VI.

Veto of the Two-Cent Fare Bill.

STATE OF NEW YORK-EXECUTIVE CHAMBER.

To the Assembly:

ALBANY, June II, 1907.

I return herewith, without my approval, Assembly Bill No. 2269, entitled, "An Act to amend the railroad law, in relation to rates of fare."

This bill, with specified exceptions, provides for a maximum passenger fare of two cents per mile upon the railroads in this State. Steam railroads less than 150 miles in length, which are not within the counties of New York and Kings (or within the limits of an incorporated city), are permitted a higher maximum charge of three, four, and five cents a mile according to length of line, unless through consolidation, lease, or control they form part of a system whose combined lines exceed 150 miles, in which case the provision for a maximum rate of two cents a mile is applicable.

The passage of the bill was not preceded by legislative investigation or suitable inquiry under the authority of the State. Nor is the fixing of this rate predicated on reports or statistics officially collated which would permit a fair conclusion as to the justice of its operation with reference to the railroads within its purview. It plainly reflects dissatisfaction with existing conditions and an effort to provide a remedy through arbitrary action. It seems largely to have been the result of annoying requirements and discriminations in connection with the sale of mileage books on certain roads.

The bill represents a policy seriously mistaken and pregnant with disaster. It is of the utmost importance that the management of our railroad corporations should be subject to strict supervision by the State and that regulations compelling the observance of the law and proper and adequate service should be rigidly enforced. It is the duty of these corporations to provide transportation of passengers and goods at reasonable rates, and the State should compel the performance of this obligation.

But injustice on the part of railroad corporations toward the public does not justify

injustice on the part of the State toward the railroad corporations. The action of government should be fair and impartial, and upon this every citizen, whatever his interest, is entitled to insist. We shall make matters not better but worse if to cure one wrong we establish another. The fact that those in control of railroad corporations have been guilty of grossly improper financiering and of illegal and injurious discriminations in charges points clearly to the necessity of effective State action, but does not require or warrant arbitrary reprisals. In dealing with these questions democracy must demonstrate its capacity to act upon deliberation and to deal justly.

It is of the greatest importance not only that railroad corporations should be compelled to respect their public obligations, but also that they should be permitted to operate under conditions which will give a fair return for their service. Upon this depend not simply the security of investors, but the security of their employees and the protection of every form of industry and commerce through the maintenance and extension of necessary transportation facilities. Nothing could be more opposed to the interests of the community as a whole than to cripple transportation corpora

tions by arbitrary reduction of earnings. It may be said that a two-cent passenger rate is not so extreme as to have a very injurious result. But this is a debatable question. Large and prosperous suburban communities. have been built up through the offer of commutation rates much less than the proposed maximum. Upon the maintenance of these rates many thousands of our citizens rely. Considerable differences exist between the railroad corporations with respect to the territory they serve and the cost of service, and it is manifest that what would be fair for one might be far from fair for another. An arbitrary dislocation of tariffs by the fiat of the Legislature without investigation is a matter of serious concern. The best that could be said for such legislation would be that it should be regarded as an isolated case and not as a precedent. For if flat freight rates, either for all commodities or for different kinds of commodities, were similarly to be fixed by the Legislature without investigation or proper ascertainment of their justice, our railroad business and our industrial and commercial interests would be thrown into confusion.

I do not mean to be understood as saying that a maximum two-cent passenger rate would

be unreasonably low. It might be high enough in many cases. Possibly it would be high enough in all cases. I fully appreciate the fact that those who have promoted this bill believe that such a rate would be fair. But I deem it most important that the policy of dealing with matters of this sort arbitrarily, by legislative rule of general application without reference to the demands of justice in particular cases, should be condemned. Every workingman, every tradesman, and every citizen believing himself to have aught at stake in the prosperity of the country, should determinedly oppose it. For it not only threatens the stability of business enterprise which makes our prosperity possible, but it substitutes unreason for sound judgment, the ill-considered demands of resentment for the spirit of fair play, and makes impossible patient and honorable effort to correct abuses.

There is a better way. It has already been pointed out in the legislation of this State. It is practically impossible, in view of the nature of the problems and the many questions requiring consideration, for the Legislature to deal directly with railroad rates in a satisfactory manner. Where a matter requires investigation in order that a just result may be