VOL. XVI

NO. 1

T

HE railroads of the country, not long since, asked permission of the Interstate Commerce Commission to raise freight rates. Upon what grounds was the appeal predicated? Said Mr. Commissioner Lane, writing the opinion dismissing the petition of the common carriers west of Chicago:

"The primary impression of the Commission was that these increased rates were impelled by the 'higher cost of living' to the railroads; that they were merely the outgrowth of the increased cost of supplies, fuel, and labor; but no sooner was the investigation under way than these matters were entirely subordinated."

Why was the higher-cost-of-living argument abandoned? A plausible reason would appear to be that the few men who control the many railroads did not welcome an investigation into the cost of supplies and fuel. For such an inquiry would certainly have disclosed a highly centralized joint ownership, both of railroads and of corporations which batten on railroads, so astounding in its nature as to cause a pusillanimous public to sit up in its Pullman berth and take notice.

Let us suppose that the question as to the higher cost of betterments and operation had not been "subordinated" by the railroads. Let us imagine that the Interstate Commerce Commission had

gone into the matter thoroughly, beginning with the concrete used in the construction of the road, appraising the steel rails, weighing the coal in the locomotive's tender, or, where electric power is used, considering the purchase of generators and other electrical machinery and equipment, passing through the express car, pausing for a little quiet meditation in the Pullman, and perhaps inquiring about the telegraph and telephone wires along the right of way. What would have been the result?

In part this service to the public was performed on May 9 by the Alpha Portland Cement Company, which charges that the Baltimore and Ohio and other railroads have discriminated against it in the matter of freight rates and in favor of the Universal Portland Cement Company of Pittsburg-a company owned by the United States Steel Corporationand that the steel influence is responsible for the discrimination. To drive home its contention, the Alpha company placed before the Interstate Commerce Commission a chart showing the total capitalization of the companies and corporations on whose boards of directors the steel trust directors and J. P. Morgan and his partners appear. This capitalization, according to the chart, amounts to $15,857,629,339, while the total gross earnings of the companies aggregates over four and a half billions!

Counsel for the Alpha company ex

HENRY C. FRICK. A director of the United States Steel Corporation and largest stockholder of the Pennsylvania Railroad.

patiently fit the parts together and behold this simple picture: There is a map of the United States of America, with its railroads, express companies, telephone and telegraph monopoly, industrial corporations denominated "the trusts," banks, trust companies, and insurance companies, all in plain sight, and astride of the continent, with one foot reaching from New York to Washington, and the other from Seattle to San Francisco, is a colossal Apollo of Rhodes, whose face is a composite of J. Pierpont Morgan, Jacob H. Schiff and John D. Rockefeller, with just a suggestion of the late Mr. Harriman about the eyes and chin. But there are a few pieces left over! We pa-,

Kuhn, Loeb and Co. (the Harriman bankers), and Standard Oil. We can't hope to "do" the land-of-the-free-andthe-home-of-the-brave jig-saw puzzle. We can only make a beginning, leaving the completion of the task to the stoical statistician.

In his autobiographical contribution to Who's Who In America, Mr. Morgan takes us into his confidence and tells us that he "controls over fifty thousand miles of railroad," together with "large American and British ocean transportation lines." Mr. Morgan is a director in twenty-seven railroads, including the New York Central and the New York, New Haven and Hartford. One of his nine partners, Charles Steele, who is skilled in the law, gives advice and coun

Steele, Stotesbury, Hamilton, Perkins, Baker, and Walters. Mr. Morgan admits that he "controls over fifty thousand miles of railroad"; if his confession were full and complete, we should read in his autobiography, "dominates the steel industry of the United States."

One year after the organization of the steel trust, the price of steel rails was fixed at twenty-eight dollars a ton. Twenty-eight dollars a ton has been the price of steel rails ever since-in Amer

ica. Abroad the price is considerably lower. Steel rails manufactured by the United States Steel Corporation are sold for less than twenty-eight dollars a ton in the foreign market with freight charges

System; with Daniel G. Reid, another steel trust director, the Moore brothers did control the Rock Island, but Mr. Reid was recently forced to dispose of his holdings in the railroad.

Does the reader wonder why the railroads, demanding higher freight rates, "entirely subordinated" the argument as to increased cost of supplies?

And the question of fuel was also "subordinated," Commissioner Lane tells us. Why? Perhaps this is a plausible reason: In this country we have a number of "coal roads"-common carriers that own immense coal fields, and therefore give preference to their own product in allotting cars for coal shipments; at least, it was so charged in the debate on the rate bill in Congress. The "commodity amendment" of the interstate commerce law was designed to divorce common carriers from the business of mining and manufacturing, but the constitutionality of this piece of legislation is still before the courts. The Lehigh Valley Railroad is one of these coal-owning roads, and among its directors are Messrs. Steele and Stotes

bury of the House of Morgan.

Whether its income is from selling coal or from hauling freight cannot make the slightest difference to the House of Morgan.

The New York Central and the New York, New Haven and Hartford are called "Morgan roads." Electricity is used as motive power on these lines, in and out of New York; which means that generators and other electrical machinery had to be installed. The General Electric Company is the largest manufacturer of electrical machinery in the United States; it was organized by the House of Morgan, and Mr. Morgan and