The complaints against railroad management, as far as they appear to be just, show that the railroad problem may be divided into two parts: First, how shareholders in railroads can meet the difficulties of joint-stock ownership, and control their property, so that it can be made by all legitimate methods as profitable as possible. This means the election of directors not as now, as a whole board by a single majority vote, but by a plan of minority representation, which will give a voice in the directorate to every interest entitled to it. It means including in the business such branches of traffic as are now delegated to subsidiary companies, where this can be done advantageously; and the employing of officers of such high character and ability that they shall be disposed to co-operate with one another to avoid illegitimate and ruinous competition—officers able to establish tariffs based on sound and consistent principles, and tariffs with which no subordinate officer shall have power to tamper.
The second part of the railroad problem is how the general public, while desirous of paying just remuneration to the roads, may protect themselves against extortion and unjust and arbitrary discriminations. This part of the subject raises the question of the constitutionality and feasibility of State control, and brings up for discussion the various influences which are spontaneously exerted within the railroad business itself for its fair and equitable management. In the brief sketch here presented of the chief complaints made against the railroads, it has been evident that some of the most serious of these complaints arise from the inherent difficulties of joint-stock ownership. A board of directors, provided with many proxies, can do pretty much as they please, and the history of American roads shows that at times they please to enrich themselves at the expense of those whom they represent.
The shareholders in a large company are often a shifting, chaotic, and helpless body, fortunate, indeed, when the directorate are sufficiently honest and interested to administer affairs as they should. It seems strange, too, that the management of railroads should so widely permit an evil which causes so much just censure, namely, the cutting of rates, by a staff of agents scattered throughout the whole country. When control by the owners of railroad property remains as imperfect as it is in important particulars, it certainly seems an idle task to attempt the State control of the largest and most complicated business in existence.
The discussion of the railroad problem has given the public some insight into the difficulties which beset this business. There are now in the United States some twelve hundred railroad companies, more or less actively competing with one another. Between two great cities like New York and Chicago, and between a great center of distribution like St. Louis and the Atlantic seaboard, there are many competing routes, and the contest for business among these routes is