The Arena. Volume 4, No. 21, August, 1891

It would be a fatal mistake to imagine that M. von Bismarck allowed himself to be led into the Danish campaign. He did nothing to bring it about, but the instant it showed itself on the cards he took advantage of it in the most predetermined, authoritative way, leaving his Austrian accomplice and victim no possibility of escape. From the hour when, in 1853, he boarded Count Richberg on the Carlsbad Railroad, and forced his enemy of the Francfort Bund to become his humble servant and carry out all his designs, to the hour when, in 1865, he drove Franz Joseph to sign the Condiminium on what he knew was a mere waste paper, he was resolved to turn to account the extraordinary opportunity offered him by the incredible blindness and insensate terror of revolution of his allies. In the Austrians, the dread of what the smaller States, encouraged by Hungary, might attempt, paralyzed every other consideration, and besides that, the abortive little plans of Count Beust, in Saxony, served to point out to him what other Germans were, in a purely German sense, thinking of, and he decided that the grand historic game thrust upon his perceptions and waited for by all around him, should be played by himself alone. Then he played it, not before seeing at once what it must entail, but by no means assured that he could win.

And then, they who watched him nearest and knew him best, know how he played that game, mindful of every event that filled the long history of the past, living over again all the struggles, all the glories and defeats of all the European nations far or near, finding examples both to imitate or avoid, losing sight of nothing, from Gregory VII. to Gutenberg, from papal obscurantism to the Reformation’s blaze of light; from Wallenstein’s murder to the treaty of Utrecht; from Richelieu to the scaffold of Louis XVI., and while calculating every catastrophe, keeping steadily on his way.

This, the fearful period between the Crimean War, when first Cavour stepped forth to the incident of Ems, when the die was cast, this was the really magnificent passage in the great chancellor’s career, for this was the time of possible doubt when responsibility lay so heavy that to elude it might be called prudence, and which to have survived is already a proof of superiority over common humanity.

And here we assert the true grandeur of the precursor,—of the one whom we have called the inventor, and who undeniably was so—of Cavour! There can be no question that his own intimate familiarity with the details of the Bond of Virtue and the War of Freedom[7 - The celebrated victory of the Great Elector, that made Prussia into a kingdom.] of the glorious epoch when modern Germany headed and achieved the victorious movement against the world’s debasement,—brought distinctly to Bismarck’s mental vision the splendor of Cavour’s impossibly unequal contest for Italian freedom! The situations were essentially much alike, but so much grander for the Italian statesman, Italy’s odds being so immeasurably longer! But still the likeness came out, and the future chancellor could in no way aspire to be an initiator. The end was still a gigantic one, and one to which no true, brave patriot dared be false as an ideal,—but how as to the execution? As to the practical means of carrying out conceptions that might daily be doomed to alteration?

There it was again that the figure of Cavour arose supreme; his long, inexhaustible patience, his undying hopes, his sacrifices day by day of the very springs of life for a self-imposed duty,—these were his titles to immortal fame, these constituted his sovereign right to success. But was not the worst probation over when Waterloo was won, and was it not an accepted theory that the Vienna Congress had settled all the vexed questions of ancient Europe? Any further movement, therefore, might seem merely a disturbance. This, for conservative statesmen above all, was a dilemma.

Germany had liberated not Germany only, but the world in 1813, and had already had her Cavours!

There was no denying it: the Cavour of Germany was Stein. But was the work done? Had the Congress of Vienna settled anything, for was that still left to do without which the independence and well-being of forty millions of Germans was unguaranteed, and the peace of all Europe uninsured? If so, what remained to be achieved? to complete what the German Cavour, the Precursor Stein, had begun, to embody and make real the glorious dreams of which Queen Louise had been the symbol, the Joan of Arc?[8 - I would recommend every student of history to read attentively the extraordinary article of M. Paleologue in the Revue des Deux Mondes entitled “La Reine Louise de Prusse Comment se Fait une Legende.” It is a poetic but true suite to Professor Lévy Brühl’s magnificent study.]

That, indeed, brought the Hohenzollerns on the scene, and lent to prosaic history its legend, giving to Frederick’s “big battalions” the white-robed heroine who should lead them on.

Whether, through the long years of indecision, during which disorder and revolution seemed the danger to be averted, the future “Chancellor of Iron” matured his plans after the manner of Newton, by “forever thinking of them” is still a question to be adequately answered by himself alone. This much is certain that when, in 1863-64, the subject of the Duchies cast its shadow on the path, it revealed its importance to Bismarck, as it had done fourteen years previously to Dahlmann, and stood forth distinctly as the initial syllable of the one mystical word, Unity.

Schleswig-Holstein was, as a matter of fact, and by all its several complications, the German question; it was its sign and portent, and if action of some sort were not taken thereupon, the door set ajar was closed upon the future, for a generation at least. Palmerston’s declaration, than which no unwiser one was ever made, touching the insanity of the man who should seek to understand the enigma of the Danish Duchies, was adopted in England solely from the dense and inconceivable ignorance of the British mind on all German topics, and the equally inexplicable but inborn dislike of all British politicians to grapple with any serious study of them.

It was the problem to which no German of the North could show indifference; and it was the one subject which brought Prussia to the fore, and put her reigning house in the van, forcing the Hohenzollerns into predominance. This was a crucial point, and wondrous to record! the will of Bismarck on that exceedingly curious detail brought the Hapsburgs together with the Hohenzollerns; Frederick with Marie-Therèse, Wallenstein’s camp with Rebels, in an unescapable atmosphere of rank Germanism!

But here again the first step of the forthcoming ruler was taken in obedience to an irresistible, though, perhaps, unavowed, national suggestion. The sense of all that the past had given to German history, to the power of German thought, formed a part of Bismarck’s very nature, and spite of the timidity of his experienced statecraft, he could not disobey the promptings of the German conscience.

When the quick-witted French public applied to Professor Lévy Brühl’s work the title of “The idea whence comes the fact,” they awarded it its permanent signification; it is the development of the German conscience that causes the imperial unity of Germany, and no one is more thoroughly aware of that than the famous chancellor.

We feel with whomsoever was a witness of the crowning struggle, that nothing can even paint its gigantic character more aptly than the concluding phrase of the now famous French historian:—

… “Thus was formed the virtual German nation,—the nation that willed to be, and for long years could not be because reality refused to bear out practically all its ideals. It was in truth, l’ame qui cherche un corps!”

These words can never be improved upon. The chancellor knows their truth, as the Kronprinz knew it, but the years lying between them threw a certainty of glory into one which the other could not attain to,—and Bismarck, too, was a man of old Prussia, of her ancient traditions and formalities, while the crown prince was modern amongst moderns—a soldier, yes! but pre-eminently a man, a citizen; but though each felt his conviction differently, its strength was one and the same in both.

The unity of Germany was the creation of no individual. German unity and the imperial unity sprang from the whole past of German history and German thought. The State existing now is the outcome of Germany’s own self, of the idea, of the soul of Germany.

“SHOULD THE NATION OWN THE RAILWAYS?”[9 - The first part of this admirable essay appeared in July Arena.]

BY C. WOOD DAVIS

PART II.—The Advantages of National Ownership

First would be the stability and practical uniformity of rates now impossible, as they are subject to change by hundreds of officials, and are often made for the purpose of enriching such officials. State and federal laws have had the effect of making discriminations less public and less numerous, but it is doubtful if they are less effective in enriching officials and their partners, although it may be necessary to be more careful in covering tracks. That they are continued is within the cognizance of every well-informed shipper, and are made clear by such cases as that of Counselman and Peasley, now before the United States Supreme Court. Counselman and Peasley—one a large shipper and the other a prominent railway official—refused to testify before a United States grand jury upon the plea that to do so might criminate themselves; the federal law making it a criminal offence to make or benefit by discriminating rates. Counselman had been given rates on corn, some five cents less per hundred pounds than others, from Kansas and Nebraska points to Chicago.

The outrageous character of this discrimination will appear when we reflect that five cents per one hundred pounds is an enormous profit on corn that the grower has sold at from eighteen to twenty-two cents per one hundred pounds, and that such a margin would tend to drive every one but the railway officials and their secret partners out of the trade, as has practically been the case on many western roads. Doubtless such rates are sometimes made in order to take the commodity over a certain line, and there is no divide with the officials; but the effect upon the competitors of the favored shipper and the public is none the less injurious, and such practices would not obtain under national ownership, when railway users would be treated with honesty and impartiality, which the experience of half a century shows to be impossible with corporate ownership.

Referring to the rate question in their last report, the Interstate Commerce Commission says: “If we go no farther than the railroad managers themselves for information, we shall not find that it is claimed that railroad service, as a whole, is conducted without unjust discriminations.”

“If rates are secretly cut, or if rebates are given to large shippers, the fact of itself shows the rates which are charged to the general public are unreasonable, for they are necessarily made higher than they ought to be in order to provide for the cut or to pay the rebate.”

“If the carrier habitually carries a great number of people free, its regular rates are made the higher to cover the cost; if heavy commissions are paid for obtaining business, the rates are made the higher that the net revenues may not suffer in consequence; if scalpers are directly or indirectly supported by the railroad companies, the general public refunds to the companies what the support costs.”

The Commission quotes a Chicago railway manager as saying: “Rates are absolutely demoralized and neither shippers, passengers, railways, or the public in general make anything by this state of affairs. Take passenger rates for instance; they are very low; but who benefits by the reduction? No one but the scalpers…. In freight matters the case is just the same. Certain shippers are allowed heavy rebates, while others are made to pay full rates…. The management is dishonest on all sides, and there is not a road in the country that can be accused of living up to the interstate law. Of course when some poor devil comes along and wants a pass to save him from starvation, he has several clauses of the interstate act read to him; but when a rich shipper wants a pass, why he gets it at once.”

From years of ineffectual efforts on the part of State and national legislatures and commissions to regulate the rate business, it would appear that the only remedy is national ownership, which would place the rate-making power in one body with no inducement to act otherwise than fairly and impartially, and this would simplify the whole business and relegate an army of traffic managers, general freight agents, soliciting agents, brokers, scalpers, and hordes of traffic association officials to more useful callings while relieving the honest user of the railway of intolerable burthens.

Under corporate control, railways and their officials have taken possession of the majority of the mines which furnish the fuel so necessary to domestic and industrial life, and there are but few coalfields where they do not fix the price at which so essential an article shall be sold, and the whole nation is thus forced to pay undue tribute.

Controlling rates and the distribution of cars, railway officials have driven nearly all the mine owners who have not railways or railway officials for partners, to the wall. For instance, in Eastern Kansas, on the line of the St. Louis & San Francisco Railway Company, were two coal companies, whose plants were of about equal capacity, and several individual shippers. The railway company and its officials became interested in one of the coal companies, and such company was, by the rebate and other processes, given rates which averaged but forty per cent. of the rates charged other shippers, the result being that all the other shippers were driven out of the business, a part of them being hopelessly ruined before giving up the struggle. In addition to gross discriminations in rates this railway company practised worse discriminations in the distribution of cars; for instance, during one period of five hundred and sixty-four days, as was proven in court, they delivered to the Pittsburg Coal Company, 2,371 empty cars to be loaded with coal, although such company had sale for, and capacity to produce and load, during the same period, more than 15,000 cars. During the same time this railway company delivered to the Rogers Coal Company, in which the railway company and C. W. Rogers, its vice-president and general manager, were interested, no less than 15,483 coal cars, while four hundred and fifty-six were delivered to individual shippers. In other words, the coal company owned in large part by the railway and its officials was given eighty-two per cent. of all the facilities to get coal to market, although the other shippers had much greater combined capacity than had the Rogers Coal Company.

During the last four months of the period named, and when the Pittsburg Coal Company had the plant, force, and capacity to load thirty cars per day, they received an average of one and a fourth cars per day, resulting, as was intended, in the utter ruin of a prosperous business and the involuntary sale of the property, while the railway coal company, the railway officials, and the accommodating friends who operated the Rogers Coal Company, made vast sums of money; and when all other shippers had thus been driven off the line the price of coal was advanced to the consumer.

On another railway, traversing the same coal-field, the railway or its officials became interested in the Keith & Perry Coal Company—the largest coal company doing business on the line—and here the plan seems to have been, in addition to the manipulation of rates, to starve other mine operators out, and force them to sell their coal to the Keith & Perry Company, by failing to furnish the needed cars to those who did not sell their coal to the Keith & Perry Company at a very low price.

When the Keith & Perry Company had a great demand for coal, such parties as sold the product of their mines to that company were furnished with cars, but for the other operators cars were not to be had, such cars as were brought to the field being assigned to such parties as were loading to the Keith & Perry Company, because that company furnished the coal consumed by the locomotives of the railway.

One operator, after being for years forced in this way to sell his product to the Keith & Perry Company, or see his several plants stand idle, has, in recent months, been obliged to build some seven miles of railway in order to reach four different roads, and thus have a fighting chance for cars, although all these railways are provided with coal mines owned by the corporations or their officials.

In Arkansas, Jay Gould, or his railway company, own coal mines and the coal is transported to the neighboring town at low rates, and there is an ample supply of cars for such mines; but the owners of an adjoining mine are forced to haul their coal some eighteen miles to the same town in wagons, as the rates charged them over Mr. Gould’s railway are so high as to absorb the value of the coal at destination.

Not only are individuals thus oppressed, but for reasons which only the initiated can fathom there are seemingly purposeless discriminations against localities, as shown in the following extract from the Coal Trade Journal of March 25, 1891.

“Capt. Thomas H. Bates, before the railroad committee of the Colorado Senate, said: The Grand River Coal & Coke Company mine their coal in Garfield County, about fifty miles west of Leadville, and all they sell in Denver, Colorado Springs, and Pueblo, has to be hauled through Leadville. At Leadville the individual consumer has to pay $7.00 per ton for this coal, while in Denver, with an additional haul of 150 miles, the coal from the same mines is delivered to the individual consumer for $5.50 per ton. The Colorado Coal & Iron Company produce all the anthracite coal sold in Colorado. It is mined at Crested Butte, which is 150 miles nearer Leadville than Denver, yet this coal is sold in Leadville for $9.00 to the individual consumer, while the same coal is hauled 150 miles farther, and sold to the individual consumer for an advance of twenty-five cents per ton over the Leadville price, and is sold in Denver for $7.10 per ton in carload lots.”

With the government operating the railways, discriminations would cease, as would individual and local oppression; and we may be sure that an instant and absolute divorce would be decreed between railways and their officials on one side, and commercial enterprises of every name and kind on the other.

There are but three countries of any importance where the railways are operated by corporations permitted to fix rates, as in all others the government is the ultimate rate-making power: these are Great Britain, Canada, and the United States; and while the British government exercises a more effective control than we do, there are many and oppressive discriminations, and complaints are loud and frequent, and English farmers find it necessary to unite for the purpose of securing protection from corporate oppression, as is shown by the following from the Liverpool Courier of January 29, 1891.

LANCASHIRE FARMERS AND RAILWAY RATES

After the counsel given them yesterday by Mr. A. B. Forwood, of Ormskirk, it may be expected that the Liverpool District Farmers’ Club will be on the watch for tangible evidence of their grievances against the railway companies…. Under certain circumstances competition operates to the advantage of the public, and rival carriers are constrained to convey goods from place to place at moderate charges; but where a company is not held in check, the tendency is for rates to advance. In many cases, too, special interests of the companies are promoted at the expense of localities, and even individuals are subjected to the wrong of preferential charges. (There are no complaints in Britain that these discriminations are practised for the purpose of enriching the officials.) Hence the necessity for the Railway Commission to regulate the magnates of the iron road, who when left without restraint pay little regard to interests other than those of their shareholders.

Although Mr. Acworth fails to mention this phase of English railway administration, it would appear that the evils of discrimination are common under corporate management in Great Britain, and that they are inherent to and inseparable from such management; and that the questions of rates, discriminations, and free traffic in fuel can be satisfactorily adjusted only by national ownership, and if for no other reasons such ownership is greatly to be desired.

The failure to furnish equipment to do the business of the tributary country promptly is one of the greater evils of corporate administration, enabling officials to practise most injurious and oppressive forms of discrimination, and is one that neither federal nor State commission pays much attention to. With national ownership a sufficiency of cars would be provided. On many roads the funds that should have been devoted to furnishing the needed equipment, and which the corporations contracted to provide when they accepted their charters, have been divided as construction profits or, as in the case of the Santa Fe, Union Pacific, and many others, diverted to the payment of unearned dividends, while the public suffers from this failure to comply with charter obligations; yet Mr. Dillon informs us that the citizen commits an impertinence when he inquires why contract obligations, which are the express consideration for the exceptional powers granted, are not performed.

Another great advantage which would result from national ownership would be such an adjustment of rates that traffic would take the natural short route, and not, as under corporate management, be sent around by the way of Robin Hood’s barn, when it might reach destination by a route but two thirds as long, and thus saving the unnecessary tax to which the industries of the country are subjected. That traffic can be sent by these round-about routes at the same or less rates than is charged by the shorter ones is prima facie evidence that rates are too high. If it costs a given sum to transport a specific amount of merchandise a thousand miles, it is clear that it will cost a greater sum to transport it fifteen hundred; and yet traffic is daily diverted from the thousand mile route to the fifteen hundred one, and carried at the same or lower rates than is charged by the shorter line. It is evident, that if the long route can afford to do the business for the rates charged, that the rates charged by the shorter are excessive in a high degree.

Under government management, traffic would take the direct route, as mail matter now does, and the industries of the country be relieved of the onerous tax imposed by needless hauls. Only those somewhat familiar with the extent of the diversions from direct routes can form any conception of the aggregate saving that would be effected by such change as would result from national ownership, and which may safely be estimated as equal to two and a half per cent. of the entire cost of the railway service, or $25,000,000 per annum.

With the government operating the railways there would be a great reduction in the number of men employed in towns entered by more than one line. For instance, take a town where there are three or more railways, and we find three (or more) full-fledged staffs, three (or more) expensive up-town freight and ticket offices, three (or more) separate sets of all kinds of officials and employees, and three (or more) separate depots and yards to be maintained. Under government control these staffs—except in very large cities—would be reduced to one, and all trains would run into one centrally located depot; freight and passengers be transferred without present cost, annoyance, and friction, and public convenience and comfort subserved, and added to in manner and degree almost inconceivable.

Economies which would be affected by such staff reductions, would more than offset any additions to the force likely to be made at the instance of politicians, thus eliminating that objection; such saving may be estimated at $20,000,000 per annum.

With the nation owning the railways the great number of expensive attorneys now employed, with all the attendant corruption of the fountains of justice, could be dispensed with; and there would be no corporations to take from the bench the best legal minds, by offering three or four times the federal salary; nor would there be occasion for a justice of the Supreme Court of Kansas to render a decision that a corporation chartered by Kansas for the sole purpose of building a railway in that State has the right and power under such charter to guarantee the bonds of corporations building railways in Old or New Mexico, and shortly after writing such decision be carted all over the seaboard States in one of the luxurious private cars of such corporation. Under national ownership such judges would pay their travelling expenses in some other way, and be transported in the ordinary manner, and not half as many judges would travel on passes. There are many judges whose decisions any number of passes would not affect; but if passes are not to have any effect upon legislation and litigation, why are congressmen, legislators, judges, and other court officials singled out for this kind of martyrdom? If the men who attain these positions remained private citizens, would passes be thrust upon them?

Although the reports of the Victorian Commissioners show, in detail, all the expenditures of railway administration, yet not one dollar is set down for attorneys’ salaries or for legal expenses, and it is presumed that the ordinary law officers of the government attend to the little legal business arising, and yet judging from reports made by Kansas roads, the expenditures of the corporate owned railways of the United States for attorneys’ salaries and other legal expenses, are at least two per cent. of the entire cost of operating the roads, and yearly aggregate some $14,000,000, all of which is taken directly from railway users, and is a tax which would be saved under national ownership, as United States district attorneys could attend to such legal business as might arise. This expenditure is incurred in endless controversies between the corporations, in wrecking railways, in plundering the shareholders, in contending against State and federal regulation, in manipulating elections and legislation, and in wearing out such citizens as seek legal redress for some of the many outrageous acts of oppression practised by the corporations. Once the government was in control, these lawyers would be relegated to some employment where they would do less harm, even if not engaged in a more honorable vocation than that of trying to defeat justice by the use of such questionable means as the control of the vast revenues of the corporations place in their hands.

Is it possible that the railway companies can legitimately use anything like $14,000,000 yearly in protecting their rights in the courts?

The president of the Union Pacific tells us that: “The courts are open to redress all real grievances of the citizen.”