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Square. Its most important line was only two miles and a half in length. In order to become a profitable road, it needed to improve its service and extend the area of its business so that it could be more economically operated. As soon as he assumed control Mr. Hanna instructed the superintendent, Mr. Geo. G. Mulhern, to buy new cars and horses, and to put the road in thoroughly good condition. "You do the work," he said, "and I'll supply the money." Little by little the lines were extended wherever possible, and every effort was made to keep the service abreast of the growth of the city.
Somewhat later a consolidation was effected with the Woodland Avenue line on the east side of the river, and then with the road on Kinsman Street. This consolidation largely increased the size of the company and the area of its operations. Its name was changed to the Woodland Avenue and West Side Street Railway Company, its capital became $2,000,000, and it obtained a long continuous route running from one end of the city to the other. Mr. Hanna was president of the new company. The Woodland Avenue line, when he assumed control, was also run down and was in need of complete rehabilitation. After a few years he converted it from a losing into a paying property.
It was about this time (that is, in the late years of the eighties) that street railroads in a city of the size of Cleveland began to be really profitable. Their traffic increased faster than the growth of population, because as the city spread, the amount of travelling became proportionately larger. Coincident with the necessary increase in travelling came the introduction of the electric trolley, which at once enormously improved the service, diminished the percentage of operating cost and made the consolidation of connecting lines necessary in the interest both of the best service and the lowest operating cost. About 1889 Mr. Hanna began the electrification of his street railways. A little later a further consolidation was effected with the Cleveland City Cable Company, which owned tracks on Payne Avenue, Superior and St. Clair streets. This new company was known as the Cleveland City Railway Company, its capital was $8,000,000, afterwards increased to $9,000,000, and the whole system was, of course, operated by electric trolleys. Mr. Hanna continued as president, and did not retire until his company, popularlyknown as the "Little Consolidated," was merged with the Cleveland Electric Railway Company—the "Big Consolidated."
Mark Hanna never owned a majority of the stock in any of the companies which succeeded to the old West Side Street Railway Company. His own interest and that of his immediate family amounted to about a million dollars in the stock of the "Little Consolidated." Nevertheless his control was complete. He did not interfere much in the details of operation, but he travelled on the cars a good deal and was constantly suggesting improvements in the service. On the whole, however, the operating superintendent was held responsible for the running of the road, while Mr. Hanna financed it, decided what improvements were necessary, and when and how they should be made. The directors almost always followed his recommendations; and under his energetic but thrifty management the Cleveland City Railway came to have a high reputation for the efficiency of its service.
As in the case of his other interests Mr. Hanna did not buy a street railway, because he had carefully calculated the probability of large future profits in that particular business. Indeed, in 1882 it required some imagination to anticipate that such a decrepit enterprise could ever be made remunerative. The opportunity for large profits in street railways resulted, it must be remembered, from the introduction of electrical power. He became a street railroad president as the accidental result of his wife's inherited interest in a property of that kind. Mr. Hanna saw that this interest would continue to be worth little under its existing management. Being a man accustomed to take decisive action, he made up his mind that the interest must either be sold or the business controlled. When the old management preferred to sell out, Mr. Hanna started in to build up the property.
He had another interest in the street railway besides the family interest. He lived at that time on Franklin Avenue on the West Side. One of the tracks of the company passed his door. He used the cars to take him to and from his office. His pride as a business man in being associated only with wellmanaged and successful enterprises was reenforced by local pride. He wanted it to be a creditable road because it served himself, his own neighbors and his own neighborhood. It always meant more to him than did an ordinary business interest. It became in fact his hobby. He used to call it his savings bank.
He called it his savings bank because he fully understood that it performed a local public function, as does a savings bank, and because he put into it for many years a portion of his surplus income. The property was built up partly with his own money, and it could not have been made profitable except by means of liberal capital expenditures. The railroad and its equipment, which he bought from Elias Sims, was, as a piece of physical property, not much better than junk. The early stockholders had all lost money. Mr. Hanna knew that he had to make a good railroad before he could have a profitable railroad, and when he took control his object was to earn a profit by excellence of service. The public responsibility which he recognized as necessarily attached to the railroad was that of giving its patrons the best" possible accommodations.
That the railroad really did become profitable was due, not merely to good management, but to the growth of the city and to the substitution of electric for horse power. Mr. Hanna entered the street railway, as he did the coal and iron business, at the right time. The conditions which were to make it much more profitable than ever before were just coming into existence. The growing population of Cleveland was spreading out and was obliged to do an increasing amount of travelling in the course of a day's work. Mechanical improvements offered an opportunity of largely reducing the cost per passenger. A judicious system of consolidation and transfers could be used to stimulate traffic. Mr. Hanna took advantage of all these opportunities and managed in the end to make the railroad pay interest, not merely on the fresh capital he had obtained, but upon all the capital originally invested in the enterprise. Before the new conditions had come into existence, the most capable management could scarcely have accomplished such a result.
Mr. Hanna's personal attitude both towards his own business ventures and later towards general economic questions was that of the industrial pioneer — the man who starts enterprises, takes whatever chance they involve and builds them up with hi3 own brains and hands. A street railway was from his point of view much like any other business enterprise. The chief difference was that the number of its customers gave it a semi-public function; but its duty to the public was simply the duty of all economic agents — that of rendering efficient service. If it rendered efficient service, the public interest no less than its own special interest demanded (from his point of view) that it should obtain the full fruits of its good management. The public had no more claim on a share of the profits of a street railway than it had on a share in the profits of the Union National Bank; and if it attempted to extort such a share, the only result would be the discouragement of private enterprise, the refusal of capital to invest and the consequent diminution of improvement and deterioration of service.
The industrial pioneer needs more than anything else a free hand. In our own country he has until recently usually enjoyed a free hand. Mr. Hanna enjoyed it everywhere except in his street railway business; and being accustomed to it, he was impatient when any unnecessary obstacles were placed in the way of his plans of improvement. His company ran its cars on many streets under grants from the municipal government. Attached to these grants were certain specific conditions. The franchises ran for a comparatively short period, because a general law in Ohio limited their term to twenty-five years. The prosperity of the company and the excellence of its service depended partly on its ability to secure other franchises, necessary to the normal development of the system, and partly upon a renewal of its existing franchises. At the time of their expiration, Mr. Hanna considered his company fairly entitled to such extensions and renewals, because they were necessary to a continuation of good service and its further improvement. He honestly believed that the interest of all concerned would be best satisfied in case he and his associates were encouraged to keep on investing their capital in the business and extending the service to the limit by means of the renewal of old franchises and the grant of new ones on liberal terms.
As a matter of fact there were always difficulties. The municipal government of Cleveland, during the years when the system of the Cleveland City Railway Company was being improved, consolidated and extended,was as corrupt as that of the average American municipality. The council, to whom was intrusted the grant of franchises, was composed of petty local politicians whose votes usually had to be secured by some kind of influence. There was no effective reform sentiment in the community. A street railway company that applied for and needed particular franchises had to purchase this influence or else go out of business. Practically every street railway in the country which was confronted by this situation (few escaped it) adopted the alternative of buying either the needed votes or the needed influence.
The West Side Street Railway Company and its successors were no exception to this rule. It was confronted by competitors who had no scruples about employing customary methods, and if it had been more scrupulous than they, its competitors would have carried off all the prizes. Mr. Hanna had, as I have said, a way of making straight for his goal. He was peculiarly intolerant of a nagging, unenlightened opposition or anything resembling a "hold up." He and his company did what was necessary to obtain the additional franchises needed for the development of the system. The railroad contributed to local campaign committees and the election expenses of particular councilmen; and it did so for the purpose of exercising an effective influence over the action of the council in street railway matters.
Mr. Hanna had in the beginning fought against the increasing corruption of municipal politics in Cleveland; but he had soon yielded and adapted himself to conditions. He was not a reformer either by disposition or by creed. He was always interested at any particular time in accomplishing some definite practical result, and in order to do so he took men and methods as he found them. What distinguished him from other American business men and politicians who used similar methods was that the results which he wished to accomplish were usually good results.
In the case of the street railway he was very anxious to give a thoroughly good service, and he was ready to perform every public duty which could in his opinion be fairly imposed upon the