Speech 58
ADMINISTRATIVE CONTROL OF RAILWAYS
FROM AN ADDRESS DELIVERED IN RALEIGH, NORTH CAROLINA, OCTOBER   19,   1905

THE position of honor in your parade today is held by the Confederate veterans.  They by their deeds reflect credit upon their descendants and upon all Americans, both because they did their duty in war and because they did their duty in peace.  Now if the young men, their sons, will not only prove that they possess the same power of fealty to an ideal, but will also show the efficiency in the ranks of industrial life that their fathers, the Confederate veterans, showed that they possessed in the ranks of war, the industrial future of this great and typically American Commonwealth is assured.

The extraordinary development of industrialism during the last half century has been due to several causes, but above all to the revolution in the methods of transportation and communication; that is, to steam and to electricity, to the railroad and the telegraph.

When this Government was founded commerce was carried on by essentially the same instruments that had been in use not only among civilized, but among barbarian, nations, ever since history dawned; that is, by wheeled vehicles drawn by animals, by pack trains, and by sailing ships and rowboats.  On land this meant that commerce went in slow, cumbrous, and expensive fashion over highways open to all.  Normally these highways could not compete with water transportation, if such was feasible between the connecting points.

All this has been changed by the development of the railroads.  Save on the ocean or on lakes so large as to be practically inland seas, transport by water has wholly lost its old position of superiority over transport by land, while instead of the old highways open to every one on the same terms, but of a very limited usefulness, we have new highways — railroads — which are owned by private corporations and which are practically of unlimited, instead of limited, usefulness.  The old laws and old customs which were adequate and proper to meet the old conditions need radical readjustment in order to meet these new conditions.  The cardinal features in these changed conditions are, first, the fact that the new highway, the railway, is, from the commercial standpoint, of infinitely greater importance in our industrial life than was the old.  highway, the wagon road; and, second, that this new highway, the railway, is in the hands of private owners, whereas the old highway, the wagon road, was in the hands of the State.  The management of the new highway, the railroad, or rather of the intricate web of railroad lines which cover the country, is a task infinitely more difficult, more delicate, and more important than the primitively cask task of acquiring or keeping in order the old highway; so that there is properly no analogy whatever between the two cases.  I do not believe in government ownership of anything which can with propriety be left in private hands, and in particular I should most strenuously object to government ownership of railroads.  But I believe with equal firmness that it is out of the question for the Government not to exercise a supervisory and regulatory right over the railroads; for it is vital to the well being of the public that they should be managed in a spirit of fairness and justice toward all the public.  Actual experience has shown that it is not possible to leave the railroads uncontrolled.  Such a system, or rather such a lack of system, is fertile in abuses of every kind, and puts a premium upon unscrupulous and ruthless cunning in railroad management; for there are some big shippers and some railroad managers who are always willing to take unfair advantage of their weaker competitors, and they thereby force other big shippers and big railroad men who would like to do decently into similar acts of wrong and injustice, under penalty of being left behind in the race for success.  Government supervision is needed quite as much in the interest of the big shipper and of the railroad man who want to do right as in the interest of the small shipper and the consumer.

Experience has shown that the present laws are defective and need amendment.  The effort to prohibit all restraint of competition, whether reasonable or unreasonable, is unwise.  What we need is to have some administrative body with ample power to forbid combination that is hurtful to the public, and to prevent favoritism to one individual at the expense of another.  In other words, we want an administrative body with the power to secure fair and just treatment as among all shippers who use the railroads —and all shippers have a right to use them.  We must not leave the enforcement of such a law merely to the Department of Justice; it is out of the question for the law department of the Government to do what should be purely administrative work.  The Department of Justice is to stand behind and cooperate with the administrative body, but the administrative body itself must be given the power to do the work and then held to a strict accountability for the exercise of that power.  The delays of the law are proverbial and what we need in this matter is reasonable quickness of action.

The abuses of which we have a genuine right to complain take many shapes.  Rebates are not now often given openly.  But they can be given just as effectively in covert form; and private cars, terminal tracks, and the like must be brought under the control of the commission or administrative body which is to exercise supervision by the Government.  But in my judgment the most important thing to do is to give to this administrative body power to make its findings effective, and this can be done only by giving it power, when complaint is made of a given rate as being unjust or unreasonable, if it finds the complaint proper, then itself to fix a maximum rate which it regards as just and reasonable, this rate to go into effect practically at once, that is within a reasonable time, and to stay in effect unless reversed by the courts.  I earnestly hope that we shall see a law giving this power passed by Congress.  Moreover, I hope that by law power will be conferred upon representatives of the Government capable of performing the duty of public accountants carefully to examine into the books of railroads when so ordered by the Interstate Commerce Commission, which should itself have power to prescribe what books, and what books only, should be kept by railroads.  If there is in the minds of the Commission any suspicion that a certain railroad is in any shape or way giving rebates or behaving improperly, I wish the Commission to have power as a matter of right, not as a matter of favor, to make a full and exhaustive investigation of the receipts and expenditures of the railroad, so that any violation or evasion of the law may be detected.  This is not a revolutionary proposal on my part, for I only wish the same power given in reference to railroads that is now exercised as a matter of course by the national bank examiners as regards national banks.  My object in giving these additional powers to the administrative body representing the Government — the Interstate Commerce Commission or whatever it may be — is primarily to secure a real and not a sham control to the Government representatives.  The American people abhor a sham, and with this abhorrence I cordially sympathize.  Nothing is more injurious from every standpoint than a law which is merely sound and fury, merely pretence, and not capable of working out tangible results.  I hope to see all the power that I think it ought to have granted to the Government; but I would far rather see only some of it granted, but really granted, than see a pretence of granting all in some shape that really amounts to nothing.

It must be understood, as a matter of course, that if this power is granted it is to be exercised with wisdom and caution and self restraint.  The Interstate Commerce Commissioner or other Government official who failed to protect a railroad that was in the right against any clamor, no matter how violent, on the part of the public, would be guilty of as gross a wrong as if he corruptly rendered an improper service to the railroad at the expense of the public.  When I say a square deal I mean a square deal; exactly as much a square deal for the rich man as for the poor man; but no more.  Let each stand on his merits, receive what is due him, and be judged according to his deserts.  To more he is not entitled, and less he shall not have.