To the bill reported by the majority of the committee we have the
strongest objections.
_First._--It sanctions an enormous inflation of capital. It
authorizes a consolidation upon the basis of an appraisal of the value
of the several properties to be made by the parties themselves. The
railroads of this Commonwealth are prohibited by law from making stock
dividends, and yet here stock dividends are allowed to such extent as
the parties think proper. One of the greatest impositions ever
practised upon the public, from which the people of this Commonwealth
now suffer, is the watered stock of the railroads between Albany and
Chicago. The amount of stock in these roads issued without any
equivalent, upon which our traffic is now taxed, is variously
estimated at from forty-four millions to one hundred and five
millions. The annual tax levied is from three millions to six
millions, of which we pay a large share. The majority bill provides
for just such a watering of stock, to the extent of perhaps ten
millions, according to the appraisal by the parties in interest. We
believe this to be all wrong, and should not be sanctioned by the
Commonwealth.
_Second._--We utterly dissent from the opinion of the majority in
allowing the Boston and Lowell Railroad to come into such a
consolidation. The Boston and Lowell forms no part of the Tunnel line.
Every witness before the committee, except the agents of the
corporations themselves, was emphatic against such a consolidation.
See Governor Claflin's testimony, 7th Hearing, page 26.
" J. T. Joy " " " " 37.
" C. F. Adams, Jr., " " " " "
" N. C. Nash " 9th " " 4.
" Q. A. Vinal " 14th " " 10.
" Col. Faulkner " " " " 12.
" J. W. Brooks " 17th " " 13.
The Northern line has been of very great value to the business of
Boston and Massachusetts; more than any other it has effected that
reduction of rates which has returned to Boston within the past few
years a portion of the export trade. It forms the shortest line at
present existing between Boston and the Lakes, and while lake
navigation is open substantially controls the rates over the other
lines. Mr. Nathaniel C. Nash says (9th hearing, page 6), "We have
derived more advantage from that line than from any other source."
(See Railroad Commissioners' Report of 1870, page 36.) While the
Lowell railroad provided the terminus and the representation in this
Commonwealth, the other railroads in the line have cooperated in
producing this result. It has cheapened food to the people of this
Commonwealth, and of all New England. The Lowell Railroad is bound by
contracts to continue in this Northern line for twenty years to come.
Although some of the corporations are under financial difficulties,
this does not affect the operations of the line. The railroads still
exist and must continue to do business, and so far as the advantage of
the traffic extends, it matters little who owns or operates the
railroads. So impressed are the majority of the committee with the
importance of maintaining the northern line that they impose upon the
Lowell Railroad Company, as they say, the conditions of withdrawing
from the Northern line, and make provision for transfer of the
business to another line--the Boston and Maine. They propose to do
this in a manner which seems to us weak and futile. The majority bill
provides for repeal of the charter of the Great Northern Railroad
Company, passed in 1869, which authorized the Boston and Lowell
Railroad Company to consolidate with certain companies in New
Hampshire, with authority to lease or purchase other railroads leading
to Ogdensburg and other points in the North and West, and lines of
boats on the lakes. As all the other companies in this consolidated
line are in New Hampshire this charter was ineffective without the
cooperation of New Hampshire, and to this bill New Hampshire has never
assented--not from any hostility to through lines, but because it
contained objectionable features, such as the consolidation of
competing lines, the creation of a monstrous corporation with power to
combine in one gigantic monopoly all the railroads within her borders.
This charter is mere waste paper, and its repeal would have no more
effect than the burning of waste paper. The Lowell Railroad remains
bound by contracts to the Northern line, and the majority bill
effectually places the Northern and Tunnel lines under one control.
The proposal to transfer the Northern line and northern business to
the Boston and Maine Railroad seems to us an absurdity. The Boston and
Maine is practically an Eastern line; of its whole length, one hundred
and twelve miles, only twenty-six could be used in connection with the
Northern line. It never could or would give that exclusive attention
to the business necessary to make such a line successful. Its only
means of connection is over the Manchester and Lawrence Railroad, the
grades of which are too heavy for a successful freight business with
the West.
The Boston and Lowell Railroad is the natural terminus of this
Northern line, and no legislation can remove it from this position.
Moreover the majority bill, placing the Boston and Lowell Railroad and
the Fitchburg in the same control, and authorizing a lease of the
Cheshire, gives the consolidated company such a substantial control of
the whole northern business that its transfer to the Boston and Maine
would necessarily be followed by such disastrous competition as to
preclude such a connection. It must inevitably result in a
consolidation of the Tunnel and the Northern line under one
management. In creating a new line we destroy one which already
exists.
Our true policy is to maintain unimpaired our four routes to the West,
and under whatever management they may be, at all events maintain that
they shall be independent of each other. If a consolidation is to be
made of the Tunnel line we are clearly of the opinion that it should
be of the direct line only between Boston and Troy, including the
Fitchburg, Vermont and Massachusetts, Troy and Greenfield, and Troy
and Boston, and the Massachusetts Central if it desires to form part
of such a line. The Boston and Lowell Railroad, and Nashua Railroad
should be studiously kept apart from such a line, because it forms no
natural part, and does form a natural part of another line. It is
urged that the possession of terminal facilities in Boston should be
allowed a controlling influence in this matter; that the Boston and
Lowell Railroad has obtained the only convenient terminus in Boston
for a great Western line--more than is needed for its own business, or
the business of the Northern line, and therefore that the railroad
policy of the Commonwealth should be compelled to yield to its
position. To this there are two answers.
_First._--That these facilities were obtained for the Northern line,
and by urgent representations of its necessities, and if they are not
needed for that business they should be transferred to other
corporations that do need them.
The Commonwealth has full power in the case, and it is only necessary
to invoke the same power which the majority bill gives the
consolidation company to take property from the Fitchburg, to take
from the Lowell Railroad Company the property which it now represents
as not needed for its business which it has obtained under the
representation of a public necessity.
_Secondly._--The question of terminal facilities is too unimportant in
itself to be permitted to determine in the least degree the decision
of a great State policy; other facilities can be obtained as good as
the Lowell.
_Finally._--We object to the plan of the majority because it continues
the policy of placing our last remaining line to the West under the
control and management of a stock corporation.
It cannot be denied that there is great and wide-spread
dissatisfaction with our present railroad system, and its management.
We have tried in vain to control by special legislation, and it may
well be acknowledged that the trial has not been very successful.