The consternation that followed may be imagined! In the end the New Yorker carried his point. At the end of just twelve months he had, through his acquaintance in Wall Street, and his keen insight into the big channels of finance, cut that little road's interest charges just $800,000 a year. The receiver has not come yet. The road has accomplished a miracle and has begun to pay dividends. There is another miracle to relate. Last spring, the directors of the road voted an increase in salary to their president--and he courteously refused it!
"I think the presidency of this road is worth $50,000 a year," he said, frankly, "and not one cent more."
That is the way a president should stand above and with his board.
Only a little time ago, another president, who had no easier proposition to set upon its feet, was criticised by a querulous old director for his lavish use of private cars and special trains. That president was having his own troubles--his job had no soft places; but he said nothing when the testy old fellow lectured him as he might have lectured a sin-filled schoolboy. When the director was done, the president spoke in a low voice.
"Gentlemen, my resignation is on the table," was his reply to the censure.
The next moment there was consternation in that board. The president slipped out of the room and left them to consider the matter. When he returned, the chairman of the board, who had nodded in half approval at the censure, was at the door to greet him.
"We refuse to accept your resignation," he said; "but the board does feel that you ought to have a new car--the present one's getting shabby, Phil."
And in that moment the president felt that his work had gained one little ounce of appreciation.
CHAPTER XI
THE LEGAL AND FINANCIAL DEPARTMENTS
FUNCTIONS OF GENERAL COUNSEL, AND THOSE OF GENERAL ATTORNEY--A SHREWD LEGAL MIND'S WORTH TO A RAILROAD--THE FUNCTION OF THE CLAIM-AGENT--MEN AND WOMEN WHO FEIGN INJURY--THE SECRET SERVICE AS AN AID TO THE CLAIM-AGENT--WAGES OF EMPLOYEES THE GREATEST OF A RAILROAD'S EXPENDITURES--THE PAY-CAR--THE COMPTROLLER OR AUDITOR--DIVISION OF THE INCOME FROM THROUGH TICKETS--CLAIMS FOR LOST OR DAMAGED FREIGHT--PURCHASING-AGENT AND STORE-KEEPER.
At the very elbow of the railroad president stands the general counsel. He is shrewd, resourceful, diplomatic. He has quick perception and action, the faith and the loyalty of a friend. In many cases he is a personal officer of the president--in the highest sense. If there is a change of administration of the railroad, there is apt to be a change in the office of the general counsel. If B----, who has been guiding the destinies of the T. & S., goes to Transcontinental, he is apt to take Y----, his general counsel along with him. For except in the case of some exquisitely organized roads like the Pennsylvania, for instance, the general counsel is in every sense personal to the president. He advises him privately, urges him to this step, cautions him from that.
On the other hand, the general attorney is more apt to be the legal officer of the railroad. Like the general counsel he has an old-fashioned pride in his profession that makes him hesitate at accepting a vice-presidency; he likes the ring of "general attorney" or "general counsel" in his own ears. Railroad history and tradition both go to prove that. He will hardly drop those titles for anything less than that of president.
The general attorney, unlike the general counsel, in most cases will make his offices in the railroad's headquarters. He will handle its litigation, and if in half a dozen years he can bring down its verdict costs from $1,250,000 to $750,000 for an average twelve month, as one man did, he will be well worth the large salary that he demands and gets. And his salary will be only one of many of the heavy expenses of the legal department. When that functionary asks for money he gets it and without many questionings. The operating department, the traffic department, the engineers, may have to give sharp account for their appropriations; the legal end of the railroad is trusted to accomplish accurate results, without detailed accounting. In some cases it might prove embarrassing.
You want to know the value of the shrewd and perceptive legal mind to a big railroad? Here is a case that proves his worth:
A certain transportation company in the East had a legal vice-president who many people supposed was a political heritage to the road, a man for whom it was supposed a berth had been made by the owner of the property, who was something of a politician himself. A quick turning of the wheel of fortune had thrown one political party out of business at the capital, and another in. The man was given a place in the railroad offices, and a little later was made a vice-president. It so happened that the vice-president knew more than supposers might even imagine; but he was a quiet man, and sometimes some of his own clerks wondered why he drew his big salary. After he had been at his desk a dozen years they found the reason.
In gathering up a number of railroad properties to make the parent company--after the fashion of modern railroad practice--one of the most important of these old-time units was found to be in woefully shabby physical form. It was a valuable road in the consolidation. The new parent was willing to guarantee an annual rental of 10 per cent on its stock; but as a railroad it fairly shook at the knees. It stood in dire need of reconstruction, and the men who were offering it a high rental made that a provision of the deal. The old road finally agreed to spend $12,000,000 in revising its line and in buying new locomotives, cars, and bridges. With much ado it accomplished its revision, and brought itself up closer to modern standards of railroading.
A decade later when the governmental supervision of the railroads had come into the full flush of its authority, the quiet vice-president had an armful of State commission reports and vouchers brought to his desk. He locked himself in his room, and in a week he had made from them a 20,000-word abstract in long hand. Then he took his report in to the president of the road.
The acute mind of that general counsel--you see that he was vice-president in this particular case--searching here and there and everywhere, had discovered a mouse-hole. The old-time road had not fulfilled its part of the contract. It had found that it could revise its lines at a cost of a little less than $9,000,000 and had quietly pocketed the change. The big rent-paying consolidation went into the courts, after its cool, impassive way. The case went to a referee and the referee took four years to hear the case and decide it. There were 5,000 exhibits offered in evidence and 8,000 closely written pages of evidence, making a case nearly equal to that of the receivership of the Metropolitan Street Railway Company of New York City, which fills twenty pudgy volumes of some 800 pages each.
The referee decided in favor of the parent company, and rendered a verdict close to $6,000,000, principal and interest. The case was appealed, and sustained. That vice-president had proved his worth. The president of the defendant road came to him.
"We simply can't pay," he pleaded. "We've no reserve fund."
"Then we will take it out of your rental," was the emotionless reply of the quiet vice-president.
That type of man stands forth as a possibility to every one of the dozens and dozens of young men who make the main staff of the railroad's legal department. Those fellows come to the railroad fresh from the law schools.
Their salaries are small but their experience and their opportunities are enormous. It is a far better career at the beginning than a briefless existence in one's own office, even though one's own name is emblazoned in brilliant gilt letters upon the door. A young man coming into the legal department of a large railroad has a diversity of work offered him. He draws up the simplest of papers at first, acts as assistant to a trial lawyer, then finally comes to the time when he will alone fight the railroad's case in some minor cause in a small court. After that the causes get bigger, the courts more important, he begins to delve into law libraries and to write briefs. Gradually he emerges into a full-fledged lawyer. He may eventually become general attorney or general counsel, and he may find himself welcome to the partnership of some really important law firm. He has knowledge that may be of value in fighting the railroad; whether he will use that knowledge in afterwards fighting his employer is a matter for his own conscience to determine.
There are special departments under the main heading of the law department. Counsel, the ablest of counsel, is retained at each important point reached by the railroad, and these counsel must act in conjunction and cooperation with headquarters. Special tax counsel have an important office by themselves, for the railroad sometimes finds itself in a difficult position. In its pride it may announce to the world, through the newspapers, that the new Bingtown depot has cost $400,000, but when the Bingtown appraisers come around, possessing in their bosoms no inherent love for the railroad, those newspaper clippings in their hands, the tax counsel begins to earn his salary.
In these days of Federal and State supervision and regulation of railroad management, with now and then an aldermanic chamber or a county board of supervisors trying its hand at the game, there is sure to be special counsel, generally known as the commerce or commission counsel, assigned to the complaints and hearings. For intricate, involved, or unusual cases the road may go outside of its own ranks and hire special counsel--lawyers who are specialists in the very thing involved.
Just as the big and tactful attorney stands back of the railroad's president, so there crouches at his feet the claim-agent of the company, who is its watch-dog and its scenting hound. Back of this claim-agent, who must have achieved a reputation for keen-sightedness and marked ability before receiving his position, is a busy company of claim agents, at headquarters and every division headquarters upon the system. Together, these form a militant organization that stands with the legal department to defend the railroad's treasury against indiscriminate raiding.
Sometimes, because the work dovetails in many ways closely with that of the operating department, these claim-agents work under the order of the general manager and the division superintendents. A sly old fellow who once headed a big road in the Middle West once explained the reason why--in the case of his property--without even a trace of a smile.
"John says," he was speaking of his own general counsel, "that a claim-agent can't be yanked up before any of these touchy bar associations and charged with unprofessional practices if we can show cases--that they're just railroad men and not lawyers, at all."
That was an exaggerated case. As a rule, the young claim-agent has abundant need to be upon his mettle. The public, with an inborn itching against the corporation, keeps him upon that mettle. The man who has had a slight bump upon a railroad train--to make an instance--hunts out the claim office at headquarters. He gets quick treatment and mighty courteous treatment. If he can prove himself in any way entitled to a reimbursement, he gets it--in cash upon the spot. Likewise he signs a release--a most ponderous and impressive document. When his "John Smith" goes upon that document he has, in its own magnificent phrasing "in consideration of money received" released the railroad company from all obligation to him from the beginning of the world, the fall of man and the decline of the Roman Empire up to the very moment of the signing.
He goes home, pretty well satisfied with himself. It was only a little bump at that. A twenty-five cent bottle of arnica had made him physically himself once again; and as for his suit, well, that was pretty well worn, anyway, and three dollars to a tailor would make it a good "second best"
for next winter. He feels that the ten dollars that the railroad gave him was pretty abundant compensation.
But wait until he sees his neighbor. The neighbor almost froths at the mouth when he hears of the transaction--of the impressively worded release that was signed.
"You're a chump," he says. "You could have gone to bed, stayed there a week and they would have been glad to give you a hundred."
After which the man looks upon his ten dollars with contempt and a feeling of injury, and becomes a corporation hater. Or perhaps he was really hurt and had some sort of a bill from his doctor and his druggist, lost time to be compensated at his job. The railroad has figured these together and paid him the sum, with the signing of the release as a necessary feature of the transaction. The thing was not very serious, we will say, in this instance also, and the hundred dollars that he received was really a fair compensation. Now watch the neighbor, who it happens is a pretty shrewd attorney:
"Let me take the case, even now," he urges slyly. "I'll get a verdict of five thousand for you, if you are wise, and we will divide the proceeds."
"But I've signed their release," groans the other.
The shyster laughs in his face.
"You were drugged," he whispers, "drugged, and we will prove it."
That is not an exaggerated case. It is the sort of thing that the railroad's claim-agents are combating every day of the year; and then wonder not, that some of them finally lose the fine sense of honor, themselves.
And beyond this class of folk, is another--nothing less than criminal.
There are men and women in this broad land who make a business of feigning injury, and make it a pretty astute business, too, so that they may dig deep into the strong-boxes of the railroad. The most dramatic of this particular brand of "nature fakirs" has been Edward Pape, the man with the broken neck. Pape has a most remarkable deformity and has not been slow to avail himself of it as a money-making device far beyond the figures that might be quoted for him by circus side-shows or dime museums. Pape makes a specialty of the trolley companies. He can so alight from a car, coming slowly to a stop, that he will fall and go rolling into the gutter.
Instantly there is excitement and a group of men to pick up the prostrate form. He is found to be badly injured and is hurried to a hospital. There the internes discover that he has a broken neck. A marvellous set of X-ray photographs are made, and the railroad is usually willing to settle a large cash sum rather than stand suit. Within a week he will probably be away and practising his trick on some unsuspecting railroad.
"There was a time over in Philadelphia that was hell," Pape once told the writer. "I'd just finished my fancy fall, and they got me into the sickhouse and rigged out most to kill. They put hip-boots on me there in bed, with their soles fastened to the foot-board and a rubber bandage under my chin and over my head. They put seventy-five pounds in weights on a cord and a pulley-jigger to that bandage and it nearly killed me all day long. At night I used to wait until it was dark and then I'd haul up the weights and put them under the blanket with me. Otherwise, I don't know how I'd 'a' got my sleep."
[Illustration: THE FREIGHT DEPARTMENT OF THE MODERN RAILROAD REQUIRES A VERITABLE ARMY OF CLERKS]
[Illustration: THE FARMER WHO SUED THE RAILROAD FOR PERMANENT INJURIES--AS THE DETECTIVES WITH THEIR CAMERAS FOUND HIM]
Little things like the discomfort of hospital treatment and searching examinations by railroad surgeons do not seem to discourage these criminals. They take these as necessary hardships that go with their profession. Inga Hanson, the woman who impersonated deafness, dumbness, blindness and paralysis to win a heavy verdict from the Chicago City Railway Company, and who was afterwards convicted of perjury, was wheeled daily into the court-room in a chair apparently nothing more than a living, inert, shapeless mass of humanity, exquisitely trained to enact her role of deception.
Sometimes the claim-agents, working in conjunction with the railroad's secret service, have used the camera to great advantage. A farmer who lives in New Jersey drove into a seaboard city with a load of produce. At a grade crossing, a switch-engine overturned his craft, about as gently as such an accident could be accomplished. The farmer was lucky in that he was bruised, rather than seriously hurt. Then he saw a lawyer and learned that he was incapacitated for life by severe internal injuries. He entered suit for $25,000 against the railroad.
There was a case for the secret-service bureau of the railroad, and it took little time to find the right detectives, husky enough to get out into the fields and work for four long weeks as farmhands. When the Jersey farmer began haying that August, he found less trouble than he had ever before experienced in hiring low-priced help. He was able to get two big lads, who were hard workers.