Kansas City Southern, which is a Harriman road. The Moore group has a half-interest in the Houston and Texas, the Houston, East and West Texas, and the Houston and Shreveport, which are in the Southern Pacific System and part of the Harriman cluster. Four Baltimore and Ohio directors represent the Pennsylvania road; four represent the Harriman group, and two are appointed to represent the State of Maryland. The Chicago and Northwestern, which is a Vanderbilt road, has on its board one of the leading Harriman men of the Union Pacific and Southern Pacific boards. J. P. Morgan, head of the Morgan group, is a director in the New York Central, the controlling company of the Vanderbilt system. William Rockefeller, representing still another group, is also a director in the New York Central. George J. Gould, head of the Gould system, is a director in the Union Pacific and in the Southern Pacific, both of which belong to the Harriman group. E. H. Harriman, President of the Union Pacific and Southern Pacific, is on the board of directors of the Northern Pacific and of the Chicago, Burlington and Quincy, which are Morgan-Hill lines.*

Speaking of the intimate relations of the great railroad groups, which I have illustrated above by examples gathered from Poor's Railway Manuals, Moody's The Truth About the Trusts and other authoritative sources, Mr. Moody says: "They are all allied and intertwined by their various mutual interests. For by their various mutual interests. For instance, the Pennsylvania Railroad interests are on the one hand allied with the Vanderbilts, and on the other with

the Rockefellers. The Vanderbilts are closely allied with the Morgan group, and both the Pennsylvania and Vanderbilt interests have recently become the *In addition to the facts of record stated in the text (which are only a part of what might be cited) we have now a press report of a gigantic merger of the Union Pacific with the New York Central and Chicago and Northwestern, bringing the Harriman and Vanderbilt interests into close federation. (See New York and Boston papers April 14, 1905.)

dominating factors in the Reading system, a former Morgan road, and the most important part of the anthracite-coal combine, which has always been dominated by the Morgan people. Furthermore, the Goulds, who are closely allied with the Rockefellers, are on most harmonious terms with the Moores of the Rock Island system, and the latter are allied in interest quite closely with both the Harriman and the Morgan groups. The dominating men in the Morgan group are also important factors in the Gould, Pennsylvania, and Moore groups; and the Rockefeller-Gould interests are represented to a greater or less degree in every group, and also in most of the 'independent' allied lines. The whole aggregation thus makes up a gigantic 'Community of Interest' or Railroad Trust, being allied together by most remarkable and intricate ties of inter-dependence and mutual advantage. While nominally controlled by two thousand corporations, the steam railroads of the country really make up a mammoth transportation trust, which is dominated by a handful of far-seeing and masterful financiers. Not only do these financiers dominate their respective groups, but, as stated above, the most important of them, such as as Rockefeller, Morgan, Harriman, Gould and Vanderbilt, are interested in and more or less dominate all the groups, and in this way knit together the entire railroad system of the country into this greater 'community' or Trust.' The superior dominating influence of Mr. Rockefeller and Mr. Morgan is felt in greater or less degree in all the groups."

Gulf and from Salt Lake City to Pittsburg and Buffalo, and are trying hard to reach the Atlantic.

The Harriman interests are linked with the Morgan-Hill union and with the Vanderbilts, who in their turn are friendly to all the interests named, as is also the Pennsylvania. A combination of the New York Central with the Union Pacific, or the Pennsylvania with the Santa Fé, or even a practical federation of Fé, or even a practical federation of the Harriman - Hill-Morgan - VanderbiltPennsylvania interests, will not surprise any one familiar with the movement of railway combination in the last dozen years.

The interlocking of interests and the forces making for closer alliance are increasing so rapidly that our leading authorities on Wall-street tendencies, who have most excellent means of knowledge and have given close attention to the subject, predict the practical coalescence of the groups at no distant day.

Besides the increase of efficiency, saving in cost of management, sending goods by the shortest routes, saving transfers and reloading, and preventing other economic wastes of severance, several ad

ditional advantages have been put for

ward as reasons for consolidation.

C. P. Huntington, the first president of the Southern Pacific Railroad, urged the consolidation of all the railways under the control of one company as the only cure for rate-cutting and railroad wars.* Jay Gould is said to have held the same opinion.

Hon. Paul Morton says: "I do not view the ownership of all the American railroads by a single company or interest with the slightest alarm."†

Mr. Newcomb, editor of the Railway World, says: "The economic advantages of absolute unification are so great that *In North American Review, September, 1891. Lectures on Commerce, Chicago University (1904), page 106.

Review of Reviews, 1901, Vol. 24, p. 174. The advantages and disadvantages of consolidation are discussed by James J. Hill, Russell Sage, Charles M. Schwab, and others in the North American Review for May, 1901 (Vol. 172, p. 641 et seq.). See

it may be expected that the movement will not cease until unification has been completely accomplished."‡

In 1898, Mr. John Hobson, one of the greatest of English economists, wrote in his Evolution of Modern Capitalism :

"The rapidity with which the whole railway system is passing into the hands of great monopolist syndicates with the necessary result of stifling competitions is in some respects the most momentous

economic movement in the United States at the present time."

Moody says (p. 491):

"The Standard influence is felt quite forcefully in all the railroad groups, and this influence is showing a steady growth throughout the entire steam-railroad field. It is now freely predicted in Wall street that the next decade will see the Rockefeller interests the single dominating force in the world of railway finance and

control."

Fifth-In the great railway groups and the stupendous Railroad-Trust they are developing, the tendency is toward the concentration of control in fewer and

fewer hands. Not only are railways absorbed by the wholesale, and the resulting systems gathered into enormous groups, but inside these systems and groups the movement is toward one-man power.

Already, as I am informed by a leading member of the United States Interstate Commerce Commission, half a dozen men can meet and practically determine the transportation rates for the country. And the forces of integration and industrial gravitation that have operated so powerfully in the past are not likely to stop even with this high degree of cen

tralization.

"In Chicago," says Spearman, "the also Report of United States Industrial Commission, Vol. IX., p. 148, and Final Report, 1902, Vol. XIX., pp. 304-309; Spearman's Strategy of Great Railroads, 36, 125, 128-29; Lewis' National Consolidation of Railroads, 29–31, 34, 35, 38, 40, 47–54. Professor Johnson's American Railway Transportation, 250-51.

five men who in authority that is absolute are traffic directors of two-thirds of the United States may be found almost every day within a few moments' walk of each

other."*

A Hill-Morgan representative, a Harriman man, a Santa Fé man, a Gould man, and a Rock Island man can shape the railroad destinies of the West and a large part of the middle and southern sections of the country.† Add a Vanderbilt man and a Pennsylvania man, and you have a board of seven capable of controlling the rates and fares for nearly the whole United States.

If you want to summon a Boston and Maine representative and swing Northern New England into line we will make it a board of eight.

66

Four years ago The Railway World declared that “A. J. Cassatt, Mr. Vanderbilt, J. P. Morgan, E. H. Harriman and James J. Hill are regarded as practically ruling all the great railroads of the country."

Whatever may be the true number of our railroad kings, it is beyond question that a very few men have power to control our railway rates, and that still fewer will control them if the present processes of consolidation and combination continue. The managers of six big systems control three-fourths of the country and five-sixths of the traffic and indirectly dominate almost all the rest. The six big groups are growing into one. The Railway Empire looms huge and powerful out of the mists that shroud the future. Those who have the largest surplus incomes are continually buying their way to more complete control. John D. Rockefeller's income is variously estimated at two to six millions a month. Even if it is only the modest sum of $100,000 a day, he can live pretty well and still use

* Strategy of Great Railroads, p. 163.

+ Ibid. pp. 126, 162.

Years ago Carroll D. Wright, United States Commissioner of Labor, is reported to have said: "Ten men control the railroad business of the United States, and nearly all of them live in the city of New York." He quoted the statement of the Inter

most of his income to buy up more railroads and other properties; and with each new purchase, the income expands and the power of further purchase increases. Even the founding of a great university only retards the process for two or three months. The money piles up on his doorstep like a snow-storm, four or five thousand dollars an hour, day and night, $600,000 or more a week, and it must be invested; the Rockefeller power must grow by the natural laws of surplus property in prudent, and especially in aggressive, hands.

Moreover the smaller capitalists in a group permit the heavy men to dominate the business in large measure even where the latter do not hold a majority of the stock—a habit that is due partly to the prestige and ability of the big financiers, and partly to the knowledge that if their will is crossed they have the power to enforce it if they choose by buying a control or compelling obedience by the pressure of related companies and properties dominated by them.

We have seen that the dead and captured companies lie in great clusters, that the independent companies controlling the clusters are themselves united in a few giant groups, that these groups are intertwined and affiliated, that the movement of concentration is going rapidly forward, and that the tendency is for fewer and fewer men to control the combinations.

If these movements, the merging of railways into great systems, the gathering of these systems into giant groups, the interlocking and coalescence of these groups, and the progressive narrowing of control in each constellation of capitalists, continue to the limit, there will be in time a Railway Empire in this country dominated by a single man.‡

state Commerce Commission: "It is a matter of common knowledge that vast schemes of railway control are in process of consummation, and that the competition of lines is to be restrained by these combinations. If the plans already foreshadowed are to be brought into effective results, there will be a vast centralization of railroad properties with all

The Railroad-Trust may never reach this degree of concentration here, but the most strenuous devotee of decentralization and compulsory competition must admit that the coming of such an aggregation, viewed from the standpoint of existing conditions and tendencies, cannot be deemed so unlikely as the present concentration would have seemed to railway men, statesmen, or economists fifty years ago. And whatever may be the outlook for the future, it is clear that the Railway question has become a trust question, and that the condensation of power already attained is sufficient to demand the serious attention of every one who believes in republican institutions and disapproves of autocratic or aristocratic power in the heart of the Republic.

In some countries consolidation does not bring these dangers. Switzerland is buying out the railway companies and consolidating the roads under public management in pursuance of the decision of the people on referendum vote. In Belgium the roads are consolidated in the hands of the government; in the German states also, and in the AngloSaxon states of Australasia. But in these cases the consolidated railways are managed by men who are trustees for the people and responsible to them. In America the tendency is to weld the roads

into an Empire, a consolidation under a management responsible to a few gigantic stockholders, dominated at last perhaps by a single autocrat, a Czar of all the railways.

The motives that impel men to build these giant combines by consolidation or coördination relate partly to the economic and transportation benefits of union, and partly to the personal profit and power of those who control the combines. The first motive and its consequences are in line with the public good. In so far as combination eliminates the wastes of conflict and secures the benefits of harmonious coöperation in the railway service, it is a gain to the community. But in so far as it conduces to the financial ascendency of Wall street and intensifies the commercial supremacy and industrial dominion of a few great capitalists, it is a political, industrial, and social danger. The railways united form a much more extensive interest than the Government from an economic point-ofview; already they outrank our State Governments and dominate the political affairs of sovereign commonwealths, and as a unit in the hands of a gigantic trust they might even overshadow and control the National Government itself.

Boston, Mass.

FRANK PARSONS.

Part I.

NE WRONG produces other wrongs as surely and as naturally as the seed of the thorn produces other thorns. Men do not in the moral-world gather figs from a thorn-bush any more than they the power involved in such far-reaching combinations, yet uncontrolled by any public authority." And commenting on this statement Mr. Wright continued: "This is a statement which will gradu

do in the vegetable-world. What they sow in either world, that they reap. Such is the law. The earth is bound under all circumstances and conditions of time duct, character, each after its own kind. and place to reproduce life, action, con

ally, and more rapidly as time goes on, sink into the consciousness of this country; as it sees that instead of ten men it is five, then instead of five it is three, and instead of three it is one man that controls all the railroad interests of the country."