A chief argument against the system proposed is the danger of
political corruption likely to follow the employment of a large
number of men in public business.
_Second._--It is alleged that the public management of any great
public service is less efficient than private management.
The purpose of the minority of the Committee in proposing their plan,
was to provide a corporate body removed as far as possible from
political influence.
The State Trustees are appointed by the Governor and Council. They are
appointed for _five_ years. A single vacancy occurs each year. They
hold nearly the same position in regard to the operatives employed ill
the operation of the corporation, as directors of corporations, and no
one ever heard of directors exerting any great political influence,
particularly State directors. I doubt if any director of any railroad
corporation in the State ever knew or thought to influence the
political vote of an operative.
If they choose, the managers of any private corporation could exert a
greater and more injurious political influence than these State
trustees.
If the power is dangerous in State trustees, who must be selected by
your Governor, it is far more dangerous in the hands of persons
elected by stockholders of a private, money-making corporation, whose
interests are in direct antagonism to the interests of the public.
This argument applies to corporate management only with a much greater
force. Let corporate management be unmasked and it would make State
management hide its face with shame. (See extract New York State
Committee on Erie.)
"If the principle is to be established that a few interested parties
of stock-jobbers, having no permanent interest, can, by the corrupt
use of money or by violence, take and hold possession of a great
railroad corporation, and reimburse themselves out of its treasury, it
is time the matter was understood by the public. As to the payment of
money to influence legislation connected with said company, or other
irregularities, the testimony was enough to show that the railroad
companies have been in the habit of expending large sums from year to
year, either to secure or defeat the passage of bills. It appears
conclusive that a large amount, reported by one witness at $100,000,
was appropriated for legislative purposes by the railroad interest in
1872, and that $30,000 was the Erie's portion. In this connection the
committee denounce the lobby roundly. It is further in evidence that
it has been the custom of the managers of the Erie Railroad from year
to year in the past to expend large sums to control elections and to
influence legislation. In 1868 more than one million dollars was
disbursed from the treasury for 'extra and legal services.' What the
Erie has done, other great corporations are doubtless doing from year
to year. We have here simply an acknowledgment, of the fact. Combined
as they are, the power of the great moneyed corporations of this
country are a standing menace to the liberties of the people. The
railroad lobby flaunts its ill-gotten gains in the faces of our
legislators, and in all our politics the debasing effect of its
influence is felt."
This cry of political corruption against State management is but the
resurrection of the old party ghost which has always been retained in
the service of all political parties to frighten people that are
naturally timid and conservative; and this terrible spectre has often
been the means of delaying and defeating enterprises that were for the
best interests of the people.
I remember, Mr. President, when this ghost was exhibited by the
Democratic party in every town in this State; and the people were made
to believe that the loan made by the State to the Boston and Albany
(Western) Railroad would ruin the State; that every man's farm was
mortgaged at nine dollars per acre; and men believed it, for that was
in times when the people followed party leaders through faith; when it
was said that the true test of the political faith of a New Hampshire
Democrat was to wake him up with the inquiry, "Who made you?" and if
he answered promptly, "Isaac Hill, sir," he was to be trusted as one
of the faithful.
The effect of this great outcry was to destroy confidence in the
enterprise and the stock at one time could not be _given_ away for
fear of assessments. And if the people at that time could have been
guaranteed that the loss of the State should not exceed the four
million loaned, they would have gladly given another million as a
guarantee. But they could not rid themselves of the supposed burden,
and the result has been the development of a great enterprise in the
interests of the State in spite of their fears. This was in a measure
to the credit of State management.
As to the efficiency of the plan, it remains to be tried; but in the
language of the minority report we believe such a management would be
efficient and reliable beyond that of ordinary railroad corporations.
It combines State control with corporate management.
The Governor and Council could be depended upon to appoint suitable
persons as trustees. The railroad corporations would naturally appoint
their most efficient agents as trustees. Such a board could find no
difficulty in securing the services of the ablest railroad officers to
direct and aid in the management.
As the plan has no precedent it cannot be judged from the record, and
the prejudice existing against State management cannot fairly apply to
this plan; but if it could have a fair trial we have no doubt of its
efficiency and success; and we are not alone in this opinion, for this
plan has received the full endorsement of eminent railroad managers,
successful and prominent manufacturers and merchants, and the Chairman
of the Railroad Commissioners, together with many of our most
enterprising and conservative citizens.