Rensselaer Union, Volume 6, Number 38, Rensselaer, Jasper County, 11 June 1874 — JAMES M’HENRY ON RAILWAYS. [ARTICLE]

JAMES M’HENRY ON RAILWAYS.

OptaloM or th( QtMt Ki(lltk H«f MU n Ik* litaatisa-Hi Defends U» Illinois ssil Wisconsin Laws, dad Takes ike {Side «t the People Against tho Monopells|p. A reporter of the New York Graphic recently called upon the great railway magnate, Mr. James McHenry, who was in New York city settling up the relations of the Brie Railway to the Atlantic & Great Western line, to get his views in regard to the great question of the day. The following was substantially what was •aid: Mr. McHenry was asked his opinion in regard to the Wisconsin and Illinois Rail way laws, and he promtlny expressed himself as in favor of them. “The Wisconsin laws,” said he, “ are a necessity of the times, and if the roads, instead of trying to oppose these laws, would endeavor faithfully to obey them, they would find it very much to their advantage. The only mistake the Wisconsin Legislature appears to have made is not endeavoring to enforce even a lower rate for freights. All those railways under the present tariff are insolvent, and therefore things can’t be worse even with a lower one. They are insolvent not for want of resources in this country, but because of the prohibitory rates they are endeavoring to charge for the carriage of freight Consequently there is no business equal to what the roads are capable of performing.” Reporter—What do you consider the limit of the capacity of roads! Mr. McHenry—The volume of business on American roads, either West or East, is limited only by the rites. These rates can be made low enough to enable America to compete with all the world, or high enough to entirely destroy her produce trade. The whole business of the trie or the New York Central Railway can now be done in four to six hours a day; consequently the business of the Western roads can now be done in much less time. The whole of the machinery, the permanent way and the rolling stock are standing idle for at least twenty hours a day. Now a great part of the capital of a railway is locked up in the permanent way, which deteriorates as rapidly from want of use as from use. And the fact is the actual cost of transportation is-so small that I believe it has never yet been proved how low a railway can carry freight and passengers and yet make a profit. R—The railways do occasionally reduce their rates pretty low in spasmodic fits of virtue ? Mr. McH.—Yes, that is where it is. If the railways would only persist in a moderate tariff sufficiently long to give confidence to our merchants in regard to the continuance of the rates, in order that they may make their contracts under•tandingly, the roads would soon find how much low rates inured to their benefit. R—What do you think of Commodore Vanderbilt’s second double track that he is now building along the line of the New York Central ? Mr. McH.—l see no necessity for it at all. I would say generally that a singletrack road could ao a much larger business than any of the roads now open. But a double track, of course, can be much more rapidly and economically managed as to time and cost, because the trains can be kept running without going upon sidings. R—Then you think the railways at present in existence are ample for the requirements of the countiy? Mr. McH. —Certainly; it is not additional rails or rolling stock that is required, but facilities at the terminal points for handling large masses of produce. This want is especially felt in New York. Her accommodations in this respect are unworthy of her position as the leading seaport of the country. R.—What about passengers! ■ Mr. McH.—A radical change is required in that respect. Dp you know what we have TouhdTh England! Why, that 70 per cent, of all the persons who travel by railway are those who go by the “ third-class” trains, as they are called. The largest revenues, therefore, are derived trom those passengers who at higher rates would be excluded. In the United States this class of passengers appear to be altogether neglected, and in their development there is, Tam convinced, a mine of wealth far surpassing all the present income of the railways. This class of passengers cannot afford to pay high rates. Men who earn three dollars a day find it impossible to travel fur long distances on the American roads at present rates of fare. The lodgers in tenement houses are. by the present system of this country, expected to pay as much as the residents of the Fifth avenue palaces. The poorer classes, accordingly, cannot travel at all. Moreover, I find that the Fifth avenue gentleman generally manages to get a free pass for himself and a friend, while the tenement lodger remains at home. R.—Then there are the emigrants, s. Mx/McH. —Exactly. The whole through paagenger traffic of the great lines of railway scarcely equal the arrival of emigrants daily' in New York alone. This fact shows how preposterously affairs have been managed. Just observe the case of the Erie Railway. It was said that the through traffic to Chicago was rapidly increasing. It appears that they take nine passengers a day where they formerly took six. The increase was truly 50 per cent., but the aggregate was very far from what it ought to be. Indeed, it was disgraceful. R—You think, then, that the Wisconsin roads are able to run their roads profitably at the rates indicated! Mr. McH.—No doubt of it All these Western roads are mere gathering grounds and feeders of the main lines and their use Is limited only by the inability of the trunk lines to deliver freight economically, but still more limited by the constant changes in the rates for transportation. Rates should be stable and fixed in order to give the merchant a chance for creating business. After all it is the man who creates business on whom the railways must rely. He must know what the carrying charges will be at least a year in advance. The produce of the United States is plentiful and cheap, but they by no means enjoy a monopoly of everything. There is not an article raised here that doesn’t come into competition with like produce from other part* of the world. Therefore the merchant in his creation of business must be able to rely on the rates of transportation in order to enable him to compete with the merchants of other countries. For instance, when American corn falls in Liverpool (which is the Treat market for that article) to 30 shillings . a quarter, the demand is practically unlimited; and aa no other country United States can supply sufficient quantities at that rate they can enjoy an enormous business in the article. As soon as the price rises above that rate through short supplies then imports commence from all parts of Europe. Therefore it is to the interest of the railways to keep a low and steady tariff; for when a merchant’s operations are once broken tip much time Js lost before a new set of speculators and dealers can take hold of the business and create it anew. Therefore, I say, whether the Wisconsin laws are unconstitutional or not they certainly deserve foe obedience of the citizens by whose representatives they were made —the more especially as these lower rates would certainly Mag them In more proflu. It is a great fUlacy to suppose that high rates make Increased revenue. In England Commercial men well know that low and steady snd flxedrate* produce the largest profits.

I shall be glad, therefore, if the bold movement of the Wisconsin people leads to a reconsideration of the subject ot transportation by the railway managers. A well-managed railway should dry'lip every canal in its neighborhood and destroy everything like Competition by water. They should compete boldly with water for business, and not show that timidity now displayed by them in regard to water communication by rivers and canals. R.—What effect will the introduction of steam on canals have! Mr. McH.—Not the slightest; for it so happens that at the very time when produce is most required by the consumer all water communication is frozen up. At-the best of times it is irregular and dangerous, tedious and expensive. As an illustration of the way in which railway!* compete with canals I may mention the case of the mo3t remunerative railway in Great Britain, the Northeastern, which originally ran from Newcastle to Carlisle, the traffic between which places was comparatively limited and controlled by a canal and stage-coach. During several years the attempt was made to construct' the railway, but there was constant opposition on the part of the canal pompany. Finally a compromise was made, the canal people agreeing to the passage of the Railway bill provided a clause was inserted in it to the effect that not more than a halfpenny (one cent) per ton per mile should be charged for the transport tation of coal. The bill was taken on these terms, which were considered very severe. But the result was that the railway people made their fortune, and the canal lost theirs. Since this period railways have made a great deal of money by carrying coal at that and much lower rates. It is now the leading feature of railway transportation, and a source of the largest profit. Again, in regard to passenger traffic, and as still bearing on the Wisconsin measures, I may mention railway management in England. There they followed the same principles of business that have been followed here—charging the highest possible rates that could be extracted from the purses of the people,. But some twenty years ago Mr. Gladstone introduced an act, wjjich was passed, compelling every railway in the country to run two trains a day, morning and evening, at a penny a mile for passen gers. These, in consequence, were called for many years “Parliamentary trains.” Here again, to th* amazement of the direct, ors, it was found that Mr. Gladstone’s interference with their rights led them on to fortune; and now 70 per cent, of the passenger traffic of England, which approaches 500,000,000 of persons, is just this third-class, which therefore pays an enormous revenue to the railways. ~ —R —What is your opinion in regard to the taking of railways by the State ? Mr. McH.—No practical railway man supposes that a State could take charge of a railway and manage it properly. But certainly citizens ought not to be defrauded of their rights by the companies in possession; and therefore a time may come, and in many of the Western States it has come, which would almost authorize the Governors of those States to take military possession of the rebellious railways and teach the managers a lesson which they do not seem disposed otherwise to learn, namely, that railways are for the benefit of the people as well as of the proprietors; and you can’t injure the one without injuring the other. Their interests are identical.