President Theodore Roosevelt and William C. Brown’s Interactions Regarding Railroad Regulation, January-May 1907

As we have seen in a prior post, William C. Brown, the Senior Vice President of the New York Central Railway (and my maternal great-great-uncle), was a major public spokesman for the interests of the railroads in 1907.

Brown also interacted privately with President Theodore Roosevelt over these issues in February 1907 and again in April-May 1907.This post will look at these interactions.

Theodore Roosevelt
Theodore Roosevelt
William C. Brown
William C. Brown

 

 

 

 

 

 

 

February 1907

Brown’s January 28th letter to Theodore P. Shonts

Brown’s interaction with the President started with the former’s private letter of January 28th to Theodore P. Shonts, the Roosevelt-appointed Chairman of the Isthmian [Panama] Canal Affairs Commission,[1] who recently had announced his resignation from that position effective March 4th.[2]

This seven-page letter’s going into great detail about the current position of the railroads is very unusual. Presumably Shonts knew all of the railroad problems and issues and by virtue of his government position had opportunities for presidential meetings. It is as if the letter really was written to be read by someone else, namely President Roosevelt. This interpretation, in my opinion, is confirmed by Brown’s immediately making the letter public.[3]

Brown’s letter emphasized the challenges facing the railroads. He said the recent “tremendous increase in the commerce of the country has almost swamped the railroads. Terminal facilities . . . are . . . inadequate; single track lines must be double-tracked; double-track roads must have three or four tracks; grades must be reduced, and the equipment of the roads must be greatly increased.” To remedy these inadequacies will be very expensive. For the New York Central, he said, in 1907 alone this will require capital investment of $130 to $ 140 million.

According to Brown, railroads also were facing increased labor costs for 1907 of 8% to 14% or an increase of $75 million for all railroads. Other costs also had increased, and total costs, including labor, were up 40% from 1897.

On the other hand, said Brown, “there is a continuous, organized and persistent effort on the part of shippers to reduce the [railroads’] revenues” which may lead to requests for the ICC to reduce freight rates. In addition, Congress probably will reduce compensation for the railroads’ carrying the mails.

However, without increased freight rates, said Brown, railroads will be forced to substantially reduce the capital improvements that are so necessary.

As a result, in Brown’s judgment, there is growing opinion in the U.S. and abroad that “the President and both the great political parties are prejudiced against the railroads,” thereby “making it almost impossible to sell any kind of railroad security except at a rate of interest and discount that make it almost prohibitive.” If the railroads are forced to halt their needed capital improvements, “the growth and development of the country will soon be stopped by the inability of the transportation lines to handle the products of mine, factory and field.”

Although Brown favored the past “regulation of the railroads by Federal authority, supplemented by state regulation” and regarded “the legislation thus far enacted . . . necessary and wise,” Brown asserted that President Roosevelt must publicly declare that:

  • “the railroads are an important and inseparable part of the wealth of the Nation;
  • “they have contributed more than any other agency in its upbuilding, growth and prosperity;”
  • “the future growth and prosperity of the country depends on, and will . . . be measured by the growth of the great lines of transportation, both rail and water;”
  • “disaster cannot come to them without serious injury to every business interest in the Country;” and
  • the people must give “fair, unprejudiced, and friendly consideration . . . of the interests, the rights, and the welfare of the railroads.”

Shonts’ February 1st letter to Brown.

Seeing Brown’s January 28th letter as really intended for other eyes, in my opinion, is also confirmed by Shonts immediately responding to Brown with a report that Shonts had discussed Brown’s letter with the President and had provided him with a copy of the letter.[4]

According to Shonts, Roosevelt had said he “would have no difficulty in treating with the railroads of the Country if the managing officials were all imbued with the same spirit as [Brown].” In addition, the President had the following specific comments on Brown’s letter:

  • Roosevelt “entirely agreed” with Brown’s statement, ‘I am not an alarmist, and . . . disposed to take a hopeful view of any situation; but the increase in expense and reduction in rates cannot continue much longer without bringing the lines of cost and compensation too near together as to stop all improvement in present, or the creation of additional, transportation facilities.’
  • According to Roosevelt, the “movement for increased pay for employees, and shorter hours of labor, carried with it the necessity for the maintenance of remunerative rates.”
  • The President believed “the public was [not] so much interested in cheaper transportation as in adequate facilities.”
  • The Government, said Roosevelt, had not contended for reduced rates, but the prevention of “unjust discrimination in rates.”
  • The President suggested there be a “safe-guard . . . [for] issuance of future securities, by requiring the railroads to specify the use to which the proceeds of such would be put [to enhance the railroad], not to the buying of parallel or competing lines.”
  • The President also was “heartily in favor of protecting the owners of railroad securities so that purchasers might rely on the security of their investments.”

Brown’s February 3rd letter to Roosevelt’s Secretary.

Responding to this indirect word from the President, Brown on February 3rd sent a letter to Roosevelt’s secretary, William Loeb, Jr.,[5] with enclosed copies of Brown’s previously mentioned January 28th letter to Shonts, a February 1st Wall Street Journal editorial about railroads[6] and Brown’s correspondence with the Journal about same.[7]

Brown did so, he said, because he cares “so much for the President’s approval” and because he believes “our views so nearly coincide on almost all the great questions . . . at the present time.”

In addition, Brown thought “the President and every good citizen of the United States, regardless of party, can say ‘Amen’ to the sentiments” in the February 2nd letter to Brown from Sereno S. Pratt, the Editor of the Wall Street Journal,[8] who said the following:

  • “The movement for corporate reform . . . has accomplished an immense amount of good, and I do not believe that the corporations as a whole will ultimately suffer from it.”
  • On the other hand, this movement “has awakened a spirit of hostility to all corporations, a spirit of hatred of wealth, so that it is full time for the defenders of individual liberty and the rights of private property to get together . . . for the purpose of impressing upon the country the need for wise discrimination. We certainly do not want to destroy wealth and make honest enterprise impossible.”

The Serano Pratt letter was prompted by Brown’s February 1st letter to Dow, Jones & Company with thanks for the editorial. It was for “most railroad men in the country, a ‘cup of cold water to a thirsty traveler.’ Its “words of kindly commendation are appreciated by . . . the railroad men.” For Brown, “Nothing can be more discouraging and disheartening that the wholesale, indiscriminate censure and criticism . . . to which railroads as a whole have been subjected during the last two years.” After all, railroads “are not, even taken as a whole, entirely without virtue and merit; and, in some cases, some roads are entitled to a very great deal of credit for the manner in which they have been operated, and their contribution to the growth and prosperity of the country through which they run.”[9]

Brown concluded his letter to Roosevelt’s secretary with a reference to these words on Grant’s Tomb: ‘Let us have peace.’ Now, said Brown, “it would be a gracious thing if the President would accept the almost unconditional surrender of the roads, and say to the public and to the thousands of disheartened, discouraged railroad men of the Country, ‘Let us have commercial and industrial tranquility and peace.’”

Another enclosure with the letter to Loeb was Brown’s January 22, 1907, letter to Joseph Nimmo, Jr., a statistician for the Interstate Commerce Commission, responding to a request for Brown’s opinions on various issues regarding railroad regulation. Brown said “no [enacted] legislation . . . will result in injury to the railroads . . . unless the [ICC] shall deplete their revenue by reducing freight rates.” Brown said, the “spirit of hostility against the railroads which seems to be felt by member of both parties, and by the [Roosevelt] administration, whether real or not, is rapidly creating a feeling of distrust, and is discrediting the railroads . . . to such an extent as to make it very difficult at the present time to secure any money for needed improvements and promises to make it almost impossible to do so in the near future.” Brown added that he agreed with Hill’s estimate of $5 billion as the amount of needed capital investment by all the railroads over the next five years.[10]

April-May 1907

As mentioned in a prior post, on April 18th Brown was a featured speaker at a banquet in Buffalo, New York where he talked about the railroads’ difficulties in raising capital for improvements due to public agitation against the railroads and his belief that President Roosevelt would exert his “powerful influence . . . fearlessly and forcefully in protecting the railroads from injustice.”[11]

The New York Times article about Brown’s speech came to the attention of Roosevelt. The next day (April 19th) Roosevelt wrote a letter to Brown saying he “heartedly” agreed with the part he had seen and inviting him to the White House the next week. The President especially wanted to hear Brown’s views on the issue of the valuation of railroads.[12]

That White House meeting took place on April 29th, and the nature of their discussion that day is revealed by their subsequent correspondence.[13]

The next day (April 30th) Brown in a letter to the President discussed his upcoming Decoration Day Address about railroads. Brown said he knew Roosevelt did “not want to do any one an injustice or say anything go unnecessarily increase or prolong a feeling of bitterness, which in the interest of all should be eliminated.” The President, however, had suggested (in their April 29th conversation (or in a draft of the speech shared with Brown?) that railroad owners mistakenly or selfishly had not been “doing all that could be done in . . . furnishing additional facilities” to alleviate public inconvenience. Any such suggestion, said Brown, was “mistaken” and “unjust to the directors, officers, and owners of the railroads.” In fact, the “railroads have done everything possible to meet conditions which the tremendous increase in business has forced upon them.”[14]

Brown’s April 30th letter also said that any announcement of the President’s idea of valuation of railroad properties should “be accompanied by some statement that will reassure timid investors.” Otherwise, such an announcement could leave the calamitous impression that such valuations will be used “to decrease [freight] rates, increase taxation, or both.” Enclosed with the letter was a document with Brown’s thoughts on the valuation issue, but this document was not available from the archives. Brown closed the letter with assurances of his “very high personal regard” for the President.

The President’s May 1st responsive letter said he had deleted the sentence of the speech, to which Brown had objected (railroad owners had mistakenly or selfishly failed to furnish additional facilities??). Roosevelt thought Brown’s ideas on valuation were better than the President’s draft on the subject and that the Director of the Census Bureau had cautioned the President on using its statistics on valuation of railroad securities.[15]

On May 2nd Brown replied to the President. Brown sent a page from a draft of his forthcoming (May 13th) speech in Syracuse, New York that had certain statistics. (This enclosure was not available from the archives.) After consulting with others at the New York Central Railroad, Brown said they all thought that his statistics along with those from the Interstate Commerce Commission “will do much to restore confidence and reassure investors in regard to the safety and stability of railway securities.” Finally, Brown urged the President to call if he can be of service in any way. Again he closed with assurances of his “very high personal regard” for the President.[16]

The next day (May 3rd), Brown again wrote to Roosevelt. He said the enclosure he had sent with his prior letter “should be made a little stronger in its characterization of stock watering jobbery” and include “a commendation of those roads that have not been guilty of this thing.” Again, Brown expressed his “very high personal regard.”[17]

On May 4th, the President responded to these two letters from Brown. He thanked him for the statistics he had provided, but urged Brown to make “full use of them in [his] Syracuse speech” and that if Roosevelt used them in his Decoration Day speech, it would be in a different form.[18]

The next missive from Brown was a handwritten letter of May 8th enclosing a recent letter he had received from General Granville M. Dodge[19] (which is not available from the archives). Brown said that the following Dodge statement “voices the sentiment of the railroads almost without exception: ‘Obey the law. Build up the country.’” Brown closed with “I know the railroads have no stauncher friend than yourself” and assurances of his “high regard.”[20]

The final letter in this exchange came from the President on May 9th. He said he liked the Dodge letter and already had referred to Dodge as “a railroad man who was a type of what a good citizen should be.” Roosevelt also said the final version of his Decoration Day speech will include some of Brown’s suggestions.[21]

Conclusion

These interactions show an amazing collaboration between a president and a private citizen. As a result of this collaboration and of Roosevelt’s discussions with other railroad executives in this time period, the President’s Decoration Day speech, which will covered in a subsequent post, contained many points that helped to alleviate the railroads angst.

==============================================

[1] Letter, Brown to “My dear T.P. [Shonts] (Jan. 28, 1907) (Image # 71-0572 through 0578 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, www.theodorerooseveltcenter.org). As noted in a prior post, in 1900 Brown and Shonts and another Midwestern railroad executive (Paul Morton) joined Roosevelt, then Republican vice presidential candidate, on his campaign train from Quincy, Illinois to Chicago.

[2] Shonts Quits Canal; Heads Interborough, N.Y. Times (Jan. 24, 1907); Shonts Quits Canal Work, N.Y. Times (Mar. 5, 1907). In accepting the resignation, Roosevelt said Shonts had shown “energy, administrative capacity, fertility of resource, and judgment in handling men . . . [and] entire devotion to your work.” (President Not Indignant, N. Y. Times (Jan. 24, 1907).)

[3] On February 2nd, Brown released to at least the New York Times a copy of his letter to Shonts, and the next day the Times published an article about the letter. (Says Railroad Whacking Menaces the Country, N.Y. Times (Feb. 3, 1907). The Times said Brown’s letter was believed to be part of an organized campaign by “important business interests” to convince Roosevelt that the “movement against corporations is going beyond bounds” and ”threatens seriously to handicap further development of the country’s industries and transportation systems.”

[4] Letter, Shonts to “My dear W. C.” Brown (Feb. 1, 1907) (Image # 71-0642 & 0643 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, http://www.theodorerooseveltcenter.org). The Theodore Roosevelt Center at Dickinson State University has advised me that through an unpublished analysis of several sources, including the presidential desk diaries, that on January 29, 1907, the President had a “Canal conference with Theodore Shonts.” This probably was the occasion when Shonts discussed Brown’s letter with the President.

[5] Letter, Brown to “My dear Mr. Loeb” (Feb. 3, 1907)(Image # 71-066 & 067 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, http://www.theodorerooseveltcenter.org).

[6] Editorial, Railroads Need Encouragement, W.S.J. (Feb. 1, 1907). The editorial said the railroads need “material and moral encouragement.” More specifically they need coal, cars and engines, more trackage, money and mercy. “They have been hammered and hammered by their critics,” but now need “human appreciation of their concern and their predicaments.”

[7] Letter, Brown to Dow Jones & Co. (Feb. 1, 1907)(Image # 71-0626 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, http://www.theodorerooseveltcenter.org); letter, Serano S. Pratt to Brown (Feb. 2, 1907)(Image # 71-0657 & 0658 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, http://www.theodorerooseveltcenter.org). Brown’s letter to the Journal said the editorial was like a ‘”cup of cold water to a thirsty traveler’” because “[n]othing can be more discouraging and disheartening than the wholesale, indiscriminate censure and criticism . . . to which railroads as a whole have been subjected during the last two years.”

[8] Letter, Sereno S. Pratt to W. C. Brown (Feb. 2, 1907)(Image # 71-0657 & 0658 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, http://www.theodorerooseveltcenter.org).

[9] Letter, Brown to Dow Jones & Co. (Feb. 1, 1907)(Image # 71-0626 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, http://www.theodorerooseveltcenter.org).

[10] Letter, William C. Brown to Joseph Nimmo (Jan. 22, 1907) (Image # 71-0489 through 0493 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, http://www.theodorerooseveltcenter.org). I wonder if this letter’s being in the Theodore Roosevelt collection at the Miller Center indicates that the letter somehow was obtained by the White House and reviewed by the President or one of his aides.

[11] William C. Brown, Address to the Buffalo Chamber of Commerce (April 18, 1907); Hughes Tells of Republic’s Foes, N.Y. Times (April 19, 1907).

[12] Letter, Roosevelt to Brown (April 19, 1907) (Image # 345-0665 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, www.theodorerooseveltcenter.org).

[13] W.C. Brown at the White House, N.Y. Times (Apr. 30, 1907).

[14] Letter, Brown to Roosevelt (April 30, 1907)(Image #308-0873 & 0874 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, www.theodorerooseveltcenter.org).

[15] Letter, Roosevelt to Brown (May 1, 1907) (Image # 345-0779 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, http://www.theodorerooseveltcenter.org). Roosevelt apparently was referring to one or all of the following letters to the President from the Director of the Census Bureau, all of which were provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, http://www.theodorerooseveltcenter.org): letter, North to Roosevelt (April 22, 1907)(Image # 308-0863 through 0867); letter, North to Roosevelt (April 22, 1907)(Image # 73-0348); letter, North to Roosevelt (April 30, 1907)(Image # 308-0875 & 0876).

[16] Letter, Brown to Roosevelt (May 2, 1907)(Image # 308-0777 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, www.theodorerooseveltcenter.org). In fact, Brown did give a speech on May 13, 1907, to the Syracuse, New York Chamber of Commerce that made many of the same points as the Buffalo speech. He again supported federal and state regulation of railroads so long as it was “undertaken in a spirit of the most liberal conservatism; the radical, the agitator, the reactionist on both sides should be suppressed.” (For Government Control, N. Y. Times (May 15, 1907).)

[17] Letter, Brown to Roosevelt (May 3, 1907)(Image # 308-0878 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, www.theodorerooseveltcenter.org).

[18] Letter, Roosevelt to Brown (May 4, 1907)(Image # 345-0822 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, www.theodorerooseveltcenter.org).

[19] Dodge was a Major General for the Union Army in the Civil War (1861-1866), an Iowa Congressman (1867-1869) and an engineer for the Union Pacific Railroad who was a leading figure in the construction of the transcontinental railway. During the 1880s and 1890s, he served as president or chief engineer of dozens of railroad companies.

[20] Letter, Brown to Roosevelt (May 8, 1907) (Image # 308-0884 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, www.theodorerooseveltcenter.org).

[21] Letter, Roosevelt to Brown (May 9, 1907) (Image # 345-0867 provided courtesy of the Library of Congress Prints and Photographs Divisions and Theodore Roosevelt Center at Dickinson State University, www.theodorerooseveltcenter.org).

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dwkcommentaries

As a retired lawyer and adjunct law professor, Duane W. Krohnke has developed strong interests in U.S. and international law, politics and history. He also is a Christian and an active member of Minneapolis’ Westminster Presbyterian Church. His blog draws from these and other interests. He delights in the writing freedom of blogging that does not follow a preordained logical structure. The ex post facto logical organization of the posts and comments is set forth in the continually being revised “List of Posts and Comments–Topical” in the Pages section on the right side of the blog.

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