[In 1908, Louis D. Brandeis was involved in a fight to keep the New Haven Railroad from buying the Boston and Maine Railroad, which would have given the New Haven a near complete transportation monopoly in New England. On March 25, 1908, Brandeis debated the matter with Timothy E. Byrnes (a vice president of the New Haven), Charles F. Choate, Jr. (New Haven counsel) and John J. Higgins (a Massachusetts lawyer and politician) before the Cambridge Citizens' Trade Association.
A transcript of the entire event is held in our collection of Brandeis' papers (folder NMF 1-I-1a) and Brandeis' speech is reprinted below. It appears to be a transcription of the speech (as evidenced by a couple insertions of crowd responses which are marked with brackets) rather than notes that were prepared ahead of time. As a result, some errors appear to have crept in, mostly missing words. There are some hand written edits on the document, apparently as part of an effort to get the speech published. Most of these edits are not reproduced here, unless they are clarifying a particular point or correcting an obvious mistake. These insertions will be in brackets and italics.
A couple sentences from this speech were reproduced in Lewis Paper's book Brandeis, but this appears to be the first publication of the speech in its entirety.]
ADDRESS OF LOUIS D. BRANDEIS, Esq.
Some corporations are born monopolies, some achieve monopoly, and some have monopoly thrust upon them [laughter]. Mr. Byrnes would have us believe that the New Haven is of the last class. I ask you to look at the past, to recall the facts within your own knowledge, and to determine whether that is the situation. Mr. Byrnes seems very much afraid of the word "monopoly" -- as afraid of the word as I am of the thing!
He says that what he desires is to find some way in which this large stockholder of the Boston & Maine may exert the influence which a large or a majority stockholder should exert. Now, see what that really means. That means for northern New England what has happened in southern New England -- not by an accident -- that every railroad in Connecticut and Rhode Island and leading into New York -- that every trolley line in Connecticut and Rhode Island and the proposed entrance into New York -- that every steamship line which in any way connects New England with any point on the Atlantic coast, with the exception of one line in the hands of a receiver -- every one of those lines, running from Portland, Maine, down to Savannah, Georgia, has passed into the control of the New Haven -- not by accident, not because wicked and designing bankers have come to them and held them up, but because that road, with a deliberate purpose of extinguishing at any cost any competition in transportation, has gone forward and bought, and bought and bought where they could buy, and destroyed where they could not buy!
Now, gentlemen, I and everyone here agrees with Mr. Byrnes as to what we want to accomplish -- honest administration, reasonable rates and efficient service. We all agree on that. And what we want to do, we who oppose the merger, is this: we not only want to do what Mr. Byrnes desires in that respect, but we want really to enable him to accomplish his other desire -- that he be not burdened now with this northern system of railroads [applause] -- that he be not burdened with that, but that he be allowed to work out, with his associates, with all the ability and all the capital that they can raise, the great and many problems which the New Haven Road now has. Therefore we desire legislation not only to take that away from the New Haven which it has acquired without authority under our law, but to prevent such a disposition of that stock as would result in a complete transportation monopoly, and would also give to Massachusetts control of the monopoly itself.
Now, Mr. Byrnes puts to you as the danger, as what might happen, the impotency of New England in regard to what exists west of the Hudson River. If the New Haven had spent upon a line west of the Hudson River one-half of the money which it has spent and the obligations which it has incurred in subjecting to absolute monopoly all of southern New England we should in New England be independent if the New Haven is independent! One hundred and fifty more millions of dollars of New Haven money and obligations have gone into forging the chains of monopoly on southern New England. It was not necessary to own all the trolleys in Rhode Island and Connecticut and in southern Massachusetts and in southern New York State. It certainly was not necessary to do it at a price by which their late trolley acquisitions in Connecticut stand at $153,000 a mile of track -- there are roads in Rhode Island that stand at $142,000 per mile of track -- when we in Massachusetts cannot earn reasonable dividends upon roads constructed at a cost of $48,000 per mile of track. That money that has gone into those acquisitions, and into the steamship lines, would have built us a trunk line, not to Buffalo, but to Chicago, and the whole of the West would have been open to us. But they had not the desire to supply New England. Their desire has been, and their theory has been, that the thing for the New Haven to do is to possess control of the transportation in the New England States.
Now, the question for us, is there hope in that? Is there prospect in that of relief from the present situation, and hope for the future? It rests, and rests wholly, upon this idea that the railroads may be trusted for their enlightened self-interest to do what is best for the community.
We in America have found out that in spite of the extraordinary ability of railroad managers, the community must look out for itself, just as the community must look out for itself in other ways. It had to look out for itself in the matter of insurance, and all the insurance men said that the community knew nothing about insurance. The politicians thought the civil service reformers knew nothing. The municipal government of the city of Boston probably thought that the Finance Commission of Boston, and those that desired it, knew nothing. The community must protect itself, and the people of Massachusetts today must exercise their reasoning powers.
Mr. Mellen tells you that he is going to give us, if he gets this huge power, better rates between northern and southern New England. I say, in the first place, that we may judge the future by the past. Mr. Byrne has told you some things that he said occurred in his presence. I may tell you some things which occurred before the time he came to New England. He has spoken of this differential of five cents on Western lines which they want to preserve to us. Before he came, and before the New Haven controlled southern New England as it controls it now, we had a differential not of five cents, but of ten cents, and the New Haven compelled our northern railroads and our differential route South at a time when the Merchants & Miners was still free from New Haven control -- it compelled them to reduce that differential from ten cents to five cents. By that line -- the Old Colony Road today -- in spite of the promises of what we were going to receive -- freights on the New Haven went up, instead of going down, and freights of all the differential roads were raised five cents, that is, from a differential of ten cents to a differential of five cents.
We have heard just that sort of siren song before. "Men may come and men may go," and this very delightful personality that we have with us tonight, representing the New Haven, Mr. Byrnes, may go as he has come, but the monopoly goes on forever if once it is started. Remember that. And remember also that just this sort of talk as to the value of being a great, or part of a great system, was the thing that we erred in eight years ago, when we were going to have our commercial greatness established by being the terminal of the New York Central Railroad. There is an instance, and there is an object lesson, which you have got to bear in mind; and side by side with the object lesson of the Boston and Albany lease is another object lesson, the object lesson of the Fitchburg, because, to a very great extent, the defects of the Boston & Maine Railroad as they exist today, the lack of financial elasticity, and the lack of improvement during the last six or seven years -- I mean of such improvement as we had a right to demand of our transportation system -- is due, in very large measure, if not wholly, to that Fitchburg lease. And why? When that Fitchburg lease was taken over, and we were going to have there too the benefits of this consolidation, what happened? The dividend on the preferred stock, seventeen millions and more of preferred stock, was increased one per cent, more than $170,000. The common stock, a large part of which was held -- five millions of which was held -- by the Commonwealth, paid no dividend. That was converted into a 3 per cent bond -- seven million dollars in all -- about two hundred thousand dollars. Then when the preferred stock went up the taxes went up. You have a fixed charge on the Boston & Maine as a result of that lease which means $400,00 a year, the equivalent of ten millions of dollars, which might have been expended in the improvement of that road. Think what that would have meant, gentlemen! Ten million dollars in improving the Fitchburg Railroad! We should have had admirable service in the Fitchburg Railroad if we could have spent upon it ten million dollars, and earned besides what those improvements would have brought to us on the Fitchburg. And when you come to this proposed merger, as it is euphemistically called -- monopoly, as it should be called -- when we come to that, gentlemen, it is introduced with a new charge of $300,000, the equivalent of about eight million dollars, which might be invested in improvement, because -- see here! -- Mr. Byrnes may be right that very large blocks of stock were owned outside, and were turned over to the New Haven in exchange for New Haven stock, but you know -- every man here must know -- many stockholders, and large stockholders, exchanged their Boston & Maine stock for New Haven stock. And why? Because they were going to get eight per cent where before they got seven per cent; and that difference of one per cent, which upon the thirty million dollars of stock of the Boston & Maine means $300,000, because the stockholder was going to get a return, means that the shipper has got to bear that charge, and also means, and has meant in the case of Boston & Maine, that improvement which would otherwise have been made cannot be made.
Now gentlemen, when Mr. Byrnes tells you that if they do not get the Boston & Maine, he fears for the independence of the New Haven, we fear, and we think that fear is well grounded today, that this movement to acquire northern New England, the railroad system of northern New England, is a device of the trunk lines, not to get the New Haven, which they already exert an extraordinary influence over, and in which they already have large holdings of stock, but to get northern New England, and to deprive us of that little independence we have, which is due wholly to the existence of two Canadian lines, The Grand Trunk and the Canadian Pacific, which these gentlemen, by community of interest, who control the trunk lines, and we believe control the New Haven, are trying to obliterate. That is the competition which has made New England as free as it is now. That is the competition which these trunk lines, through the New Haven's movements, wish to rob us of. And it is that independence which is all that is left to us since the New Haven has taken that other liberty which we did have until recently, through the Merchants & Miners Transportation Company, to send our freight via Baltimore and Norfolk to the West and to the South.
Now, gentlemen, do not be misled by any ideas that this is an age of consolidation, and that the manifest destiny is to be all consolidated. If Mr. Byrne's arguments were true and sound, they would prevail equally for the whole of the United States. We might as well have one railroad system for the whole country, because, for certain purposes, if the railroads do not want to co-operate, all railroads have junction points somewhere, and it is a question of whether they want to co-operate or do not. But, gentlemen, remember this: a consolidation may be a good thing, or it may be a bad thing. A combination may grow more efficient, or it may grow less efficient, by growing larger. We have seen one combination, one trunk line, with which the New Haven is very closely associated by traffic arrangements, but which is held up by now as a thing that they fear apparently -- the New York Central -- we have seen how that line has grown so inefficient that the Boston & Albany, which ten years ago was held up in this country as the model railroad, so that the Chicago, Rock Island & Pacific had emblazoned upon its banner "The Boston & Albany of the West" -- under this mania for consolidation, and the being a part of a through line which would give us the benefits of all those good things west of the Hudson which Mr. Byrnes wants us to have, it reached the degree of degradation that there is hardly a man in Massachusetts that has not suffered from it.
Don't imagine either, gentlemen, that there is such a thing as an efficient regulation where you do not have an efficient instrument. Our [Massachusetts] Railroad Commission has long had the reputation of being the best Railroad Commission in the country, as it was the first to be inaugurated. Our Commission has been absolutely powerless even to prevent the constant deterioration of the Boston & Albany Railroad. That ought not to be a very serious problem, to prevent deterioration. But the prevention of deterioration is not what we want -- the prevention of deterioration merely. We want improvement. We want progress. We want men to think and feel and men to care for Massachusetts and to develop it.
Mr. Byrnes says that this [the New Haven] is a Massachusetts road; that we own 40 per cent of the stock and 60 per cent of the securities. Gentlemen, there is nothing so humiliating in this whole situation as that fact which he mentions, because although we do own 60 per cent of the securities and 40 per cent of the stock nearly, we are absolutely powerless so far as the New Haven is concerned. Of 24 directors in the New Haven, Massachusetts, with its great ownership, has two [applause] and the influence of those two, I venture to say, is not in proportion to their numbers. [Laughter and applause.]
Now, gentlemen, do not be misled by these generalizations which you have heard. Do not be misled, above all, by the charming personality of Mr. Byrnes [laughter], because Mr. Byrnes is not the New Haven Road [laughter]. Mr. Byrnes has the great merit -- he has many merits, and one of them is that he was born in New England [laughter]; but he is not the New Haven Road, and we must remember the past of the New Haven -- the past in fastening monopoly upon all the territory that it controls. We must remember its political past, and bear in mind that if this monopoly is once perfected, Massachusetts cannot control [it?] under any circumstances. Massachusetts will be a State within a corporation, as Connecticut is now a State within the New Haven, and New Hampshire has been a State within the Boston & Maine. [Loud applause.]