By Hon. John C. Spooner.

From the address delivered at the annual dinner of the Railway Business Association, New York, November 10, 1909.

The topic which has been assigned to me is brief, but very large: "Railroads and the Public." It suggests nothing of humor, but everything of gravity and involves considerations which affect the prosperity of our whole people. The railroads, often berated in legislatures and in congresses as leechlike and piratical, are, after all, vital to the happiness of our people and to the progress of our industries and commerce. The people are apt to forget that they have been the greatest factors—I say the greatest factors—in the development of our resources and the enlargement of our commerce, both in times of war and in times of peace. If one would stop to think of what would have happened if, during the war for the preservation of the Union, we had been without railroads, ready and willing to serve the government upon its demand and at prices fixed by it, how long would the war have continued? And what might not have been its result? They carried troops from the North to the places of rendezvous in the fields; they enabled the government to transfer quickly from the East to the West, or the West to the East, as emergency demanded, troops essential to successful military operations. They carried munitions of war, they carried the mail to our soldiers, they carried food and raiment to those who were fighting under our flag.

And in time of peace, what would this country have been without the railroads? The railroad has been the advance courier of progress, of settlement, of production, of commerce. It is absolutely, and has been, indispensable to the government, to the commerce and to the happiness and comfort of our people. Its mission is not performed or fulfilled. Considered solely with reference to construction, there are new fields to be penetrated by them. Today men of courage and men of means are building railways with characteristic American energy in far off Alaska, to bring the gold mines and the coal mines and the timber and the unknown resources of that distant territory into the markets of the United States. If there is one instrumentality which above another has been a factor, appreciable by all thoughtful men, in making this country what it is, it is the railroad. And the railroad has kept abreast with the demands of commerce. Every device which ingenuity or invention has presented has been promptly adopted by the railway companies of the country. They have kept abreast of invention and improvement, until today the railway system of the United States is the most luxurious, the safest, the best managed railway system under the bending sky.

The first thing that would occur to one from this toast, the railroads being first mentioned, is what do the railroad companies owe to the public? That is easily defined. They owe it to the public to furnish safe roadbeds and equipment; they owe it to the public to furnish prompt service; they owe it to the public to treat all men, with obvious limitations, passengers and shippers under the same circumstances, equally and without unjust discrimination, and they owe to the public the duty of, as far as it is possible, so maintaining their roads and their equipment as to be able to meet in a fair way all the demands of commerce and traffic at reasonable rates. That excludes the rebate which never had any justification in logic or in fair play. I think those who hated it most were those who felt obliged to adopt it. When one railway company gave rebates it is quite manifest that the competitor was obliged to, or go out of business. And I believe that railway companies of the United States were glad, and their officers were glad, when it was made a penal offense for railway companies to give rebates. I think a railway company owes to the public to be careful in the selection of its employes; they should be capable, of course, and they should not only be capable, but they should be courteous and polite. To sum it up, you would say that what the railway in the enlarged sense—which includes details—owes to the public is just and fair treatment.

What does the public owe to the railway companies? Precisely, as I view it, the same thing, just and fair treatment. Only that and nothing more. Everybody knows that the railway companies of the United States—I won't put it that way—that the railway system of the United States never could have been created without the utilization of corporate entities. Partnerships never could have concentrated the capital necessary to that end. Only corporations could have achieved it. That was true in the past and it always will be true. Now, why is the railway company different from other corporations, most other corporations? One trouble with the general public is that they don't seem to understand—and they are not perhaps to be chided for it—their relation to the railway company. They think, and they are told, they have been told it in Congress, and they have been told it where one would least have expected it, that railway corporations are public corporations, and they have been taught to believe that their power over public corporations was supreme, which is not far from the truth; but the railway corporation is not a public corporation. The Supreme Court has many times decided that a railway company is a private corporation, that its property is private property, under the protection and safeguards of the Constitution of the United States against the public as well as against individuals who attack it. Then, wherein lies the difference between a private corporation engaged in manufacture and a railway corporation? Right here: A railway corporation can not construct its railway without being clothed with a power which is not given to the usual private corporation, a power which inheres in the sovereignty of the state, the ultimate power of the people delegated to the railway corporations and very few others, and that is the power to take your land without your will at a price fixed not by you but by a jury. Why? Because it is for the public use, and private interest and private sentiment can not be permitted to obstruct the interest of the state, and therefore the property of a railway company while it is private property is, as the Supreme Court of the United States has said, affected with the public interest.

A railway company serves the public, that is what it is organized to do. Those who apply for the corporate franchises do not apply for an altruistic purpose. They wish it because they think they can make profit out of it, and that is legitimate, but the state grants it for the public use. And so it comes about that the state has the power to regulate it. Mark what I say, to regulate it, to prevent it from exacting extortionate rates from the people; to prevent it from putting upon the people abuses in its management, but that does not mean that the state may take its property. That does not mean that the state may take its management out of the hands of its owners. It means simply that the state may protect the public from any abdication by it or violation by it of its duty as a common carrier, and this principle is too often forgotten.

In these days regulation has apparently achieved a wider field for operation, and is deemed to be broad enough to regulate not only the property and the management of the property, but the management of everybody connected with it. That won't do. Why, I see it is stated in the report of your Business Association that commissions which have been organized by the states and the Commission organized under the act of Congress, have come to stay. Of course they have come—we know that, and we know another thing, that whenever a governmental commission comes, it stays. The commissions in the states, most of the states—God knows I wish I could say all the states, but I can not truthfully—have subserved a useful purpose. The state lays down the rule and the commission administers the law. There is one thing about a commission in the regulation under the law of railway carriers which places it in respect of proprietary, fairness and fitness for that function, far above Congress or any other legislative body, and that is this: That they have time to listen, to investigate, to get at the truth, which a legislative body does not have time to do in the very nature of things. I do not know, but I think nothing added more to the reputation of Governor Charles E. Hughes, of New York, than the fact that he refused to sign a bill, but vetoed it, reducing the rates which railway companies might charge, upon the ground that there had been no investigation which enabled fair judgment as to what was fair treatment to the railway corporations.

I was in public life a good many years and I am a firm believer in the sober second thought of the American people, for it represents the average judgment of every class of our people; but they get wrong, they get wrong about men, and they get wrong about policies and measures. They are subject, en masse, as men are individually, to moments of passion and excitement, and they know it. As Mr. Webster said, and as the Supreme Court of the United States has said, the fundamental object of a constitution adopted by the people is that they may protect themselves against themselves in moments of excitement and passion. And the American people will always give heed to the popular translation of the phrase, "Due process of law," that is, hear before you strike.

Now the Commission, the Interstate Commerce Commission, was intended by the Congress which created it to be an absolutely independent body. It was to report to the Congress, it was not to be subject to the command of either House of Congress, or of the Executive of the United States. It was intended to be a quasi-judicial body. I know all of its members, and I do not depreciate to the slightest extent the services which it has rendered. The only criticism I would have of it, and that does not arise from its membership, but it is inherent in the system, is that it is never satisfied with the powers it has got. It is as insatiable as death for power. It has been proposed that they shall have the power to regulate the issue of stocks and bonds by railway corporations created by the states, that is, if the state which creates the railway company authorizes it, desiring it to utilize its privileges for the construction of a new railroad, to issue stock, or issue bonds, that it shall not be permitted to do that thing until the act of the legislature and the approval of the governor shall have been supplemented by the approval of the Interstate Commerce Commission. Now I am getting along in years, and I am a little old-fashioned, and I have not yet been able to satisfy myself that where one government creates a stock corporation, another government shall regulate the amount of its capital stock and its bonded indebtedness.

I have seen it proposed lately that the Commission should have the power to fix a rate, and that that rate should be final until a final judgment setting it aside was reached. What becomes of the constitution under such a law as that? A railway company, as I have said, owns its property. It renders a compulsory service to the public over its own property, with its own equipment, with its own employes, and at its own risk, and is entitled to a fair compensation, based upon the fair value of the property which it devotes to the public convenience, and the Supreme Court has held that that property can not be taken—because the use of property is the property—can not be taken for the public use without just compensation, and if the state, the legislature, or the Congress may authorize a commission to fix a rate as reasonable and fair, beyond which the railway company may not charge for services it renders, and require it to observe that rate until the final adjudication as to whether the rate is reasonable or not, and after the lapse of months it is decided that it was unreasonable, how can the railway company recover the great sum in unreasonable rates which it had lost? It is a taking of a private property for a public use without just compensation, and I deny the constitutional power of Congress to do that thing. I admit the power, and the exercise of it to the fullest extent to so far regulate railway corporations as to secure to the public a faithful discharge of all their duties to the public at reasonable rates, and under fair regulations; beyond that I believe that the owners of the property ought to be permitted to manage the property.

The business of railway management has become one of the learned professions. It calls for some of the brightest intellects in the country. It calls for the exercise of powers which, if devoted to the law or to finance or to any other business, would place those who exercise it among those at the head. It is one of infinite complication, and it is not to be supposed that railway commissions can manage railway properties as well as the men who have been trained from boyhood to that business. I have never questioned that the Interstate Commerce Commission, the Commission in Wisconsin, and other commissions, earnestly set out to do the just and fair thing, but the trouble with this whole question is, and has been through many a year, that it gets too often into politics. I do not believe myself that questions of business ever ought to find their way into the political platform of the party, any more than I believe that the relations of the employer to the employe, whatever the business may be, ought to become the football of party politics.

This Association was born out of a happy inspiration. I think these troublesome problems are approaching solution. The railway companies must obey the law. The people ought to see to it that the law which the railway corporations are obliged to obey is a just law, and that is to be ascertained only on painstaking inquiry, and not through the speeches of enthusiastic orators or on the floors of Congress. It has got to be at times that where there was no other issue upon which a political contest could be fought out, the easy, obvious and last resort was "let us go for the railroads," or, as a Governor of Minnesota once expressed it, "Let's shake the railroads over hell." The truth is that the interest of the railroads is the interest of the people. The railroad company is dependent upon the people for its life and its sustenance, and the people are no less dependent upon the railway company, and between the two there should be even-handed justice. They should be dealt with calmly, and legislation should only follow deliberation and investigation, and a law once enacted should be impersonally enforced, not enforced against some and left to fall into innocuous desuetude as to others.