Monopolies and the People
by D. C. Cloud · English · Gutenberg #39095 · 1,026,122 chars · public domain (US)
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Title: Monopolies and the People
Author: D. C. Cloud
Release date: March 10, 2012 [eBook #39095]
Language: English
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MONOPOLIES
AND
THE PEOPLE.
BY
D. C. CLOUD,
MUSCATINE.
"THE ENUMERATION IN THE CONSTITUTION OF CERTAIN RIGHTS SHALL NOT
BE CONSTRUED TO DENY OR DISPARAGE OTHERS RETAINED BY THE PEOPLE."
"THE POWERS NOT DELEGATED TO THE UNITED STATES BY THE CONSTITUTION,
NOR PROHIBITED BY IT TO THE STATES, ARE RESERVED TO THE STATES
RESPECTIVELY, OR TO THE PEOPLE."
--Articles IX. and X. of the Constitution of the United States.
DAVENPORT, IOWA:
DAY, EGBERT, & FIDLAR.
1873.
Entered according to Act of Congress, in the year 1873.
By D. C. CLOUD,
in the Office of the Librarian of Congress, at Washington.
TO THE
Patrons of Husbandry,
WHO HAVE BECOME THE PIONEER CORPS IN THE EFFORTS BEING MADE
TO REFORM THE ABUSES NOW OPPRESSING THE COUNTRY, AND WHO ARE
EARNESTLY AND EFFICIENTLY LABORING FOR THE RESTORATION OF
THE RIGHTS OF THE PEOPLE, WITH THE HOPE THAT IT MAY AID THEM
IN THEIR PATRIOTIC WORK, THIS BOOK IS RESPECTFULLY DEDICATED
BY
THE AUTHOR.
PREFACE.
TO THE READER.
For two years past the author has awaited the auspicious moment for
presenting to the public his views upon the oppressions and abuses
practiced by corporations and combinations of men who were apparently
getting a controlling influence over the commerce, finances, and
government of the country. Recent action on the part of the people has
convinced him that his opportunity has come, and he embraces it. He has
aimed to present a true history of the operations of the different
monopolies.
Since he began the preparation of his work, some events have taken
place not noticed by him. Oakes Ames and James Brooks, two prominent
characters among railroad men, and whom he has had occasion to name,
have died. Some changes in the laws of congress have been made affecting
the interests of corporations. The law requiring the secretary of the
treasury to retain but one-half of the earnings from the government of
the Pacific roads to apply on the interest due to government on subsidy
bonds, has been repealed, and he may now retain and apply the whole
amount. Suit has also been brought against the Union Pacific company
because of its dishonest practices.
On the whole, however, combinations of corporations, and other rings
and organizations, at war with the best interests of the people, have
acquired new strength and more power within the last few months.
The reader will notice the fact, that while the author has quoted
liberally from the statutes and resolves of congress to show the great
privileges and powers conferred upon railroad companies, and
familiarized the reader with their financial and other transactions for
a clear understanding of their manner of doing business, he has not
pretended to give a full history; satisfying himself with such chapters
as would place before the public the true character of these monopolies.
The author has sought to present truthful statements of matters in
connection with the various _interests_ now so hostile to the _rights_
of the people, and he believes he has embodied the facts as they exist.
D. C. C.
MUSCATINE, Iowa, July 28, 1873.
TABLE OF CONTENTS.
CHAPTER I. PAGES.
A PRELIMINARY SURVEY, 15-18
CHAPTER II.
THE PACIFIC RAILROAD INIQUITY, 19-28
CHAPTER III.
THE MONOPOLISTS "HELP THEMSELVES," 29-39
CHAPTER IV.
HOW CONGRESS BETRAYED THE PEOPLE, 40-48
CHAPTER V.
CONGRESS BECOME A STOCK EXCHANGE, 49-55
CHAPTER VI.
HOW THE LAND GRANT RAILROADS "DEVELOPE" A COUNTRY, 56-62
CHAPTER VII.
THE CREDIT MOBILIER AND A VILLAINOUS CONTRACT, 63-80
CHAPTER VIII.
HAS CONGRESS THE POWER, UNDER THE CONSTITUTION, TO CREATE
OR ENDOW PRIVATE CORPORATIONS? 81-91
CHAPTER IX.
STATE RIGHTS AT THE BAR OF A CORRUPT CONGRESS, 92-98
CHAPTER X.
AN UNSETTLED ACCOUNT--A GUILTY DIRECTORY, 99-105
CHAPTER XI.
SOLE PURPOSES OF TAXATION, 106-111
CHAPTER XII.
THE RIGHT OF EMINENT DOMAIN--UNCONSTITUTIONALITY OF
MUNICIPAL AID TO RAILROADS, 112-122
CHAPTER XIII.
THE FATAL POLICY OF MORTGAGING CITIES AND COUNTIES FOR
THE CONSTRUCTION OF RAILROADS, 123-129
CHAPTER XIV.
THE IMPOVERISHING TRANSPORTATION SYSTEM--THE WAREHOUSE
CONSPIRACY, 130-137
CHAPTER XV.
A NEW AND FALSE PRINCIPLE IN HYDRAULICS--WATERED
STOCK--ITS UNLAWFUL PROFITS THE SOURCE OF EXTORTIONATE
TARIFFS--THE FAST DISPATCH SWINDLE, 138-146
CHAPTER XVI.
A PRIVILEGED CLASS--THE MONOPOLISTS RELIEVED OF THE
BURDENS OF TAXATION--AN OUTRAGE UPON REPUBLICAN
GOVERNMENT, 147-151
CHAPTER XVII.
THE STRONG GRASP OF CONSOLIDATED CAPITAL UPON
AMERICAN LEGISLATION--BEECHER ON "REFORMATION OR
REVOLUTION"--HISTORY OF RAILWAY LEGISLATION IN IOWA, 152-168
CHAPTER XVIII.
THE "TRAIL OF THE SERPENT" IN THE INTERIOR DEPARTMENT, 169-179
CHAPTER XIX.
THE MONOPOLISTS AT THE DOOR OF THE WHITEHOUSE, 180-185
CHAPTER XX.
THE UNITED STATES TREASURY THE VASSAL OF WALL
STREET--STOCK "OPERATIONS" EXPLAINED, 186-197
CHAPTER XXI.
HOW WALL STREET BUILDS RAILROADS--A HOT-BED OF CORRUPTION, 198-201
CHAPTER XXII.
THE SUPREME BENCH INVADED--ITS DECISIONS REVIEWED, 202-222
CHAPTER XXIII.
BANK MONOPOLISTS--THEIR CONTROL OF THE CURRENCY--A BANKRUPT
FINANCIAL POLICY, 223-230
CHAPTER XXIV.
OUR TARIFF POLICY--DOES "PROTECTION" PROTECT? 231-239
CHAPTER XXV.
PATENT RIGHTS, AND THEIR ABUSES, 240-246
CONCLUSION.
REFORMATION OR REVOLUTION--A RADICAL CHANGE DEMANDED IN
THE ADMINISTRATION OF PUBLIC AFFAIRS--CONCLUSIONS OF THE
AUTHOR, 247-326
APPENDIX.
CHAPTER I.
LEGAL TENDER DECISIONS, 329
CHAPTER II.
DISSENTING OPINION OF CHIEF JUSTICE CHASE, 330-345
CHAPTER III.
DISSENTING OPINION OF JUSTICE CLIFFORD, 346-386
CHAPTER IV.
DISSENTING OPINION OF JUSTICE FIELD, 387-430
CHAPTER V.
GOVERNMENT CONTROL OF RAILROADS, 431-453
CHAPTER VI.
THE INFLUENCE OF MONOPOLIES UPON LABOR, 454-462
ERRATA.
Page 125, third line from top, for "Then" read _These_.
153, second line from bottom, for "Gould Jay" read _Jay Gould_.
202, fourth line from top, for "jealous" read _zealous_.
238, eleventh line from top, for "1862" read 1872.
257, second line from bottom, for "to" read _by_.
272, fifteenth line from bottom, for "ultro" read _retro_.
MONOPOLIES AND THE PEOPLE.
INTRODUCTORY CHAPTER.
In treating of the topics discussed in this work, the author addresses
himself to the task with no partisan bias. His purpose is to draw aside
the veil, and let the facts speak for themselves. He writes, as he
believes, in the performance of duty. Serious dangers are threatening
the people. There is a power in the land, possessing elements
destructive not only of the industrial and producing public, but of the
very form and spirit of republican government. It will be the aim of the
author to show forth the progress and present attitude of this power in
its relations with the people, and to suggest, if not to advocate, such
measures of relief and protection as the exigency demands.
It is a fact to be admitted by every candid thinker, that of late
years, corporations, rings, and single speculators have, by united and
persistent efforts, obtained control of the government; that their
interests are guarded and protected by the legislative, executive, and
judicial departments of the government, both state and national.
The men who are thus combined in opposition to the people, do not belong
to any one political division; they are found in all parties; they are
firmly united for the purpose of grasping power; of controlling the
government in their own interest; of fastening upon the people
oppressive monopolies, and of enriching themselves at the expense of the
public. To accomplish these ends they procure donations of land, money
subsidies, protective tariffs, continue a depreciated currency, and by
arbitrary rules and by-laws of their own, hold the whole people at their
mercy. To such an extent have these monopolies been fostered and
protected, that at the present time the farmer pays in freights, taxes,
and duties, at least one-half of his farm products for their support.
A silent or passive acquiescence in, and submission to, these abuses and
oppressions, have given a controlling strength and power to monopolies
that cannot now be overcome without a united, long, and hard struggle.
These evils cannot be corrected, nor the rights of the people restored,
save by concerted action on their part, not only in securing proper
legislation, but in asserting and maintaining in their business, at
elections, and in the courts, their rights as free and independent
citizens of the United States. The taxing of the people for the purpose
of aiding private enterprises, the donation of the public land, or of
the public money, to individuals, or companies, or the enactment of laws
by which the people are compelled to pay a part of their hard-earned
substance to aid private parties in accumulating wealth, are oppressions
not to be tolerated in a republic. Yet it is true that we are now taxed
for the purpose of paying the interest on many millions of money given
or loaned to railroad corporations; that we pay large duties on goods
for the benefit of wealthy manufacturers; that extortionate rates are
exacted for transportation of products to market; that we are taxed to
build railroads for private owners, and these things are all pronounced
legal and constitutional, not because they are so, but because these
private interests have become so powerful that they control the country.
The _antiquated_ idea that the government was instituted by the people,
and for the people, has become entirely obsolete, and the new doctrine
has obtained that the whole duty of the government is to foster,
protect, and support monopolies, and that these monopolies own the
people.
In no country of the civilized world are the people more directly
connected with all the questions affecting their well being, than they
are in the United States. It follows that all should be familiar with
such measures as tend to fix and establish the general policy of the
government, not only in respect to its general administration, but
especially in those matters that directly or indirectly give to
corporations, associations, companies, or individuals, exclusive grants,
donations, or privileges, detrimental to the interests of those who are
not of the "favored few."
A republican government can only exist when it is controlled by the
people, and administered in their interest. When special, or class
legislation, for the benefit of certain limited interests, or in favor
of certain parties, becomes the rule of action in the administration of
either the state or national government, accompanied by grants of land,
money, or taxes, to be returned to the government by levies made upon
the people without their consent, that government ceases to be
republican.
In our country, with its vast extent of territory, its diverse
interests, and variety of products, and manufactures, it is but natural
for different localities and interests to ask governmental aid; nor is
it always an abuse of power for the government to give this aid. In some
instances it is the duty of the government to use its power and the
public money in matters that in some degree, at least, are in their
nature local; such, for instance, as the improvement of rivers, harbors,
&c. In these cases it is not an abuse of power, but a legitimate
exercise of the delegated authority for the benefit of the people.
But there is another species of legislation, approved by the executive
and judicial departments of the general government, and endorsed and
supported by the legislatures and courts of many of our states, that is
in its operation anti-republican and oppressive to the people. We refer
to the current special legislation in favor of railroad corporations,
our protective tariff, and the banking system, and financial policy of
the government.
No one will accuse the author of indulging in a partisan view of these
matters. The history of our country shows that men of all parties have
sought for and obtained special grants and privileges. Our aim is to
direct the attention of the reader to some of the facts connected with,
and resulting from, special legislation on the above named subjects, and
show their effect upon the people generally.
The assertion that the government is now committed to the policy of
donating the public lands to railroad corporations may be thought
untrue, yet if we look through the acts of congress for the last few
years we will find that more than two hundred million acres have been
donated to such corporations, and from the number of bills asking for
further grants introduced during the last congress these donations have
but just begun. It will not be claimed that the people asked for these
grants, or that the necessities of the government demanded them. Nor
will it be contended that the people derive any direct benefit from
them. On the contrary, the lands and the roads are owned and controlled
by private corporations, and not even the government can use these roads
for purposes of transportation without compensation. Now, these lands do
not belong to the government, but to the people. Those persons filling
the different departments of government are but the agents or servants
of the people, and have no more right to give the public lands to
railroad corporations than to tax the people and donate the money
received as taxes to these companies. The policy is bad and oppressive
in its effects. If one owns lands and employs an agent to sell it at a
given price per acre, this agent has no right to convey one-half of it
to himself and friends, and mark up the remaining half to a double
price, and leave it on the owner's hands. This is what congress has done
with the public lands, and in every instance the grants or donations
have been made to aid monopolies, corporations, and powerful companies,
who disregard the interests of the public, and use their power and these
immense gifts for the purpose of securing further grants by corrupting
legislators, judges, and executive officers. If we scale their efforts
at corruption by their apparent success, they have not always failed.
The interests of these monopolies are adverse to those of the people.
The privileges granted them are taken from the people. The wealth of the
nation, held by the government in trust for the people, has been and is
now being misapplied by the people's trustees, and given to these
anti-republican monopolies, and unless something is done to arrest this
species of dishonest and unconstitutional legislation, it is only a
question of time, and that time not distant, when this government,
called republican, will deny to the common people those _unalienable
rights_ guaranteed to them by the constitution. How is it now?
Discriminations are made against the public in favor of these monopolies
in payment of taxes, in special legislation for their benefit, and the
aid and protection afforded them by the courts.
Corporations and joint stock companies should have such legislation and
judicial aid afforded them as is necessary to give them a legal being,
and place them on an equal plane with individuals, and no more. All
privileges, immunities, and favors granted to them, beyond such as
are necessary for the above enumerated purposes, are in conflict with
the spirit and genius of our government. The granting of exclusive
privileges to individuals or companies tends to build up an aristocracy
of wealth, to array capital against labor, and to divide the people into
classes. While we have no titled aristocracy in this country, under the
fostering care of the government an aristocracy of wealth has sprung up
among us, more despotic in its nature than exists in the old world. It
holds in its grasp the labor of the country; it compels the whole people
to pay tribute to it; it is constantly asking, claiming, and receiving
additional strength at the expense of the people. So great has its power
become throughout the country as to alarm all who have considered the
subject. For the purpose of self-protection, the laboring community
throughout the country are banding together to resist this monopoly.
The Patrons of Husbandry are moving in the same direction, all feeling
assured that no time must be lost, and that the welfare of the country,
the perpetuity of our free institutions, and the privilege of owning and
enjoying the fruits of thrift and labor, without giving at least
one-half of them to support these monopolies, demand prompt, united, and
efficient action.
We propose discussing the different matter referred to in the following
order:--
I. Donations of land and government subsidies, and their effect upon the
people and the country.
II. The oppressions practiced, and unjust discriminations made by
railroad companies in the transportation, shipping, and storage of
freights.
III. The unjust system of taxation and discrimination made by
legislatures and congress in favor of railroad companies.
IV. The financial policy of the government, and the aid afforded by it
to corporations and monopolies.
V. The tendency of the courts of the country to uphold special or class
legislation in favor of monopolies and corporations, at the sacrifice of
the interests and rights of the people.
VI. The banking system of the country with its useless burdens imposed
upon the public.
VII. The policy of protective tariff, and its effect upon the people and
the interests of the country.
VIII. The evils incident to the patent laws of the country.
IX. The author will present his views respecting the means to be used
for redressing the grievances considered by him.
In treating of these different subjects, it will be our design to cite
and quote such acts of congress, of the state legislatures, and
decisions of the courts as will sustain the views presented, in order
that the reader may fully understand how these giant monopolies are in
fact aided and supported by the government; and we shall try to
demonstrate that the only way to arrest and correct these evils is by
united and persistent action on the part of the industrial and farming
communities, and that the remedy for all improper legislation for, and
governmental aid to, these monopolies is in the hands and under the
control of the people.
CHAPTER I.
A PRELIMINARY SURVEY.
Nothing in this country has contributed so much to the subversion of our
republican institutions as Land Grants made by congress to railroad
corporations, and congressional legislation in their favor. The policy
has opened a wide field for reckless speculation and corrupt
legislation. It has reversed the old rule, that "the people are
sovereign," and has given to "the favored few" the absolute control of
the nation. The reckless giving of lands to railroad corporations, by
congress, is without excuse, or even apology. When grants were first
made to states, it was pretended that railroads could not be built
without this aid. Subsequent developments exploded this idea. Take Iowa
as an example: In 1856 four leading railroads crossing the state from
east to west, received grants of lands sufficient to pay at least
one-half of the entire cost of their construction across the state, yet
they were not built until long years after the grants were made, nor
were they constructed as rapidly as roads built exclusively by private
enterprise and private capital. The effect of the grants was to retard
the settlement and development of the wealth and resources of the state,
by demanding from those who wished to settle upon the lands so granted,
an extortionate, or at least a greatly appreciated price therefor. It
does not require a great stretch of the imagination to arrive at the
conclusion that but for these grants the population and wealth of Iowa
(the taxable wealth) would be quite one-fourth greater now. The grant of
lands to certain railroad companies in Iowa reach eight thousand acres
per mile; this, at $1.25 per acre, amounts to $10,000. per mile; much
more than one-half of the actual entire cost of their construction. Yet,
as a matter-of-fact, some, if not all, of them became insolvent, and
either before, or soon after their completion, their roads were sold to
other parties--the original companies becoming bankrupt. But while the
companies became bankrupt, the officers and few stockholders who
controlled the corporation retired with immense wealth. These are the
men who, at the inception of the land grant system of building
railroads, inaugurated the theory which has since been practiced, that
all lands thus granted were to be treated as donations to the men who
controlled the roads receiving the grants. The result has been
demoralizing. It has opened a field to adventurers, stock jobbers, and
unscrupulous men, who have gone to the national capital and organized
themselves into squads, rings, and companies, for the purpose of robbing
the people. Not unfrequently the men elected by the people to look after
their interests in congress, have themselves become leaders and partners
in these raids upon the public treasurer; and so powerful are these
organizations that all the departments of government have yielded to
them, and the rule, with but few exceptions, is, to plunder the treasury
upon all occasions, and for every conceivable object. But as these
matters will be treated in detail in the following pages, we dismiss
them for the present.
The rule has been, with few exceptions, in granting lands, to provide
that the railroad company shall select alternate sections; that the
residue shall be for sale at $2.50 per acre; that it shall not be
subject to settlement under the pre-emption or homestead law. By these
provisions, those persons who enter the remaining alternate sections,
pay back to government the value of the lands donated to the railroad
company. This plan of aiding monopolies is at variance with every
principal of right and justice. The people themselves are the governing
power. They are the government. Those who fill the various offices are
not rulers, but agents and servants of the people. The public lands are
the property of the people, and these agents or servants representing
them in congress have no more right to give these lands to corporations
than to vote a part of each citizen's private fortune to the same
corporations. When, in addition to these grants, embracing territory
eight or ten times larger than the state of Iowa, large subsidies of
money are also voted to accompany the lands, the people should become
alarmed, and, if possible, arrest such abuses.
Every acre of land given to railroad companies is a direct robbery of
the people, and the fact that whenever a grant is made the people are
required to make good the amount taken from them by paying a double
price for the moiety that is left to them, but adds insult to injury.
The citizen who wishes to live upon and improve his quarter section,
instead of claiming it as a homestead, or even purchasing it at the
government price of $1.25 per acre, must pay $2.50 per acre before he
will be permitted to occupy it. Nor is this all; he must be taxed to pay
the interest on the subsidy bonds issued to the same companies that have
received the grants of land, and all the benefit he derives from these
unjust burdens imposed upon him, is the privilege of traveling upon
railroads, or of shipping his produce over them, after he has paid to
their officers whatever sum they choose to demand for the privilege.
To show more fully the extent to which the people are being plundered
under the plea of assisting railroads in their efforts to develope the
country, we desire to direct the reader's attention to some of the acts
of congress covering "railroad legislation." Let us, for an example,
take the Union and Central Pacific railroad, beginning at Council Bluffs
and terminating at San Francisco. The charter for this road was granted
in 1862, at a time when the country was at war; when it would be natural
to presume that the government had no surplus capital, and when reason
and common prudence demanded strict integrity and rigid economy in every
department. In chartering the company, all idea of economy, integrity,
or even _common honesty_ seems to have been abandoned. The demand for
the road as a national necessity in time of war, for direct
communication between the Atlantic and Pacific states, and the immense
cost of the road, with its great length, were the arguments used in
favor of liberal aid. All these reasons were plausible--perhaps valid.
They were seized upon, and the action of congress besought in the
premises by a ring that was formed for the purpose of making immense
fortunes out of the enterprise. A noticeable feature in the matter is,
that members of congress, in the senate and house, as soon as the act
was passed granting the charter, became large stockholders and managers
in the corporations. The aid granted by congress to this company was
sufficient, if honestly applied, to construct a double track road the
entire distance, and leave a large margin for distribution among the
stockholders. The act of congress granting the charter, with subsequent
amendments, opened a wide field for plunder, and the way the corporators
availed themselves of their opportunity shows that they had determined
to plunder the people of the last available dollar. A reference to this
act and amendments, as published by congress, will fully sustain all we
have asserted. Selecting the charter of this road as an apt illustration
of all others receiving aid from government, we ask the reader's
attention to some of its more remarkable features.
CHAPTER II.
THE PACIFIC RAILROAD INIQUITY.
On the first day of July, A. D. 1862, the charter of the Union Pacific
railroad was passed. It contains, among others, the following
provisions, to-wit:--
"SECTION 2. That the right of way through the public lands be, and the
same is hereby, granted to said company for the construction of said
railroad and telegraph line, and the right, power, and authority, are
hereby given to said company to take from the public lands adjacent to
the line of said road, earth, stone, timber, and other materials, for
the construction thereof. Said right of way is granted to said railroad
to the extent of two hundred feet in width on each side of said
railroad, where it may pass over the public lands, including, all
necessary grounds for stations, buildings, workshops, and depots,
machine shops, switches, side tracks, turn-tables, and water stations."
The right of way was reduced to one hundred feet for each side of the
railroad, by act of congress of July 2, 1864, and the right to take
material for the construction of the road was limited to ten miles on
each side thereof, by the same act. By this section the company is
allowed to take from the public lands all the material needed in the
construction of the road; to strip the lands, and leave them naked for
the people. The real value of the lands is given to the company; the
refuse left for the American people.
A part of the third section reads as follows:--
"That there be, and is hereby, granted to the said company, for the
purpose of aiding in the construction of said railroad and telegraph
line, and to secure the safe and speedy transportation of the mails,
troops, munitions of war, and public stores thereon, every alternate
section of land, designated by odd numbers, to the amount of five
alternate sections per mile, on each side of said road, on the line
thereof, and within the limits of ten miles on each side of said road,
not sold, reserved, or otherwise disposed of, by the United States, and
to which a pre-emption or homestead claim may not have attached at the
time the line of said road is definitely fixed. Provided, that all
mineral lands shall be exempted from the operation of this act; but when
it shall contain timber, the timber is hereby granted to said company."
By the act of congress of July 2, 1864, this act was so amended as to
grant ten alternate sections on each side of the road, and to grant to
the company the iron and coal found within ten miles of the road. The
reader will notice the reasons given for this grant. 1st. To aid in the
construction of the road; a legitimate reason. 2d. _To secure the safe
and speedy transportation of the mail, troops, munitions of war_, &c.
Twenty sections of land per mile are given to the company for the
purpose of securing the safe and speedy transportation of troops, and
above enumerated articles. It has been said that a poor reason is better
than no reason. Of all poor reasons given for an act, this appears to be
one of the weakest. The reader will not be able to discover its force.
As we progress, we will find that from its inception this Pacific
railroad charter, and amendments, were "conceived in sin, and brought
forth in iniquity;" that, in its provisions and grants, it presents a
state of facts which stamps the whole scheme as a base fraud upon the
public, planned by men who were seeking to enrich themselves at the
expense of their country; and that congress, either from inattention to
the interests of the people, or because the spoils were to be divided,
granted the company the precise charter that was to enable it to plunder
the public without hindrance.
That we may not be regarded as treating the subject captiously, let us
concede that the reason given was a good one, and that the grant of
lands would give security to the transportation of the mails; still the
thought presents itself that a grant of lands to the value of $15,500
per mile would be ample aid for the people to give to this company, in
the construction of its road. It is not a government work, owned by the
public, operated and controlled by the government. It is a private
enterprise, and while all persons see the necessity of a railroad
connection between the Atlantic and Pacific states, but few will indorse
the policy of the government giving to this private company more aid in
lands and money than the entire cost of the road, or more than it would
have cost if built by private capital. And when it is found that this
large grant is made without any equivalent, that not even the mails,
troops, or munitions of war, can be transported over the road without
the payment of just such rates as this private corporation chooses to
charge, the conclusion is inevitable that the good, not of the public,
but of the corporation, was the controlling motive in affording it aid;
that the untold millions of subsidy bonds, and vast tracts of land
wrongfully taken from the public, and given to this company, was but
placing the interests of the whole people, in their social and business
intercourse across the continent, at the mercy of a soulless
corporation.
The donations we have already noticed are the "right of way;" the right
to take all building material within ten miles of the road, and the
grant of twenty sections of land per mile. But this is not all. Section
five of the act provides: "That for the purposes herein mentioned, the
secretary of the treasury shall, upon the certificate, in writing, of
said commissioners, of the completion and equipment of forty consecutive
miles of said railroad and telegraph line, in accordance with the
provisions of this act, issue to said company bonds of the United States
of one thousand dollars each, payable in thirty years after date,
bearing six per centum per annum interest (said interest payable
semi-annually) which interest may be paid in United States treasury
notes, or in any other money or currency which the United States have,
or shall, declare lawful money, and legal tender, to the amount of
sixteen of said bonds per mile; and to secure the repayment to the
United States, as hereinafter provided, of the amount of said bonds so
issued and delivered to said company, together with all interest thereon
which shall have been paid by the United States, the issue of said bonds
and delivery to the company shall _ipse facto_ constitute a first
mortgage on the whole line of the railroad and telegraph, together with
the rolling stock, fixtures, and property of every kind and description,
and in consideration of which said bonds may have been issued." As we
shall hereafter see, this section was amended by act of July 2d, 1864,
so as to allow the company to issue its own bonds to the same amount per
mile issued by the government, and to subrogate the government bonds to
those issued by the company, thus making the bonds issued by the company
the first mortgage bonds.
Section six provides for the transmission of messages by telegraph, and
the transportation of the mails, troops, munitions of war, supplies, and
public stores for the government, giving it the preference at all times,
"at fair and reasonable rates of compensation, and not to exceed the
amount paid by private parties for the same kind of service."
Section eleven reads as follows:--
"That for three hundred miles of said road, most mountainous and
difficult of construction, to-wit: One hundred and fifty miles
westwardly from the eastern base of the Rocky mountains, and one hundred
and fifty miles eastwardly from the western base of the Sierra Nevada
mountains, said points to be fixed by the president of the United
States, the bonds to be issued in aid of the construction thereof shall
treble the number per mile hereinbefore provided, and the same shall be
issued, and the lands herein granted be set apart, upon the construction
of every twenty miles thereof, upon certificate of the commissioners as
aforesaid, that twenty consecutive miles of the same are completed; and
between the sections last named, of one hundred and fifty miles each,
the bonds to be issued to aid in the construction thereof shall be
double the number per mile first mentioned, and the same shall be
issued, and the lands herein granted be set apart, upon the construction
of every twenty miles thereof, upon the certificate of the commissioners
as aforesaid, that twenty consecutive miles of the same are completed;
provided that no more than fifty thousand of said bonds shall be issued
under this act to aid in constructing the main line of said railroad and
telegraph."
This vast amount of bonds was issued to the main line of the road,
which, as will be seen by an examination of the first section of the
act, terminates at the western boundary of Nevada territory. This
company, under its charter, gets $50,000,000 in bonds; its charter does
not authorize it to construct the whole road to the Pacific, but to the
western boundary of Nevada, where it meets the Central Pacific railroad,
built by a company chartered by the legislature of California. Fifty
millions in bonds, with the privilege of subrogating the security for
their payment to a like amount issued by the company as first mortgage
bonds on the road, with the grant of lands above named, the right of
way, and the right to all building material within ten miles of the line
of the road; this is deemed a fair provision for one company. In order
that no charge of selfishness, or want of charity, should be brought
against congress, it next turned its attention to other companies.
Perhaps it was thought promotive of the interest of this corporate
power, now controlling the government, that there should be unity of
action and purpose; that its strength should be so great, and its
ramifications so extensive, that neither private persons nor the public
would dare to resist its demands. The necessity for a railroad from the
Atlantic to the Pacific states was not the only consideration
influencing the law-making power of the country. This fact is clearly
apparent from the provisions of the charter, for numerous branch or
spike roads are included in the charter, and provided for in the land
grants and subsidy bonds.
Let us look at the "Central Pacific railroad company," of California.
This company received its charter from that state, was duly organized,
and as we are informed, was at work on its road when the charter was
granted by congress to the "Union Pacific." But congress, not to show
partiality, in the ninth section of the charter of the Union Pacific,
provides for the Central Pacific as follows:--
"The Central Pacific railroad company, of California, a corporation
existing under the laws of California, is hereby authorized to construct
a railroad and telegraph line from the Pacific coast, at or near San
Francisco, or the navigable waters of the Sacramento river, to the
eastern boundary of California, upon the same terms and conditions, in
all respects, as are contained in this act for the construction of said
railroad and telegraph line first mentioned, and to meet and connect
with the first mentioned railroad and telegraph line on the eastern
boundary of California."
Here is a company building its road exclusively in a single state, under
a charter derived from a state having the exclusive control of its own
affairs, and not subject to the legislation of congress, or the
administration of the general government, like the territories; yet
congress, that it may aid a great monopoly, assumes control of the
matter, reaches out its hand laden with the people's land, and the
people's money, and says to this California company: "If you will unite
with and become a part of this giant monopoly we are creating to crush
the people, and will accept the provisions of this act and render fealty
to the general government as the 'higher power,' we will give you twenty
sections of land, and subsidy bonds to the amount of sixteen thousand
dollars per mile, with the privilege of issuing your own first mortgage
bonds for an additional sixteen thousand dollars per mile for every mile
of road you build in the state of California." Of course this California
company accepts this tempting offer, and in addition to the fifty
thousand of subsidy bonds for sixteen thousand dollars each to the Union
Pacific, an additional sixteen thousand dollars per mile is issued to
the Central Pacific, all of which, as we will show, principal and
interest, will in the end come out of the pockets of the people. The
uniting of these two companies, and the completion of their roads and
telegraph lines, afforded to the country and the government (provided in
all cases they paid to the companies the amounts they charged therefor)
a road for the purpose of travel, and transportation of freights, and
secured a _"safe and speedy transportation of the mails, troops,
munitions of war, and public stores thereon,"_ and if the construction
of the road was aided for that purpose, it would seem to have been
accomplished, and as a matter of justice to the public, no further
burdens should have been imposed upon the public. Two companies had been
provided for at the people's expense, and all that was demanded for the
prosecution of the public business had been effected. But there was
danger that other through lines of railroad might be constructed across
the territories that might become rivals of this giant monopoly. The
Hannibal & St. Joseph railroad company were across the state of
Missouri, looking to the west. The Leavenworth, Pawnee, & Western
company were preparing for action. A road was crossing Minnesota and
Iowa to strike the Missouri river at Sioux City. Any or all of these
roads might become rivals. To prevent such a catastrophe, and to retain
for all time to come an absolute and exclusive monopoly, these companies
must be absorbed, or at least rendered harmless. To assist this scheme,
congress is called upon for further aid from the public lands and
treasury. The response is all that could be desired. It gave the final
blow to competition, and left the people powerless in the grasp of this,
the greatest monopoly in the country. A monopoly created by the servants
of the people, and enriched with spoils taken from the people, in
violation of every principle of right and justice, had been created by
act of Congress, and to insure it the absolute control of the country,
anything promising competition must be absorbed. To accomplish this
object, the same act, section nine, provides: "That the Leavenworth,
Pawnee, & Western railroad company, of Kansas, is hereby authorized to
construct a railroad and telegraph from the Missouri river, at the mouth
of the Kansas river, on the south side, so as to connect with the
Pacific railroad of Missouri to the aforesaid point, on the
one-hundredth meridian of longitude west from Greenwich, as herein
provided, upon the same terms and conditions in all respects as are
provided in this act for the construction of the railroad and telegraph
line first mentioned, and to meet and connect with the same at the
meridian of longitude aforesaid; and in case the general line or route
of the road from the Missouri river to the Rocky mountains should be so
located as to require a departure northwardly from the proposed line of
said Kansas railroad before it reaches the meridian of longitude
aforesaid, the location of said Kansas road shall be made so as to
conform thereto; and said railroad through Kansas shall be so located
between the mouth of Kansas river as aforesaid, and the aforesaid point,
on the hundredth degree of longitude, that the several railroads from
Missouri and Iowa herein authorized to connect with the same can make
connection within the limits prescribed by this act, provided the same
can be done without deviating from the general direction of the whole
line to the Pacific coast."
It will be seen that one of the rival lines is given a premium of lands
and bonds to intersect with the Union Pacific near the east end thereof;
it becomes, for a consideration, a part of this great monopoly, and
abandons all idea of competition.
Section ten provides for a union or consolidation of the Union Pacific,
the Central Pacific, the Leavenworth, Pawnee, & Western, and the
Hannibal & St. Joseph companies; and section thirteen provides: "That
the Hannibal & St. Joseph railroad company, of Missouri, may extend its
road from St. Joseph, via Atchison, to connect and unite with the road
through Kansas, upon filing its assent to the provisions of this act,
upon the same terms and conditions in all respects, for one hundred
miles in length next to the Missouri river, as are provided in this act
for the construction of the railroad and telegraph line first mentioned,
and may for this purpose use any railroad charter which has been or may
be granted by the legislature of Kansas." The section also provides for
connecting this road with the main line. This company promised to be a
rival, but when congress is appealed to, $1,600,000 in subsidy bonds,
and two thousand sections of land are given it as its share of the
spoils, provided it will accept this trifle as an inducement to combine
its interest with this great corporation. This disposes of all rivals
south of Omaha. True the people have paid dearly for it. They, through
their servants in congress, have enriched a lot of unscrupulous men,
banded together for the purpose of plundering the public, and given to
these corporations the power to oppress the people for all time to come;
but as it affords a safe means of transporting the mails, &c., for a
consideration which the people must pay as the services are rendered,
the public should not complain. Congress thought the matter so important
as to require the gift of vast sums of the public moneys, and princely
donations out of the public domain, and as our legislators acted for the
people, and the companies have built their roads, the public must
submit.
But there was danger that the roads crossing Iowa and Minnesota might
compete with the Union Pacific. Sioux City was an objective point on the
Missouri river. West of that city, across the then territory of
Nebraska, a road could be constructed at comparatively small cost. This
line might become a rival, and it also must be absorbed. To effect this
object, the following provision was made a part of the fourteenth
section of this act: "And whenever there shall be a line of railroad
completed through Minnesota or Iowa to Sioux City, then the said Pacific
railroad company is hereby authorized and required to construct a
railroad and telegraph line from said Sioux City, upon the most direct
and practicable route, to a point on, and so as to connect with, the
branch railroad and telegraph line in this section hereinbefore
mentioned, or with the said Union Pacific railroad, said point of
junction to be fixed by the president of the United States, not farther
west than the one-hundredth meridian of longitude aforesaid, and on the
same terms and conditions as provided in this act for the construction
of the Union Pacific railroad, as aforesaid, to complete the same at the
rate of one hundred miles per year." The amendment made to this part of
the act in 1864, to which we shall refer in another chapter, materially
changes its provisions; and as we examine these provisions, we will
discover that all the unjust donations made of the public lands and
moneys are exceeded in this amendment.
Now, if the reader will take a map on which the railroads are marked, he
will discover that from Leavenworth to Sioux City all the railroads
running west are concentrated into one line, after leaving the
one-hundredth degree of longitude--the Burlington & Missouri railroad
company being made by the act of 1864 a part of the same great monopoly.
By the exclusive franchises and imperial wealth conferred upon it by
congress, this great corporation is given control, absolute control of
the business interests of the great west. This grand system of railroads
looks well on the map, and lends color to the plea that the wants of the
public and of the government justified this large outlay of money and
lands; but an inspection of the act chartering the companies,
consolidating them, and by law giving them unlimited control of the
interests of the public, will convince the impartial reader that the
interests of the companies, rather than the needs of the government, or
the welfare of the people, controlled the action of congress.
Grants of lands and exclusive privileges have been made to other
corporations, as also to states, for the purpose of aiding in the
construction of railroads; but our aim being to combat the policy
itself, as involving gross injustice and oppression, and to show its
effects upon the public, we have selected the Union Pacific and its
branches as the best illustration of the action of congress in making
these grants, and the companies owning this road and its branches as a
fair sample of the class of professed benefactors of the people.
CHAPTER III.
THE MONOPOLISTS "HELP THEMSELVES."
The Pacific companies are such a deep mine of iniquity, we must sink our
shaft somewhat deeper if we would see the true quality of the
corruption. In order to fully comprehend the injustice done to the
people, it will be necessary to examine the further legislation of
congress in their favor.
A perusal of the act from which we have quoted will convince the reader
that these companies received all that was necessary for the successful
completion and operation of their road, and its numerous branches, and
to enable them to extort from the government and the people all that the
most grasping and avaricious could desire. But, like Oliver Twist, they
still asked "for more," and they got it; not in more lands and money,
but in being relieved, by act of congress, from the restrictions and
duties imposed upon them by their charter.
The act of congress chartering the Union Pacific railroad, and its
numerous branches, was amended by the act of July 2, 1864, in many
particulars, to some of which we have already referred. The fourth
section amends the third section of the original charter by increasing
the number of sections of land granted per mile to said road, from ten
to twenty, and allowing the selection of the lands to be made within
twenty miles of the line of the road, instead of ten, as provided in the
original charter; and also provides that the secretary of the interior
shall withdraw from sale and pre-emption all the land within twenty-five
miles of the line of the road, until the company has selected its twenty
sections. The original charter limited the withdrawal to fifteen miles.
The amendment also qualified the term "mineral lands," contained in the
original act, so as to except from the lands reserved by the government
all coal and iron lands; thus enabling the company to select coal and
iron lands to the full amount of twenty sections per mile, giving to
said railroad company, or companies, a monopoly of the coal trade in a
country where coal is, and will continue to be, the greatest
desideratum; and the same section gives the company the right to use, in
fact grants to the company, all the timber found on each side of the
road within ten miles thereof. The company can, under its charter, take
all the timber from the land it does not select, and then take its
twenty sections in coal lands, when they can be found. This it has done,
and in addition, bought of the government other large tracts of coal
land; not in the name of the company, perhaps, but in the name of the
individual stockholders. By this means, all who settle along the line,
in the vicinity of this Union Pacific road, are placed in the power of
this great corporation, and must pay it for fuel and transportation
whatever sum may be demanded, because the charter does not restrict the
company in the matter of charges for transportation.
Section seventeen of the original charter provided that twenty-five per
centum of the subsidy bonds should be retained by the government until
the entire line of the road was completed. Section seven, of the act of
July 2, 1864, repealed this provision.
Other amendments are made for the benefit of the corporation, as to time
and manner of payment; but as it is not our intention to examine all of
its provisions in detail, we pass to the tenth section.
By the original charter, the subsidy bonds issued to the company were to
be and remain first mortgage bonds upon the road and property of the
company, the company paying six per cent interest (payable
semi-annually) on said bonds, and the principal in thirty years. The
tenth section of the amendment reads as follows:--
"That section five of said act be so modified and amended that the Union
Pacific railroad company, the Central Pacific railroad company, and any
other companies authorized to participate in the construction of said
road, may, on the completion of each section of said road, as provided
in this act, and the act to which this act is an amendment, issue their
first mortgage bonds on their respective railroad and telegraph lines,
to an amount not exceeding the bonds of the United States, and of even
tenor, time of maturity, rate and character of interest, with the bonds
authorized to be issued to said railroad companies, respectively. And
the lien of the United States bonds shall be subordinate to that of the
bonds of any or either of said companies, hereby authorized to be issued
on their respective roads, property, and equipments, except as to the
sixth section of said act, to which this is an amendment, relating to
the transmission of dispatches, and the transportation of mails, troops,
munitions of war, supplies, and public stores, for the United States."
By this amendment, the public money appropriated to private
corporations, to the amount of about $65,000,000, for which security had
been taken, on all the property of the companies, was left in the hands
of the companies without any security; or, in other words, the servants
of the people made an absolute gift of this great sum of money. The
history of the country, in connection with railroad corporations,
demonstrates the fact that these corporations by "watering" their stock,
and other characteristic management, show, if they so desire it, no
margin from the business of their roads. They permit the interest on
their bonds to accumulate, until a foreclosure and sale on first
mortgage bonds are necessary, and then, under a new name, but with the
same persons as stockholders, the road is bought in and becomes
profitable. In this case the amount of $65,000,000, and the accrued
interest must be first paid, or the property of the corporation must be
sold, and the public money advanced by the government will be lost. Even
at the present time (as we shall show hereafter) the people are paying
the interest on these subsidy bonds, and the only security they have for
its repayment is the _honor_ of the company; for all precedents prove
that as a rule second mortgage bonds, when a large sum of first mortgage
bonds is to be paid, are of no real value.
Sections fifteen and sixteen provide for a division of earnings, and a
consolidation of the various companies. Sections eighteen, nineteen, and
twenty, provide for the admission of the Burlington & Missouri river
railroad company as a branch of the Union Pacific, with a grant of land
in Nebraska. But the greatest outrage upon the rights and interests of
the people, in this Pacific railroad law, will be found in the
seventeenth section of this amendment. By the original act, the Union
Pacific company was required to construct a branch, road from Sioux City
(on the most direct and practicable route) to some point on its road to
be fixed by the president of the United States (but not beyond the
one-hundredth parallel) when a railroad should be constructed through
Minnesota or Iowa to Sioux City. This new road was to unite with and
form a part of the great monopoly, and was to receive the same amount of
lands, and subsidy bonds, per mile, as the main line received. The
building of this road from Sioux City west, to a proper point of
connection with the main line, would have cost but little,
comparatively, because of the favorable character of the country through
which it would pass.
For some reason, unknown to the public, it was decided to make a change
in respect to this branch, not only as to its location, but also as to
the company whose _duty_ it should be to build it. To effect this
object, this seventeenth section contains the following provisions:--
"That so much of section fourteen of said act as relates to a branch
from Sioux City, be, and the same is hereby, amended so as to read as
follows: That whenever a line of railroad shall be completed through the
state of Iowa, or Minnesota, to Sioux City, such company now organized,
or as may be hereafter organized, under the laws of Iowa, Minnesota,
Dakota, or Nebraska, as the president of the United States, by its
request, may designate, or approve for the purpose, shall construct and
operate a line of railroad and telegraph from Sioux City, upon the most
direct and practicable route to such point on, and so as to connect
with, the Iowa branch of the Union Pacific railroad, as such company may
select, and on the same terms and conditions as are provided in this
act, and the act to which this is an amendment, for the construction of
said Union Pacific railroad and telegraph line, and branches; and said
company shall complete the same at the rate of fifty miles per year.
Provided, that said Union Pacific railroad company shall be, and is
hereby, released from the construction of said branch. And said company
constructing said branch shall not be entitled to receive, in bonds, an
amount larger than the said Union Pacific railroad company would be
entitled to receive if it had constructed the branch under this act, and
the act to which this is an amendment; but said company shall be
entitled to receive alternate sections of land for ten miles in width on
each side of the same, along the whole length of said branch; and
provided further, that if a railroad shall not be completed to Sioux
City, across Iowa or Minnesota, within eighteen months from the date of
this act, then said company designated by the president as aforesaid,
may commence and complete the construction of said branch, as
contemplated by the provisions of this act. Provided, however, that if
the company so designated by the president as aforesaid, shall not
complete the said branch from Sioux City to the Pacific railroad within
ten years from the passage of this act, then, and in that case, all of
the railroad that shall have been constructed by said company, shall be
forfeited to, and become the property of, the United States."
Now if the reader will take a late map, having the lines of railroads
upon it, he will discover that a road from Sioux City to Columbus, in
Nebraska, would be about one hundred miles in length, on a line running
nearly west; and at this latter point it would intersect and unite with
the Iowa branch of the Union Pacific; or a line running southwest for a
less distance would unite with the Union Pacific at Fremont, in
Nebraska. In the original charter it was contemplated to occupy one of
these lines, and, in fact, a branch road was commenced from Sioux City
to Fremont. The directors of this branch and the Union Pacific are in
part the same, to-wit: Oakes Ames, of Boston, and G. M. Dodge, of Iowa.
It would seem that this road, running southwest to Fremont, and there
uniting with the Pacific, would afford all necessary facilities for
securing the transportation of the mails, troops, &c., and that upon no
pretext whatever could another grant of land and subsidy bonds be asked.
Yet congress thought otherwise, and in the section last quoted
authorized any company organized under the laws of Iowa, Minnesota,
Dakota, or Nebraska, that might be designated by the president of the
United States, on application to him for that purpose, to construct a
railroad to unite with the Union Pacific, leaving it with the new
company to fix the point at which it would so unite, but requiring it to
commence at Sioux City. Taking advantage of this act, two companies, the
Sioux City & Missouri Valley, and the Chicago & Northwestern,
constructed a line of road from Sioux City to Council Bluffs, there to
unite with the Pacific; the Sioux City & Missouri Valley constructing
the road from Sioux City to Missouri Valley, and the Chicago &
Northwestern from Missouri Valley to Council Bluffs. This line of road
was constructed ostensibly as a part of the Pacific road. It is presumed
to run west. Look at the map and you will see that from Sioux City to
Council Bluffs, instead of going west, it runs on a line east of south,
to the extent of thirty miles, Council Bluffs being thirty miles east of
Sioux City. The company constructing this last named road received from
the government a grant of one hundred sections of land per each mile,
and $16,000 in subsidy bonds for each mile of road. This road runs along
the east side of the Missouri river, and in truth, is of no use as a
route for the transportation of mails, troops, &c., unless the
government prefers to use the longest, least expeditious, and most
expensive line of road. Indeed, it seems to be a road that is under the
especial care and protection of congress. It is called in the Railroad
Manual, "The Sioux City & Pacific Railroad." It was a "nice and fat"
job. It has one feature not often found in these railroad jobs carried
through congress. It appears to have been gotten up for the benefit of
congressmen. After repeated efforts to learn who were the incorporators
of this company, we addressed a letter to the secretary of state of
Iowa, and received the following answer:--
DES MOINES, December 7, 1872.
DEAR SIR:--In answer to yours of the 6th inst., I will say that there
is no line of railroad from Sioux City to Council Bluffs, run as one
road, or by one company. The Sioux City and Pacific railroad runs from
Sioux City to Missouri Valley, and the Chicago and Northwestern (Cedar
Rapids and Missouri River) from Missouri Valley to Council Bluffs. The
corporators of the Sioux City and Pacific company were L. B. Crocker,
M. K. Jessup, James F. Wilson, A. W. Hubbard, Chas. A. Lombard, Frank
Schuchardt, W. B. Allison, and John I. Blair.
Yours truly,
ED. WRIGHT,
_Secretary of State_.
Among the present directors are to be found the names of Oakes Ames,
John I. Blair, D. C. Blair, and G. M. Dodge. Ames was a member of the
late congress, and G. M. Dodge is an ex-member. Among the directors of
the Cedar Rapids & Missouri river company appear the names of John B.
Alley, and James F. Wilson, who were members of congress when the act of
July, 1864, was passed, amending the charter of the Union Pacific, and
making the large grants to the company designated by the president to
build the Sioux City branch of the Union Pacific railroad. Wm. B.
Allison has been a member of congress almost continuously from 1860 to
the present time.
This Sioux City branch seems to have been a special favorite with
certain congressmen. It received the lion's share of lands, getting five
times as many sections per mile as the main lines, and this, too, for
the purpose of building a railroad running east of south, instead of
west--the direction of the main line--following the course of the
Missouri river on the east side thereof for the entire length of this
branch, and crossing on the bridge to the Nebraska shore at Omaha.
In addition to the road from Sioux City to Omaha, and for the purpose of
getting all the land and money possible out of the government, the
conspirators organized another company, under the laws of Nebraska,
to-wit: The Fremont, Elkhorn, & Missouri Valley company, and built a
road running from Missouri Valley to Fremont, in Nebraska--about fifty
miles,--and these two roads, from Sioux City to Missouri Valley, and
from Missouri Valley to Fremont, are now called the Sioux City &
Pacific. We do not know who were the incorporators of the Fremont,
Elkhorn, & Missouri Valley company, but we find among the present
directors, John I. Blair, D. C. Blair, and ex-congressman John B. Alley.
The two companies are consolidated. The grant of one hundred sections of
land, and bonds to the amount of $16,000 per mile, with the privilege
of issuing first mortgage bonds to the amount of $16,000 per mile,
altogether comprise one of the most remunerative jobs ever conceived and
consummated by incorporating, stockholding and "direct"-ing congressmen
in the companies receiving the aid. When it is remembered that the
actual cost of the construction of the road was less than $30,000 per
mile (as shown by the _Railroad Manual_), and that it is of no value to
the government because of its course, save for carrying local mails (its
entire earnings for government transportation being less than $1,000 per
annum), it will not be uncharitable to conclude that this _fat_ little
slice of the Pacific railroad job was put through congress, and nursed
and petted by government for the exclusive benefit of congressmen, their
friends and relatives.
We do not deny the right to congressmen to become and remain
stockholders and directors in railroad corporations, but we do deny
their right to vote lands and money to companies in which they are
stockholders and directors. They are elected to represent the people, to
attend to and protect the public interests. When they form themselves
into companies and vote the lands and moneys of the people to
themselves, they violate their trust, and instead of protecting the
people, plunder them, and divide the spoils. To give these unjust
practices some color of right, or in some manner to excuse themselves
for thus appropriating the wealth of the country and dividing it with
their friends, they assert in the laws thus enacted that it is done to
aid in the construction of railroads, and "to secure the safe and speedy
transmission of the mails, troops, munitions of war, and government
supplies," &c. It is no part of the duties of congressmen to construct
railroads, nor are the people under obligations to furnish them the
means for that purpose. When members of congress form themselves into
private companies, and to procure the means for prosecuting their
private enterprises, agree to divide among themselves a part of the
money and property belonging to the public, because the position they
occupy enables them to do so, they manifest the same disregard for the
rights of others, and the same disregard of law that is shown by the
class of men who follow theft and robbery for a livelihood.
But let us follow still further the course of this Pacific railroad
company. It would occupy too much space, and weary the reader were we to
state in detail all the acts of congress passed in aid of this gigantic
combination. In speaking of the Pacific railroad we are apt to look upon
it as simply a line of road extending from the Missouri river to the
Pacific ocean; to consider its great length; the character of the
country through which it passes; the sparse settlements; the necessity
for direct and speedy communication between the Atlantic and Pacific
states, and we yield a ready assent to the action of congress in voting
lands and subsidy bonds for its construction. But when we find that the
charters of the Union Pacific and Central Pacific companies, and their
various amendments, together with the several acts of congress making
many other companies branches of the Pacific road, virtually
consolidates all the railroads between the cities of St. Louis and St.
Paul on the Mississippi river, and all the railroads running west from
Chicago, into one vast corporation, uniting all in one track from Fort
Kearney to the Pacific ocean, the people will begin to realize that
while they thought congress was appropriating lands and moneys solely
for the purpose of opening a highway across the territories, it was in
fact aiding a combination of men and corporations in their attempt to
control the commerce of the great west; and when we further learn that
this great railroad interest is already virtually consolidated, and that
the whole people are placed at the mercy of this great monopoly, we see
at a glance the extent of the power vested in it by act of congress.
Among the railroad companies that are included in this combination are
the following: Chicago & Northwestern; Iowa Falls & Sioux City; Cedar
Rapids & Missouri River; Leavenworth, Atchinson, & Northwestern; Kansas
Pacific; Union Pacific; Burlington & Missouri River; Sioux City &
Pacific; Missouri River; Chicago, Iowa, & Nebraska; Hannibal & St.
Joseph; and the St. Paul and Sioux City. Most of the above roads
received grants of lands; some of them received subsidy bonds,
ostensibly for the public benefit, but in reality for the purpose of
combining in one the interests of all these combinations. Whatever may
have been the intention of congress in granting exclusive privileges to
these companies and permitting them to unite, the effect has been to
fasten upon the great west a monopoly, that for all time to come will be
an instrument of oppression. With its vast power and wealth it can but
control the fortune of the laboring and producing classes inhabiting the
richest portion of our common country. The further fact that this great
corporate power is the particular pet of congressmen, and that among its
directors and stockholders are members and ex-members of congress,
render the hope of any change in favor of the people remote, if at all
attainable. If the reader is desirous of learning who are the directors
and managers of the Pacific railroad and branches, he has only to
consult _Poor's Railroad Manual_ for 1872-3. He will find among the
present directors the men who, in congress, voted the lands and
subsidies to the companies in which they are now directors, and also,
that some of these directors are now holding the office of congressmen
and of United State's senators.
By the acts of congress granting and amending the charters of the
Pacific railroad companies and branches, it is made the duty of the
president of the United States to appoint five directors, "who shall be
denominated directors on the part of the government," and these acts
forbid such directors being stockholders in said Pacific railroad
companies. It is made the duty of these government directors to exercise
a general supervision of the Pacific road and branches, and to report
its condition from time to time to the secretary of the interior. In
contemplation of law they are to have no pecuniary interest in the
companies or in the roads. The present government directors are B. F.
Wade, of Ohio; Hiram Price, and J. F. Wilson, of Iowa; J. C. S.
Harrison, of Indiana; and D. S. Ruddock, of Connecticut. By act of
congress of June 2d, 1864, the Cedar Rapids & Missouri River railroad
was authorized to connect with the Iowa branch of the Union Pacific
road, and sections fifteen and sixteen of the acts of July 2d, 1864,
place all roads connecting with the Union Pacific on an equality as to
charges for freights and passengers, and permits them to consolidate if
they elect so to do. The Cedar Rapids & Missouri River company has
leased its road to the Chicago & Northwestern company, and it is
operated in connection with the Union Pacific, uniting with it at
Council Bluffs, and it virtually becomes a branch of the Union Pacific
road. The reader can look over the list of directors, as shown in the
_Railroad Manual_ before referred to, and learn if any of the government
directors of the Union Pacific are directors in the Cedar Rapids &
Missouri River company. The reports made of the cost, condition, and
other matters connected with Pacific railroad enterprises, disclose such
utter disregard of the rights and interests of the people, and such a
gross betrayal of the public good for the benefit of a ring (in part a
congressional ring) as to leave it without precedent.
The fact that the men who formed this ring have become a powerful
moneyed aristocracy, able by their votes and influence in congress to
convert the public lands and money to their own use, and are now boldly
taxing the people with the interest on the money appropriated to build
up these oppressive monopolies, should arouse the country to a sense of
its imminent peril.
CHAPTER IV.
HOW CONGRESS BETRAYED THE PEOPLE.
In order to fully realize the great power of what is known as the
Pacific railroad companies, it will be necessary to look at the Central
Pacific company, and its control of the transportation of freights and
passengers from the Pacific country. This company, organized under the
laws of California, was, by acts of congress of July 1st, 1862, admitted
into the grand combination known as the Pacific roads, and granted equal
privileges with the Union Pacific and branches. The Central Pacific
extends from the Pacific ocean to Ogden, a distance of eight hundred and
eighty-one miles. The acts of congress of April 4th, 1864, and July 2d,
1864, granted to this company additional privileges and powers,
including the right of consolidating with all the companies on the
Pacific coast. In 1870 the following companies, to-wit: The Western
Pacific railroad company; the San Francisco, Oakland, & Alameda railroad
company; the San Joaquin railroad company; the California & Oregon
railroad companies were consolidated.
The state of California at that date had but one thousand and thirteen
miles of road within its borders. Of this number of miles, about
one-half became a part of the Central Pacific, by the consolidation as
above stated. All the roads pointing towards the east were combined in
this one great corporation, forming a solid body, with one common and
general object and interest, viz: a monopoly of the travel and traffic
with the eastern states. And congress, by appropriating lands and
subsidy bonds, and granting exclusive rights and privileges to this
monster monopoly, has given it the key not only to the overland commerce
of the country, but also to the commerce of our country with other
nations upon the Pacific ocean. This giant monopoly, by the aid of
congress, has obtained the absolute control of the best interests of
the whole people for all time to come--a control that is now being used,
and will continue to be used, to enrich its own members and stockholders
by oppressive levies for transportation over its roads.
To fully comprehend the cost to the country of these munificent gifts by
congress to the Union and Central Pacific corporations, let us examine
the expense somewhat in detail.
First. A grant is made of all the material needed in the construction of
the roads, found within ten miles of the line of said roads.
Second. A grant of thirty-five million acres of the public lands,
amounting, at $1.25 per acre, to $43,750,000. This vast amount of land
is taken from the people and given to companies by congressmen who in
some instances are members of the companies, and receive their _pro
rata_ share of the grants.
Third. Aid voted by congress in shape of subsidy bonds, $65,000,000,
payable in thirty years, with six per cent per annum. The theory was
that the companies would pay the interest as it matured (semi-annually)
and eventually the principal. But that this was not the intent of the
companies, nor of congress, is apparent from the different acts
regulating the matter, and as the case stands, the government is
actually paying the interest and collecting the amount from the people
in tariffs and excise taxes. The payment of the amount of these bonds,
with the interest according to their terms, will require about
$200,000,000. This amount, or nearly all of it, will be paid by the
people, and not by the companies. The report of the secretary of the
treasury shows that the amount of interest annually due on these subsidy
bonds is $3,875,000, of which the Pacific railroad companies have paid
about $750,000, and the government the balance, say $3,125,000. The
original charter of the companies provided that the charges for carrying
done for the government should be credited to the companies in
liquidation of these bonds, and also that five per cent of the net
earnings of the road should be applied to the same object. The secretary
of the treasury of the United States insisted that these companies
should be bound by this provision of their charters, refused to pay them
their earnings for government services, and also demanded the five per
cent, under the law. The companies refused to pay the five per cent of
their net earnings, and demanded pay for transportation. If we remember
that congress had already so amended the charters of these companies as
to permit them to issue $65,000,000 of their own bonds as "first
mortgage bonds," and provided that the subsidy bonds obtained from
government should be subordinate or junior to the bonds issued by the
companies, and also bear in mind that these amendments also provided
that whenever twenty miles of road was completed the patent for twenty
sections of land per mile was to issue to the companies, so that when
the roads were completed they would have title to all their lands, we
will see good reasons for the stand taken by the United States secretary
of the treasury.
The security which the United States had for the payment of the
principal and interest of the bonds, under the charter, was destroyed by
subsequent legislation, and unless the secretary could retain the
amounts due from government for transportation, and collect the five per
cent, the whole amount of the subsidy bonds, would be lost to the
government and the people. The facts of the case being well known to
congress, who are supposed to be the representatives of the people, and
to legislate in their interest and for their benefit, it would hardly be
supposed that an act would pass both branches, and receive the approval
of the president, compelling the secretary of the treasury to yield to
the demands of these corporations. Honest legislation, and a decent
regard for the public welfare, would seem to forbid any attempt on the
part of any one of the departments of the government to aid the
companies in their dishonest endeavor to avoid the provisions of a
charter which had been enacted for their special benefit. And when it is
remembered that at the time the application was made to congress (March,
1871) certain members were stockholders and directors in these same
companies, one would not think it possible that an act could be passed
relieving the companies from these requirements of their charters, or
only possible because of the practice being so long established for
congressmen to appropriate public lands and moneys to their own use,
that they had arrived at the point where they deemed the property and
money of the government lawful plunder, and that their first duty was
to provide for the rings and corporations in which they had a personal
interest. It seems to have required some strategy for the friends of
these corporations to grant them the aid they asked. Afraid to take
issue with the secretary of the treasury, and unwilling to hazard the
success of their scheme by an attempt to pass an act for the _relief_ of
these railroad companies independently of any other measure, to insure
the safe passage of the legislation and its approval by the president,
congress, by an amendment, tacked it to the army appropriation bill
(which passed March 3d, 1871), secured the relief asked for.
Section nine of the army appropriation bill reads as follows: "That, in
accordance with the fifth section of the act approved July 2, 1864,
entitled 'An act to amend an act to aid in the construction of a
railroad and telegraph line from the Missouri river to the Pacific
ocean, and to secure the same for postal, military, and other purposes,
approved July 1, 1862,' the secretary of the treasury is hereby directed
to pay over in money to the Pacific railroad companies mentioned in said
act, and performing services for the United States, one-half of the
compensation, at the rate provided by law for such services heretofore
or hereafter to be rendered: _Provided_, that this section shall not be
construed to affect the legal rights of the government or the
obligations of the companies, except as herein specifically provided."
This act was approved by the president, and the question at issue
between the secretary of the treasury and the companies was settled by
congress in favor of the latter--absolutely relieving them from the
payment of any part of the $65,000,000 of subsidy bonds, except such
sums as may be paid by allowing the government to retain one-half of the
earnings of the roads for carrying mails, etc., which sums, as shown by
the companies themselves, amount to less than one-fourth of the annual
interest accruing on the bonds. The people must pay all the balance,
principal and interest. These companies have received, in lands and
bonds, from the general government, about $109,000,000, to aid in the
construction of their roads, and all that government receives in return
is one-half of the fare levied on government transportation over these
roads, "at the price fixed by law." The only provision as to price is,
that after having donated to the companies sufficient to pay the entire
cost of the construction of the roads, government shall pay such
reasonable prices as may be agreed upon, not exceeding the rate the
companies charge to other parties. When we say "the entire cost," we do
not mean the full cost claimed by the companies, for it is not policy
for them to make a correct showing in this matter; we mean the real
actual cost. We cannot find a statement of the cost of the Union
Pacific, and do not know what the company claim to be its cost per mile,
or the aggregate cost. The Central Pacific puts the cost of its roads at
$120,000,000, or about $136,000 per mile. It shows a paid-up capital
stock of $54,000,000, and a funded debt of about $82,000,000, making its
indebtedness about $16,000,000 more than the entire cost of its road,
including rolling stock and equipments. Making a liberal margin for the
value of these last named items, and allowing the Central Pacific to
cost nearly double the ordinary cost of other roads, and the reader must
conclude that there has been, in this case, a watering of stock and an
excessive issue of bonds for the benefit of the company and at the
expense of the people. The statement of the capital stock and funded
debt of the Union Pacific shows about the same condition for its road as
to indebtedness; but the estimated cost of the road is not given.
For proof that we are not mistaken in our estimated cost of these roads,
and that the companies have received from the government a sum more than
sufficient to defray the entire expense of their construction, we turn
to reports of the cost of railroads generally, in the country, made by
men who are in sympathy with our present railroad system. These men say
that the cost of railroads in this country, from their first
introduction, is about $50,000 per mile, and that those constructed
recently will average about $30,000 per mile. We are apt to think that
the cost of the Pacific roads would exceed that of most other roads.
Such is not the fact. On the contrary, taking the entire road into
consideration, the line was more favorable than any other in the
country. It is thus described in the Railroad Manual, before referred
to:--
"The route for the eastern portion of the line is up the valley of the
Platte, which has a course nearly due east from the base of the
mountains. Till these are reached, this valley presents, probably, the
finest line ever adopted for such a work for an equal distance. It is
not only straight, but its slope is very nearly uniform towards the
Missouri, at the rate of about ten feet to the mile. The soil on the
greater part of the line forms an admirable road bed. The road, after
leaving the mountains, has very few affluents, the only constructed
bridges for the distance being one over the Loup Fork and the North
Platte. The base of the mountains is assumed to be at Cheyenne, five
hundred and seventeen miles from the Missouri river. This part is
elevated six thousand and sixty-two feet above the sea, and five
thousand and ninety-five feet above Omaha. From Cheyenne to the summit
of the mountains, which is elevated eight thousand two hundred and
forty-two feet above the sea, the distance is thirty-two miles. The
grades for reaching the summit do not exceed eighty feet to the mile.
The elevation of the vast plain from which the Rocky mountains arise, is
so great, that the mountains, when they are reached, present no
obstacles so formidable as those offered by the Allegheny ranges to
several lines of railroads which cross them. * * * The line of the
railroad up the eastern slope of the Rocky mountains is not so difficult
as those upon which several great works have been constructed in the
eastern states. After crossing the eastern crest of the mountains, the
line traverses an elevated table land for about four hundred miles, to
the western crest of the mountains, which forms the eastern rim of the
Salt Lake basin, and which has an elevation of seven thousand five
hundred and fifty feet above the sea. Upon this elevated table land is a
succession of extensive plains, which present great facility for the
construction of the road. The whole line is a very favorable one, when
its immense length is considered. More than one-half of it is
practically level, while the mountain ranges are surmounted by grades
not in any case exceeding those now worked upon some of our most
successful roads."
The description of the line of the Central Pacific, or western six
hundred and sixty-seven miles, from Ogden to Sacramento, will not vary
much from that given of the Union Pacific. It is not quite so
favorable. Taking the character of the route as given, with the
facilities for building the road, and it is not probable that the actual
cost of construction averaged more than $30,000 per mile, or $57,000,000
for the whole line. Taking the highest rate, as given, viz: $50,000, and
apply it to the whole road, the entire cost would be $94,000,000.
To aid in the construction of this road, the government issued subsidy
bonds at the rate of $48,000 per mile for three hundred miles, $32,000
per mile for nine hundred and four miles, and $16,000 per mile for the
balance of the main road and branches. The funded debt of the companies
owning and operating the road (not including the debts of the branches),
after deducting the amount of bonds they received from the government,
to-wit: $65,000,000, is, as shown by their own report, $93,000,000. How
much their floating debt amounts to we cannot tell. The stock on their
road cannot cover one-tenth of the amount of their debts. The companies
report a paid up capital stock of $91,028,190. The statement of account
would be about as follows:--
CREDIT ACCOUNT.
Paid up capital $91,028,190
Bonds from government 65,000,000
Funded debt 93,000,000
------------
Total invested $249,028,190
CONTRA.
Actual cost of construction $94,000,000
------------
Balance $155,028,190
Deduct, for 37,500,000 acres of land at $1.25 per acre 46,875,000
------------
Balance against road $108,153,190
Thus, after placing the land received from the government to the credit
of the road, still a small balance of more than $108,000,000 has
disappeared, and the companies are not able to pay the interest on the
government bonds. The reports of these companies show, for the year
1871, that the net earnings of their roads (over and above all expenses,
including taxes, repairs, damages to property and persons, cost of snow
sheds, and all other items of expense) amounted to about $9,000,000, and
yet, because these companies asked it, congress released them from the
payment of the interest on the subsidy bonds.
The conclusion to be drawn from the facts of the case, as they develop
themselves, is, that these Pacific railroad companies have used the
federal offices, and the public moneys, and lands, for enriching
themselves; that a company of men, in congress, and out of it, have
combined and confederated together for the purpose of robbing the
people, and controlling the government. We have selected the Union and
Central Pacific companies for illustrations, and attempted to state the
facts in their case, not because of any exception that they present to
the general rule, but to show the manner in which the people are duped
and defrauded by congressmen voting government aid to railroad
companies, under the pretext of developing the country, and the equally
false necessity of providing speedy and secure transportation for the
mails, troops, supplies, and munitions of war.
One peculiar feature about the whole matter is, that congressmen have
deemed it necessary for the accomplishment of their object, to become
personally interested in their own legislation by subscribing stock, and
becoming directors in the companies to which they voted these aids. We
can name congressmen who, if they were not stockholders in these Pacific
roads, at the time the bonds and lands were voted, certainly were
stockholders and directors when these companies were relieved from the
payment of the interest on the bonds issued to them by the government,
to-wit: Oakes Ames and James Brooks. How many more held stock we cannot
tell; but the fact that members were stockholders and directors must
have been known to the different departments, for, under the charter of
these companies, the directors, and especially the government directors,
are required to report in detail the condition of the companies, and the
names of the directors once each year to the secretary of the interior,
at Washington. If the reader would know the extent of congressional
legislation in favor of the rings, and combinations of men, plundering
the people, he need only look over the different acts of congress passed
directly for their benefit during the last twelve years. He will arise
from their perusal feeling that the chief duty of the government is to
foster, protect, and enrich these rings at the expense of the people.
These Pacific companies are required, by their charters, to construct
telegraph lines along the route of their roads, and to transmit messages
for the government at such rates as they charge other parties. The
appropriations by congress show that $40,000 have been voted annually to
pay for telegraphic dispatches, between the Atlantic and Pacific, but
there is nothing to show that any such sum was due from the government
for telegraphing. Among the appropriations is an item for the mileage of
the government engineer for travel, from Cincinnati to Omaha, and from
Omaha to Washington, and thence to New York; but the charters of the
companies required _them_ to pay the expenses incurred on account of the
services of persons appointed by the president to inspect these roads.
Indeed, the action of congress is such as to induce the belief, that
these roads, if not owned by the general government, are owned by
congress, or congressmen, and that it is perfectly legitimate and proper
for government to pay the cost of their construction, and of the
telegraph lines, and also their running expenses. The energy and zeal
manifested by congress, in aid of these corporations, and the great
number and variety of acts passed for their benefit, demonstrate the
fact that while the representatives of the people assemble at Washington
ostensibly to legislate for the public generally, they devote their time
to legislation for their own benefit, and that of the numerous
corporations and companies of which they are members.
CHAPTER V.
CONGRESS BECOME A STOCK EXCHANGE.
In scanning the names of the directors of the railroad corporations
which have received large grants of lands, subsidies, and special and
exclusive privileges, we find many ex-members of congress in whose terms
of service these grants were voted. We also find members of congress who
were directors at the time their relief and aid bills were passed. We
find one member who is now a director in three of the companies
receiving the largest sums from government, and which are considered the
best of all, because of the opportunity they present to _enterprising_
men of legislative and financial ability; and in order that proper
provision should be made for his kindred, one of the brothers of this
same congressman is a director in five of these land grant subsidy
corporations. These jobs are "nice and fat," made so by the unjust
legislation of congress, and being "nice and fat," the division and
distribution of the spoils is made among these congressmen and their
friends. The practice of voting the money and lands of the public to
these corporations has become so common that it is considered legitimate
to bribe or buy the votes and influence of certain congressmen in favor
of certain grants. Large bribes have been offered, and perhaps accepted
for these purposes. So common is the practice of lobbying these jobs
through congress that it excites but little attention save in
extraordinary cases, and elicits but little comment. The power and
corrupting influence of these corporations have grown to such
proportions that they and their friends in congress can disregard and
defy public opinion, and compel all the departments of the government to
yield to their demands. They plunder the people with impunity. They have
transformed the government; while we are in name a republic, and
theoretically the people govern, we are in fact an oligarchy, and
corporations rule the country. If the reader has followed us thus far he
will have seen that while the idea of public necessity has been put
prominently forth as the excuse for the great donations made to railroad
companies, and the apology for the special privileges granted to them,
in fact, the real object has been to create by special charter a
privileged class with facilities to amass fortunes, and by the power
granted to this class of perpetual succession and exclusive right under
the law, to compel the whole people to pay tribute to it. This power is
so great at this time, that it controls the whole commerce of the
country, and as we will hereafter demonstrate, it controls not only the
financial, but also the judicial department, and reigns supreme in the
general politics of the country. Looking at these charters the thought
is presented to the mind, and the idea is incorporated in the charter,
that the people of the whole country are petitioning congress to grant
aid to these companies for the purpose of developing the country; that
by a spontaneous movement on the part of the whole people congress is
called upon to incorporate these different companies, and to grant lands
and money to aid in the different enterprises as they are presented. To
give color to this idea, the names of men from most of the states and
territories are included among the incorporators, some fifteen or twenty
of whom are named as provisional directors who are to hold their places
until the first regular meeting of the company, and the election of
officers. Congress fixes the time and place of meeting and the notice to
be given to the stockholders, and to carry out the idea that it is to be
a company in which all can participate, the charter provides that any
person can subscribe stock and become a stockholder who desires to do
so. In fact though, no petitions have been presented to congress, nor do
any considerable number of the persons named as corporators know of the
organization, or that their names have been used; nor is it intended
that they should know; the fifteen or twenty interested parties who have
formed their plan for a raid upon the treasury, are the only ones,
besides their particular friends in congress, who are supposed to know
anything about it. These fifteen or twenty men who have gotten up the
scheme, meet and elect themselves directors, and are then ready for
action. Having obtained their charters, and organized under them, the
work of robbing the people begins. With their friends, and some of their
directors in Congress, they have been able thus far to obtain all they
have demanded. There is no authority for the assumption that the
chartering of these companies is in obedience to the wish of the people,
either expressed or implied. On the contrary, this action of congress
has uniformly been in opposition to public opinion, and indeed it has
excited popular remonstrance. None but the few who wish to get their
hands into the public treasury have asked the interference of congress,
or desired the government to aid in these enterprises. So great is their
anxiety to aid in the development of the country that substantially the
same companies undertake to construct all the roads for which congress
will grant sufficient aid. All these railroad schemes which have
received the special attention of congress were planned by a set of
unscrupulous men, who combined to plunder the treasury.
The system of aiding in the construction of railroads by grants of land
was inaugurated in 1850, by grants to the Illinois Central, and did not
develop itself fully until 1862, when the plan of obtaining charters
from congress, connected with grants of land and subsidies, was
systematically adopted. Since the latter date, the practice has
increased with fearful rapidity, and within the last four or five years
it has assumed such immense proportions as to threaten the entire
subversion of the government.
The greatest raid made upon congress for these grants and special
charter privileges during any one term was at the session closing March
4th, 1868. When it is remembered that the public business did not
require these roads, and that the people had not asked congress to aid
in their construction, it seems incredible that in the fortieth congress
representatives and senators should have introduced more than _one
hundred and fifty bills and resolutions_ to aid railroad companies. Yet
such is the fact. A gentleman who spent much time in Washington, and
examined into this matter writes as follows:
"The latest developments show that in the grandeur and number of their
schemes of spoil and plunder, the congressional rings of railroad
jobbers throw into the shade all other rings of the lengthy catalogue of
confederate treasury robbers. * * * One hundred and fifty-nine railroad
bills and resolutions have been introduced in the fortieth congress, and
twice as many more are in preparation in the lobby; one hundred millions
of acres of the public lands, and two hundred millions of United States
bonds would not supply the demands of these cormorants. In other words,
this stupendous budget of railway jobs would require sops and subsidies
in lands and bonds, which, reduced to a money valuation, would swell up
to the magnificent figure of half of the national debt!" He continues:
"Among the jobs of this schedule is the Atchison & Pike's Peak railroad
company, or Union Pacific Central branch, which, after having received
government sops to the extent of six millions, puts in for seven
millions more. Next comes the Denver Pacific and Telegraph company,
which, having feathered its nest to the tune of _thirty-two millions_,
puts in for a little more, and this company is reported to be a mere
gang of speculators without any known legal organization whatever--a set
of mythical John Does and Richard Roes, who cannot be found when called
for. Next, we have the Leavenworth, Pawnee, & Western railroad, now
known as the Union Pacific, eastern division, chartered by the Kansas
territorial legislature in 1855, subsidized with Delaware Indian Reserve
lands in 1861, and then in 1862, by a rider on the Pacific railroad law,
granted sixteen thousand dollars per mile in United States bonds and
every alternate section of land within a certain limit on each side of
the line of the road, and the privilege of a first mortgage (by
subsequent amendment) to secure bonds issued by the company to the
amount of sixteen thousand dollars per mile. It further appears that a
clique of seceders from the old company illegally formed a new company,
and having by force of arms taken possession of the road, are pocketing
the spoils which legally belong to the old company. All this, too, with
the consent of the president, the secretary of the treasury, and
congress. From another source we learn that some half dozen Pacific
branch or main stem railroads, northern and southern, are on the anvil,
involving lands and bonds by tens and twenties and hundreds of millions;
that Senator Pomeroy of Kansas, has seven of these jobs on the docket;
Senator Ramsey of Minnesota, four; Senator Conners of California, five;
and Senator Harlan of Iowa, four. Senator Pomeroy, however, distances
all competitors in the number and extent of his jobs, for as it appears,
they include a line from Kansas to Mexico, three bills for roads from
Fort Scott to Santa Fe, in Texas, a South Carolina road through the Sea
Island cotton section, two or three lines from the Mississippi river
through to Texas, and a little private Atchison Pacific--one of the
nicest and fattest speculations ever worked through. Is not this a
magnificent budget, and is not the audacity of these railroad jobs and
jobbers positively sublime?"
We do not vouch for the entire accuracy of the statements above quoted,
but we know that much contained in them is absolutely true. If the
congressional committee now investigating the alleged Credit Mobilier
frauds, perform their duty honestly and faithfully, we will probably
learn that the John Does and Richard Roes referred to, were Ames, Alley,
and other distinguished persons in congress and out of it. An _expose_
by this committee of the sum total voted to this eastern division of the
Union Pacific, and the actual cost of the road and telegraph lines,
would show a large margin for division, a goodly portion of which found
its way into the pockets of members of congress. Can it be claimed that
the needs of government required these large subsidies of lands and
money? Had the people requested congress to make these grants? Has the
development of this country returned to the people a tithe of the wealth
thus recklessly given away by congress? The people are now groaning
under the burdens imposed upon them by reckless or dishonest legislation
at Washington. We might well stop and inquire, from what source the
power for this kind of legislation is derived. Mr. Washburn of Illinois,
now United States minister at Paris, in a speech in congress, in the
winter of 1868, seems to have comprehended the situation, and in
opposition to the system of plundering the public treasury spoke as
follows:
"With the unreconstructed states admitted into the Union, with full and
equal protection for all men, in all of the states, and with manhood
suffrage secured by legislation or constitutional amendments, the minds
of the people will turn to questions of finance, of taxes, of economy,
of decreased expenditures, and honest and enlightened legislation--to
questions of tariff, and to questions of railroads, telegraphs, and
express monopolies which are sucking the very life-blood of the
people--to the administration of the revenue laws and to the robberies
and plunderings of the treasury by dishonest office holders. Already the
eyes of the people of this country are upon congress. I may say they are
upon the republican majority in congress, for that majority is now
responsible before the country for the legislation of congress. It can
make and unmake laws in defiance of executive vetoes. The republican
party triumphed because it was pledged to honesty and economy, to the
upholding of public faith and credit, and to the faithful execution of
the laws. * * * The condition of the country, the vast public debt, the
weight of taxation, the depreciated and fluctuating currency, the
enormous expenditure of public money, mal-administration of the
government, the extortion of monopolies press upon our attention with
most crushing force. The people elected General Grant to the presidency,
not only on account of the great and inestimable services he had
rendered the country, in subduing the rebellion, not only on account of
his devotion to the great principles of the republican party, but
because they believed him to be emphatically an honest man, and an
enlightened statesman who would faithfully administer the laws without
fear, favor, or affection. The time has come when we are imperatively
called upon to take a new departure. Added to the other terrible evils
brought upon the country by the war for the suppression of the great
rebellion, in the demoralization incident to all great wars, and to the
expenditure of vast and unheard of amounts of public money; to the
giving out of immense contracts, by which sudden and vast fortunes were
made; the inflation of the currency, which engendered speculation,
profligacy, extravagance, and corruption, by the intense desire to get
suddenly rich out of the government and without labor, and the
inventions and schemes generally to get money out of the treasury for
the benefit of individuals without regard to the interest of the
government. While the restless and unpausing energies of a patriotic and
incorruptible people were devoted to the salvation of their government,
and were pouring out their blood and treasure in its defence, there was
a vast army of the base, the venal, and unpatriotic who rushed to take
advantage of the misfortune of their country, and to plunder its
treasury. The statute books are loaded with legislation which will
impose burdens on future generations. Public land enough to make empires
has been voted to private railroad corporations; subsidies of untold
millions of bonds, for the same purposes, have become a charge upon the
people, while the fetters of vast monopolies have been fastened closer
and still closer upon the public. It is time that the representatives of
the people were admonished that they are the servants of the people, and
are paid by the people; that their constituents have confided to them
the great trust of guarding their rights and protecting their interests;
that their position and their power is to be used for the benefit of the
people whom they represent, and not for their own benefit, and the
benefit of the lobbyists, the gamblers, and the speculators who have
come to Washington to make a raid upon the treasury."
The above shows the light in which Mr. Washburn, four years ago, viewed
the matters of which we are now treating. Since the delivery of that
speech act after act has been passed by congress in favor of these
corporations, giving them greater privileges, releasing them from their
obligations to government, discharging their liability to government for
many millions of money, and to accomplish this, imposing upon the people
additional burdens and taxes for which no equivalent has been or even
will be given. The determination to plunder the government and people,
seems to control not only the adventurers who go to Washington to lobby
their schemes through congress, but also congressmen themselves, who
become chiefs among this class of money and land grabbers. They vote to
the corporations, of which they are a part, large sums in money and
lands, and then use the means thus obtained for the purpose of bribing
and corrupting their fellow members in favor of other and larger
robberies.
CHAPTER VI.
HOW THE LAND GRANT RAILROADS "DEVELOPE" A COUNTRY.
The ostensible object in granting lands to railroad companies was to aid
new and undeveloped portions of the country in procuring necessary
railroad facilities for communication with the rest of the world; and to
assist, by donations of alternate sections, in their development and
settlement.
Whether these ends have been achieved is a matter of doubt. It is
scarcely to be hoped that the people will ever be reimbursed for the
vast extent of lands, and large amount of bonds, which have been so
recklessly lavished upon so many railroad companies. When the
proposition to grant lands to railroad companies was brought before
congress, the right to donate them to private corporations was not
admitted; the right of the states to have control of the lands was not
questioned. Recognizing this latter right, the lands were granted to the
states for the purpose of aiding in the construction of certain roads
within their borders. It was not until 1862 that congress came to the
front, created private railroad corporations, and endowed them with
lands and money. Nor did these corporations commence their wholesale
raid upon the public treasury until after congress went into the
business of creating railroad companies. Is it true that the country has
been benefited in proportion to the grants made? Are the people richer
because of these grants? Has the country, as a general rule, been more
rapidly settled and improved by this railroad legislation? We are aware
that the idea is commonly entertained that the people receive an
equivalent for these railroad grants in the increased facilities for
travel and transportation of freights. Were it true that the roads
receiving grants of land were more speedily constructed, or that
transportation over them was less expensive, then we would admit that
the benefits derived would in some degree be an equivalent for the aid
afforded them. To ascertain the facts let us see how this legislation
has affected the west, taking Iowa and Kansas as illustrations.
In the first place, for every acre of land given to railroads in these
states the people have paid $1.25; inasmuch as they are charged $2.50
for the reserved alternate sections. Taking the land granted in Iowa,
the amount charged to the people of this state is $9,009,841, or, taking
the grants already certified to, the people are charged with $4,387,303.
This sum, amounting to about $4.00 per head, has been taken from the
people of Iowa and given to railroad companies, and must be charged
against the benefits received. The construction of about eleven hundred
miles of railroad in Iowa was aided by land grants. The cost, at $30,000
per mile, would be less than $33,000,000. The amount the people are
obliged to pay into the public treasury for the _reserved sections_, in
making up the account should be charged to the land grant roads, as also
the increased price they are compelled to pay the companies for the
donated lands, which range from $5.00 to $50.00 per acre; and this, too,
of lands that under the general laws they could have entered at $1.25
per acre.
The amount taken from the people who settle in and improve the state and
develop its resources, which they must pay to the government and these
railroad companies before getting title to their lands, is about
$25,000,000 more than would have been demanded of them but for these
land grants. What have they received in return? The companies in Iowa
receiving grants of land have not extended their lines across the state
more rapidly than companies receiving no grants. In fact, roads built
entirely with private means have been constructed more rapidly than
these land grant roads. The companies receiving the grants did not keep
pace with the settlement of the country; the people, as pioneers, were
always in advance of the roads. It was only when the population of the
country was sufficient to afford a paying business that the roads were
extended. The excuse paraded by congress for making these grants was
that the companies would advance their roads so as to draw after them
an agricultural population. This has not been done. On the contrary, the
lands outside of the boundaries of the railroad grants were the first
settled, and the most rapidly developed. Has the result been different
in Kansas? The number of miles of railroad in this state in 1870 was
about seventeen hundred, of which nearly one thousand received grants of
land, and the Kansas Pacific company $6,303,000 in subsidy bonds.
Companies constructing these roads received land grants to the amount of
5,420,000 acres. At $1.25 per acre the grants amount to $6,775,000. This
sum is charged upon the reserved sections as in Iowa, and must be paid
by the people of Kansas. Add to this the $6,303,000 subsidy bonds, and
the Kansas railroads have cost the people of that state and the public
treasury $13,000,000, outside of the immense local aid voted to them by
the different cities, towns and counties. The population of this state
in 1860 was 107,206. In 1870 it was 362,872. Saying nothing about the
increased prices to be paid to the railroad companies for the lands
granted to them, or the large amount of subsidy bonds, and leaving out
the immense amounts of local aid afforded to the different railroads,
and the sum to be charged to the railroads for the extra price of the
reserved sections is about $20.00 per head for the entire population.
Looking at the facts as they are developed we conclude that the people
have not been benefited by these grants of lands, that railroad
companies are the only parties benefited, that the people are not richer
because of these grants, but, on the contrary, they would have made
money by giving to the railroad companies the actual cost of the roads.
Has the country been more rapidly settled and improved by reason of this
special legislation? The leading idea advanced in favor of grants to
railroad companies has been their necessity in developing the new states
and territories. We are pointed to the new states of Iowa, Minnesota,
Nebraska, Kansas, and Nevada, and the territories of Colorado, Utah, and
Wyoming, and referred to the fact that these states have a population of
2,874,000, and 9,000 miles of railroad; and from this exhibit an
argument is deduced in favor of these grants. The theory is that the
population has followed the roads. Is this theory correct? In 1850 Iowa
had a population of 676,913, and in 1870 a population of 1,191,729. In
1860 there were 655 miles of railroad, about three-fourths of which had
received grants of land. In 1870 the number of miles of railroad had
increased to 2,668. Of this increase not more than one-third was aided
by land grants, private enterprise having constructed at least
two-thirds of it; and the same kind of enterprise is still at work, and
since 1870 has increased the number of miles to 3,250. The land grants
were nearly all made to Iowa in 1856, yet the energetic and rapid
building of roads was not shown until after the close of the war, nor
until the people had advanced beyond the roads, and their necessities
demanded them. Kansas in 1860 had a population of 107,209; In 1870 it
had increased to 364,400. Prior to 1864 it had no railroads. In 1870 it
had 1,501 miles, all of which, save forty miles, was built in four
years. Nearly all of the Kansas roads were aided by grants, and some of
them by subsidy bonds. In 1870 there was one mile of railroad in Kansas
for every 242 inhabitants. To construct these roads in Kansas, counties,
cities, and towns have taxed themselves by vote to the amount of
$4,400,000, or about $9.00 to each inhabitant. This debt must be charged
to the railroad account, and a similarly voted indebtedness in Iowa to
the amount of about $6,000,000. The valuation of property in Iowa in
1860 was $205,166,000, and in 1870 $302,515,000. Thus while the
population of the state had nearly doubled, and the lines of railroad
had more than quadrupled, the valuation had increased less than fifty
per cent, and at least one-half of this increase was in the value of
railroads. Deducting from the increased valuation of property in Kansas
the value of railroads there, and about the same state of facts appears.
The figures in these two states will show, that so far from the
donations of land and money adding to their wealth the reverse is true.
And this position is supported by the exhibit of other states. In
Pennsylvania the population has increased since 1860, 600,000. The
mileage of railroads has nearly doubled in this time, and the valuation
of property has increased from $719,253,000 to $1,318,236,000. In that
state, where no government aid has been voted to railroads, the wealth
of the state has nearly doubled, while in the same time in the state of
Iowa it has not increased fifty per cent, land grants included.
The population of Nebraska has increased from 7,000 to 42,000 in the
last decade. This state has 593 miles of railroad, or one mile of
railroad to each seventy of its population, nearly all aided by grants.
California had a population in 1860 of 380,000. In 1870 it had increased
to 560,000.
Colorado in the last decade increased from 34,000 to 40,000. In this
territory there are 392 miles of railroad, all built by grants of lands
and bonds.
Of course the roads through the territories are the Pacific roads, but
as the states and territories were both cited as illustrations of the
wisdom of congress in making grants to companies for the construction of
railroads, we have examined the matter somewhat in detail to show the
weakness of the argument. If we take the census of 1860 and that of
1870, and observe the increase in population, wealth, and railroad
building, we will discover that the laws of trade, of supply, and demand
have controlled the whole matter, and that the growth of the country has
not been increased because of these grants from government. In all cases
where the construction of railroads has approached the frontier line of
settlement, it has drawn but little population after it, aside from the
employes of the road. The real pioneer immigration, that which opens and
improves the country, is doing now what it has done for the last
generation, moving steadily to the west, followed and surrounded by
railroad sharks and jobbers, who, after getting all they can from
government, prey upon the people; and the people of the new states,
instead of being blessed with the means of adding to their wealth, find
themselves burdened with debt and taxes, fastened upon them by the
construction of railroads, many of which are of doubtful utility. As a
necessary consequence of the railroad taxes upon their lands, and the
excessive charges imposed for the transportation of their produce, their
farms do not appreciate in value, and the anticipated rapid increase in
population and wealth of the locality is not realized. From a view of
the whole situation, regarding the benefits accruing to the people from
these grants to railroad companies, with what the people have paid for
them, the withholding of these railroad lands from market, and the high
prices charged per acre by the companies, together with the unjust
privileges granted to these corporations, we conclude that the people of
the new states and territories have not received an equivalent for the
grants made to railroad companies. We are aware that a different opinion
prevails, and that our conclusions will be controverted; but when it is
remembered that thousands of people have left Iowa, or, coming from the
east, have refused to settle in Iowa, because of the fact that lands
could only be had by purchase from railroad companies at extravagant
prices, and that for this reason vast tracts of Iowa lands are yet
unimproved which would now be settled upon and cultivated had they not
thus been withdrawn from the market, it must be admitted that Iowa would
have had a greater population, and greater wealth, had her railroad
companies received no land grants. And what is true of Iowa is also
true, as a general rule, of other states and territories. Perhaps an
exception exists in the far western territories, whose gold and silver
mines are in themselves an exception to the general rule, and where
agriculture has but few followers.
The advocates of the railroad land grant and subsidy bond system for the
settlement of a country have the following to say in its favor. We quote
from the _Railroad Manual_ before referred to: "One of the most
remarkable things connected with the progress of this country is the
construction of railroads in advance even of the lines of settlement of
our people. Such result is largely due to the grants made by government
of lands for the encouragement of these works. Never was a policy more
wise or more beneficent." No instances can be shown where railroads have
been built in advance of the line of settlement, save when the objective
point could only be reached by passing over an unsettled country, as in
the case of the road from the Atlantic to the Pacific states. In all
other cases, railroad companies have awaited the settlement and
development of the country, and followed, not led, our pioneer corps. Of
the wisdom and beneficence of these grants the people can judge from
their acquaintance with the workings of the system, and the wholesale
robberies and frauds practiced by the companies, to some of which we
have already referred. Again the author says: "The government has been
greatly the gainer in a pecuniary point of view, as it was enabled to
sell the land reserved at twice the established rate." It is not clearly
seen how this _gain_ is made. The people, who are the government, give
away one-half of their lands, and then pay into their treasury just
money enough for the remaining half to make up the value of the lands
they have given away. The only gain the government has made (and this is
not a pecuniary one) is the reflection that the men who have received
these large grants have become rich, while the people have been deprived
of their lands at the original price; they must pay for one-half of them
a double price, and for the residue just what they can buy it for from
the corporations to whom their servants have donated it. This author
says: "That the public has reaped the advantage of the construction of
some ten thousand miles of railroads, that otherwise would not have been
built." Is this true? In Iowa the land-grant roads were not built as
fast as other roads having no grants, and the companies finally
completed them because they were about to lose their lands by longer
delay. And in other states and territories some of these land grant
roads are dragging their slow length along, and are being constructed
only as fast as the lines are settled with a sufficient number of
inhabitants to make the business of the roads profitable. After showing
that in certain states and territories there is now one mile of railroad
for each three hundred inhabitants, the author adds: "This is certainly
a most wonderful exhibit, and is one no other nation can display, and
which in our case has only been secured by the wise, benevolent policy
of our government, which in this way did more to give remunerative
employment to the poorer classes than any other legislation could
adopt." It is certainly a "_most wonderful exhibit_." It is one that
"_no other nation can display_;" but its wisdom and benevolence are
matters of grave doubt. If we add to this "wonderful exhibit" the
$65,000,000 stolen from the people by corrupt men and interested
legislation, with the $3,126,000 annual interest that the whole people
are taxed to pay, because the Pacific railroad companies and the
congressional Credit Mobilier have wrongfully appropriated this vast sum
to their own use, it presents truly "a _most_ wonderful exhibit,"
without a parallel in any country in the world, but its wisdom and
benevolence are certainly wanting.
CHAPTER VII.
THE CREDIT MOBILIER, AND A VILLAINOUS CONTRACT.
We now approach one of the grandest schemes for defrauding a people ever
conceived in the breast of the speculator. Before considering the Credit
Mobilier, and to show the utter rottenness of the policy of affording
congressional aid to railroads, indulge us in a brief re-survey of the
subsidy bonds issued to the Pacific railroad corporations. We may
concede that at the date of the original charter of these companies,
there were no congressman interested in the grand scheme, and that it
was planned by outside combinations. The charter received various
amendments, with additional aids and privileges after members of
congress had became interested; these amendments were made while
directors of, and contractors for, these Pacific roads were occupying
seats in congress. Whether or not they voted for these amendments does
not appear, but it is certain they did not oppose them. As we have
already shown, the aid voted by congress was ample to build and equip
these roads, taking the statements of the Railroad Manual upon the
character of the country through which they pass, and the average cost
of railroads, as the basis for our conclusion. The companies could have
built the roads without using the capital stock they reported as paid
up. The Union Pacific has made no public exhibit of the cost of its
portion of the roads, and from this fact we are at liberty to infer that
an honest exhibit would present a bad look. Facts enough have been
disclosed to prove that the stockholders and directors of the Union
Pacific company had formed a combination for the purpose of defrauding
the government and the people. The letting of the contract for the
construction of its division of the roads presents one of the most
perfect combinations for private speculation at the expense of the
public that was ever planned or executed. When this division was
completed, according to the statements of the company it was indebted in
the sum of $112,911,512. The cost of the whole line of road, at the
highest price per mile given, to-wit, $50,000, would amount to less than
one-half of the reported indebtedness of the company, including the
paid-up capital reported as $37,000,000. To show what was done with the
subsidy bonds issued to this company, we must look at the contract made
by the directors with Oakes Ames for the construction of six hundred and
sixty-seven miles of the road, and the subsequent transfer of this
contract to the Credit Mobilier of America. Let us remember that, in
addition to the bonds issued by government to the amount of $16,000 per
mile for a part of the road, $32,000 per mile for a part, and $48,000
per mile for a part, congress, by a subsequent amendment to the charter,
allowed the company to issue its own bonds, for a like amount per mile,
as first mortgage bonds, and that at the time of making the contract now
under consideration, the directors of the company, and of the Credit
Mobilier were the same persons, some of whom were at that time and since
members of congress. With these facts before us, we can see the reason
for the excess of the debts over the cost of the road, as well as for
many of the peculiar features of this singular contract. The executive
committee of the company was composed of the following named persons:
Oliver Ames (brother of Oakes Ames, contractor and member of congress),
C. S. Bushnell, Springer Harbaugh, and Thomas C. Durant. The seven
directors of the company who were made trustees, and who signed the
transfer of the contract to the Credit Mobilier, were Thomas C. Durant,
Oliver Ames, John B. Alley (a member of congress), Sidney Dillon, C. S.
Bushnell, H. S. McComb, and Benjamin E. Bates; and the president of the
Credit Mobilier was Sidney Dillon.
The grant of lands and bonds was made to the railroad company, as well
as the right to issue their first mortgage bonds. All of the contracting
parties were directors in the railroad company, and in the Credit
Mobilier. As a body they controlled the whole matter. If a desire to
protect the best interests of the company, and to deal honestly with the
public had actuated these men, and not a determination to plunder the
public, no reason can be shown for this strange contract; but if it was
the intent of a combination of men to defraud the public and the
government, then the contract and its assignments can easily be
accounted for. All of the stockholders of the company, at the time the
contract was made with Oakes Ames, by indorsement on the back of their
certificates of stock, appointed the above named seven trustees,
irrevocably to represent their stock at all business meetings and
elections of directors, during the existence of the Ames contract. The
following is a correct copy of the contract and assignments:
THE "OAKES AMES CONTRACT."--ITS ASSIGNMENTS TO THE CREDIT MOBILIER.
Agreement made this 16th day of August, 1867, between the Union Pacific
railroad company, party of the first part, and Oakes Ames, party of the
second part, witnesseth:
That the party of the first part agrees to let and contract, and the
party of the second part agrees to contract, as follows, to-wit:
_First._ The party of the second part agrees and binds himself, his
heirs, executors, administrators, and assigns to build and equip the
following named portions of the railroad and telegraph line of the party
of the first part, commencing at the one-hundredth meridian of
longitude, upon the following terms and conditions, to-wit:
1. One hundred miles at and for the rate of $42,000 per mile.
2. One hundred and sixty-seven miles at and for the rate of $45,000 per
mile.
3. One hundred miles at and for the rate of $96,000 per mile.
4. One hundred miles at and for the rate of $80,000 per mile.
5. One hundred miles at and for the rate of $90,000 per mile.
6. One hundred miles at and for the rate of $96,000 per mile.
_Second._ At least three hundred and fifty miles shall be, if possible,
completed and ready for acceptance before the first day of January,
1868, provided the Union Pacific railroad company transport the
material. The whole to be constructed in a good and workmanlike manner,
upon the same general plan and specifications as adopted east of the
one-hundredth meridian of longitude. The party of the second part shall
erect all such necessary depots, machine shops, machinery, tanks, turn
tables, and provide all necessary machinery and rolling stock at a cost
of not less than $7,500 per mile, in cash, and shall construct all such
necessary side tracks as may be required by the party of the first
party, not exceeding six per cent of the length of the road constructed,
and to be constructed under this contract. The kind of timber used for
ties and in the bridges and in its preparation, shall be such as from
time to time may be ordered or prescribed by the general agent, or the
company, under the rules and regulations and standard as recommended by
the secretary of the interior, of the date of February--, 1866.
_Third._ Whenever one of the above named sections of the road shall be
finished, to the satisfaction and the acceptance of the government
commissioners, the same shall be delivered into the possession of the
party of the first part, and upon such portions of the road, as well as
on that part east of the one-hundredth meridian now completed, the party
of the first part shall transport, without delay, all men and material
to be used in construction at a price to be agreed upon by the party of
the second part, his heirs, executors, administrators or assigns, and
the general agent, but not less than cost to the party of the first
part.
_Fourth._ The party of the second part, his heirs, executors,
administrators or assigns, shall have the right to enter upon all lands
belonging to the company, or upon which the company may have any rights,
and take therefrom any material used in the construction of the road,
and may have the right to change the grade and curvature within the
limits of the provisions of the act of congress for the temporary
purpose of hastening the completion of the road; but the estimated cost
of reducing the same to grade and curvatures, as established by the
chief engineer, or as approved from time to time by the company, shall
be deducted and retained by the party of the first part, until such
grade and curvature is so reduced.
_Fifth._ The party of the second part, his heirs, executors,
administrators, or assigns, is to receive from the company and enjoy the
benefits of all existing contracts, and shall assure all such contracts
and all liabilities of the company accrued or arising therefrom for work
done or to be done, and material furnished or to be furnished, for or on
account of the road west of the one-hundredth meridian, crediting,
however, the party of the first part on this contract all moneys
heretofore paid or expended on account thereof.
_Sixth._ The party of the second part, for himself, his heirs,
executors, administrators, and assigns, stipulates and agrees that the
work shall be prosecuted and completed with energy and all possible
speed, so as to complete the same at the earliest practicable day, it
being understood that the speed of construction and time of completion
is the essence of this contract, and at the same time the road to be a
first-class road, with equipments; and if the same, in the opinion of
the chief engineer, is not so prosecuted, both as regards quality and
dispatch, that then the said party of the first part shall and may,
through its general agent or other officer detailed for that purpose,
take charge of said work and carry the same on at proper cost and
expense of the party of the second part.
_Seventh._ The grading, bridging, and superstructure to be completed
under the supervision of the general agent of the company, to the
satisfaction of the chief engineer, and to be of the same character as
to the workmanship and materials as in the construction of the road east
of the one-hundredth meridian.
It is, however, understood that all iron hereafter purchased or
contracted for, shall be of the weight of not less than fifty-six pounds
to the yard, and to be fish bar joints.
_Eighth._ All the expenses of the engineering are to be charged and paid
by the party of the second part, except the pay and salary of the chief
engineer and consulting engineer, and their immediate assistants, and
the expenses of the general survey of the route.
_Ninth._ The depot buildings, machine shops, water tanks, and also
bridges shall be of the most approved pattern, and they, as well as the
kind of masonry and other material used, shall be previously approved by
the general agent and chief engineer of the company, and all tunnels
shall be arched with brick or stone, when necessary for the protection
of the same.
_Tenth._ Payments to be made as the work progresses, upon the estimates
of the chief engineer, in making which the engineer shall deduct from
each section its proportion of the cost of equipment not then furnished,
station buildings, superstructure, and cost of telegraph, but all
materials delivered or in transit for the account of the company may be
estimated for.
_Eleventh._ Payments hereon shall be made to the party of the second
part, his heirs, executors, administrators, or assigns, in cash; but if
the government bonds received by the company cannot be converted into
money at their par value net, and the first mortgage bonds of the
company at ninety cents on the dollar net, then the said party of the
second part, his heirs, executors, administrators, and assigns shall be
charged thereon the difference between the amount realized and the
above-named rates; provided the first mortgage bonds are not sold for
less than eighty cents on the dollar, and if there shall not be realized
from the sale of such bonds an amount sufficient to pay the party of the
second part, his heirs, executors, administrators, or assigns, for work,
as stipulated in this contract, and according to the terms thereof, then
such deficiency shall from time to time be subscribed by said party of
the second part, his heirs, executors, administrators, or assigns, to
the capital stock of said company, and proceeds of such subscriptions
shall be paid to said party of the second part, his heirs, executors,
administrators, or assigns, on this contract.
_Twelfth._ On the first one hundred miles on this contract, there shall
be added to the equipment now provided for and intended to apply on this
section as follows, viz: Six locomotives, fifty box cars, four passenger
cars, two baggage cars, and a proportionate amount of equipment of like
character be supplied to the second section of one hundred miles, after
the same is completed.
_Thirteenth._ The amount provided to be expended for equipment, station
buildings, &c., shall be expended under the direction of the party of
the first part, and in such proportion for cars, locomotives, machine
shops, station buildings, &c., and at such points as they may determine;
the party of the first part to have the full benefit of such
expenditures without profit to the contractor, or they may, in their
option, purchase the equipment and expend any portion of said amount
provided at any point on the road where they may deem the same most
advantageous to the company, whether on the section on which said
reservation occurs or not.
_Fourteenth._ The telegraph line is included herein under the term
"railroad," and is to be constructed in the same manner and with similar
materials as in the line east of the one-hundredth meridian.
The said parties hereto, in consideration of the premises and of their
covenants herein, do mutually agree, severally, to perform and fulfil
their several and respective agreements above written.
This contract having been submitted to the executive committee by
resolution of the board of directors, August 16, 1867, and we having
examined the details of the same, recommend its execution by the proper
officers of the company with the Hon. Oakes Ames, the party named as
the second part.
OLIVER AMES,
C. S. BUSHNELL,
SPRINGER HARBAUGH,
THOMAS C. DURANT.
_Executive Committee Union Pacific
Railroad Company._
_Resolved_, the foregoing contract between the Union Pacific railroad
company and Oakes Ames, referred to the executive committee by a
resolution of the board, August 16, 1867, to settle the details, be
approved, and that the proper officers of the company be instructed to
execute the same, subject, however, to the written approval of the
stockholders of the company, as understood by the board of directors
when the same was voted upon.
_Resolved_, that the option to extend this contract to Salt Lake be
referred to the board, with recommendation that said option be accepted.
ASSIGNMENT OF CONTRACT TO SEVEN TRUSTEES.
Memorandum of agreement, in triplicate, made this 15th day of October,
1867, between Oakes Ames of North Easton, Massachusetts, party of the
first part, Thomas C. Durant, of the city of New York; Oliver Ames, of
North Easton, Massachusetts; John B. Alley, of Lynn, Massachusetts;
Sidney Dillon, of the city of New York; Cornelius S. Bushnell, of New
Haven, Connecticut; Henry S. McComb, of Wilmington, Delaware, and
Benjamin E. Bates, of Boston, Massachusetts, parties of the second part,
and the Credit Mobilier of America, party of the third part.
That whereas, the party of the first part has undertaken a certain large
contract for the construction of certain portion therein named of the
railroad and telegraph line of the Union Pacific railroad company over
the plains and through and over the Rocky mountains, which will require
a very large and hazardous outlay of capital, which capital he is
desirous to be assured of raising, at such times, and in such sums as
will enable him to complete and perform the said contract according to
its terms and conditions.
And whereas, the Credit Mobilier of America, the party of the third
part, a corporation duly established by law, is empowered by charter to
advance and loan money in aid of such enterprises, and can control large
amounts of capital for such purposes, and is willing to loan to said
party of the first part such sums as may be found necessary to complete
said contract, provided sufficient assurance may be made to said party
of the third part therein, that said sums shall be duly expended in the
work of completing said railroad and telegraph line, and that the
payments for the faithful performance of said contract by said railroad
company shall be held and applied to reimburse said party of the third
part for their loans and advances, together with a reasonable interest
for the use of the money so loaned and advanced.
And whereas, said party of the third part fully believes that said
contract, if honestly and faithfully executed, will be both profitable
and advantageous to the parties performing the same, and therefore
willing to guarantee the performance and execution of the same for a
reasonable commission to be paid therefor.
And whereas, both parties of the first and third parts have confidence
and reliance in the integrity, business capacity, and ability of the
several persons named as parties of the second part hereto, and
confidently believe that said persons have large interests as well in
the Union Pacific railroad company as in the Credit Mobiler of America,
they will execute and perform the said contract, and faithfully hold the
proceeds thereof to the just use and benefit of the parties entitled
thereto.
Therefore, it is agreed by and between the said parties of the first,
second, and third parts hereto as follows; that is to say:
That said Oakes Ames, party of the first part hereto, hereby, for and in
consideration of $1.00 lawful money of the United States, to him duly
paid by the party of the second part, and for divers other good and
valuable considerations herein, thereunto moving, doth hereby assign,
set over, and transfer unto the said Thomas C. Durant, Oliver Ames, John
B. Alley, Sidney Dillon, Cornelius S. Bushnell, Henry S. McComb, and
Benjamin E. Bates, parties of the second part, all the right, title, and
interest of, in, and to, the said certain contract heretofore made and
executed by and between the Union Pacific railroad company and the said
Oakes Ames, bearing date the 16th day of August, 1867, for the
construction of portions of the railroad and telegraph line of said
railroad company, to which contract reference is herein made for them,
the said parties of the second part, to have, and to hold the same to
them and their survivors and successors forever in trust.
Nevertheless, upon the following trusts and conditions and limitations,
to-wit:--
1. That they, the said parties of the second part, shall perform all the
terms and conditions of said contract so assigned in all respects which
in and by the terms and conditions thereof is undertaken and assumed and
agreed to be done and performed by the said party of the first part
herein named.
2. That they, the said parties of the second part, shall hold all the
avails and proceeds of the said contract, and therefrom shall reimburse
themselves and the party of the third part hereto, all moneys advanced
and expended by them, or either of them, in executing or performing the
said contract, with interest and commission thereon as hereinafter
provided.
3. Out of the said avails and proceeds to pay unto the parties of the
second part a reasonable sum as compensation for their service, as such
trustees, for executing and performing the terms and conditions of this
agreement, which compensation shall not exceed $3,000 per annum to each
and every one of the parties of the second part.
4. To hold all the rest and residue of the said proceeds and avails for
the use and benefit of such of the several persons holding and owning
shares in the capital stock of the Credit Mobilier of America on the day
of the date hereof, in proportion to the number of shares which said
stockholders now severally hold and own, and for the use and benefit of
such of the assignees and holders of such shares of stock at the times
herein set forth, for the distribution of said residue and remainder of
said avails and proceeds, who shall comply with the provisions,
conditions, and limitations herein contained, which are on their part to
be complied with.
5. To pay over on or before the first Wednesday of June and September
each year, or within thirty days thereafter, his just share and
proportion of the residue and remainder of the said proceeds and avails
as shall be justly estimated by the said trustees to have been made and
earned as net profit on said contract, during the preceding six months,
to each shareholder only in said Credit Mobilier of America, who being a
stockholder in the Union Pacific railroad shall have made and executed
his power of attorney or proxy, irrevocable, to said several parties of
the second part, their survivors and successors, empowering them, the
said parties of the second part, to vote upon at least six-tenths of all
the stock owned by said shareholders of the Credit Mobilier of America,
in the capital stock of the Union Pacific railroad company, on the day
of the date hereof, and six-tenths of any stock in said Union Pacific
railroad company he may have received a dividend, or otherwise, because
or by virtue of having been a stockholder in said Credit Mobilier of
America, or which may appertain to any shares in said Union Pacific
railroad company, which had been so assigned to him at the time or times
of the distribution of the said profits as herein provided; and this
trust is made and declared upon the express condition and limitation
that it shall not enure in any manner or degree to the use or benefit of
any stockholder of the Credit Mobilier of America who shall neglect or
refuse to execute and deliver unto the said parties of the second part
his proxy or power of attorney, in the manner and for the purpose
hereinbefore provided, or who shall in any way, or by any proceeding,
knowingly hinder, delay, or interfere with any execution or performance
of the trust and conditions herein declared and set forth.
And the above transfer and conveyance of said contract is made upon
these further trusts and conditions, to-wit:--
1. The said parties of the second part, their survivors and successors,
trustees as aforesaid, in all their acts and doings in the execution and
performance of said contract, and in the execution of their several
trusts and conditions herein set forth, shall act by the concurrent
assent of four of their number, expressed in writing, or by yea and nay
vote, at a meeting of said trustees, either or both of which shall be
recorded in a book of proceedings of said trustees, kept for the purpose
by their secretary, and not otherwise.
2. Said parties of the second part shall keep an office in the city of
New York for the transaction of the business incidental to said trust.
Meetings of said trustees may be held on call of the secretary on
request of any two of their number; such call may be made personally or
by mail.
3. The said trustees shall appoint a competent person as secretary, who
shall keep a faithful record of all their acts, proceedings, and
contracts, in books to be provided for that purpose, and shall cause to
be kept suitable books of accounts and vouchers of all their business
transactions, which books shall at all times be open to the inspection
of any of said trustees.
4. The said trustees shall cause a monthly statement to be made, showing
the amount due from the Union Pacific railroad company on account of
work done or equipment or material furnished under the contract,
according to the estimates of the engineer of the Union Pacific railroad
company, as provided in said contract, a copy of which statement shall
be furnished to the Credit Mobilier of America.
And the above transfer and conveyance of said contract is made upon the
further trust and condition:--
1. That in case of death, declination, disability, by reason of sickness
or absence from the country for the space of six months, or neglect to
fulfil the duties and obligations of said trust for the same time by
either of said trustees, the remaining or surviving trustees may declare
the place of said trustee to be vacant, and to fill such vacancy by vote
in manner aforesaid.
2. That in case any one of said trustees shall wilfully neglect or evade
the performance of his duties as such trustee, or shall wilfully attempt
to hinder, delay, obstruct, or interfere with the execution or
performance of said contract, or the due execution or performance of
said trust and conditions, according to the true intent thereof, or
shall appropriate to his own use or benefit any money or other valuable
thing belonging or appertaining to said trust, fund, or property, he
shall not be entitled further to act as such trustee, or to receive any
of the benefits of said trusts, either as shareholder in said Credit
Mobilier of America, or otherwise.
The parties of the second part do hereby accept the said trust, and
agree faithfully to execute and perform the same according to the terms,
conditions, and limitations herein set forth.
The party of the third part, in consideration of the premises, hereby
agree to advance, as upon a loan, to the said parties of the second
part, their survivors and successors, all such sums of money, and at
such times as maybe necessary, to enable said trustees, economically and
promptly, to execute and perform the conditions of said contract, upon
the call of said parties of the second part, their survivors and
successors, such sums never to exceed in the whole the amount provided
for in said contract, to be paid by the Union Pacific railroad company,
for the execution and performance thereof, and to receive therefor
interest at the rate of seven per cent per annum, payable
semi-annually, on each sum so advanced, until the same are repaid.
And said party of the third part do further agree, for the consideration
aforesaid, and for an amount equal to two and one-half per cent on the
amount to be by them advanced, to be paid to them as commission, to, and
do hereby guarantee unto, the parties of the first part and second part,
the due performance and execution of the said contract, according to its
terms and conditions, and do indemnify and hold harmless the said
parties of the first and second part of and from all cost, liability,
loss or damage to them, or either of them, arising from or on account of
said contract, and to the faithful performance of the agreement,
contracts, and conditions herein above specified to be done and
performed by each.
And this conveyance and transfer is made upon the further trust and
condition.
That the trustees shall adjust and pay over to the Credit Mobilier of
America such portion of the net profits of the work done and material
furnished on the first one hundred miles west of the one-hundredth
meridian, as was done and performed prior to January 1, 1867.
In witness whereof, the party of the first part, the several parties of
the second part, in their own proper persons, have hereunto set their
hands and seals, and the party of the third part has caused these
presents to be executed by its president, attested by its secretary with
the seal of the said company, on the day and year above written.
OAKES AMES,
THOMAS C. DURANT,
OLIVER AMES,
JOHN B. ALLEY,
SIDNEY DILLON,
CORNELIUS S. BUSHNELL,
H. S. MCCOMB,
BENJAMIN E. BATES.
Signed, sealed, and delivered in presence of CLARK BELL.
The Credit Mobilier of America, by its president,
SIDNEY DILLON.
Attest: BENJAMIN F. HAM,
_Assistant Secretary_.
The first noticeable feature of this instrument is that the directors of
the company contract with one of their own body to build six hundred and
sixty-seven miles of its road.
Second, that they agree to pay to one of their own body nearly double
the actual cost of the work. Aside from these facts, nothing striking
appears in the contract. It is dated August 16, 1867. It was approved by
the directors, and on the 15th of October following, only two months
after its execution, it was assigned to the seven trustees for the
consideration of one dollar and diverse other good and valuable
considerations. These trustees agree to perform Oakes Ames' contract,
but upon consideration that they shall hold all the avails and proceeds
of the contract, reimburse themselves and the Credit Mobilier for all
money expended on said contract, with interest and commission, and
reserve to each of themselves $3,000 per year for services. The trustees
are to hold all of the residue for the several persons possessing and
owning stock in the Credit Mobilier, or to their assigns, but upon
condition that all stockholders in the Pacific railroad company, who own
stock in the Credit Mobilier, shall give an irrevocable proxy for their
railroad stock to the trustees named in the agreement. The Credit
Mobilier is to advance at seven per cent the money necessary for the
prosecution of the work, and for a commission of two and one-half per
cent, agrees to save harmless the parties of the first and second part
from all loss or damages to them, or either of them, arising from, or on
account of, said contract. The contracting parties are all stockholders
and directors in the railroad company, and in the Credit Mobilier
(whatever that may be) they are trustees for themselves. They loan to
themselves the money they receive as a grant from government (voted to
the railroad corporation while a part of their own members were members
of congress); they pay themselves seven per cent interest for loaning to
themselves their own money; also, two and one-half per cent commission
for furnishing this money, donated by government, to themselves, besides
$3,000 per year, each to themselves for their services in this most
extraordinary transaction. In order to have funds with which to
compensate themselves, they issue the first mortgage bonds on the road
of the Union Pacific company to the amount of many millions, and then
ask congress to relieve them from interest on the bonds received from
government; and congress, composed in part of the persons signing the
above quoted contract and assignment, relieves the company from
$3,125,000 per year, for thirty years, and taxes the people with this
vast sum, because the government requires "a _more safe and speedy_
transmission of the mails, troops, &c., across the territories to the
Pacific coast." We have nothing to do with the financial operations of
this company, only as far as the people are affected by them. Bearing in
mind that the eight persons concerned in and signing this contract and
assignment, were all directors of the Union Pacific railroad company;
that four of them were the executive committee; that one of them was the
contractor, and all of them stockholders in the Credit Mobilier,
probably at that time constituting that entire corporation; and that
seven of them were trustees for some persons, company, or corporation,
or what appears still more probable, for themselves, and Oakes Ames, the
contractor, and we can account for the wholesale robbery of the people,
perpetrated by these eight men with the aid of congress, as above shown.
But how the five non-stockholding directors, appointed by the president,
who are presumed to act for the government and its interest, could have
been ignorant of the whole matter, is not so easily understood. The act
of congress of July 2, 1864, section 13, provides:
"That at least one of said government directors shall be placed on each
of the standing committees of said company, and at least one on every
special committee that may be appointed. The government directors SHALL
from time to time report to the secretary of the interior, in answer to
inquiries he may make of them touching the condition, management, and
progress of the work, and shall communicate to the secretary of the
interior, at the same time, such information as should be in the
possession of the department. They shall, as often as may be necessary
for a full knowledge of the condition and management of the line, visit
all portions of the line of road, whether built or surveyed, and while
absent from home, attending to their duties as directors, shall be paid
their actual traveling expenses, and be allowed and paid such
reasonable compensation for their time actually employed as the board of
directors may decide."
If these government directors and the company observed the law, then one
of them was on the executive committee of the Union Pacific company and
must have known of this fraudulent contract and its assignment. If no
one of them was placed on the executive committee, then in the discharge
of their duty they should have reported the facts to the secretary of
the interior. One of two inferences is irresistible. 1st. That they were
ignorant of what it was their duty to know, or 2nd. That they were
unfaithful to the public trust confided in them.
Follow us a little further into this Credit Mobilier organization. It
was first organized in Pennsylvania as the Pennsylvania Fiscal Agency
for the buying and selling of railroad bonds, advancing loans to
railroads and contractors, and to do almost any kind of business except
banking. The charter was granted in 1860, to Duff Green and some fifteen
others, but included none of the Credit Mobilier company. In 1864 (the
corporation having done nothing up to this time) the secretary of the
company, supposing Duff Green (the president) to be dead, sold out the
charter to George Francis Train, Thos. C. Durant, Oakes Ames, Oliver
Ames, and others, and Train baptized it with the new name of, "The
Credit Mobilier of America;" and then George Francis seems to have
disappeared. It does not appear that any considerable amount of the
capital stock was ever paid in (the whole capital stock being
$5,000,000;) perhaps just sufficient to legalize their operations,
to-wit, $25,000. The first business done, of which there is any record,
was a contract made by the directors of the Union Pacific company with
one Hoxie, of Iowa, for building 247 miles of the road, at what price
per mile we cannot learn. It was not intended that Hoxie should build
this road, but, as the directors of the company could not contract with
themselves, it was arranged to contract with Hoxie, and then to set the
Credit Mobilier to "running," and divide the spoils. With the consent of
the executive committee of the company, Hoxie assigned his contract to
the Credit Mobilier. The first mortgage bonds of the company were sold
and sufficient realized to build forty miles of road in 1865, and in
1866 to complete the Hoxie contract. From the subsidy bonds received
from government, or from some other and unknown source, the Credit
Mobilier, in the year 1867, reported a paid-up capital stock of
$3,750,000, and were ready for extensive operations. In pursuance of the
plan formed by the executive committee of the railroad company and the
owners and directors of the Credit Mobilier, the contract with Oakes
Ames herein copied was made, and then assigned. The Credit Mobilier was
so used as to _do good_. It was "placed where it would do the most
good." It does not appear that this corporation had any considerable
financial transactions, or did any particular business save in
connection with the Pacific road; yet it proved to the holders the most
prolific stock of any on record. The Ames contract was assigned to
Sidney Dillon, and others, trustees, on the 15th of October, 1867. It
declared dividends as follows:
Dec. 12, 1867, Union Pacific R. R. bonds, valued at $2,700,000
Jan. 3, 1868, " " " " " 637,500
June 17, 1868, " " " " " 525,000
June 17, 1868, cash 2,250,000
July 8, 1868, " 1,125,000
----------
Total of dividends in seven months $7,237,500
In addition to the above, another dividend was declared July 3d, 1868,
of $2,390,625 in bonds, which were pronounced bogus, or worthless. It is
thus seen that the directors of the Pacific railroad company, who were
also the Credit Mobilier--trustees for themselves, and some of them
members of congress--by the aid of congressional legislation, and the
fiction of the Credit Mobilier, contracted with themselves, agreeing to
pay themselves extravagant prices for building their own road, and
getting their pay as a donation from the public treasury, and were able
in seven months to declare dividends to themselves of nearly two hundred
per cent upon the reported paid up capital, which capital was also
obtained from government. If the reader has followed us in the
statements we have made relative to the land and bond subsidies granted
to the Pacific railroad companies, he will not wonder that the
indebtedness of these companies, after the completion of the roads, and
after the receipt from government of more than their entire cost, nearly
doubles the amount necessary to build them, had honesty and economy been
used in their construction.
We might pursue this subject further, but we think enough has been shown
to convince the impartial reader, that whatever the pretence for making
these grants, the real object has been to enrich unscrupulous and
dishonest men at the expense of the public; and that this corrupting
power has become so great that those who occupy high and responsible
places in the government have become partners in these wholesale
robberies of the people. This conclusion becomes irresistible when we
find members of congress voting government aid to railroad companies in
which they are stockholders and directors at the time the aid is voted.
CHAPTER VIII.
HAS CONGRESS THE POWER, UNDER THE CONSTITUTION, TO CREATE OR ENDOW
PRIVATE CORPORATIONS?
To answer this question intelligently, we must examine the powers
granted to the United States, as well as the rights, powers, and
relative duties of the state governments. The state governments are
supreme in all matters affecting the public and the people, save in
those which, by the expressed provisions of the constitution, are
delegated to, or conferred upon, the general government. The powers thus
delegated to the general government are all of a public character, such
as states individually could not control or execute, and such as were
deemed essential to our national existence. All privileges, rights, and
powers, not deemed essential to the successful administration of the
national government, were reserved to the states and to the people. It
follows that the general government is one of limited powers; that while
it is supreme in all matters delegated to it by the constitution, and
while in its several departments it can exercise all such implied powers
as are necessary for the complete execution of those expressly
delegated, neither the executive, legislative, nor judicial departments
can assume the exercise of powers not conferred upon them by the express
provisions of the constitution; and that while the state governments can
exercise all powers not expressly prohibited in their constitutions,
because of their general sovereign character, the general government is
limited to such as are expressly granted. If these propositions are
correct, then the general government has no authority for creating
private corporations.
We are aware that congress has assumed the negative of these
propositions, and has granted charters to some of the most gigantic
corporations of the country, under which charters they have organized
and are doing business in states which, according to our interpretation
of the constitution, as above stated, should have the absolute control
of such companies. We shall attempt to demonstrate that the acts of
congress granting charters to railroad and other private corporations
are usurpations of power, in conflict with the provisions of the
constitution, destructive of the rights of the people and of republican
government.
What are the powers delegated to the general government by the
constitution in questions of this character? Article I. Section 8,
contains, among others, the following, as some of the powers conferred
upon congress: "To regulate commerce with foreign nations, and among the
several states, and with the Indian tribes;" "To establish post offices
and post roads;" "To make all laws which shall be necessary and proper
for carrying into execution the foregoing powers and all other powers
vested by this constitution in the government of the United States, or
in any department or office thereof." The same section gives congress
power to provide for organizing the army, &c.; and, in time of war,
extraordinary powers, controlled only by the necessities of the case,
are vested in congress. If congress have power under the constitution to
charter private corporations, it must be derived from, or contained in,
the provisions above quoted. Article IX. of the constitution reads as
follows: "The enumeration in the constitution of certain rights shall
not be construed to deny or disparage others retained by the people."
And Section 10 reads as follows: "The powers not delegated to the United
States by the constitution, nor prohibited by it to the states, are
reserved to the states respectively, or to the people." And the framers
of the constitution it would seem, for the purpose of making the line of
demarcation between the powers of the states and the general government
still more plain and definite, provided as follows: Article IV., Section
2: "The citizens of each state shall be entitled to all privileges and
immunities of citizens in the several states."
We think that the above quotations from the constitution (and we have
quoted all having any relation to the question we are discussing) prove
conclusively that the powers conferred upon congress by the
constitution are limited; that while within the scope of the delegated
powers its action is supreme, there is inherent in it no general power
to legislate upon subjects not named in the constitution, or not
included by necessary implication. On the contrary, all the powers not
expressly given are reserved to the states or to the people.
Is the authority to charter private corporations necessarily included in
the delegated power to regulate commerce among the several states, or to
establish post roads? We think not. What do we understand by the word
"Commerce?" Webster defines it as follows: "1st. _In a general sense_,
an interchange or mutual change of goods, wares, productions, or
property of any kind between nations or individuals, either by barter,
or by purchase and sale; trade; traffic. Commerce is _foreign, or
inland_. Foreign commerce is the trade which one nation carries on with
another; inland commerce, or inland trade, is the trade in the exchange
of commodities between citizens of the same nation or state. 2d.
Intercourse between individuals; interchange of work, business,
civilities, or amusements; mutual dealings in life." And again: "To
traffic; to carry on trade." In the absence of any definition given to
it in the constitution, we must accept the above general definition of
its meaning as being the sense in which it is used in the constitution.
Respecting trade with foreign nations or the Indian tribes, it can only
relate to the interchange of commodities, or purchase or sale of
articles of traffic. As incidental to this power, congress can prescribe
rules for the regulation of navigation upon the high seas, including
police regulations on board of vessels, because the oceans are the
common or public highways of all nations, and each nation navigating the
same is bound to protect not only its commerce, but its citizens or
subjects. Nations hold commerce with nations across and upon the high
seas, the citizens and subjects of each being protected by their own
government. This commerce with foreign nations is not regulated by
grants of private charters, but by acts of congress is open to all
alike, save where, for the encouragement of certain branches of trade,
certain bounties or privileges have been granted to particular parties
for a specified time. But all such grants have been to parties
navigating the high seas. The control of navigable streams within the
United States does not depend alone upon the powers given to congress to
regulate the commerce of the country, but depends also upon the further
power vesting in the general government exclusive maritime jurisdiction.
If we concede that the power to regulate commerce among the several
states gives congress the exclusive right to regulate the commerce
carried on upon our rivers, it would not follow that the power to
charter railway companies is conferred. Navigable streams are _public
highways_, open to the travel of all. No man, set of men, or
corporations, can claim the exclusive right to navigate these rivers,
nor could congress grant such exclusive right. The duty of protecting
the rights of the citizen, and of making river transportation safe, and
of protecting the rights of property, demand that the national, and not
the state legislature, should be supreme in this particular
jurisdiction, and hence this branch of commerce is placed in the custody
of the nation. But keeping in mind the definition of the word,
"Commerce," let us see what is meant by the term as applied to dealings
between the states. We insist that it has no reference to the
construction of roads, railroads, canals, or any other ways upon which
commerce might be carried, or over which articles of trade or traffic
might pass, but that it refers only to the dealing of the people of one
state with another; that while the people of each state are under the
supreme control of their state authority, all the privileges enjoyed by
the citizens of any one of the states as to residence or traffic with
the citizens of another state, are to be the same. No distinction can be
made, and for the purpose of carrying out this provision of the
constitution, and preventing the levy of tariffs or taxes by one state
upon the citizens of another state, and for the purpose of guaranteeing
to all citizens of the United States immunity from these unjust
discriminations, the power to regulate commerce among the states was
delegated to congress. Nor does it follow, that, for the purpose of
regulating commerce among the states, congress can grant exclusive
privileges and monopolies in any business not confided to one state.
When the constitution was adopted, each state was independent; each had
all the powers and prerogatives of a nation; each was supreme within its
geographical limits; each might prescribe its own rules in relation to
immigrants, and to trade and traffic with other states; it might
discriminate in favor of its own citizens; it might impose tariffs on
foreign imports, and deal with its sister states as with foreign
nations. To prevent this, and to secure to all citizens of the United
States equal privileges and immunities in all parts of the United
States, the provisions of the constitution we have quoted were adopted.
While the independence of the states was recognized and preserved, the
power to regulate commerce, among them, was delegated to congress; not
the power to withdraw from the state its right to legislate upon the
subject of commerce among its own citizens, or the right to protect its
own citizens in their dealings with the citizens of other states; but
simply providing that no discriminations should be made on account of
residence, and establishing equal rights and privileges of all citizens
of the United States in all the states, free from discriminations sought
to be enforced under local or state statutes and regulations. Should any
one state attempt to deny to the people of another state the privileges
guaranteed by the constitution, then it would be the plain duty of
congress to interfere and "_regulate commerce_" between these states.
But while a general national law might constitutionally be enacted upon
this subject, it certainly cannot be claimed, that upon the pretext of
regulating commerce among the states, congress can charter railroad
companies, or any other companies organized for pecuniary profit. Nor
can this power be claimed under the constitutional provision for the
establishment of post offices and post roads. We admit that the grant of
this power carries with it all such as are incidental; that by
implication it includes within its terms the carrying and distribution
of the mails, and all other matter necessarily connected therewith; and
that congress might build, own, and control post roads, so far as the
same might be found necessary for the transportation of the mails over
the territory belonging to the United States, and to provide for the use
of public roads for government purposes. Public highways are free to
all. Over these highways, whether on land or water, congress can
provide for the transportation of the mails, troops, army stores,
munitions of war, and other public property. These highways are at all
times open to the public. But while this is true, it does not follow
that the government of the United States can take the absolute control
of these public highways, and, by act of congress, deny the states a
control over those within their borders respectively. The location and
establishment of public roads within a state is a part of the local or
police regulation, and while these roads are free to the passage of all,
they are, by the provisions of the constitution and the universally
accepted custom of the country, recognized as being under the exclusive
control of the states within which they are situated. The fact that
congress never has taken the control of the public roads of the country
is a full recognition of the exclusive right of the states to control
them. Then how can it be claimed that congress, under the constitution,
possesses the power to charter railroad companies? Until within the last
few years, no attempt was made to grant charters to railroad companies
by the general government, nor indeed were charters granted for any
purpose save in relation to the financial departments, as in the case of
United States banks, fiscal agencies, &c., which were chartered for the
public benefit, and not as private institutions. We are not positive
that the constitutionality of these railroad charters has been
determined by the courts of the United States, but we are aware of the
fact that congress has deemed it necessary, in almost every instance
where charters have been granted and aid voted, to declare, and place
upon the record as a part of the charter, the reasons for granting it.
The following are the reasons assigned in some of the charters, to-wit:
In the charter of the Union Pacific railroad company--"For the purpose
of aiding in the construction of said railroad and telegraph line, and
to secure _the safe and speedy transportation of the mails, troops,
munitions of war, and public stores thereon_."
In the charter of the Northern Pacific railroad company: "For the
purpose of aiding in the construction of said railroad and telegraph
line to the Pacific coast, and to secure _the safe and speedy
transportation of the mails, troops, munitions of war, and public
stores_." In all other cases the above quoted statement of cause is
inserted in the charters, as though the right or authority to make these
grants was so doubtful that it became necessary in every case to state
the reason for the grant. If the present necessities of the government
demand such special legislation, then the same reasons existed from the
organization of our government; and if congress possesses the power
under the constitution to make these grants, and to assume the absolute
control of public or private roads through the states, then from the
adoption of that constitution congress could have taken the absolute
control of all the public roads in all the states of the Union. Before
railroads were constructed, all overland transportation of mails,
troops, munitions of war, &c., was over the public highways--highways
that were and still are under the exclusive control of the states in
which they lie. Over these public roads and such private ways as maybe
selected, government has a right to transport the mails, troops, and
public property, and no state has the right to prohibit or restrict this
right. Still, no power is given by the constitution, nor is there any
implied, under which congress can, under the plea of rendering more safe
and speedy the transportation of mails, troops, &c., grant exclusive
charters and privileges to private corporations. In the nature of
things, as our government is organized, the right to charter and control
all corporations organized for pecuniary profit remains with the states.
This power has never been delegated to the general government, nor
prohibited to the states, or people. There can be no doubt upon this
point, when we remember that the general government is limited to the
delegated powers; and that it is supreme only in those matters which are
delegated to and vested in it by the constitution. This position is
fully sustained by the adjudication of the supreme court of the United
States. In Marshall, on the federal constitution, page 164, we find the
following: "This government is acknowledged by all to be one of
enumerated powers. The principle that it can exercise only the powers
granted to it, would seem too apparent to have required to be enforced
by all those arguments which its enlightened friends, while it was
depending before the people, found it necessary to urge. That principal
is now universally admitted." Again, on page 301, the author says: "In
our complex system presenting the rare and difficult scheme of one
general government whose action extends over the whole, but which
possesses only certain enumerated powers and of numerous state
governments, which retain and exercise all powers not delegated to the
union, contests respecting power must arise. Were it otherwise, the
measures taken by the respective governments to execute their
acknowledged powers would often be of the same description, and might
sometimes interfere. This, however, does not prove that the one is
exercising, or has the right to exercise, the power of the other."
As to the power of congress to create corporations, an argument has been
drawn in its favor from the provision of the constitution, which
declares that congress shall have the power of making "all laws which
shall be necessary and proper for carrying into execution the foregoing
powers, and all other powers vested by this constitution in the
government of the United States, or in any department thereof." The
question before the court arose out of the attempt of the state of
Maryland to tax the United States bank, a corporation chartered by
congress. In this case the power was upheld on the ground that the bank
was necessary in the administration of the finances of the government,
that being one of the matters vested in or delegated to the general
government, the power to charter the bank was incidental to the granted
power. But on the question of the power of congress to create
corporations, Mr. Marshall says, page 167: "The creation of a
corporation, it is said, appertains to sovereignty. This is admitted.
But to what portion of sovereignty does it appertain? Does it belong to
one more than another? In America the powers of sovereignty are divided
between the government of the Union, and those of the states. They are
each sovereign with respect to the objects committed to it, and neither
sovereign with respect to the objects committed to the other. We cannot
comprehend that train of reasoning which would maintain that the extent
of power granted by the people is to be ascertained, not by the nature
and terms of the grant, but by its date. Some state constitutions were
formed before, some since that of the United States. We cannot believe
that their relation to each other is in any degree dependent upon this
circumstance. Their respective powers must, we think, be precisely the
same as if they had been formed at the same time. Had they been formed
at the same time, and had the people conferred on the general government
the power contained in the constitution and on the states the whole
residium of power, would it have been asserted that the government of
the union was not sovereign with respect to those objects which were
entrusted to it, in relation to which its laws were declared to be
supreme? If this could have been asserted, we cannot well comprehend the
process of reasoning which maintains that a power appertaining to
sovereignty cannot be connected with that vast portion of it which is
granted to the general government, so far as it is calculated to
subserve the legitimate objects of that government. The power of
creating a corporation, though appertaining to sovereignty, is not like
the power of making war, or levying taxes, or of regulating commerce, a
great substantive and independent power which cannot be implied as
incidental to other powers, or used as a means of executing them. It is
never the end for which other powers are exercised, but the means by
which these objects are accomplished. No contributions are made to
charity for the sake of an incorporation, but a corporation is created
to administer the charity. No seminary of learning is instituted in
order to be incorporated, but the corporate character is conferred to
subserve the purposes of education. No city was ever built with the sole
object of being incorporated, but it is incorporated as the best means
of being well governed. The power of creating a corporation is never
used for its own sake, but for the purpose of effecting something else.
No sufficient reason is therefore perceived why it may not pass as
incidental to those powers which are expressly given, if it be the
direct mode of executing them."
Taking the above definition of corporations, and their use, in the
administration of the government, we can have no difficulty in
distinguishing the cases in which congress can grant charters to any
company or association. It is only when some of the delegated powers
require the aid of corporate acts in their administration, that the
right exists in congress to grant charters, as incidental to the grants.
The grants of charters to railroad companies cannot be claimed as
incidental to any express delegation of power to the general government.
If railroads are private property, they cannot be chartered or
controlled by congress. If they are to be taken and treated as public
highways, then they are as exclusively under and subject to the control
of the respective state governments, as common highways. The state
legislatures have exclusive control of them in either case. If they are
treated as private corporations, then under the rights reserved to the
states, as well as by long usage, their exclusive control is retained by
the states. If they are public roads, the same local or state laws apply
to them as to all other public roads. Admit that congress has the right
to grant charters for railroads, then it follows that it can control
them. Admit that they are public roads, and that they are to be taken
and treated as common highways, and congress at once assumes the local
and police regulations of all the public roads in all of the United
States.
To this doctrine we cannot subscribe, but insist that the exclusive
power to charter and control railroad corporations remains with the
people to be exercised by and under the exclusive control of the state
governments. Nor can congress, rightfully, under the constitution,
charter railroad corporations in the territories. The power vested in
congress "to dispose of and make all needful rules respecting the
territory or other property belonging to the United States," does not
authorize the creation of private monopolies. When territorial
governments are formed, they are clothed with many of the attributes of
sovereignty. These governments are at liberty to legislate and to
provide for the well-being of the people, and subject to the provisions
of their "organic law," have the complete control of local and police
regulations. They can construct highways, erect public buildings, impose
taxes, grant charters, including charters to railroad companies. That
territorial governments can charter railroad companies, and that general
government has so acknowledged is proven by the acts of congress in
donating lands and bonds to companies chartered by territorial
legislation. This was done in the case of the Leavenworth, Pawnee, &
Western railroad company, chartered by the territorial legislature of
Kansas; and other instances are common. The power to grant charters
cannot vest in the states, and territorial governments, and at the same
time exist in the general government, for the reason that the supreme
power must exist in one or the other. If this were not so, one
government could destroy what the other had created. The privileges
acquired by a corporation under the one could be entirely annulled by
the other. Private rights would be subject to the adjudication of two
separate and distinct tribunals, created and sustained by distinct
governments, the one claiming to be supreme, because the right to
exercise the power had been granted to it, and the other denying such
grant, and because of this denial claiming the power as still remaining
with the state government. This course would be destructive of the
rights of the people, as well as of our system of government. Concede to
congress the right to charter railroad companies, and there is no limit
to the monopolies that can be forced upon the people of the whole
country. Land companies, loan, and interest companies, manufacturing
companies, and in short all conceivable projects of speculation can
obtain charters from congress, and our government becomes entirely
personal in character, without restraint or constitutional limit. The
assumption by congress of the power to create private corporations is a
fatal stab at our system of government, destructive of state rights, and
a wanton violation of the constitution.
CHAPTER IX.
STATE RIGHTS AT THE BAR OF A CORRUPT CONGRESS.
None of the subjects of legislation have tended to destroy
constitutional safeguards and debase public morals so much as
congressional legislation, with its grants of land and bonds, and other
special benefits in favor of railroad corporations. This species of
legislation has well nigh destroyed republican institutions. While our
government is republican in name it is in fact controlled by an
oligarchy. The whole government has become a prey to the class of
corporations above named, and is administered in their interest. Their
influence controls the legislative department, the courts of the
country, and its finances. This is a sweeping assertion, but who will
deny it. Further, the very men who by their votes in congress have
created these monopolies, have themselves in many instances received
pecuniary consideration for their votes, either in corporate stock, or
direct payment. This last assertion is now (January 9, 1873) being
supported by results arrived at by committees appointed to investigate
charges of corruption made against members of both branches of congress.
Having assumed the right to grant charters and aid to these corporations
in violation of the constitution, it was but one step further in the
same direction for congress to enact other unconstitutional laws,
regulating and combining railroads receiving their charters from state
legislatures, laws which enable these roads to so combine their
operations as to control the entire interests of the country. These acts
are numerous in the published laws of congress. We will refer to some of
them, and direct the reader to the following, of a general nature: On
the 15th of June, 1866, congress passed the following unconstitutional
act in the interest and for the benefit of railroad corporations: See
Second Brightley's Digest, page 528, "That every railroad company in
the United States, whose road is operated by steam, its successors and
assigns, be and is hereby authorized to carry upon and over its road,
boats, bridges, and ferries, all passengers, troops, government
supplies, mails, freight, and property, on their way from one state to
another state, and to receive compensation therefor, and to connect with
roads of other states so as to form continuous lines for the
transportation of the same to the place of destination. Provided, that
this act shall not affect any stipulations between the government of the
United States, and any railroad company for transportation and fares
without compensation, nor impair or change the conditions imposed by the
terms of the acts granting lands to any such company to aid in the
construction of its road, nor shall it be construed to authorize any
railroad company to build any new road, or connection with any other
road without authority from the state in which said railroad, or
connection, may be proposed." Commenting upon this extraordinary
statute, the editor says: "In the preamble to this extraordinary
assumption of power, on the part of the federal congress, they prefer to
base their authority for it on the power to regulate commerce among the
several states, to establish post-roads, and to raise and support
armies. But it has been decided that the constitutional power to
establish post-roads is confined to such as are regularly laid out under
state authority; the government of the United States cannot construct a
post-road within a state of the Union without its consent. The
post-roads of the United States are the property of the states through
which they pass. The United States have the mere right of transit over
them for the purpose of carrying the mails; the government could not
have an injunction to prevent the destruction of a mail-road." Citing
the case of the Cleveland, Painesville, & Ashtabula railroad company
_vs_. The Franklin canal company, in the circuit court of the United
States, the editor adds: "Congress certainly can confer no rights on a
railroad company incorporated by a state government, which are withheld
from it by the charter of its creator."
The above quoted act assumes that congress has full power to regulate
the connection of railroads in the different states, as well as the
carrying trade upon the same. It strips the several state governments of
all power to interfere, and in case of any controversy takes from the
state courts the power to determine the rights of the respective
parties; the act of congress could be pleaded, and, as a necessary
consequence, the United States courts would have exclusive jurisdiction.
It cannot be claimed that this act can be supported under any express
delegation of power to the general government, nor can it be supported
as being incidental to any express grant. It is an usurpation not
warranted or sustained by any part of the constitution. This one section
quoted, destroys the right of any state of the Union, or of two or more
of them, to legislate upon the subject of uniting or connecting
railroads meeting on the lines dividing them, and also takes from the
states the right to regulate the carrying trade within their own
respective borders. Congress had no more authority under the
constitution to enact this law, than to provide by statute for the
construction of public highways when they meet upon the line dividing
states, or to provide for the passage of teams from one state to
another, and the transportation of freights over the common highways
within or across a state. The whole power under the constitution is
reserved to the states. Prior to the creation of these great railroad
monopolies by congress, an attempt at such legislation would have been
deemed unconstitutional, but as soon as the whole affairs of government
passed into the hands of the few, and when the protection of their
interests demanded it, the act was passed, and has remained upon the
statute book as one of the laws of the land. This act is about the only
one that openly and broadly covers the whole ground, and assumes to
regulate the internal affairs of the states, but there are numerous acts
passed in relation to land grants and the companies chartered by
congress, which have the same effect. In some cases the absolute control
of roads constructed under charters obtained from state legislatures, or
under state laws, has been taken from the states by acts of congress,
and placed under the jurisdiction of the general government. In most
instances where this has been done, members of congress, or their near
relatives, were large owners of stock in the companies to be benefited
by the act. To speak more plainly, the acts granting special privileges
to particular companies, and placing them under the jurisdiction of the
federal government, were passed for the benefit of congressmen and
others in high official position. Let us examine some of these acts.
Among the stockholders and directors of the Union Pacific and its
branches, there are found at least eight persons who were members of
congress at the date of the act of congress creating the corporation,
and also at the date of the material amendments to the charter. Some of
these congressmen are still stockholders and directors, and were
directors when congress released these companies from payment of
interest on the bonds they had received from the government. Another
land grant company having congressmen among its stockholders and
directors, is the Leavenworth, Lawrence, & Galveston; also, the Iowa
Falls & Sioux City; also, the Cedar Rapids & Missouri River; also, the
Burlington & Missouri River; also, the Atlantic & Pacific; also, the New
Orleans, Mobile, & Texas; also, the Northern Pacific; also, Sioux City &
Pacific; also, the Fremont, Elkhorn, & Missouri Valley. The number might
be extended, but enough is given to sustain our charge. Most of the
above named companies were organized under state laws, or received their
charters from state or territorial legislatures. For the purpose of
consummating certain speculative ends, congress has treated with
contempt state laws and state authority. Where charters have been
granted under state authority, and the companies were rightfully under
the control of the states within which their roads were located, acts
like the following have been passed by congress: "That the Leavenworth,
Pawnee, & Western railroad company, of Kansas, are hereby authorized to
construct a railroad and telegraph line from the Missouri river, at the
mouth of the Kansas river, on the south side thereof so as to connect
with the Pacific railroad of Missouri;" and then follow the details for
constructing and operating the road, and placing it under the control of
the general government. In the case of the Central Pacific company,
chartered by the state of California, congress passed the following
act:--
"The Central Pacific railroad company of California, a corporation
existing under the laws of the state of California, are hereby
authorized to construct a railroad and telegraph line from the Pacific
coast, at or near San Francisco, or the navigable waters of the
Sacramento river, to the eastern boundary of California."
Substantially the same provision is found for most of the corporations
above named, and in all those cases, the authority to construct the road
is followed by a provision for aid by the general government.
It might be pertinent to inquire why it became necessary for congress to
assume the control of railroads already chartered under state authority.
It cannot be claimed that the states acted without authority in granting
the charter; nor can the authority of the general government to take
from the states the control of railroads within their border, be
supported by any grant of power contained in the constitution. On the
contrary, the power is reserved to the states, and its exercise is
denied to the general government. It cannot be urged that the interests
of the people are subserved by this assumption of power; on the
contrary, these acts of congress take from the public its rights
reserved by the constitution. But one answer can be given, _these acts
were passed for the promotion of selfish and corrupt ends_. In support
of this, we need only state the fact, that in almost every instance
where congress has attempted to re-charter companies organized under
state authority, and granted them aid, members of congress who were
members at the date of the passage of the acts, were stockholders, and
not unfrequently directors. Some congressmen who have been members for
the last ten or twelve years, are stockholders in several of the
companies, and at least one member of congress of twelve years standing
is now a director in at least three companies that received grants of
land, one of them getting large amounts of subsidy bonds, for all of
which he voted, and for which, as often as occasion served, he has used
his vote and influence in procuring additional privileges. We do not
claim that every member of congress is interested in railroads; but we
do assert that there are many senators and representatives who are
personally interested, and that the proportion is so great that whenever
it is desirable to have legislation it can be obtained without
difficulty. To prove that the chartering and endowing of railroad
companies is one of the principal occupations of the national
legislature, we have only to look through the acts of congress the last
two or three sessions. At the first session of the forty-second congress
fourteen railroad bills were passed, some of them conferring grants to
companies yet in embryo, having no being save upon paper, but presenting
"great expectations" to our congressmen, who combine the business of
granting charters and building railroads, and who find no indelicacy in
becoming stockholders and directors in the corporations to which they,
as congressmen, have voted lands and money. Some of these roads, under
the acts of congress, present great inducements for investments, and in
due time will receive proper attention. The effect of this species of
legislation has been most baneful. The national congres
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