago with a membership of 300.…
There is only one country merchant, perhaps, to every 500 country customers, and the country customers are all in favor of a parcels post. All other things being equal, Congress always moves in the direction of the greatest number of votes. But in this matter, as in many others, things are not equal. Great financial interests and a few country merchants are regarded by Congress as a majority.…
“At any rate, I cannot forget that while Marshall Field & Company cry out against a parcels post, because it would build up the mail order houses, that they themselves do a large mail order business.
“This action on their part may seem like patriotism of the highest sort—but it isn’t. The mail order houses don’t care a rap about a parcels post. They are not against it, but they are not for it. My authority for this statement is Mr. Julius Rosenwald, President of Sears, Roebuck & Company of Chicago, the largest mail order house in the world. I approached him upon the subject, believing that he would grow enthusiastic, but he didn’t. He said he had never signed a petition for a parcels post, or otherwise interested himself in the matter, and never should do so. He didn’t tell me why, but I found out why and will tell you.
“The minimum freight rates of the railroads literally drive country customers into the mail order houses. A farmer’s wife, we will say, has a present need for two or three articles that she can buy from a mail order house for less than her local merchant can afford to sell them to her. But the articles weigh only fifteen pounds, the express charge would annihilate her saving, and the minimum freight rate,for which she might as well have 100 pounds shipped to her, is just as high as the express rate. But she still wants the two or three articles and she wants to buy them from the mail order house. So what does this thrifty woman do? First, she increases her order by putting down a few articles that she will need perhaps three months later. Then she canvasses her neighbors for orders until she gets enough to make 100 pounds, and divides the freight charges pro rata. The result is that the mail order house gets an order for 100 pounds of goods instead of an order for the fifteen pounds that would have been bought if a parcels post like the English or the German had enabled the farmer’s wife to order only what she first meant to buy. Incidentally, the country merchant in her vicinity is not helped thereby.
“If you have any doubt about the truth of this statement, send a petition for a parcels post to Mr. Julius Rosenwald, President of Sears, Roebuck & Company, Chicago, and see how quickly he will not sign it. You will not be able to get him to lift a finger to help you. He is sending out fifty-eight loaded freight cars each day, comparatively little express matter, doing a business of $63,000,000 a year, and is quite satisfied with such transportation facilities as exist.
“But don’t blame the mail order men because they don’t help you. Help yourself. First, help yourself by getting it clearly in your mind who in this matter is the chief offender. Your government is the chief offender. So far as postal matters are concerned, your government is protecting the interests that are robbing you. Your government goes even to the extent of submitting to robbery at the hands of the interests that rob you. I refer to the continuing scandal of exorbitant mail contracts.”…
Now, I desire to talk somewhat directly to the rural and village storekeeper and of storekeeping.
The manufacturer, wholesaler or jobber always sells the retail merchant—the quantity buyer—cheaperthan they will sell in broken lots to the consumer. They will always sell toyoucheaper than they will sell to your customer, will they not?
You have an “edge” of 20 to 40 per cent., have you not? But to hold that “edge” now, you must order in quantities whichanticipatethe demands of your custom, must you not? You must “stock up,” must you not? If you miss your guess, andunderbuythe demands of your trade, you must, later, “sort up,” must you not? If you sort-up,you do it at “broken-lot” rates and payexcessive carriage chargesfor delivery to your place of business, do you not? If, on the other hand, youoverbuythe demands of your trade, your shelves are soon full of “shelf-worns,” are they not? These shelf-worns you must unload, must you not? To do that, you offer “bargains,” do you not? Unloading “bargains”loses your “edge”—yourprofits—does it not?
But still another point in your presentand compelledmethod of business. Your customer isneverso well pleased with yoursacrifice“bargains” as he or she is with thefresh, up-to-date article, which you sell at aprofit. Is that not so?
Now, let us see how acheapparcels post would “knock your business silly.” Let’s put the rate, say at 5 cents for parcels up to one pound, 8 cents to two pounds, 10 cents to three pounds, 12 cents to four pounds, and so shading up in weight to twenty-five pounds,at one cent a pound. I present this scale of weights and prices merely to illustrate. I have given them no particular thought or consideration—that is, I do not present them as arecommendedbasis for a parcels carriage system. I believe, however, that the government can carry anddeliverparcels at about the rates namedand not create any larger “deficits”than the postal service now shows.
That aside, let us see how you, Mr.RetailCountry Merchant, would come out in the deal:
First: You would not have to “stock up” beyond theknowndemands of your customers. Your “shelf-capital,” then, would need not, necessarily, be more thanhalfwhat is now is.
Second: You could serve your customers fresh goods of latest pattern and atlesscost, and still serve themat a profit, instead of working off shelf-worn “bargains” on them at aloss.
Third: Mrs. Lucy Smith sees a Sereno Payneimportedglove, advertised by an “eastern merchant” or some distant “mail order house.” It is the “very latest” and guaranteed to be the very best “kid” ever built—from aprematurecalf. Or Uncle Joe wants a mop rag-holder for Martha. It, too, is advertised by some distant manufacturer, merchant or mail-order bogey man. Say the advertised price of each is $1.00. Each, of course, weighsless than one pound.
Now, if Mrs. Smith or Uncle Joe ordersdirect, the article costs them, postage added at our hypothetical rate, $1.05. Of course,they will have inquired of you before they ordered—to see if you have it in stock—will they not? Well, you haven’t it in stock—and you can’t work off on them “something just as good.” Mrs. Smith justmusthave those particular gloves, and no other mop-holder will satisfy Uncle Joe. Now what do you do?
Do you tear off a yard or two of tirade about mail order houses that are “knocking your business silly” and about manufacturers who are “flooding the country with fake goods?” If you do, you ought to quit business and go put your head in pickle or take the “cure.” But you won’t tirade. No sir, nary tirade from you! You will be onto your job in a minute. And why?
Well, first, you know that you can get those gloves or that mop-holder for 20to40per cent lessthan the rate advertised for Mrs. Smith and Uncle Joe. You can have either sent by mail and deliver it to Mrs. Smith or Uncle Joe at theadvertisedrate, pay the parcels charge yourself and still make 10 to 20 cents on the deal. If the gloves or the mop-holder strikes you as a probable “seller,” you can order a half dozen or a dozen pairs of the gloves, or three or four mop-holders, andstill keep your parcel inside the one or two pound rate.
One other point in closing:
Well, it may be of no use—ofnoservice value to the reader who asks the question. He may be a man who has reached his limit of endurance—who has given up all hope of improving or correctinglegalizedinjustices whichrob him to enrich others. If so, he has my sympathy. Or he may be a man who has “set into the game” and lost, or one who ishiredas a capper, steerer or “look out” for its operators. I cannot say. If the former, he still has my sympathy; if the latter, my contempt.
I am fully convinced that the outrages permitted by the municipal, state and national governments of this country in rendering public service to its people havediscouraged thousandsof itsbest citizens—best inmanhoodI mean, of course. The beneficiaries of the outrages I speak of are, usually, rated as “best” at the bank, in the society columns andin court proceedings. Even our divorce court records give the latterconspicuous precedence.