In 1836—fifty years ago—there were but a little more than 1,000 miles of railroad on the American continents, representing an outlay of some $35,000,000, and controlled by a score or so of corporations. There are now (1886) about 135,000 miles in the United States alone, capitalized at over eight thousand millions of dollars.

The railroad interest is thus the largest single interest in the country. Probably 600,000 men are in its employ as wage-earners. It is safe to say that over two millions of human beings are directly dependent upon it for their daily support. The Union Pacific, as a single and by no means the largest member of this system, controls 5,150 miles of road, represented by stock and bonds to the amount of $275,000,000. More than 15,000 names are borne upon its pay-rolls. Its yearly income has exceeded $29,000,000, and in 1885 was $26,000,000. Large as these aggregates sound, there are other corporations which far exceed the Union Pacific both in income and in capitalization, and not a few exceed it in mileage. The Pennsylvania, for instance, either owns or directly controls 7,300 miles of road. It is represented by a capitalization of $670,000,000; its annual income is $93,000,000; it carries 75,000 names on its pay-rolls.

This has been the outgrowth of a single half-century. The vast and intricate organization implied in the management of such an interest had, as it were, to be improvised. The original companies were small and simple affairs. Some retired man of business held, as a rule, the position of president; while another man, generally a civil engineer, and as such supposed to be more or less acquainted with the practical working of railroads, acted as superintendent. The superintendent, in point of fact, attended to everything. He was the head of the commercial department; the head of the operating department; the head of the construction department; and the head of the mechanical department. But there is a limit to what any single man can do; and so, as the organization developed, it became necessary to relieve the railroad superintendent of many of his duties. Accordingly, the working management naturally subdivided itself into separate departments, at the head of which men were placed who had been trained all their lives to do the particular work required in each department. In the same way, the employees of the company—the wage-earners, as they are called—originally few in number, held toward the company relations similar to those which the employees in factories, shops, or on farms, held to those who employed them. In other words, there was in the railroad system no organized service. As the employees increased until they were numbered by hundreds, better organization became a necessity. The community was absolutely dependent upon its railroad service for continued existence, for the running of trains is to the modern body politic very much what the circulation of blood is to the human being. An organized system, therefore, had to grow up. This fact was not recognized at first; and, indeed, is only imperfectly recognized yet. Still the fact was there; and inasmuch as it was there and was not recognized, trouble ensued. No rationally organized railroad service—that is, no service in which the employer and employed occupy definite relations toward each other, recognized by each, and by the body politic—no such service exists. Approaches to it only have been made. A discussion, therefore, of the form that such a service would naturally take if it were organized, cannot be otherwise than timely.

It has already been noticed that in the process of organization the railroad, following the invariable law, naturally subdivides itself into different departments.[32] In the case of every corporation of magnitude there are of these departments, whether one man is at the head of one or several of them, at least five. These are:

1st. The financial department, which provides the ways and means.

2d. The construction department, which builds the railroad after the means to build it are provided.

3d. The operating department, which operates the road after it is built.

4th. The commercial department, which finds business for the operated road to do, and regulates the rates which are to be charged for doing it.

5th. The legal department, which attends to all the numerous questions which arise in the practical working of everyone of the other departments.

These five divisions of necessary work exist in the organization of every company, no matter how small it may be, or how few officers it may employ. In the larger companies the need is found for yet other special departments. In the case of the Union Pacific, for instance, there are two such: First, the comptroller's department, which establishes and is responsible for the whole method of accounting; second, a department which is responsible for all the numerous interests which a large railroad company almost of necessity develops outside of its strict, legitimate work as a common carrier.

When it comes to dealing with the employees of the company, it will be found that the vast majority of those whose names are on the pay-rolls belong to the operating department. This department is responsible not only for the running of trains and, usually, for the maintenance of the permanent way, but also for the repairs of rolling stock. All the train-hands, all the section-men and bridge-gangs, and all the mechanics in the repair shops thus belong to the operating department. The accounting department employs only clerks. The same is true of the commercial department, though the commercial department has also agents at different business centres who look after the company's interests and secure traffic for it. The construction department is in the hands of civil engineers, and the force employed by it depends entirely upon the amount of building which may at any time be going on. As a rule, the bulk of the employees in the construction department are paid by contractors, and not directly by the railroad company. The legal department consists only of lawyers and the few clerks necessary to aid them in transacting their business.

In the operating department of the Union Pacific at the present time (1886) about 14,000 names are carried upon the pay-roll. The number varies according to the season of the year and the pressure of traffic. In January, and during the winter months, the average will fall to 12,000, while in June and during the summer it rises to 14,000.

Of these, 2,800, or 20 per cent., are engaged in train movement; 4,200, or 30 per cent, are in the machine-shops and in charge of motive power and rolling-stock; 7,000, or 50 per cent., are employed in various miscellaneous ways, as flag-men, section-hands, station agents, switch-men, etc., etc.

So far as the wage-earner is concerned, it is, therefore, this portion of the force of a railroad company which may be called distinctively "the service." If good relations exist between the men employed in its operating department and the company no serious trouble can ever arise in the operation of the road. The clerks in the financial department, or the engineers in the construction department, might leave the company's employ in a body, and their places could soon be filled. In point of fact, they never do leave it; but should they do so, the public would experience no inconvenience. The inconvenience—and it would be very considerable—would be confined to the office of the company, and their work would fall into arrears. It is not so with the operating department. So far as the community at large is concerned, whatever difficulties arise in the working of railroads develop themselves here. All serious railroad strikes take place among those engaged in the shops, on the track, or in handling trains. That these difficulties should be reduced to a minimum is therefore a necessity. They can be reduced to a minimum only when the railroad service is thoroughly organized.

How then can this service be better organized than it is? It is usually maintained that only the ordinary relation of employer and employed should exist between the railroad company and the men engaged in operating its road. If the farmer is dissatisfied with his hands, he can dismiss them. In like manner, if the laborer is dissatisfied with the farmer, he can leave his employ. It is argued that exactly the same relation should exist between the great railroad corporation and the tens of thousands of men in its operating department. The proposition is not tenable. The circumstances are different. In the first place, it is of no practical consequence to the community whether difficulties which prevent the work of the farm from going on arise or do not arise between an individual farmer and his laborers. The work of innumerable other farms goes on all the same, and it is a matter of indifference what occurs in the management of the particular farm. So it is even with large factories, machine-shops—in fact, with all industrial concerns which do not perform immediate public functions. A railroad company does perform immediate public functions. The community depends upon it for the daily and necessary movements of civilized existence. This fact has to be recognized. For a railroad to pause in its operation implies paralysis to the community which it serves.

Such being the fact, it is futile to argue that the ordinary relations of employer and employed should obtain in the railroad service. Something else is required; and because something else is required but has not yet been devised we have had the numerous difficulties which have taken place during the present year—difficulties which have occasioned the community much inconvenience and loss.

The model railroad service, therefore, is now to be considered. Of what would it consist? At present, there is practically no difference between individuals in the employ of a great railroad corporation. All the wage-earners in its pay stand in like position toward it. There should be a difference among them; and a marked difference, due to circumstances which should receive recognition. Take again the case of the Union Pacific. The Union Pacific, it has already been mentioned, numbers 14,000 employees in its operating department as a maximum, and 12,000 as a minimum. They vary with the season of the year, increasing in summer and diminishing in winter. Consequently there is a large body of men who are permanently in its employ; and there is a smaller body, although a very considerable portion of the whole, who are in its employ only temporarily. Here is a fact, and facts should be recognized. If this particular fact is recognized, the service of the company should be organized accordingly, and each of the several divisions of the operating department would have on its rolls two classes of men: First, those who have been admitted into the permanent service of the company; and, second, those who for any cause are only temporarily in that service. And no man should be admitted into the permanent service until after he has served an apprenticeship in the temporary service. In other words, admission into the permanent service would be in the nature of a promotion from an apprenticeship in the temporary service.

Those in the temporary service need not, therefore, be at present considered. They hold to the companies only the ordinary relation of employee to employer. They may be looked upon as candidates for admission into the permanent service—they are on probation. So long as they are on probation they may be engaged and discharged at pleasure. The permanent service alone is now referred to.

The permanent service of a great railroad company should in many essential respects be very much like a national service, that of the army or navy, for instance, except in one particular, and a very important particular: to wit, those in it must of necessity always be at liberty to resign from it—in other words, to leave it. The railroad company can hold no one in its employ one moment against his will. Meanwhile, to belong to the permanent service of a railroad company of the first class, so far as the employee is concerned, should mean a great deal. It should carry with it certain rights and privileges which would cause that service to be eagerly sought. In the first place, he who had passed through his period of probation and whose name was enrolled in the permanent service would naturally feel that his interests were to a large extent identified with those of the company; and that he on the other hand had rights and privileges which the company was bound to respect. It has been a matter of boast in France that every private soldier in the French army carried the possibility of the field-marshal's baton in his knapsack. It should be the same with every employee in the permanent service of a great American railroad company. The possibility of his rising to any position in that service for which he showed himself qualified should be open before him and constantly present in his mind. Many of the most remarkable and successful men who have handled railroads in the United States began their active lives as brakemen, as telegraph operators, even as laborers on the track. Such examples are of inestimable value. They reveal possibilities open to all.

Beyond this, the man who is permanently enrolled should feel that, though he may not rise to a high position, yet, as a matter of right, he is entitled to hold the position to which he has risen just so long as he demeans himself properly and does his duty well. He should be free from fear of arbitrary dismissal. In order that he may have this security, a tribunal should be devised before which he would have the right to be heard in case charges of misdemeanor are advanced against him.

No such tribunal has yet been provided in the organization of any railroad company; neither, as a rule, has the suggestion of such a tribunal been looked upon with favor either by the official or the employee. The latter is apt to argue that he already has such a tribunal in the executive committee of his own labor organization; and a tribunal, too, upon which he can depend to decide always in his favor. The official, on the other hand, contends that if he is to be responsible for results he must have the power of arbitrarily dismissing the employee. Without it he will not be able to maintain discipline. The two arguments, besides answering each other, divide the railroad service into hostile camps. The executive committees of the labor organizations practically cannot save the members of those organizations from being got rid of, though they do in many cases protect them against summary discharge; and, on the other hand, the official, in the face of the executive committee, enjoys only in theory the power of summary discharge. The situation is accordingly false and bad. It provokes hostility. The one party boasts of a protection which he does not enjoy; the other insists upon a power which he dares not exercise. The remedy is manifest. A system should be devised based on recognized facts; a system which would secure reasonable protection to the employee, and at the same time enable the official to enforce all necessary discipline. This a permanent service, with a properly organized tribunal to appeal to, would bring about. Meanwhile the winnowing process would be provided for in the temporary service. Over that the official would have complete control, and the idle, the worthless, and the insubordinate would be kept off. The wheat would there be separated from the chaff. Until such a system is devised the existing chaos, made up of powerless protection and impotent power, must apparently continue. None the less it is a delusion on the one side and a mockery on the other.

How the members of such a court as has been suggested would be appointed and by whom is matter for consideration. It would, of course, be essential that the appointees should command the confidence of all in the company's service, whether officials or employees. The possible means of reaching this result will presently be discussed.

Not only should permanent employees be entitled to retain their position during good behavior, but they should also look forward to the continual bettering of their condition. That is, apart from promotion, seniority in the service should carry with it certain rights and privileges. Take the case of conductors, brakemen, engineers, machinists, and the like; there seems to be no reason why length of faithful service should not carry with it a stipulated increase of pay. If conductors, for example, have a regular pay of $100 a month, there seems no good reason why the pay should not increase by steps of $5 with each five years' service, so that when the conductor has been twenty-five years in the service his pay should be increased by one-quarter, or $25 a month. The increase might be more or less. The figures suggested merely illustrate. So also with the engineer, the brakeman, the section-man, the machinist. A certain prospect of increased pay, if a man demeans himself faithfully, is a great incentive to faithful demeanor. This is another fact which it would be well not to lose sight of.

There ought likewise to be connected with every large railroad organization certain funds, contributed partly by the company and partly by the voluntary action of employees, which would provide for hospital service, retiring pensions, sick pensions, and insurance against accident and death. Every man whose name has once been enrolled in the permanent employ of the company should be entitled to the benefit of these funds; and he should be deprived of it only by his own voluntary act, or as the consequence of some misdemeanor proved before a tribunal. At present the railroad companies of this country are under no inducement to establish these mutual insurance societies, or to contribute to them. Their service, in principle at least, is a shifting service; and so long as it is shifting the elaborate organizations which are essential to the safe management of the funds referred to cannot be called into existence. A tie-up, as it might be called, between the companies and their employees is a condition precedent. Were this once effected the rest would follow by steps both natural and easy. For a company like the Union Pacific to contribute $100,000 a year to a hospital fund and retiring pension and insurance associations would be a small matter, if the thing could be so arranged that the permanent employees themselves would contribute a like sum; and permanent employees only would contribute at all. Once let the growth of associations like these begin, and it proceeds with almost startling rapidity. At the end of ten years the accumulated capital on the basis of contribution suggested would probably amount to millions. Every man who was so fortunate as to become a permanent employee of the company would then be assured of provision in case of sickness or disability, and his family would be assured of it in case of his death.

The moment a permanent service was thus established it would also involve further provision of an educational nature. That is, the companies must continually provide a stock of men for the future. Where a boy—the son of an employee—grows up always looking forward to entering the company's service, he becomes to that company very much what a cadet at West Point or Annapolis is to the army or the navy of the United States; the idea of loyalty to the company and of pride in its service grows up with him. Railroad educational institutions of this sort have already been created by at least one corporation in the country, and they should be created by all railroad corporations of the first class. The children of employees would naturally go into these schools, and the best of them would at the proper age be sent out upon the road to take their places in the shops, on the track, or at the brake. From those thus educated the higher positions in the company would thereafter be filled. The cost of maintaining these schools, at least in part, would become a regular item in the operating expenses of the road. Properly handled, a vast economy would be effected through them. The morale of the service would gradually be raised, and the morale of a railroad is, if properly viewed, no less important than the morale of an army or navy. It is invaluable.

But it is futile to suppose that such a service as that outlined could be organized, in America at least, unless those concerned in it were allowed a voice in its management. Practically the most important feature of the whole is therefore yet to be considered. How is the employee to be assured a voice in the management of these joint interests, without bringing about demoralization? No one has yet had the courage to face this question; and yet it is a question which must be faced if a solution of existing difficulties is to be found. If the employees contribute to the insurance and other funds, it is right that they should have a voice in the management of those funds. If an employee holds his situation during good behavior, he has a right to be heard in the organization of the board which, in case of his suspension for alleged cause, is to pass upon his behavior. No system will succeed which does not recognize these rights. In other words, it will be impossible to establish perfectly good faith and the highest morale in the service of the companies until the problem of giving this voice to employees, and giving it effectively, is solved. It can be solved in but one way: that is, by representation. To solve it may mean industrial peace.

It is, of course, impossible to dispose of these difficult matters in town-meeting. Nevertheless, the town-meeting must be at the base of any successful plan for disposing of them. The end in view is to bring the employer—who in this case is the company, represented by its president and board of directors—and the employees into direct and immediate contact through a representative system. When thus brought into direct and immediate contact, the parties must arrive at results through the usual method: that is, by discussion and rational agreement. It has already been noticed that the operating department of a great railroad company naturally subdivides itself into those concerned in the train movement, those concerned in the care of the permanent way, and those concerned in the work of the mechanical department. It would seem proper, therefore, that a council of employees should be formed, of such a number as might be agreed on, containing representatives from each of these departments. In order to make an effective representation, the council would have to be a large body. For present purposes, and for the sake of illustration merely, it might be supposed that, in the case of the Union Pacific, each department in a division of the road would elect its own members of the employees' council. There are five of these divisions and three departments in every division. The operating-men, the yard and section-men, and the machinists of the division would, therefore, under this arrangement choose a given number of representatives. If one such representative was chosen to each hundred employees in the permanent service those thus selected would constitute a division council. To perfect the organization, without disturbing the necessary work of the company, each of these division councils would then select certain (say, for example, three) of their number, representing the mechanical, the operating, and the permanent way departments, and these delegates from each of the departments would, at certain periods of the year, to be provided for by the articles of organization, all meet together at the head-quarters of the company in Omaha. The central council, under the system here suggested, would consist of fifteen men; that is, one representing each of the three departments of the five several divisions. These fifteen men would represent the employees. It would be for them to select a board of delegates, or small executive committee, to confer directly with the president and board of directors. Here would be found the organization through which the voice of the employees would make itself heard and felt in matters which directly affect the rights of employees, including the appointment of a tribunal to pass upon cases of misdemeanor, and the management of all institutions, whether financial or educational, to which the employees had contributed and in which they had a consequent interest.

There is no reason whatever for supposing that, within the limits which have been indicated, such an organization would lead to difficulty. On the contrary, where it did not remove a difficulty it might readily be made to open a way out of it. The employees, feeling that they too had rights which the company frankly recognized and was bound to respect, would in all cases of agitation proceed through the regular machinery, which brought them into easy and direct contact with the highest authority in the company's service. They would not, therefore, be driven into outside organizations. Meanwhile, on the other hand, the highest officers of the company, including the president and the board of directors, would be brought into immediate relations with the representatives of the employees on terms of equality. Each would have an equal voice in the management of common interests; and it would only remain to make provision for arriving at a solution of questions in case of deadlock. This would naturally be done by the appointment of a permanent arbitrator, who would be selected in advance.

The organization suggested includes, it will be remembered, only those employees whose names are on the permanent rolls of the operating department. For reasons which have been sufficiently referred to, those whose names are on the rolls of the other four departments have not been considered. But there would be no difficulty in making provision for them also, should it be found expedient or desirable so to do. Through the system of representation the organization could in fact be made to include every employee in the permanent service of the company, not excepting the president, the general manager, or the general counsel. Each employee included would have one vote, and each division and department its representatives. The organization in other words is elastic. No matter how large it might be it would never become unwieldy so long as it resulted in the small committee which met in direct conference face to face with the board of directors.

Could such a system as that which has been suggested be devised and put in practical operation there is reason to hope that the difficulties which have hitherto occurred between the great railroad companies and those in their pay would not occur in future. The movement is the natural and necessary outcome of the vast development referred to in the opening paragraphs of this paper. It is based on a simple recognition of acknowledged facts, and follows the lines of action with which the people of this country are most familiar. The path indicated is that in which for centuries they have been accustomed to tread. It has led them out of many difficulties. Why not out of this difficulty?