reputable Chinese merchants in San Francisco such urgent
complaints that I feel it my regrettable duty to again address
you on the subject of the manner in which the immigration laws
of Congress are being enforced against Chinese subjects. They
represent what I set forth in my note of the 30th ultimo, that
under the rulings of the authorities of the port of San
Francisco Chinese students holding certificates in conformity
to the treaty and law of Congress are virtually debarred from
entering the United States, it being held by the said
authorities that such students must come here with a knowledge
of the English language and with an education that will permit
them to forthwith enter a college or take up an advanced
professional course of study. They further represent that
under the act of November 3, 1893, the Government of the
United States issued certificates of residence to a large
number of Chinese persons, not laborers—merchants and others—
and that the rights acquired under these certificates are
being entirely ignored. Holders of such certificates desiring
to make a temporary visit to China are denied the privilege,
and persons who have departed holding such certificates are
denied the privilege of reentering the United States. They
state that merchants returning to San Francisco after a
temporary visit to China are often imprisoned in the detention
dock for weeks and months pending their landing. Their
Caucasian witnesses are put to all sorts of inconveniences and
annoyances and treated with suspicion and discourtesy. When
present to sign identification papers they are compelled to
await the pleasure of the Chinese bureau for examination, and
are plied with all sorts of immaterial questions from an
inspector, who assumes the character of an inquisitor.
{538}
The result of this is that it is now very difficult for
Chinese desiring to visit their native land to obtain the
necessary signatures for their identification papers, thus
causing them untold mental and financial suffering. They
report that it has been heretofore the custom in San Francisco
for years to allow the attorney for the persons desiring to
enter the United States to be present at the Chinese bureau
pending the taking of evidence on their behalf, thus affording
a protection to the Chinese applicants and operating as a
restraint upon overzealous subordinate officials. It has just
been ordered by the port authorities that henceforth no
attorneys shall be allowed to be present at the taking of such
testimony, or of any testimony on behalf of Chinese desiring
to enter that port. They assert that this action makes the
immigration inspector, whose avowed policy is to cause the
return to China of every Chinese he possibly can, the master
of the situation and throws all Chinese applicants at his
feet."
_Minister Wu to Secretary Hay, December 26, 1900
(Foreign Relations, 1901, page 64)._
In a previous communication the Chinese Minister had expressed
the opinion that the matter demanded the attention of the
President; to which Secretary Hay replied that "in the
Department’s view the immigration acts do not confer upon the
President any power to interpose in the matter. The act of
August 18, 1894, provides that ‘in every case where an alien
is excluded from admission into the United States under any
law or treaty now existing or hereafter made, the decision of
the appropriate immigration or customs officers, if adverse to
the admission of such alien, shall be final, unless reversed
on appeal to the Secretary of the Treasury." On this statement
Mr. Wu now remarked:
"I beg to say that I was aware of the law which is quoted in
your note of the 5th instant, when I suggested the
interposition of the President of the United States, but I am
advised that it can hardly be interpreted as a prohibition
against the exercise by that supreme official of the nation of
his influence with one of his own Secretaries, if he was
convinced, upon examination of the facts, that a solemn treaty
guaranty was being violated and a great wrong being done to
subjects of a friendly Government. I am further advised that
it was not the intent of Congress, by the act cited, to take
from the President the duty, which I have understood was
imposed on him by your great and wise Constitution, to ‘take
care that the laws be faithfully executed,’ and by the same
instrument the treaties with foreign nations are declared to
be ‘the supreme law of the land.’ I feel persuaded that if you
will lay the questions presented in the present note and that
of the 30th ultimo before the President, he will be inspired
by his high sense of justice to induce the honorable Secretary
of the Treasury to revise the decisions which have been made
by the official of his Department, or that he will at least
submit the question to the Attorney-General for a construction
of the treaty and the laws depending thereon."
_Foreign Relations,
1901, page 65._
Any fair-minded reader of the correspondence between Chinese
and American officials, relative to the treatment of Chinamen
in the United States, is likely to find himself quite
generally in sympathy with the former, and compelled to doubt
whether the subjects of China would lose anything if all the
treaty engagements supposed to be in force, between their
Government and the Government of the United States, were
cancelled to-morrow.
RACE PROBLEMS:
Anti-Japanese Agitation in California.
Segregation of Orientals in San Francisco Schools.
Japanese Resentment.
The Labor Question at the Bottom.
State Rights and Treaty Rights.
"The events noted in this article belong mostly to San
Francisco, but to a very considerable extent the agitation is
one of state and national importance.
"In November, 1904, the American Federation of Labor held its
annual meeting in San Francisco. It adopted a resolution
demanding that the terms of the Chinese Exclusion Act should
be so extended ‘as to permanently exclude from the United
States and its insular territory all classes of Japanese and
Coreans other than those exempted by the present terms of the
act.’"
"In February, 1905, the San Francisco _Chronicle_, a
daily newspaper of state-wide reputation, began to publish a
series of articles having the general object of representing
the immigration of Japanese, particularly of Japanese
laborers, as a menace to the interests of the people of
California and of the nation as well. On the date of the first
publication, February 23, 1905, the purpose of the series was
thus announced editorially:
"‘With this issue we summon the attention of the public to a
matter of grave import, a matter that no longer admits of
delay if we are to preserve the integrity of our social life
not only in California but throughout the Union. The Japanese
invasion with which we are confronted is fraught with a peril
none the less momentous because it is so silent, none the less
attended with danger to American character and to American
institutions because it is so peaceful. … It will be well for
us to choose now the line of least resistance, to determine
now and forever whether this State and this country are to be
American or whether they are to be Asiatic, whether they are
to continue under the sway of American thought and aspiration
or whether they are to become a seminary, an abiding place,
and an inheritance for the Oriental peoples. … This is a
matter first for California and for the Pacific Coast and
secondly for the whole Nation. California stands to-day as an
open door for Japan and for Asia and when these portals have
been passed the road to the Atlantic is unbarred.’
"The series of articles printed conspicuously on the front
page at intervals of two or three days sought to establish as
fact a rapidly increasing inflow of Japanese laborers, ready
to work at wages far below the white standard, and sending
native-born white men into the ranks of the unemployed.
"By a unanimous vote in each House, and with only few
absentees, the California Legislature on March 1 and 2, 1905,
placed itself on record with respect to Japanese immigration
in the adoption of a concurrent resolution. After a lengthy
preamble, the Legislature—
"‘_Resolved_, that in view of the facts and reasons
aforesaid, and of many others that might be stated, we, as
representatives of the people of the State of California, do
earnestly and strenuously ask and request, and in so far as it
may be proper, demand for the protection of the people of this
State and for the proper safe-guarding of their interests,
that action be taken without delay, by treaty, or otherwise,
as may be most expeditious and advantageous, tending to limit
within reasonable bounds and diminish in a marked degree the
further immigration of Japanese laborers into the United
States.
{539}
"‘That our Senators and Representatives be, and they are
hereby, requested and directed to bring the matters aforesaid
to the attention of the President and the Department of
State.’
_California Statutes, 1905,
Concurrent & Joint Res. chapter xxiv._
"On Sunday May 7, 1905, there was held in Lyric Hall, San
Francisco, a sort of convention of representatives of various
Labor organizations and Improvement Clubs of San Francisco and
near-by cities,—such as the Building Trades Council, District
Council of Painters, Carpenters’ Union No. 22, Federation of
Mission Improvement Clubs, et al. After much speech-making of
a demagogic character, committees were appointed and an
adjournment taken to the following Sunday. On that day, May
14, organization was perfected by the election of the usual
officers. All of these were men active in the promotion of
labor organization.
"On May 6, 1905, the San Francisco Board of Education adopted
a resolution expressing its determination ‘to effect the
establishment of separate schools for Chinese and Japanese
pupils … for the higher end that our children should not be
placed in any position where their youthful impressions may be
affected by association with pupils of the Mongolian Race.’
But finding itself without sufficient funds for equipment of a
separate school, the Board did not pursue the matter at this
time. Its zeal in the matter was not abated by the vast amount
of labor required to reëstablish the schools after the great
fire of April, 1906, and on October 11, 1906, it adopted and
put into effect the following resolution:
"‘_Resolved_, That in accordance with Article X, Section
1662, of the School Law of California, principals are hereby
directed to send all Chinese Japanese or Corean children to
the Oriental public school, situated on the south side of Clay
street, between Powell and Mason streets, on and after Monday,
October 15, 1906.’
"The Consul of Japan in San Francisco at once addressed
protests to the Board of Education, urging that the
requirement would work great hardship upon Japanese children,
by reason of distance and the difficulties of travel,
street-car transportation at the time being very uncertain on
account of the derangements produced by the great
conflagration of April, 1906. Protests and appeals were alike
turned aside in California, but they received instant
attention in Washington by President Roosevelt, who sent
Honorable V. H. Metcalf, the Secretary of Commerce and Labor,
to San Francisco to investigate on the ground.
"There seemed to be a possible solution of the school question
by securing a judicial determination of the matter as a
violation of treaty rights. Upon these points Secretary
Metcalf reported to the President substantially as follows:
"1st.
There is no ‘favored nation’ clause in any treaty between the
United States and Japan which clearly guarantees the right of
education. The action of the San Francisco School Board is
therefore not the denial of a treaty right.
"2nd.
Two points remain upon which the validity of the resolution of
the School Board might be questioned, as follows:
"a. May the sovereign State of California delegate legislative
rights to district school boards or other municipal or local
bodies?
"b. Are the Japanese Mongolians, and as such covered by the
state statute governing the establishment of schools?
"Suit upon these points is inadvisable for the reason that in
case of a favorable decision, the next legislature would
hasten to enact legislation especially singling out the
Japanese for discrimination.
"In December, 1906, however, the United States District
Attorney was summoned from San Francisco to Washington for
conference with the President and Attorney-General, and upon
his return to San Francisco two suits were commenced. One was
a petition for a writ of mandate in the Supreme Court of
California, the other was a suit in equity in the United
States Circuit Court for the Northern District of California.
Neither suit was prosecuted, and both actions were
subsequently dismissed.
"The influence of the Japanese Consul and of the leaders among
the Japanese resident in San Francisco was strongly exerted
toward allaying excitement and preventing any acts that might
give ground for complaint. However, it was impossible to
conceal the fact that the effort of the School Board toward
segregation was a stinging blow to Japanese national pride.
"The San Francisco school question was suddenly lifted into
national prominence by President Roosevelt, who included
pointed criticism of the San Francisco authorities in his
annual message to Congress, as follows:
"‘Not only must we treat all nations fairly, but we must treat
with justice and good will all immigrants who come here under
the law. … Especially do we need to remember our duty to the
stranger within our gates. … I am prompted to say this by the
attitude of hostility here and there assumed toward the
Japanese in this country. … It is most discreditable to us as
a people and it may be fraught with the gravest consequences
to the nation. … Here and there a most unworthy feeling has
manifested itself toward the Japanese—a feeling that has shown
itself in shutting them out from the common schools in San
Francisco, and in mutterings against them in one or two other
places, because of their efficiency as workers. To shut them
out from the public schools is a wicked absurdity, when there
are no first-class colleges in the land, including the
universities and colleges of California, which do not welcome
Japanese students and on which Japanese students do not
reflect credit.’ The president then specifically recommended
to Congress the enactment of legislation for the
naturalization of Japanese and for the enlargement of the
powers of the federal government for the better protection of
resident aliens against infringement of treaty rights.
{540}
"The effect of the president’s utterances was to raise new
questions and to bring new and powerful influences to the
support of the San Francisco authorities. In California the
San Francisco School Board received at once the credit of
heroic defense of the principle of state sovereignty.
Expression of the same sentiment in Congress was immediate and
direct.
"Early in 1907, President Roosevelt invited the San Francisco
Board of Education to come to Washington. This invitation was
accepted, and the Board, accompanied by the Mayor of San
Francisco, journeyed across the continent. Several conferences
were held, and after their return to San Francisco, public
statements of results were made both by the Board of Education
and by the Mayor. On March 13, 1907, the offending resolution
of the previous October was repealed.
"The action of the San Francisco authorities aroused very
general comment throughout the country. The actual facts in
regard to the Japanese in the schools were not inquired into
by the San Francisco press, nor in fact were they accurately
known at the time even to the school authorities of the city.
The exact facts were published by _The Outlook_ on June
1, 1907, from accurate investigation on the ground. The
Superintendent of Schools had given as the main reason for
segregation, that 95 per cent. of the Japanese pupils were
young men and ‘we object to an adult Japanese sitting beside a
twelve year old girl.’ The facts were that on December 8,
1906, in all schools of primary and grammar grade there was an
enrollment of 28,736 pupils. Of these there were 93 Japanese,
nearly one-third of whom were born in the United States. There
were 28 girls and 65 boys. Of the 65 boys 34 were under 15
years of age, and of the remaining 31 only 2 were 20 years. 25
of the boys over 15 years were in the grammar grades, leaving
but 6 to justify the objection of adults ‘sitting beside
children of tender years.’ The conclusion of the
_Outlook_ inquiry was that there was nothing in the
situation that could not have been met by simpler remedies
than the attempted segregation, and that the underlying motive
in the whole matter was a desire to win the political support
of the labor unions.
"The great fire in San Francisco in 1906 drove the Japanese
from their established quarters. Their attempts to gain new
locations in districts previously occupied wholly by white
residents tended to draw attention to them. For a time the
policing of the city was inadequate, and cases of bodily
violence toward Japanese were not infrequent. Anything like
organized action took the form of boycotts directed against
Japanese restaurants that sought white patronage and
subsequently against the Japanese laundries.
"The biennial sessions of the legislature since 1905 have
regularly furnished a large supply of anti-Japanese
resolutions and bills, introduced for effect and without
sufficient support for enactment. However, in 1909 legislation
was attempted looking toward prohibiting Japanese from
becoming owners of real property. It was only the strenuous
protests of President Roosevelt actively supported by the
governor of the state that prevented for this session the
enactment of some such measure. The legislature finally
contented itself with making an appropriation for a state
census of Japanese.
"This census was intrusted to the state commissioner of labor,
and is now (July, 1909) in progress. It may be regarded as a
step toward an authoritative inquiry as to facts upon which
later action may be based, if deemed necessary.
"The Japanese on the Pacific Coast uniformly exercise a most
commendable self-restraint, and their officials take advantage
of every opportunity to display a spirit of friendliness. This
is illustrated by liberal contributions to the city’s fund for
the entertainment of the sailors of the Atlantic Fleet during
its visit to San Francisco in May, 1908, and by an invitation
extended by the Chambers of Commerce of the large cities of
Japan in July, 1908, to similar bodies in the Pacific Coast
states to visit Japan as guests of the country. This
invitation was accepted by numerous commercial representatives
of the cities from Los Angeles northward to Seattle."
_Frederick H. Clark,
Head of History Department,
Lowell High School, San Francisco._
"'If you provide a system of education which includes alien
children you must not exclude these particular alien
children.'"
Inasmuch as the Constitution and the laws of the United States
made in pursuance thereof, and all treaties made under the
authority of the United States, are declared to be the supreme
law of the land, and that the judges in every State shall be
bound thereby, anything in the constitution or laws of any
State to the contrary notwithstanding, this prohibitory power
was shown to be incontestable.
{541}
The common-sense ground of opinion and feeling on the whole
subject in America could not be set forth more indisputably
than it was by Mr. Roosevelt, after he had ceased to be
President, when he wrote as a private citizen, in his
editorial connection with _The Outlook_, on the 8th of
May, 1909, this:
"The Japanese are a highly civilized people of extraordinary
military, artistic, and industrial development; they are
proud, warlike, and sensitive. I believe that our people have,
what I personally certainly have, a profound and hearty
admiration for them; an admiration for their great deeds and
great qualities, an ungrudging respect for their national
character. But this admiration and respect is accompanied by
the firm conviction that it is not for the advantage of either
people that emigrants from either country should settle in
mass in the other country. The understanding between the two
countries on this point should be on a basis of entire
mutuality, and therefore on a basis which will preserve
unimpaired the self-respect of each country, and permit each
to continue to feel friendly good will for the other. Japan
would certainly object to the incoming of masses of American
farmers, laborers, and small traders; indeed, the Japanese
would object to this at least as strongly as the men of the
Pacific Coast and Rocky Mountain States object to the incoming
in mass of Japanese workmen, agricultural laborers, and men
engaged in small trades. The Japanese certainly object to
Americans acquiring land in Japan at least as much as the
Americans of the far Western States object to the Japanese
acquiring land on our soil. The Americans who go to Japan and
the Japanese who come to America should be of the same general
class—that is, they should be travelers, students, teachers,
scientific investigators, men engaged in international
business, men sojourning in the land for pleasure or study. As
long as the emigration from each side is limited to classes
such as these, there will be no settlement in mass, and
therefore no difficulty."
That the emigration from Japan has been thus closely limited
was shown in September, 1909, by the issue of a statistical
circular from the office of the Japanese Consul-General at San
Francisco, dealing in tabulated form with the arrivals and
departures from Japan for the year 1908 and for the first six
months of the year 1909. It shows that the number of the
excess arrivals in Japan over the departures for 1908 was
1807, and for the first six months of the present year 737,
making a total excess of arrivals in Japan over departures for
the 18 months of 2544. The circular states that "no new
labourers are now leaving Japan for American territory," and
this may be taken as the official Japanese reply to the
continued assertions of the California labour unions that
large numbers of coolies are still reaching the country by way
of the Canadian and Mexican frontiers.
RACE PROBLEMS:
Exclusion of Chinese.
The Law and its Administration.
The Chinese Resentment expressed in a Boycott.
President Roosevelt’s Vain Appeal to Congress.
Opinion of Secretary Straus.
Resentful feeling aroused in China by the immigration and
exclusion laws of the United States, in their special
application to incoming Chinese and in the harshness of their
administration, began to have expression at Shanghai in May,
1905, when resolutions were adopted at a meeting of the
merchant guilds of that city which initiated an extensive
boycotting of American goods and of everything connected with
America. A report of the meeting and of its recommendations
was sent to all parts of the Empire and elicited a quick and
general response. The undertaking of the movement was to stop
the buying of American goods; to socially ostracise tradesmen
who continue to handle them, and to render no service to
Americans in China, except for higher pay than is demanded
from others. This boycotting attitude of large numbers in
China was persisted in throughout the year, and not only made
itself felt seriously in commercial circles, but impressed the
American public with a proper sense of the indignities they
were allowing to be imposed on a people who deserve their
respect. The President, in his Message to Congress at the
opening of the session in December, dealt justly with the
subject, as follows:
"The conditions in China are such that the entire Chinese
coolie class, that is, the class of Chinese laborers, skilled
and unskilled, legitimately come under the head of undesirable
immigrants to this country, because of their numbers, the low
wages for which they work, and their low standard of living.
Not only is it to the interest of this country to keep them
out, but the Chinese authorities do not desire that they
should be admitted. At present their entrance is prohibited by
laws amply adequate to accomplish this purpose. These laws
have been, are being, and will be, thoroughly enforced. …
But in the effort to carry out the policy of excluding Chinese
laborers, Chinese coolies, grave injustice and wrong have been
done by this Nation to the people of China, and therefore
ultimately to this Nation itself. Chinese students, business
and professional men of all kinds—not only merchants, but
bankers, doctors, manufacturers, professors, travelers, and
the like—should be encouraged to come here and treated on
precisely the same footing that we treat students, business
men, travelers, and the like of other nations. Our law's and
treaties should be framed, not so as to put these people in
the excepted classes, but to state that we will admit all
Chinese, except Chinese of the coolie class, Chinese skilled
or unskilled laborers. There would not be the least danger
that any such provision would result in any relaxation of the
law about laborers. These will, under all conditions, be kept
out absolutely. But it will be more easy to see that both
justice and courtesy are shown, as they ought to be shown, to
other Chinese, if the law or treaty is framed as above
suggested. Examinations should be completed at the port of
departure from China. For this purpose there should be
provided a more adequate consular service in China than we now
have. The appropriations, both for the offices of the consuls
and for the office forces in the consulates, should be
increased.
{542}
"As a people we have talked much of the open door in China,
and we expect, and quite rightly intend to insist upon,
justice being shown us by the Chinese. But we can not expect
to receive equity unless we do equity. We can not ask the
Chinese to do to us what we are unwilling to do to them. They
would have a perfect right to exclude our laboring men if our
laboring men threatened to come into their country in such
numbers as to jeopardize the well being of the Chinese
population; and as, mutatis mutandis, these were the
conditions with which Chinese immigration actually brought
this people face to face, we had and have a perfect right,
which the Chinese Government in no way contests, to act as we
have acted in the matter of restricting coolie immigration.
That this right exists for each country was explicitly
acknowledged in the last treaty between the two countries. But
we must treat the Chinese student, traveler, and business man
in a spirit of the broadest justice and courtesy if we expect
similar treatment to be accorded to our own people of similar
rank who go to China."
_President's Message to Congress,
December 5, 1905._
No effective impression on the moral sense or the rationality
of Congress was made by the President’s appeal, and the laws
which are contemptuous of national treaties and indifferent to
the national honor remain on the statute books unchanged. That
others than the President in the Federal Administration felt
the wrong and the shame of the law which it had to administer,
was shown by an article from the pen of the Secretary of
Commerce and Labor, published in the spring of 1908. The
following are some passages from the article:
"It is not the policy of the Government with reference to
Chinese immigration, but the manner in which it is, of
necessity, carried out, by reason of the way in which the laws
are framed, that causes constant friction and dissatisfaction.
… The attitude of the Chinese Government may be inferred from
the fact that in 1904, after the convention of 1894 had been
in force ten years, China availed herself of her reserved
right and formally denounced the treaty, refusing longer to be
a party to an arrangement which, as carried into effect, was
offensive to her national pride. …
"For proof of the feeling of the Chinese people it is only
necessary to refer to the boycott of American goods,
inaugurated by various trade guilds and business and
commercial associations of the Empire during the summer of
1905. At that time China held first rank among Oriental
countries as a consumer of American products. In that year,
her total commerce amounted to $497,000,000, of which
$329,000,000 were imports; $57,000,000, or more than seventeen
per cent., being supplied by the United States. The exports
from the United States to China had grown to these proportions
by rapid strides. They were less than $3,000,000 in the
seventies. They only reached $7,500,000 in 1886, $12,000,000
in 1897, $15,000,000 in 1900, $24,000,000 in 1902, $57,000,000
in 1905. It was reasonable to believe that American trade
would continue to progress in something like the same ratio,
and a larger and larger share of the foreign trade of China
accrue to the United States. Instead of that, the exports of
the United States to China, according to our statistics, fell
to $44,000,000 in 1906, and to $26,000,000 in 1907.
"It is not necessary to attribute the decline wholly to the
boycott of 1905, but a drop in our exportations to that
country of fifty per cent. in two years is sufficiently
startling to challenge attention. But on higher grounds than
those of mere commercial interest should the frame of the laws
be changed. …
"I would not suggest a change in the established policy of
rigidly excluding Chinese laborers of every description, both
skilled and unskilled. The policy has been and will continue
to be as effectively enforced as circumstances will permit.
But, at a time when this policy of exclusion has been so
thoroughly applied that there remain in the United States only
about 70,000 Chinese—less than one-tenth of one per cent, of
our population—little danger need be apprehended from a full
and fair reconsideration of the subject and a recasting of the
laws upon a juster basis. …
"By making admission the rule, and exclusion the exception, we
could easily preserve the present policy in all its integrity,
and even strengthen the real prohibitory features thereof, at
the same time entirely removing a material cause of friction,
dissatisfaction and unnecessary humiliation to the people of a
friendly nation."
_Oscar S. Straus
(Secretary of Commerce and Labor),
The Spirit and Letter of Exclusion
(The North American Review, April, 1908)._
A much stronger expression was given to the shamed feeling of
honorable Americans on this subject by the veteran diplomatist
and former Secretary of State, Honorable John W. Foster, in an
article written in 1906. The following is a passage from the
article:
"I do not know how I can better illustrate the kind of
protection, or want of protection, extended to the Chinese, as
guaranteed by the Constitution, the treaties, and the solemn
promises of the government of the United States, than by
recalling a notorious case which occurred, not on the sand
lots of California, not under the auspices of labor agitators,
but in the enlightened city of Boston and under the conduct of
Federal officials.
"The following narrative is condensed from the newspapers of
that city. At about half past seven o’clock on the evening of
Sunday, October 11, 1902, a number of United States officials
of Boston, New York, and other cities charged with the
administration of the Chinese exclusion laws, assisted by a
force of the local police, made a sudden and unexpected
descent upon the Chinese quarter of Boston. The raid was timed
with a refinement of cruelty which did greater credit to the
shrewdness of the officials than to their humanity. It was on
the day and at the hour when the Chinese of Boston and its
vicinity were accustomed to congregate in the quarter named
for the purpose of meeting friends and enjoying themselves
after a week of steady and honest toil. The police and
immigration officials fell upon their victims without giving a
word of warning. The clubs, restaurants, other public places
where Chinese congregated, and private houses were surrounded.
Every avenue of escape was blocked. To those seized no warrant
for arrest or other paper was read or shown.
"Every Chinese who did not at once produce his certificate of
residence was taken in charge, and the unfortunate ones were
rushed off to the Federal Building without further ceremony.
There was no respect of persons with the officials; they
treated merchants and laborers alike. In many cases no demand
was made for certificates, the captives were dragged off to
imprisonment, and in some instances the demand was not made
till late at night or the next morning, when the certificates
were in the possession of the victims at the time of their
seizure.
{543}
"In the raid no mercy was shown by the government officials.
The frightened Chinese who had sought to escape were dragged
from their hiding-places, and stowed like cattle upon wagons
or other vehicles, to be conveyed to the designated place of
detention. On one of these wagons or trucks from seventy to
eighty persons were thrown, and soon after it moved it was
overturned. A scene of indescribable confusion followed, in
which the shrieks of those attempting to escape mingled with
the groans of those who were injured. …
"About two hundred and fifty Chinese were thus arrested and
carried off to the Federal Building. Here they were crowded
into two small rooms where only standing space could be had,
from eight o’clock in the evening, all through the night, and
many of them till late in the afternoon of the next day. There
was no sleep for any of them that night, though some of them
were so exhausted that they sank to the floor where they
stood. Their captors seemed to think that they had to do with
animals, not human beings. Some of them were released during
the night, when relatives brought their certificates or
merchants were identified. But the greater part were kept till
the next day, when the publicity of the press brought friends,
or relief through legal proceedings. …
"So strong was the indignation of the respectable citizens of
Boston, that a large public meeting was held in Faneuil Hall
to denounce the action of the immigration officials and the
police. … It was announced by the immigration officials that
their raid was organized under the belief that there were a
number of Chinese in Boston and its vicinity unlawfully in the
United States, and this method was adopted for discovering
them. The official report of the chief officer soon after the
event showed that two hundred and thirty-four Chinese were
imprisoned, that one hundred and twenty-one were released
without trial or requirement of bail, and that only five had
so far been deported, but that he hoped that he might secure
the conviction and deportation of fifty; as a matter of fact,
however, the deportations fell much below that number."
_J. W. Foster,
The Chinese Boycott
(Atlantic Monthly, January, 1906)._
In the same article Mr. Foster recalled facts connected with
the negotiation of the Treaty of 1880 which deepen the shame
to the United States of what followed: "In communicating to
the Secretary of State," he said, "the signature of the treaty
of 1880, the American commissioners wrote: ‘In conclusion, we
deem it our duty to say to you that during the whole of this
negotiation the representatives of the Chinese Government have
met us in the fairest and most friendly spirit. They have
been, in their personal intercourse, most courteous, and have
given to all our communications, verbal as well as written,
the promptest and most respectful consideration. After a free
and able exposition of their own views, we are satisfied that
in yielding to the request of the United States they have been
actuated by a sincere friendship and an honorable confidence
that the large powers recognized by them as belonging to the
United States, and bearing directly upon the interests of
their own people, will be exercised by our government with a
wise discretion, in a spirit of reciprocal and sincere
friendship, and with entire justice.’
"But even this treaty, which had been obtained from China so
reluctantly, yet with the generous exhibition of friendship on
her part just described, did not prove satisfactory to the
increasing demands of the labor unions. Before ten years were
passed, under the spur and excitement of the presidential
campaign of 1888, and upon the hesitation of the Chinese
government to make a further treaty modification, the Scott
Act was passed by Congress, which was a deliberate violation
of the treaty of 1880, and was so declared by the Supreme
Court; but under our peculiar system it became the law of the
land. Our government had thus flagrantly disregarded its
solemn treaty obligations. Senator Sherman, then chairman of
the Committee on Foreign Relations, stated in the Senate that
we had furnished China a just cause for war."
----------RACE PROBLEMS: End--------
RACE-TRACK GAMBLING.
See (in this Volume)
GAMBLING.
RADIO-TELEGRAPHY.
See (in this Volume)
SCIENCE AND INVENTION: ELECTRICAL: TELEGRAPHY, WIRELESS.
RADIUM, and Radio-activity.
See (in this Volume)
SCIENCE, RECENT: RADIUM;
See also
PHYSICAL.
RADOLIN, Prince de:
Arrangement with France for the Algeciras Conference.
See (in this Volume)
EUROPE: A. D. 1905-1906.
RAIGOSA, Don Genaro:
President of Second International Conference
of American Republics.
See (in this Volume)
AMERICAN REPUBLICS.
----------RAILWAYS: Start--------
RAILWAYS
RAILWAYS: Abyssinia:
French Projects.
See (in this Volume)
ABYSSINIA: A. D. 1902.
RAILWAYS: Africa: A. D. 1909.
Progress of the Cape to Cairo Line.
A telegram from Broken Hill, Northern Rhodesia, November 10,
1909, announced that the Cape-to-Cairo Railroad had reached
the Congo frontier on the 16th.
RAILWAYS: Argentina-Chile: A. D. 1909.
The Transandine Railway Tunnel.
The great work, of boring a tunnel through the chain of the
Andes at an altitude of over 10,000 feet above sea level for
the trains of the Transandine Railway was practically
completed in the fall of 1909. "Early in April next the rails
will be laid, and from then onward the journey from Buenos
Ayres, on the eastern side of the South American continent, to
Valparaiso, on the Pacific Coast, may be undertaken in comfort
in a railway carriage all the year round. Up to the present
time passengers from the east have had to leave the rail at
Las Cuevas and proceed by a zigzag road over the mountains on
mule-back or in coaches to Caracoles, the rail head on the
Chilian side—a journey which occupies about two hours; but
this route is only open during the summer months. In the
winter, when the pass is closed by snow, travellers have to go
round by sea. The route under the Andes will effect a saving
of about twelve days. The work of boring the two-mile tunnel
was begun four years ago and has presented exceptional
difficulties."
{544}
RAILWAYS: Australia:
Government Ownership.
Difference of Gauge.
Each State having its own.
"Warfare against monopoly is easier in Australia than in some
other countries for the reason that in Australia the close
relation between monopoly and transportation is generally
understood and is not an issue. Some few and for the most part
small railroad projects, including mining and timber lines,
are still in private hands. All the other railroads are
publicly owned and publicly operated. So far the ownership is
vested in the several states, each having its own system. In
the good old conservative days before the Labor demon raised
its head, there was much childish jealousy among the different
governments. In the conservative view the destiny of Australia
was not to be a nation but a handful of nice little colonies
vying with one another in expressing loyalty to the
monarchical idea and the established order. When these came to
build railroads each colony established its own gauge and
stuck thereto. A more preposterous notion never bewitched the
human mind, but the truth is that a gauge of 4 feet 8½ inches
in New South Wales actually seemed a reason (to the
conservative intellect) for a gauge of 5 feet 3 inches in
Victoria and a gauge of 3 feet 6 inches in Western Australia.
The annoyance, delay, and expense resulting to through traffic
make the thing seem like a section of Bedlam. Between
Melbourne and Sydney, for instance, a line with an immense
business and with otherwise excellent accommodations, you must
change cars on the frontier and all the freight must be
transferred. Eventually the federal Government is to take over
and unify the systems of the different states. Considering the
multiplicities of systems and gauges, the task that will then
confront the federal Government will not be for a holiday."
Charles E. Russell,
The Uprising of the Many, chapter 27
(Doubleday, Page & Co., New York, 1907).
RAILWAYS: Canada: A. D. 1903-1909.
The Grand Trunk Pacific Railway.
See (in this Volume)
CANADA: A. D. 1903-1909.
RAILWAYS: Canada: A. D. 1904.
Establishment of the Board of Railway Commissioners
with large Regulative Powers.
In _Moody’s Magazine_ of January, 1906, the Honorable
Robert Bickerdike, M. P., of Montreal, gave a favorable
account of the operation of the Canadian Act of two years
before which created a Board of Railway Commissioners, taking
the place of the former Railway Committee of the Privy
Council, and exercising large powers of control over rates,
construction of road, and speed of trains. "No toll" (that is,
freight rate), he said, "may be charged which unjustly
discriminates between different localities. The board shall
not approve any toll which for like goods or passengers,
carried under substantially similar conditions in the same
direction over the same line, is greater for a shorter than a
longer distance, unless the board is satisfied that, owing to
competition, it is expedient to do so. Where carriage is
partly by rail and partly by water, and the tolls in a single
sum, the board may require the company to declare, or may
determine, what portion is charged in respect of carriage by
rail, to prevent discrimination. Freight tariffs are governed
by a classification which the board must approve, and the
object is to have this classification uniform. Railways shall,
when directed by the board, place any specified goods in any
stated class. Tariffs shall be in such form and give such
details as the board may prescribe. The maximum mileage tariff
shall be filed with the board and be subject to its approval;
when approved, the company shall publish it in the _Canadian
Gazette_, the official publication. As respects this act,
the board is invested with the rights, privileges, and powers
of a superior court. None, therefore, may oppose it."
RAILWAYS: Canada: A. D. 1906.
Government Ownership and Operation of a Railway Line.
See (in this Volume)
CANADA: A. D. 1906-1907.
RAILWAYS: Canada: A. D. 1908-1909.
Projected Railway from the Canadian Northwest to Hudson Bay.
In a speech at Niagara Falls, in September, 1908, the Canadian
premier, Sir Wilfrid Laurier, announced positively that his
government had undertaken the construction of a railway from
the Canadian Northwest to Hudson Bay; that surveyors are in
the field determining the route, and that plans for the
construction of the road are being prepared. For a few weeks
in the year this will give another outlet to the greatest
wheat region of the continent for its harvests; and even a few
weeks will afford important relief, no doubt, to the pressure
of its need. Unfortunately, the passage from Hudson Bay to the
ocean, through Hudson Strait, is sealed up with ice during
much the greater part of the year. Quite recently there were
reports of the return of a vessel from the strait which had
found it blocked in July.
Notwithstanding the limit thus put on the usefulness of the
Hudson Bay route, the Northwest is counting on immediate
advantages from it. The _Manitoba Free Press_ exclaims:
"To bring uncounted millions of acres of wheat in Western
Canada a thousand miles nearer to the market in Europe, and
make a saving of many millions of dollars every year in
transportation charges, thereby ensuring higher prices to the
farmers of the Prairie Provinces—this is what the opening up
of the Hudson Bay outlet will achieve. It will mean a
revolution in traffic routes and traffic rates. The immense
amount of territory within the cost-saving reach of Hudson
Bay, the New-World Mediterranean, will make this route one of
the greatest trade arteries of the world. It will place the
grain-growers of Western Canada in control of the markets of
the world by making possible a great reduction in the cost of
transportation. This saving will be brought about because the
Hudson Bay route is by a very considerable distance the
shortest route, and the saving is in the rail haul. … The
total cultivable area in Manitoba, Saskatchewan and Alberta is
some 175,000,000 acres. Even estimating the as yet
uncultivated area as being only one-half as productive as that
which has already come under the plow, a tenfold increase of
the present production is to be counted upon."
{545}
"Roughly speaking," says a magazine article on the subject,
"Churchill [one of the proposed Hudson Bay terminals] is just
1000 miles from the grain areas of Hill’s roads. New York is
2000 miles. Churchill is 1500 miles from Oregon. New York is
nearly 3000. … The harbor itself could not have been better if
it had been made to order. It is a direct 550-mile plain, open
deep-water sailing from the west end of the Straits,—no
shoals, no reefs, deep enough for the deepest-draft keel that
ever sailed the sea."
Tentative surveys of two routes from Winnipeg were undertaken
in October, 1908, and a report of them made in the following
spring. They were favorable to the project on either line.
That to Fort Churchill would have 465 miles of length and its
cost was estimated at $11,608,000. The alternative line, to
Fort Nelson, at the mouth of Nelson River, would be 397
miles long, and have an estimated cost of $8,677,000; but
harbor construction at Fort Nelson would cost heavily. The
report, however, recommended the latter route. Moreover,
abundant water power is waiting development along the Nelson
River, which might result in an economical electrification of
the road. Furthermore, the report suggested possibilities of a
canal along the river from Hudson Bay to Lake Winnipeg, and
from the latter to Winnipeg city, through which ocean craft
might ultimately reach the Manitoba metropolis.
In connection with this projected opening of a commercial
route from America to Europe through Hudson Bay, a Danish
writer has lately urged the Danish Government to bring
Greenland into touch with it.
RAILWAYS: Canada: A. D. 1909.
Important Ruling by the Railway Commission,
affecting American Railways.
In June, 1909, an important decision of the Canadian Railway
Commission was announced, "in the case of the Dawson Board of
Trade against the Yukon and White Pass Railway Company, an
English Corporation, laying down that by the amendment of the
Railway Act passed last session all railways, whether
originating in the United States or not, are under the
jurisdiction of the Canadian board. The point involved is the
question of rates on the White Pass, as to which counsel
asserted that if ordinary rates were ordered to prevail it
would be impossible to pay dividends. The board takes time to
consider the question of rates in view of the details
involved, but orders both the American and Canadian sections
of the line to file figures before the board. It is probable
that the rates of all American railways crossing Canada will
by this decision come under the jurisdiction of the board.
This will affect the Vanderbilt lines, which cross the Niagara
peninsula, also the Hill lines, which enter Canada from
Washington, Oregon, and other States. Railway men regard the
decision as the most important in the history of Canada,
because it gives the Canadian Commission power to regulate
rates on American railways entering Canada."
RAILWAYS: Central Africa: A. D. 1909.
Lines to Katanga.
In March, 1909, the _Temps_, of Paris, published
information according to which the work of constructing the
railway from the Upper Congo to the great Central African
lakes was making such progress that communication with the
Katanga mine fields would probably be established by the end
of 1910. The British South Africa lines, also, are being
pushed toward Katanga.
RAILWAYS: Chile-Bolivia: A. D. 1909.
The Arica-La Paz Railway.
According to a Press despatch from Santiago de Chile, April 5,
1909, a contract for the great railway to be made across the
Andes from Arica, in Chile, to La Paz, in Bolivia, attaining
an elevation of upwards of 12,000 ft. and having a length of a
little over 300 miles, had just been given to an English firm.
The actual money voted for the scheme was said to be
£3,000,000.
RAILWAYS: China:
Extent of Railway Travel.
Unused Concessions.
See (in this Volume)
CHINA: A. D. 1904.
RAILWAYS: China: A. D. 1904-1909.
The Hankau-Sze-chuan Railway Loan.
American participation.
See (in this Volume)
CHINA: A. D. 1904-1909.
RAILWAYS: China: A. D. 1909.
The Fa-ku-menn Railway and the Antung-Mukden Railway
questions between China and Japan.
See (in this Volume)
CHINA: A. D. 1905-1909.
RAILWAYS: China: A. D. 1909.
The Chinese Eastern Railway.
New Russo-Chinese Agreement.
Municipalities on the Line.
See (in this Volume)
CHINA: A. D. 1909 (MAY).
RAILWAYS: China: A. D. 1909.
Opening of the Peking-Kalgan Line.
A purely Chinese undertaking.
The opening, October 2d, 1909, with grand ceremonies, of the
Peking-Kalgan Railway, was an event of especial pride and
satisfaction to the Chinese people. It has been, wrote a
newspaper correspondent, "a purely Chinese undertaking, the
chief engineer of which, Jeme Tienyow, a member of the
Institute of Civil Engineers, and every employé are Chinese;
but the rails and rolling stock are foreign. It has been paid
for from the earnings of the Northern Railways, without
foreign financial assistance.
"The line, the length of which is 122 miles, joins Peking with
the important trade mart of Kalgan, piercing the Nankau Pass
by four tunnels, the longest, under the Great Wall, being
3,580 ft. It taps extensive coalfields and is well and
economically laid. Already the traffic is astonishing and will
add to the wealth of the province and increase the earnings of
the Northern Railways.
"The construction of the line has given training and
experience to a body of young Chinese engineers, who will find
ready employment in the future. The line will now be continued
westwards through populous country to Kwei-hua-cheng and the
Yellow River, a distance of 275 miles, the route for which was
surveyed last year. This line will also be paid for from the
earnings of the Northern Railways."
RAILWAYS: China: A. D. 1909-1910.
Proposal to neutralize Manchurian Railways and
to internationally finance a Chinchow-Aigun Line.
See (in this Volume)
CHINA: A. D. 1909-1910.
RAILWAYS: England: A. D. 1907-1909.
Adopted System in Great Britain for pacific Settlement
of Labor Disputes in the Railway Service.
See (in this Volume)
LABOR ORGANIZATION: ENGLAND: A. D. 1907-1909.
RAILWAYS: England: A. D. 1908.
No Passengers killed by Train Accidents.
The British public had the happiness of being informed that no
passenger was killed by a train accident on the railways of
Great Britain in 1908, and also that the number of passengers
injured—283—was not only 251 less than in 1907 and 345 less
than in 1906, but, like the number of killed, was less than
any previously recorded.
{546}
RAILWAYS: France: A. D. 1908.
Government purchase of the Western Railway.
In June, 1908, the French Government secured legislation
authorizing it to purchase the Western Railway of France,
which adds 3100 miles to the previous 2500 miles of
State-owned railways. The purchase is said to have been made
with the expectation "that sufficient pressure will be brought
on the other railway companies to make them adopt the methods
of management applied by the State to its railways."
RAILWAYS: France: A. D. 1909.
The Pensioning of State Railway Employés.
See (in this Volume)
POVERTY AND UNEMPLOYMENT: FRANCE.
RAILWAYS: Mexico: A. D. 1906.
Nationalizing of the Mexican Railway System.
Opening of the Tehuantepec Railway.
"1906 was a year of railway consolidations in Mexico. In March
last, the National Railway of Mexico bought the Hidalgo
Railway, which starts from the capital, passes through the
important mining camp of Pachuca, and will ultimately reach
the port of Tuxpam on the Gulf of Mexico. But by far the most
important operation of the year along these lines was
announced by Finance Minister Limantour on December 14. The
Minister, in an address to Congress, informed that body that
the negotiations, which for some time past had been in
progress, for the reorganization of the finances of the
Mexican Central Railway, had culminated in a plan for the
consolidation of that property with the Mexican National, and
the incorporation of a new company, with headquarters in the
City of Mexico, to own and operate the merged system.
Moreover, the Minister informed the legislature that the
Mexican government, which had owned a controlling interest in
the Mexican National, would hold an absolute majority of the
stock of the new corporation.
"The transaction is an important one, as by it the Mexican
government gains unquestioned control of the transportation
system of the Republic."
_F. R. Guernsey,
The Year in Mexico
(Atlantic Monthly, March, 1907)._
Early in November, 1906, President Diaz formally opened the
Tehuantepec Railway. The event marks the completion of the
plan first proposed by Cortez four hundred years ago, when he
wrote to the king of Spain concerning the feasibility of a
canal from the Atlantic to the Pacific by this route, though
he little dreamt of a railway.
RAILWAYS: Mexico: A. D. 1909.
Extended Governmental Control of Railways.
"The most important step ever taken by the Mexican Government
in connexion with transportation was completed on February 1,
when the amalgamation of the National lines and the Mexican
Central Railway became operative. With this achievement the
Government secured control of 7,012 miles of railway, thus
possessing a majority of the stock of the national lines and
70 per cent. of the stock of the Mexican Central. The
combination includes, apart from the Mexican Central, the
National, International and Interoceanic lines. The Government
likewise controls the Vera Cruz and Pacific Railroad, with 265
miles, and the Tehuantepec National, with 206 miles."
_Correspondence London Times,
July 16, 1909._
RAILWAYS: Mono-Rail System, The Brennan Gyroscopic.
See (in this Volume)
SCIENCE AND INVENTION: RAILWAYS.
RAILWAYS: Netherlands:
Laws against Railway Strikes.
See (in this Volume)
LABOR ORGANIZATION: NETHERLANDS: A. D. 1903.
RAILWAYS: New York: A. D. 1907.
The Public Service Commissions Act.
See (in this Volume)
NEW YORK STATE: A. D. 1906-1910; and
PUBLIC UTILITIES.
RAILWAYS: New Zealand: A. D. 1909.
No more building by the Government of Railways not
likely to pay Interest on Cost.
A despatch from Wellington, New Zealand, to the English Press,
October 18, 1909, reported that "the Premier has made an
important announcement regarding his future railway
construction policy. He said that the Government would not
undertake the building of any more lines that were likely not
to pay. If the people wanted such lines they would have to
guarantee their earnings up to 3 per cent."
RAILWAYS: Nigeria: A. D. 1909.
Rapid development of the Railway System.
Early in 1909 Press despatches to London announced that "a
junction had been effected between the rails proceeding
northwards from Lagos and the rails proceeding southward from
Jebba on the Niger River. This places the Niger River, at a
point some 500 miles from its mouth, in direct communication
by rail with the town of Lagos, the capital of Southern
Nigeria, and fulfils the wishes of the inhabitants of Lagos
that ‘the iron horse should drink of the waters of the
Niger.’"
"The completion of the southern branch of the Nigerian railway
system," said a correspondent, "as far as Jebba on the Niger
is an event of considerable significance in the history of
British action in West Africa. The Anglo-French Agreement of
1898 secured us in the possession of what is undoubtedly the
most interesting portion of West Africa; interesting above all
from the character of its varied inhabitants—the agricultural
Yoruba, the keen Hausa trader and manufacturer, the Fulani, by
turn statesman and ruler or wandering herdsman. To this
region—to many parts of it at least—Islam has brought its
schools, its literature, and an effective system of
administration."
RAILWAYS: Rhodesia:
Rapid Extension of Railways.
See (in this Volume)
RHODESIA.
RAILWAYS: Switzerland: A. D. 1905.
Completion of the Tunnel under the Simplon Pass.
The tunnel under the Simplon Pass, between Brigue,
Switzerland, and Iselle, Italy, was finished February 24th,
1905, after seven years work and at a cost of $14,000,000. It
is twelve miles long,—two and three-quarters miles longer than
the St. Gothard tunnel. It opens direct railway communication
between Paris and Milan.
RAILWAYS: Switzerland: A. D. 1909.
Government Purchase of the St. Gothard Railway.
The St. Gothard Tunnel and Railway were built under an
agreement (1879) with the Swiss Government under which the
latter reserved the right of buying the St. Gothard within
thirty years, and the price arranged was twenty-five times the
amount of the net profits of the line during the last ten
years of working. The right was exercised in the spring of
1909, and thus the last of the principal Swiss lines passed
into the possession of the Government. The St. Gothard Company
at first demanded 215,800,000 francs, but eventually accepted
212,500,000 francs. The Confederation took over the debt of
the company--117,090,000 francs ($23,418,000) with 3½ per
cent. interest, and paid six million francs for expenses of
the issue of the company’s loans.
{547}
RAILWAYS: Turkey: A. D. 1899-1909.
The Bagdad Railway.
In January, 1902, the Turkish Sultan signed a convention which
provides a guarantee, to the extent of 12,000 francs per
kilometre for the undertaking of the Bagdad Railway, to build
which a concession had been obtained by a German syndicate in
1899.
See, in Volume VI. of this work,
TURKEY: A. D. 1899--NOVEMBER).
The new railway was to be an extension of the existing
Anatolian Railway, starting from the terminus of the latter at
Konieh and running, via Bagdad, to some point on the Persian
Gulf, the selection of which was left for future arrangement.
The line, with its branches, was to have a length of 2,500
kilometres or about 1550 miles.
A further convention respecting this project was signed in
March, 1903, concerning which the following statement was made
in the British Parliament on the 23d of that month by the
Premier, Mr. Balfour: "A copy of the convention, concluded
March 5, 1903, between the Turkish Government and the
Anatolian Railway Company is in our possession. It leaves the
whole scheme of railway development through Asia Minor to the
Persian Gulf entirely in the hands of a company under German
control. To such a convention we have never been asked to
assent, and we could not in any case be a party to it."
Mr. David Fraser, a young traveller of experience, was
commissioned by the _Times of India_ in 1907 to follow
the proposed route of the Bagdad Railway and report on its
prospects. He started from Constantinople, and traversed the
completed portion of the line to where it breaks off suddenly
some ten kilometres east of Eregli, "with its pair of rails,"
he wrote, "gauntly projecting from the permanent way and
pointing in dumb amazement where the Taurus shares the horizon
with the very skies." "They have now," said the _London
Times_ not long since, "been pointing thus for nearly five
years, to the bewilderment of those who, not knowing the
country, imagined, in 1904, that with Germany determined and
Turkey desirous to push ahead, the Bagdad line would go
forward with inevitable march towards its distant goal."
RAILWAYS: A. D. 1908.
Damascus to Mecca.
The Pilgrims’ Road.
"The Damascus to Mecca Railway has many remarkable features
which distinguish it from other lines. Its principal object is
to provide a means for faithful Moslems to perform their
pilgrimage to the holy places of Mecca and Medina with a
greater degree of comfort than formerly. Its inception is due
to the initiative of the present Sultan, and the enthusiasm
created by its first announcement brought in subscriptions
from the faithful in all parts of the Islamic world."
The length of the line from Damascus to Mecca is 1097 miles.
"The gauge of the line is the somewhat curious one of 1.05
meter (3 feet 5¼ inches), which was necessary, when the line
was first commenced, to correspond with the gauge of the
Beirut-Damascus line, over which the rolling stock had to be
brought."
_Colonel F. R. Maunsell,
National Geographic Magazine,
February, 1909._
The line was opened to Medina early in the autumn of 1908.
RAILWAYS: United States of America: A. D. 1870-1908.
Railway Rate Regulation.
Its slow Development.
"Granger" Legislation in the Middle West.
State Commissions.
Defiant Rebating.
Tardy Federal Legislation.
The Interstate Commerce Act, 1887, 1906.
President Roosevelt on the subject.
The creation of largely capitalized and therefore powerful
corporations was first developed in a rapid and extensive way
by the modern enterprise of railway building; and the railways
became soon so essentially related to every kind of interest,
personal or general, that they naturally gave rise to the
earliest of the specially modern problems of public policy
concerning corporations which required to be solved. For a
long period society had no call to defend itself against
monopolistic combinations among its railway corporations;
because it was long before seriously competitive lines of rail
could be built. Each served its own belt of country; but each
company owning and managing a line held therefore, in itself,
a monopoly of the transportation agency it had created, and
could, in an unchecked management of that agency, either wrong
its whole clientele by excessive rates of charge, or wrong one
part of it by some favoritism of unequal rates. Those were the
original abuses of opportunity and power which provoked
defensive measures of law. Naturally the earlier undertakings
of defence in the United States were by State legislation,
since nearly all charters of incorporation for business
purposes have been derived from the States. Wherever the
operations of business conducted under such charters extend
over more than a single State, the constitutional power of
Congress to "regulate commerce … among the several States"
gives it an undoubted right to take part in the regulation of
them; but it was slow to exercise that right. The following
abridgment of an excellent sketch of the slow development of
railway-rate regulation gives the essential facts. It is
quoted from extensively by kind permission of its authors and
of The _Boston Evening Transcript_ for which it was
prepared:
"Perhaps the most remarkable fact in the whole history of
interstate transportation is that, despite flagrant abuses,
Federal regulation was held off until 1887. Within the States
themselves railroad rates had been often subjected to severe
regulation: yet even the public excitement which accompanied
the ‘granger’ legislation between 1870 and 1880 did not result
in Federal legislation. In several States, notably in the
Middle West, during that epoch, detailed statutes were passed
fixing maximum rates which by no present standard could be
said to be anything but outrageous. In those times the Federal
courts held that they would not consider legislation as
confiscatory if it left to the railroad one cent of net profit
above operating expenses. But even with this rule, now almost
incredible, it was found in the next decade that much of the
rate-fixing under the State statutes was unconstitutional.
{548}
Nor was the situation much ameliorated by the later
establishment of State commissions, for many of them,
according to the present standards, flagrantly abused their
powers. … After the first outburst more conservative counsels
generally prevailed. The movement met much opposition in its
progress throughout the country, and although commissions were
generally created in the East, they were given no final powers
over rates. Then a reaction set in, due in part to the
prostration of the Western roads. … Much wise legislation
dates from this period, and many State commissions acted in a
moderate spirit. The history of railroad legislation in these
seventeen years illustrated, however, the slow process by
which a popular movement culminates in Federal legislation;
and good law or bad, proper action or improper action, the
legislation of the States supplied experience in view of which
Congress could act wisely when, in 1887, Federal legislation
became inevitable. That this legislation had become inevitable
was due very largely to the continued abuse of their
commercial power by the railroad managers. For several years
public opinion as to railroad discrimination had become so
well settled as to work a real change in the common law, yet
the railroad officials persistently defied it. Rebating,
which, as late as 1875, was at common law merely a doubtful
practice, by 1885 had become generally accepted as an illegal
business; but this change the railroads refused to recognize
in any other way than to make their practices more secret. It
was public indignation against long continued illegal
discrimination and undue preference which brought down upon
the railways the inter-State commerce legislation in 1887. The
wonder is, in view of the railway practices, that it did not
come sooner. But however well behaved the railways might have
been, Federal regulation would have come inevitably long
before the end of the nineteenth century, in accordance with
the general current of public opinion that public services
could no longer go without governmental regulation. Still the
act itself as finally passed was really very conservative,
when the nature of the crisis is considered. … By the
principal provisions of the Interstate Commerce act the
railways were forbidden: (1) To charge unreasonable rates; (2)
To discriminate between persons; (8) To give preference
between localities; (4) To charge less for a long haul than
for a shorter haul included within it ‘under substantially
similar circumstances.’ These provisions were undoubtedly
intended by the majority of those who framed the act as rather
radical legislation, which should materially affect the
practice of the railroads; but the conservative force of
judicial decision soon modified the intended force of the act.
From the outset the commission claimed that it not merely had
power under the act to forbid any unreasonable rate upon
complaint made, but that also, in giving relief, it might
indicate to the railroad what should be the reasonable rate
thenceforth. But within ten years the Supreme Court decided
that the commission had no power to fix rates at all. This was
a famous victory for the railroad bar, for without an
authoritative statement by the commission of what rate it
would regard as reasonable, even a railroad which yielded
obedience to the decree of the commission without appeal to
the courts, could make a slight reduction in the rate, and any
dissatisfied shipper would be obliged to enter again into an
expensive and dilatory litigation. In this way the railroads
tired out objecting shippers; but in the process they
stimulated a widespread demand for a power in the commission
to fix rates similar to that given to many State commissions
and to the corresponding body in Great Britain. The long and
short haul clause provided that exceptions to it must be by
special dispensation from the commission. … But tucked away in
the section was the vague phrase, ‘under substantially similar
circumstances,’ which proved its destruction. At first the
commission began to enforce the act according to its obvious
reading, and to grant dispensations from its operation on
petition of the railroad in proper cases. But the whole effort
of the railway counsel was concentrated upon the courts, and
it was finally held that wherever there was competition at the
distant points, the conditions were dissimilar with those at
the intervening points of any benefit from the clause. Water
competition was first held an excuse for a lower rate for the
longer haul. Then rail competition was recognized. Next
potential competition over existing routes was held enough.
But finally the courts refused to consider the mere
possibility of new routes. … Commercial cities and towns were
left at the mercy of the railways, as they had been before the
act, and the long and short-haul clause became a dead letter.
This was a cause of most bitter complaint; yet, singularly
enough, when the amendments of 1906 were adopted, no attempt
was made to amend this clause. … Further action by the Federal
Government was foreshowed as before by a very considerable
body of legislation throughout the United States, between 1900
and 1905. In many States there was an unfortunate
recrudescence of the ill-advised ‘granger’ legislation, by the
passing of statutes fixing maximum rates; but this time it was
passenger rates which were chiefly attacked, while before it
had been freight rates. The two-cent fare was a popular
programme in this period, and it all but swept the country.
Some legislatures, however, defied it, and some governors
stood out against the legislatures. … The legislation of this
period had, however, another branch which was well-advised. It
is the general characteristic of this legislation that it
confers on the railroad commission the power, while setting
aside unreasonable rates, of fixing a maximum rate. The giving
of such power to the interstate Commission was the principal
point in the programme for further Federal legislation. One
other general power that has been given to State commissions
in the legislation since 1900 is the authority to compel
railroads to furnish proper facilities, together with power of
supervision of management in other respects, which is adopted in
the Federal legislation of 1906 in an experimental way. Those
who would understand the Federal legislation in its latest
form should study the most recent railroad regulation in
Minnesota and Wisconsin, Indiana and New York. … As finally
adopted, the act of 1906 [known as the Hepburn Act] is in form
of a series of amendments to the original act of 1887. … The
main object in most of the legislation was to strengthen still
further the power of the commission over rates and rebates.
{549}
In regard to these, the amendments affected change chiefly
along these two lines. (1) Power is given to the commission to
fix maximum rates in cases where, upon complaint, the rates
fixed by the railroad were found to be excessive. This
includes the power to fix joint through rates. (2) Rebating is
forbidden under heavy penalties, civil and criminal, both to
the railroad and to the shipper; and the cases in which a
reduced rate can be given are enumerated."
_Joseph H. Beale and Bruce Wyman,
Two Years of the Railroad Rate Law
(Boston Evening Transcript, October 10, 1908)._
It was through no fault of the President that effective
legislation to suppress secret rebates and other practices of
favoritism to large shippers by the railways came so tardily
from Congress, as appears above. In his first Message, of
December, 1901, he began urging the needed amendments to the
Interstate Commerce Act of 1887, saying:
"That law was largely an experiment. Experience has shown the
wisdom of its purposes, but has also shown, possibly, that
some of its requirements are wrong, certainly that the means
devised for the enforcement of its provisions are defective. …
The act should be amended. The railway is a public servant.
Its rates should be just to and open to all shippers alike.
The Government should see to it that within its jurisdiction
this is so and should provide a speedy, inexpensive, and
effective remedy to that end. At the same time it must not be
forgotten that our railways are the arteries through which the
commercial life-blood of this Nation flows. Nothing could be
more foolish than the enactment of legislation which would
unnecessarily interfere with the development and operation of
these commercial agencies. The subject is one of great
importance and calls for the earnest attention of the
Congress."
For five years after this reasonable and most just
recommendation was addressed to Congress, the special
interests opposed to public interests in the matter were
represented so controllingly in that body that the impotences
of the law remained uncured. In the Presidential Message of
1904 a more imperative language on the subject was used. "It
is necessary," said the Chief Magistrate, "to put a complete
stop to all rebates. Whether the shipper or the railroad is to
blame makes no difference; the rebate must be stopped, the
abuses of the private car and private terminal-track and
side-track systems must be stopped, and the legislation of the
Fifty-eighth Congress which declares it to be unlawful for any
person or corporation to offer, grant, give, solicit, accept,
or receive any rebate, concession, or discrimination in
respect of the transportation of any property in interstate or
foreign commerce whereby such property shall by any device
whatever be transported at a less rate than that named in the
tariffs published by the earner must be enforced. … The
Government must in increasing degree supervise and regulate
the workings of the railways engaged in interstate commerce;
and such increased supervision is the only alternative to an
increase of the present evils on the one hand or a still more
radical policy on the other. In my judgment the most important
legislative act now needed as regards the regulation of
corporations is this act to confer on the Interstate Commerce
Commission the power to revise rates and regulations, the
revised rate to at once go into effect, and to stay in effect
unless and until the court of review reverses it."
Still Congress did nothing in response to this demand, which
was the demand of the American public, uttered by its chief
and truest representative. Another year passed, and when the
next annual communication of counsel from the national
executive to the national legislature came forth, all other
topics in it were overshadowed by this. The force of argument,
admonition, and pleading in the Message was fairly
overpowering, and it went to a newly chosen Congress in which
the people had represented themselves with somewhat better
effect. The result was the amending act of 1906.
In the energy of the President’s advocacy of this legislation
there was nothing of animosity to the railway corporations.
His most impressive arguments, for example, were such as
these: "I believe that on the whole our railroads have done
well and not ill; but the railroad men who wish to do well
should not be exposed to competition with those who have no
such desire, and the only way to secure this end is to give to
some government tribunal the power to see that justice is done
by the unwilling exactly as it is gladly done by the willing.
Moreover, if some Government body is given increased power the
effect will be to furnish authoritative answer on behalf of
the railroad whenever irrational clamor against it is raised,
or whenever charges made against it are disproved. I ask this
legislation not only in the interest of the public but in the
interest of the honest railroad man and the honest shipper
alike, for it is they who are chiefly jeoparded by the
practices of their dishonest competitors."
RAILWAYS: A. D. 1890-1902.
Application of the Sherman Anti-Trust Law of 1890 to
Railway Combinations and Poolings of Rates.
The Trans-Missouri Freight Association Case.
Decision of the Supreme Court.
Remarks of the Industrial Commission.
In the period between 1870 and 1880 the widening of
combination and organization in all fields of heavily
capitalized industry began, especially in America, to attain
proportions that could be dangerous to social interests in
many ways, by its concentration of the power that money
commands. Alarming possibilities of monopoly, of oppression to
labor, of political corruption, of commercial tyranny
exercised in many forms, were all involved. At the same time
the processes working in this matter were wholly those of a
natural evolution, and were shaping human industry, very
plainly and surely, to perfected economic conditions and
results. Serious problems in government were thus pressed on
public attention for the first time. How to realize the
economic benefits which industrial organization on the large
scale can produce, and which are unattainable without it, and
be at the same time securely defended in all social and common
interests against selfishly hostile uses of the power so
engendered, became then a subject of anxious debate, and the
satisfying answer to it has not yet been found.
{550}
Railway companies were now no longer alone, as corporations
that challenge the exercise of public authority to control
their performance of the public service for which they were
chartered. The growth of mammoth organisms of business in
other fields—such, for example, as the Standard Oil
Company—had reached startling proportions, and the power of
oppression in them was being displayed. Economists, jurists,
and thoughtful legislators were giving earnest study to the
problems they raised. The difficulty of the problem, in the
United States more than in other countries, because of the
divided jurisdictions in government under the federal system,
is made plain by Mr. E. Parmalee Prentice, in the seventh
chapter of his treatise on "The Federal Power over Carriers
and Corporations." Before Congress attempted legislation for a
general control of commercial combinations that were operative
in the country at large, there was much searching for an
adequate ground of constitutional power. In the first instance
it was sought for, not in the authority to regulate commerce,
but in the taxing power, or the right of government to protect
itself from injury to the operation of its revenue laws. When
this was given up there were efforts to frame an act "in
restraint of competition in the production, manufacture or
sale of goods ‘that in due course of trade shall be
transported from one State’ to another." But, says Mr.
Prentice, "a statute of this nature could be sustained only on
the ground of an anticipating and continuing jurisdiction over
every article which, at any period in its history—from
production commenced to consumption completed—had ever
crossed, or would cross, State lines, and over every buyer and
every seller of such article." This, too, was abandoned, as
"an attempt to do the impossible." "The clause relating to
diversity of citizenship was stricken out, and the bill once
more rested upon the narrow power to regulate commerce." As it
finally passed the two houses of Congress and was approved by
the President, July 2d, 1890, this much discussed and much
litigated piece of legislation, known as the Sherman Act,
embodied its purpose in the first two sections, which read as
follows:
"Section 1.
Every contract, combination in the form of trust or otherwise,
or conspiracy, in restraint of trade or commerce among the
several States, or with foreign nations, is hereby declared to
be illegal. Every person who shall make any such contract or
engage in any such combination or conspiracy, shall be deemed
guilty of a misdemeanor, and, on conviction thereof, shall be
punished by fine not exceeding five thousand dollars, or by
imprisonment not exceeding one year, or by both said
punishments, in the discretion of the court.
"Section 2.
Every person who shall monopolize, or attempt to monopolize,
or combine or conspire with any other person or persons, to
monopolize any part of the trade or commerce among the several
States, or with foreign nations, shall be deemed guilty of a
misdemeanor, and, on conviction thereof, shall be punished by
fine not exceeding five thousand dollars, or by imprisonment
not exceeding one year, or by both said punishments, in the
discretion of the court."
"In a number of early cases," says the writer already quoted,
"the act was applied to combinations of laborers to interrupt
the free passage from State to State, the defendants in most
instances being railroad employees. At this point in the
process of judicial construction the case of the Freight
Association [United States v. Trans-Missouri Freight
Association] presented to the Supreme Court the question
whether the act applied to interstate carriers. Of the
intention of Congress there is probably little doubt. Railroad
transportation had been covered in 1887 by the Interstate
Commerce Act. The Sherman Act of 1890 was intended to cover
not transportation, but trade."
The suit of the United States against the Trans-Missouri
Freight Association, the Atchison, Topeka and Santa Fe
Railroad Co., and others, was brought for the dissolution of
an association or combination alleged to be in restraint of
trade, and in violation therefore of the Act of July 2, 1890,
called the Sherman Anti-Trust Law. It was tried originally in
November, 1892, before United States District Judge Riner, of
the Kansas District, who ruled that the law did not apply, and
dismissed the case. On appeal it was tried again with the same
result the next year before Circuit Judge Sanborn and District
Judges Shiras and Thayer. Judges Sanborn and Thayer affirmed
the judgment of the District Court, while Judge Shiras
dissented. The question then went for final adjudication to
the Supreme Court, where it was argued on the 8th and 9th of
December, 1896, and decided on the 22d of March, 1897. The
opinion of the Court, delivered by Justice Peckham, reversed
the judgment of the courts below, affirming that the
Anti-Trust Act applies to railroads, and that it renders
illegal all agreements which are in restraint of trade. The
case was accordingly remanded to the Circuit Court "for
further proceedings in conformity with this opinion." Justices
White, Field, Gray, and Shiras dissented from the opinion of
the majority.
"In the Final Report (transmitted to Congress in February,
1902), of the Industrial Commission, created by Act of
Congress in 1898, this case of the Trans-Missouri Freight
Association, and the general status at that time of questions
involved in it, are discussed at length, and partly as
follows:
"It is of peculiar interest to note that this leading case was
decided, not upon interpretation of the interstate commerce
act itself, but under the provisions of the Sherman anti-trust
law of 1890. … Two questions were plainly before the court:
First whether the Sherman anti-trust law applied to and
covered common carriers by railroad; and secondly, whether the
Trans-Missouri Freight Association violated any provision of
that act by being an unreasonable restraint upon trade. The
court itself acknowledged that it was doubtful whether
Congress originally intended to include railroads under the
prohibitory provisions of the anti-trust law. Counsel for the
carriers showed, it would seem conclusively, that an amendment
proposed by Mr. Bland to include railroads in the prohibition
was rejected. The dissenting Supreme Court justices maintained
that in the absence of a specific application of the
anti-trust law to railroads, inasmuch as the anti-trust law
was a general act, while the act to regulate commerce,
antedating it by three years, was specific, the latter
exempted the railroads, in any case, from the drastic
provisions of the Sherman Act against combinations in
restraint of trade. The court refused to consider other than
mere questions of law, holding that if pooling were excepted
it was the province of Congress to take appropriate action. …
{551}
"It has very frequently been asserted that a primary cause of
the notable tendency toward railroad consolidation since 1898
was the definitive prohibition of all varieties of traffic
contracts or agreements by the Trans-Missouri Freight
Association decision of 1897. This decision, as has already
been indicated, was rendered upon the basis of the Sherman
anti-trust law, without contemplation of the prohibitive
provision of the Act to regulate commerce of 1887. According
to the opinion of many jurists, in fact, the latter act could
not reasonably have been construed to prohibit many of the
traffic agreements which have been customary between carriers.
It has been urged with great force that coöperation among the
railroads having been finally adjudged illegal, it became
necessary to have recourse to a more drastic remedy, namely,
consolidation in some of its various forms. … The first
difference to be noted between pooling and consolidation is
that the latter is much more comprehensive in its scope. …
Agreements for the division of traffic constitute but the mere
machinery by which a certain result is to be attained. …
Experience has abundantly shown that it is possible for
railroads to maintain a large part of their identity, even
reserving to themselves the power to make rates independently,
under a pool, in exceptional cases, without thereby entirely
nullifying the steadying influences of such traffic
agreements. Consolidation, however, necessarily involves the
unification of all interests as between railroads. … In brief,
pooling may still permit competition in respect to facilities.
It may merely eliminate the ruinous phases of competition in
rates, leaving still in force the healthful influences of
reasonable rivalry. Consolidation proceeds to the uttermost to
stifle competition of all kinds, whether in respect of rates
or of facilities. … A second point to be kept in mind as
between the effects of consolidation and pooling lies in the
fact that consolidation can never hope to accomplish the
steadying influence upon rates which is claimed for railroad
pools, until such time as every railroad within a given
competitive territory shall have been bought up and absorbed.
… A division of territory into a number of specific groups,
each absolutely monopolized by one interest, seems to be the
only logical outcome of the consolidations which have been
already accomplished. …
"Pools and pooling still exist: although outwardly called
gentlemen’s agreement or disguised in some other way, it is
incontestable that in every case where consolidation has not
proceeded to its uttermost limits, as in New England, traffic
agreements exist. Railroad men are almost unanimous in the
expression of their desire to have the inhibition removed.
Representatives of commercial interests have, in the main,
acceded to this opinion. As has been shown, the prohibition
was not contemplated originally. It was included in the act
only as a concession to certain opponents of pooling in the
House of Representatives. … On the other hand, it is
universally recognized that certain dangers to the shipper are
incident to such action. Railroad pools may, and certainly
have, in some instances, operated either to raise rates, or to
maintain them in face of a tendency to decline. As a
consequence, the majority of these appeals for remedial
legislation are accompanied by a demand that pooling, if once
more permitted by law, shall be subject to governmental
approval and supervision."
_Final Report of the Industrial Commission,
pages 338-348._
RAILWAYS: A. D. 1901-1905.
The Northern Securities Case.
Another test of the Sherman Act.
The question of the Legality of Combination
between Corporations through a "Holding Company."
At about the time when the Industrial Commission was producing
its final report, from which the above is taken, the courts of
the United States were called on to give attention to another
mode, distinctly different from either "pooling" agreements or
corporate consolidation, by which an effective combination of
railway lines could be secured. It came to the consideration
of the courts in the case of the Northern Securities Company,
which was famous in its day. Briefly related, the case arose
as follows:
Although the Great Northern Railway and the Northern Pacific
Railway traverse the same Northwestern section of the United
States, from the Mississippi River and the western extremity
of the Great Lakes to the Pacific Coast, at no great distance
apart, there was not rivalry, but a community of interest
between them, in 1901, when the corporations to which they
belong became joint purchasers of the Chicago, Burlington and
Quincy Railway system, in order to secure for each of them a
direct connection with Chicago, under their joint control.
This achievement of the powerful railway interests controlled
by James J. Hill was followed by what is known in Wall Street
as a "raid" on the stock of the Northern Pacific, by the Union
Pacific interests, headed by E. H. Harriman, with the object
of securing votes to elect the next board of directors in that
corporation, and thus control the whole Northern
transcontinental combination. The outcome of the fierce
struggle was a compromise, from which issued the famous
"holding company" known as the Northern Securities Company,
incorporated on the 12th of November, 1901, under the
accommodating laws of the State of New Jersey. The term
"holding company" describes precisely the function which this
corporation was created to perform. In the language of its
charter, "the objects for which the corporation is formed are:
To acquire by purchase, subscription or otherwise, and to hold
as investment, any bonds or other securities or evidences of
indebtedness. … To purchase, hold, sell, assign, transfer,
mortgage, pledge, or otherwise dispose of, any bonds or other
securities or evidences of indebtedness created or issued by
any other corporation. … To purchase, hold … etc., shares of
capital stock of any other corporation … and, while owner of
such stock, to exercise all the rights, powers and privileges
of ownership, including the right to vote thereon."
{552}
The specific plan of operation was set forth in a circular
issued by the Northern Securities Company, on the 22d of
November, 1901, to holders of the stock of the Great Northern
Railway Company, which said: "The Northern Securities Company,
incorporated under the laws of the State of New Jersey, with
an authorized capital stock of $400,000,000, and with power to
invest in and hold the securities of other companies, has
commenced business, and has acquired from several large
holders of stock of the Great Northern Railway Company a
considerable amount of that stock. A uniform price has been
paid of $180 per share, in the fully paid stock of this
company, at par. This company is ready to purchase additional
shares of the same stock at the same price, payable in the
same manner, and will accept offers made on that basis if made
within the next sixty days."
"It seems," says Professor Meyer, in his "History of the
Northern Securities Case," "that the capitalization of
$400,000,000 was fixed at that figure in order to cover
approximately the combined capital stock of the Northern
Pacific and Great Northern at an agreed price apparently based
upon earning capacity. The par value of the outstanding
capital stock of the Great Northern was $123,880,400, and that
of the Northern Pacific amounted to $155,000,000. The Northern
Securities Company purchased about seventy-six per cent. of
the former and ninety-six per cent. of the latter, on the
basis of $115 per share of $100 of Northern Pacific and $180
per share of $100 of the Great Northern."
From the side of the railway interests concerned, this holding
together of the stocks of the two corporations which owned
between them the connecting Burlington line to Chicago was a
necessary business transaction. Their view of it was stated
subsequently by Mr. Hill, in testimony given during
proceedings which tested the legality of the holding company,
when he said: "With the Northern Pacific as a half-owner in
the shares of the Burlington and responsibility for one-half
of the purchase price of these shares, the transfers of the
shares of the Northern Pacific or the control of the Northern
Pacific to an interest that was adverse or an interest that
had greater investments in other directions, the control being
in the hands of companies whose interests would be injured by
the growth and development of this country would, of course,
put the Great Northern in a position where it would be almost
helpless, because we would be, as it were, fenced out of the
territory south which produces the tonnage we want to take
west and which consumes the tonnage we want to bring east, and
the Great Northern would be in a position where it would have
to make a hard fight—either survive or perish, or else sell
out to the other interests. The latter would be the most
business-like proceeding."
On the other hand, from the standpoint of public interests,
the combination looked dangerous to the Northwestern States,
as being a suppression of competition and a creation of
monopoly in railway transportation, and it was quickly
announced that the Governor of Minnesota had determined to
invite the Governors of States affected by the transaction to
a conference, for the purpose of considering "the best methods
of fighting the Northern Securities Company’s propositions in
the courts and by new legislation, if necessary." The result
of the conference was a suit undertaken by the State of
Minnesota, at first in the Supreme Court of the United States,
where it was found to be impracticable, but finally begun in
the United States Circuit Court. This State action was soon
followed by proceedings taken by the Federal Government.
Attorney-General Knox was asked by the President for an
opinion as to the legality of the procedure involved in the
formation of the Northern Securities Company, and replied
that, in his judgment it violated the provisions of the
Sherman Act of 1890. The President then "directed that
suitable action should be taken to have the question
judicially determined." Suit was begun accordingly on the 10th
of March, 1902, by the United States, in the United States
Circuit Court at St. Paul, against the three companies,
—Northern Securities, Great Northern, and Northern Pacific.
Testimony was taken in St. Paul and New York, and the case was
argued in March, 1903, at St. Louis, before a special trial
court, composed of four circuit judges. The decision rendered
by this court, the four judges concurring, declared the
transaction illegal, and enjoined the Northern Securities
Company from performing the acts that it was intended to
perform. This decision was contradicted, however, by one given
at about the same time in the suit of the State of Minnesota,
which had its trial in the United States Circuit Court for the
District of Minnesota. There the legality of the formation of
the Northern Securities Company was affirmed.
Appeals from both decisions were taken to the Supreme Court,
and that of the special trial court, in the suit of the
Federal Government, which declared the procedure involved in
the formation of the Northern Securities Company to be in
violation of the Sherman Act of 1890, was fully sustained by a
majority of the Court, in March, 1904. In the opinion of the
majority of the justices, "if Congress has not, by the words
used in the Act, described this and like cases, it would, we
apprehend, be impossible to find words that would describe
them."
See (in this Volume)
COMBINATIONS, INDUSTRIAL: UNITED STATES: A. D. 1901-1906.
The Court below was authorized accordingly to execute its
decree against the Securities Company. A little later the
Supreme Court decided in the Minnesota State suit that it had
no jurisdiction, and sent the case back, to be remanded to the
State court from which it had been originally removed. With
this case nothing further was done.
In connection with the undoing of the Northern Securities
Company’s operations, to reconvey the property for which it
had issued its stock, fresh litigation arose, over questions
that touched the construction to be put on the court’s decree.
This, too, went up to the Supreme Court of the United States,
and was decided there in March, 1905; but it has no important
bearing on the questions involved in the original case.
{553}
In the final chapter of his history of the case, Professor
Meyer has this to say of it: "The chief interest of the
Northern Securities case lies in the magnitude of the
interests involved and in the variety of the economic and
legal problems which were incidentally drawn into the
controversy. From the point of view of railway organization
the case presents little of consequence, except that railway
corporate organization, in the process of metamorphosis or
evolution, must, avoid the technicality of the particular type
of holding company which the Northern Securities Company
represented. From the point of view of railway regulation and
the relations between the general public interests and private
railway management, the case has no significance whatsoever,
in spite of the fact that action against the Securities
Company arose out of alleged injurious consequences to the
public. It was assumed that competition had been stifled,
without first asking the question whether competition had
actually existed; and whether, if competition could be
perpetuated, the public would profit by it."
_Balthazer Henry Meyer,
A History of the Northern Securities Case
(Bulletin of the University of Wisconsin, Number 142)._
RAILWAYS: A. D. 1901-1909.
The Harriman System.
Its Creation.
Its Magnitude.
The Rapid Rise of the late E. H. Harriman to Financial Power.
On the death of the late Edward H. Harriman, which occurred on
the 9th of September, 1909, it was said that he was the
absolute dictator of 75,000 miles of railroad in the United
States—about one-third of the country’s total mileage of
railways—besides being a leading director in four ocean
steamship lines, two trust companies, and three banks. Some
time previously the Interstate Commerce Commission, in the
report of its investigation of the Union Pacific Railroad
management, said of him: "Mr. Harriman may journey by
steamship from New York to New Orleans, thence by rail to San
Francisco, across the Pacific Ocean to China, and, returning
by another route to the United States, may go to Ogden by any
one of three rail lines, and thence to Kansas City or Omaha,
without leaving the deck or platform of a carrier which he
controls, and without duplicating any part of his journey."
In the same report, referring to one of the most questionable
of Harriman’s financial operations, the Commission remarked
that it was "rich in illustrations of various methods of
indefensible financing," but added that it was no part of the
Harriman policy to permit the properties under the Union
Pacific control to degenerate. "As railroads," it was said,
"they are better properties to-day, with lower grades,
straighter tracks, and more ample equipment than they were
when they came under that control. Large sums have been
generously expended in the carrying on of engineering works
and betterments which make for the improvement of the service
and the permanent value of the property."
On the occasion of Mr. Harriman’s death, the New York
_Evening Post_, reviewing his career, said of him that
"his worst enemies are forced to admit that as a railroad
executive he had no peer. What he found on taking charge of
the Union Pacific was two dirt ballasted streaks of rust. The
stations along the mountain grades were tumbled-down shacks,
and most of the equipment was fit only for the scrap pile.
Moreover, there was no organization. From top to bottom of the
staff the men had lost heart. In 1898 the Union Pacific was
suffering from bankruptcy, brought on by years of political
and financial intrigue. But when Harriman got his grip on the
property he said to his associates: ‘We will rebuild it and do
it right away.’
Harriman’s plans called for hundreds of millions of dollars
for new rails, lower grades, and modern cars, locomotives, and
terminals. After a struggle the Union Pacific directors came
around to his way of thinking."
"It is necessary to remember," said the _Post_, in
another article, "in summing up the Wall Street side of Mr.
Harriman’s history, that fifteen years ago he was hardly
known, even in railway circles; that ten years ago, his name
would have conveyed no meaning or association to the general
public; that even at the inception of the celebrated Northern
Pacific fight of 1901 [see above, under date of 1901-1905], in
which he was actually a chief protagonist, Wall Street
mentioned his name only incidentally in connection with it.
The fight, as the Stock Exchange and the newspapers then saw
it, was waged between the ‘Standard Oil interest,’ and the
‘Morgan interest,’ and the Union Pacific’s chairman cut little
individual figure in the public view."
RAILWAYS: A. D. 1903 (February).
Act of Congress to Further Regulate Commerce with Foreign
Nations and among the States, known commonly
as "the Elkins Law."
The following are the essential provisions of the Act,
approved February 19, 1903, which is commonly referred to as
the Elkins Anti-Rebate Law:
"The willful failure upon the part of any carrier subject to
said Acts to file and publish the tariffs or rates and charges
as required by said Acts or strictly to observe such tariffs
until changed according to law, shall be a misdemeanor, and
upon conviction thereof the corporation offending shall be
subject to a fine not less than one thousand dollars nor more
than twenty thousand dollars for each offense; and it shall be
unlawful for any person, persons, or corporation to offer,
grant, or give or to solicit, accept, or receive any rebate,
concession, or discrimination in respect of the transportation
of any property in interstate or foreign commerce by any
common carrier subject to said Act to regulate commerce and
the Acts amendatory thereto whereby any such property shall by
any device whatever be transported at a less rate than that
named in the tariffs published and filed by such carrier, as
is required by said Act to regulate commerce and the Acts
amendatory thereto, or whereby any other advantage is given or
discrimination is practiced. Every person or corporation who
shall offer, grant, or give or solicit, accept or receive any
such rebates, concession, or discrimination shall be deemed
guilty of a misdemeanor, and on conviction thereof shall be
punished by a fine of not less than one thousand dollars nor
more than twenty thousand dollars. In all convictions
occurring after the passage of this Act for offences under
said Acts to regulate commerce, whether committed before or
after the passage of this Act, or for offenses under this
section, no penalty shall be imposed on the convicted party
other than the fine prescribed by law, imprisonment wherever
now prescribed as part of the penalty being hereby abolished.
Every violation of this section shall be prosecuted in any
court of the United States having jurisdiction of crimes
within the district in which such violation was committed or
through which the transportation may have been conducted; and
whenever the offense is begun in one jurisdiction and
completed in another it may be dealt with, inquired of, tried,
determined, and punished in either jurisdiction in the same
manner as if the offense had been actually and wholly
committed therein.
{554}
"In construing and enforcing the provisions of this section
the act, omission, or failure of any officer, agent, or other
person acting for or employed by any common carrier acting
within the scope of his employment shall in every case be also
deemed to be the act, omission, or failure of such carrier as
well as that of the person. Whenever any carrier files with
the Interstate Commerce Commission or publishes a particular
rate under the provisions of the Act to regulate commerce or
Acts amendatory thereto, or participates in any rates so filed
or published, that rate as against such carrier, its officers
or agents in any prosecution begun under this Act shall be
conclusively deemed to be the legal rate, and any departure
from such rate, or any offer to depart therefrom, shall be
deemed to be an offense under this section of this Act."
_Statutes at Large of the United States,
Fifty-seventh Congress, Session II, chapter 708._
In comment on the above Act, Professor Ripley wrote, sometime
after its passage:
"Two years ago, at the instance of the railways, which were
desirous of stopping large leakages of revenue due to rate
cutting, Congress enacted the so-called Elkins law. This was
distinctly a railway measure. Hence the ease and quiet of its
passage. It roused none of the corporate watch dogs of the
Senate, ostensibly guardians of the public welfare. Nor was it
a compromise. There was no need of compromise. Both railways
and shippers were agreed in the wish to eliminate rebates.