III. Public Ownership of Railways

PLUMB PLAN FOR GOVERNMENT OWNERSHIP AND DEMOCRACY IN OPERATION OF THE RAILROADS

By Glenn E. Plumb

Special Attorney for the Railway Brotherhoods, Washington, D. C. MR. PLUMB:-Mr. President, ladies and gentlemen. This is a time for careful, earnest study and thinking. It is a time for all men who seek the good of their country to sink all personal feelings and try to find out the cause of the disorders. We need skilled physicians, for the case requires careful diagnosis. Physicians cannot agree on a remedy unless they agree upon the diagnosis, and if they do not agree on the diagnosis it is useless for them to consult as to remedies. Our nation is in a very, very desperate condition. The industrial situation must be deeply and carefully analyzed. We have made that analysis to the best of our ability out of our years of experience and with a knowledge of the facts which few other men outside of the railway employees could possibly possess, for this is a peculiar subject. Misinformation begets wrong theories and the lack of knowledge and experience induces idle fantasy. We bring to you actual experience, actual knowledge, and the best analysis that our minds can put at your service.

Those Who Suffer-See

Now whenever a nation or a people have a question that must be answered they do not seek the answer first; they try to analyze the situation, to see what principles are involved, what interests are at stake, and then study the facts that are essential to a correct answer. When we have understanding we can make an answer, but an answer without understanding is mere foolishness. So in order that you may grasp our answer I want you to put yourselves in the position in which these men stand who have been at the head of these labor organizations for a generation. And I want to say one thing more, to repeat what President Wilson said—no matter how we may disagree with his theories, with his performances, or with his plans, all the world owes him a debt that never can be paid, for the wonderful clarity with which he has expressed truths that no man has ever before put into words. Here is one truth that he expressed on coming back from Europe. He said, "The statesmen of the world do not understand; they

Those who suffer see.”
If we see correctly it

cannot see the things that must be done. Our vision comes from those who suffer. is because we are compelled by dire necessity to find the answer and find it truly.

Principles Underlying The Plumb Plan

So I want to analyze for a moment the economic principles, the necessities which underlie the railroad industry. This industry has many things in common with all other kinds of business, and then it has certain things that differentiate it from every other industry. I will tell the differences first so that our minds will not be clouded by the study of unnecessary things. For that purpose we divide all industry into two classes, first, industries which are individualistic, that is any business which an individual may carry on as an inherent right of his citizenship, under his right to the pursuit of happiness, for that means nothing but the right to make a living. The individual is guaranteed by the constitution the right to make a living in any lawful manner that does not involve a grant from society. The second class of industry is that which is based upon grants from society. Railroads are the best illustration of that. All public utilities come within that class. Yet the railroads have certain differences that sharply separate them from other public utilities. Those differences we will take up later.

The Public Must Have Transportation

Now, analyzing the principles which are common to all franchise industries, I want to find what interests are involved and what are the essential interests in the industry. Society must have transportation. It could be carried on by individuals as was done in the olden days, but it can better be served if it be served through agencies which the state creates. Therefore the state grants its franchise to some agency to construct, maintain and operate a highway. That franchise in the hands of the grantee is a very valuable asset, and it has been considered as a gratuity from society to the grantees, the grantees to receive the benefits therefrom. Of course this is wrong. We consider that grant, which is merely the crystalized expression of society's need for service to be as valuable an asset in the hands of the state as it is in the hands of the corporation. It is an investment made by the state as the basis of the industry, and like all other investments the state expects to receive returns on its investmentreturns not in the shape of profits to the state, but of benefits to the individuals who compose the state and who must use these highways. Those benefits should be received in the shape of cheaper service, better service and more service than the people could have received if the grant had not been made. There is

your first interest. I do not say it is the first interest in importance, but it is first in point of time, for without it the industry could not have begun to come into existence.

Investment and Return of Capital Protected

The second interest is that of capital. What is capital? It is the unexpended surplus of past labor. Some one in the past produced more things than was needed to support his life-more than he consumed, and that surplus becomes capital, whether in his hands or in the hands of another, it makes no difference, it is capital just the same. What is the function of capital? Merely to supply tools, equipment and materials-the things which labor must have in order to supply society's needs. Now we have to have capital. Again we have been accustomed to think of the rights of capital, the rights of property, as though money, lands, houses, railroads, had some rights in themselves, inherent in their existence, that this government and our constitution should protect. That is a mistake; that is a misconception. What we really mean is this when we speak of the rights of capital-the rights which individuals have lawfully acquired to own, possess and dispose of, the things which constitute capital. That right of ownership and disposition is what makes property, and that is a human right. It is the right which we recognize in human beings to control their possessions. Our governments are erected to protect human rights and our constitution deals with men and not with things. It is that right of possession, control and disposition which the constitution protects. Now if we must have capital which legally belongs to individuals we can only get it with their consent. To take it without their consent is confiscation of property rights. This is prohibited by the constitution, and we cannot for a moment contemplate such a thing in America. So if we are to get this capital there are two things we must do; we must guarantee to the owner the protection of his investment, so if he lets us have money for our use he will know that that money is always there, that he can get it when he needs it, and that his return on it is safe, sure and certain, and not to be disturbed, and that return must be such a return as induces the investor to make the investment. That means the market rate of interest for that kind of security. When we have guaranteed the owner of capital that security and that return, then we have satisfied every right which he possesses under the constitution; he has received the full protection that the government guarantees, and that is the protection we accord him.

The Rights and the Dignity of Labor

Now we have labor, the third fundamental interest: again we want some definition. What is labor? Labor we have considered

to be that of human effort which was compensated by wages, payments by the day or month or by the completed task. All labor not so compensated we have thought was something else; we do not consider it. We consider labor to be all human effort expended in production, whether it be the directing force of the president of a railroad company, with his mental effort directing the affairs of the industry, or the mere muscular service of the boy who brings water to the track gang. It is all human effort expended in human service, and it is all labor. True, the president renders more service with his mind than he does with his hand, but he cannot render any service at all unless he gives it physical expression. When you so separate the physical expression from the mental effort, that mental effort alone remains, you have nothing but the spirit. That is ofno human use whatever It has passed from the realm of earthly affairs and ceases to serve. On the other hand, when you get down to the point where no mental effort is needed you have a machine, and no matter how perfect that machine may be it is as worthless as the unmined metal unless it be directed by a human hand and human brain. We speak of the efficiency of machinery. There is no

such thing. A machine is a device designed by man to make human effort more efficient. Machines can make our efforts more efficient, but we cannot make a machine more efficient unless we work it. A machine increases human efficiency, that is all.

We have a wider, broader conception of labor than that. It involves what might almost be called a religious idea. You would not think that labor men and labor leaders ever gave much thought to the technical things of religion, but no man who seeks the fundamental basis of human action can very long escape the weight and force of these obligations. I do not mean sectarian obligations, I mean a recognition of justice as the basis of human action, and he who worships justice worships God and is religious under any term. (Applause.)

Labor the Expression of the Creative Force

Here is our conception of labor: when God made this earth He placed man upon it and His work of creation ceased. The sustaining of life is just as important a part of creation as the making of life, and in all the things that came to the hand of man on the land, on the seas, in the forests or in the fields, not one single thing could be used to support that life without some human effort either to acquire it or to prepare it for human use; so there was placed in every man, in every human being, some spark of the divine creative force to carry on that which He had begun, so we could take the things that God furnished and through our creative power, the exercise of this divine element, prepare

them for human use, for human advancement. Every step of human effort that gave us this golden room 1 has been perfected through labor, the expression of the creative influence. Labor alone has led us to this moment. Labor must protect us now, and it must pave the way to the future that we hope for. That is labor, the expression of the creative force which every man possesses.

Now we have treated labor heretofore as a commodity, to be bought and sold in the markets like goods and other things for the lowest price. Well, did you ever think that if you make the laborer a merchandiser of a commodity he is controlled by the same human law which controls every merchandiser? He seeks to sell as little of his commodity for as much as he can get. So do the merchants on State street. Can you complain of the laborer, if you insist that he is selling a commodity, if he seeks to shorten the hours of labor, to limit the output and to force up the price which he is to receive for his commodity? Is not that what the packers are doing? Is it not what the mine owners are doing, is it not what the owners of railroads are doing? And shall we imprison the laborer because he obeys the same human impulses and seeks to do what those in greater authority do without criticism? (Applause.) Our constitution protects the rights of individuals to own, possess and dispose of the things which constitute property. It is supposed to protect the right of individuals to control and dispose of that human effort which creates the things that constitute property. To take the things without the owner's consent is confiscation. To take human effort which produces things without the owner's consent is slavery. (Applause.) And men who hope to control their own efforts under our constitution will be the last to say that man shall not control his own lawful possessions, for you cannot violate one guarantee without forfeiting the other.

Give Labor the Investor's Hope-A Share in the Profits

Now how are we going to change this attitude towards labor? A grant of society is an investment. Letting us have money is an investment. Giving us human effort is an investment, when we get the service of human effort we must pay that rate of interest which induces its owner to make the investment and give us his service. We pay that interest in wages; but now see how we have changed the fundamental basis of industry. The maker of any investment under free and competitive systems knows that his profits depend upon his making more goods, better goods and cheaper goods than his nearest competitor, otherwise he cannot get the trade of society and his investment is lost. Well,

1 The meetings of the Conference were held in the famous "Gold Room" of the Congress Hotel, a very beautifully designed and decorated assembly room.