Great Fortunes from Railroads

preliminary survey of the concatenating circumstances leading up to the time when these vast fortunes were rolled together. Without this explanatio

e construction of railroads, yet the next great group of fortunes to develop after, and along with

NG FACTOR

red against factory, and an intense struggle for survival and ascendency enveloped

s of dollars, were either unknown or in an inchoate or rudimentary state. Invention, if we may put it so, was just blossoming forth. Hand labor was largely prevalent. Huge combinations were undreamed of; paper cap

s commercial contests with persistent personal doggedness. Beneath his occasional benevolence and his religious professions was a wild ardor in the c

, other intervening factors had the tendency of holding back the factory owners' quick progres

THE RAILR

d puissant powers and privileges, and vested with a sweep of properties beside which those of the petty industrial bosses were puny. Railroad owners, we say; the distinction is necessary between the builders

t may be said that there was created over night a number of entities empo

factory was usually a personal affair, owned by one man or in co-partnership; to get control of this property it was necessary to get the owner in a financial corner and force him to sell out, for, as a rule, he had no bond or stock issues. But the railroad corporation was a stock corporation; whoever secured control of a majority of the stock became the legal administrator of its pol

LIZING O

hts and properties. In turn, the law interposed no effective hindrance to the seizing of their possessions by any other group proving its power to grasp them. All of this was done under nominal forms of law, but diff

and-owning classes, as has been repeatedly pointed out, had demonstrated very successfully how the f

on; how Government loaned vast sums of public money, free of interest, to the traders, while at the same time refusing to assist the impoverished and destitute; how it granted immunity from punishment to the rich and powerful, and inflicted the most drastic penalties upon poor debtors and penniless violators of the law; how it allowed the possessing classes to evade taxation on a large s

ates Government was organized, most of the land in the North and East was already expropriated. But immense areas of public domain still remained in the South and in the Middle West. Over much of the former Colonial land the various legi

AWS AGAINS

secured vast tracts for trivial sums. These capitalists then either held the land, or forced settlers to pay exorbitant prices for comparatively small plots. No laws were in existence compelling the purchaser to be a bona fide settler. Absentee landlordism was the rule. The capitalist companies were largely com

enth Congress, Doc. No. 63.] The company then leisurely disposed of its land to settlers at an enormous profit. Nearly all of the land companies had banking adjuncts. The poor settler, in order to settle on land that a short time previously had been national property, was first compelled to pay the land company an extortionate price, and then was forced to borrow the money from the banking adjuncts, and give a heavy mortgage, bearing heavy intere

S SECURED

our land companies. The people of the State were convinced that this purchase had been obtained by bribery. It was made an election issue, and a Legislature, comprising almost wholly new members, was elected. In February, 1796, this Legislature

r ten years more lobbying, succeeded in getting an award from the United States Treasury of $1,077,561.73. The total amount appropriated by Congress on the pretense of settling the claims of the various capitalists in the "Yazoo Claims" was $1,500,000. [Footnote: Senate Documents, Eighteenth Congress, Second Session, 1824-25, Vol. ii, Doc. No. 14, and Senate Documents, Twenty-fourth Congress, 1836-37, Vol. ii, No. 212. After the grants were secured, the companies attempted to swindle the State of Georgia by making payments in depreciated currency. Georgia refused to accept it. When

on the prevailing system of selling millions of acres to companies or individuals. The new system, it announced, was to be one adapted to the interests of both capitalist and poor man. Land was thereaf

form of many small allotments. Having obtained the best lands, the capitalists then often held them until they were in demand, and forced actual settlers to pay heavily for them. During all of this time the capitalists themselves held the land "on credit." Some of them eventually paid for the lands out of the profits made from the settlers, but a great number of the purchasers cheated the Government almost entirely out of what th

ad been made by non-resident speculators, and it called upon Congress to pass a law providing for selling the remaining lands at fifty cents an acre. [Footnote: U. S. Senate Documents, Second Session, Eighteenth Congress, 1824-25, Vol. ii, D

NT OF THE

the public sales of lands, had united for the purpose of driving other purchasers out of the market and in deterring poor men from bidding. The committee detailed how these companies and individuals had fraudulently bought large tracts of land at $1.25 an acre, and sold

l of them "naturally united to render this investigation odious among the people." The committee told how an attempt had been made to assassinate one of its members. "The first step," it set forth, "necessary to the success of every scheme of speculation in the public

most enormous profits between the members of the different companies and speculators. The committee refers to the depositions of numerous respectable witnes

5, 1835, to President Jackson: "Governments, like corporations, are considered without souls, and according to the code of some people's morali

affidavits already prepared by himself, and sworn to before some justice of the peace in some remote county. These claims, to an immense extent, are presented and allowed. And upon what evidenc

year for a long period. The House Committee on Public Lands, reporting in 1847, disclosed how most of the lands were bought up by capitalists. It cited the case of the Milwaukee district where, although 6,441 land entries had been made, there were only forty actual settlers up to 1847. "This clearly show

companies. The first railroad company to get a land grant from Congress was the Illinois Central, in 1850. It rec

40 (Senate Document No. 616) made public the fact that from the establishment of the Federal Government to 1839, the Indian tribes had ceded to the Government a total of 442,866,370 acres. The Indian tribe

ING OF G

fficials were put in office by them, and were saturated with their interests, views and ideals, or whether corruption had to be resorted to in order to attain their objec

rly in the nineteenth century, suddenly discovered that there was an exception. They wanted canals built; and as they had not sufficient funds for the purpose, and did not see any immediate profit for themselves, they clamored for the building of them by the States. In fin

lions of the public funds for undertakings profitable to commerce, why would it not be equally simple to secure

te. The trading and land-owning classes knew its effectiveness. It was they who had utilized it; who from the year 1795 on had bribed legislatures and Congress to give them bank and other charters. Bribery had proved a signal success. The performance was extended on a much wider scale, with far greater results, an

CANAL CO

State. The commercial men could succeed in having it managed for their purposes and profit, and the politicians could often extract plunder from the successive contracts, but there was no opportu

rnment, began. One after another, canal companies came forward to solicit public funds and land grants. These companies neither had any c

the sum of $2,500,000 in funds appropriated by the United

ain areas of land to various States, to be expressly given to designated canal companies. The States in donating them, sometimes sold them

he St. Mary's Falls Ship Canal Company received 750,000 acres in 1852; the Portage Lake and Lake Superior Ship Canal Company, 400,000 acres in 1865-66; and the Lac La Belle Ship Canal Company, 100,000 acres in 1866. Including a grant by

long as possible, for by this process they could periodically go to Legislatures with this argument: That the projects were more expensive and involved more difficulties than had been anticipated; that the original appropriations were exhausted, and that if the projects were to be completed, fresh appropriations were imperative. A large part of these successive appropriati

FRAUDULENTL

ttle attempt to build canals. What some of them did was to turn about and defraud the Government

al" was only a worthless ditch and a complete fraud. What had the company done with its large land grant? Instead of accepting the grant as intended by Congress, it had, by means

ost valuable mineral, grazing, agricultural and timber lands to be fraudulently surveyed as "swamp" lands, is described at length a little later on in this work. Commissioner Sparks wrote that the one hundred thousand acres appropriated in violation of explicit law "were taken outside of legal limits, and that the lands

, pp. 79-95). This suit disclosed the fact that the mines of the Calumet and Hecla Mining Company were located on part of the identical alleged "swamp" lands, granted by Congress in 1852. The plaintiff, Chandler, claimed an interest in the mines. Concluding the court

lroad builders were regarded as public benefactors; that people and legislatures were only too glad to present them with public resources. There is just a slight substance of truth in this alleged historical writing, but nothing more. The people, it is true, were eager, for their own convenience, to have the railroads bui

GREAT P

ally with a population stretched over such a vast territory as that of the United States. But alone they would not have accomplished the ends sought, had it not been for the quantities of cash poured into legislative pockets. The cash was the real eloquent persuader. In turn, the virtuous legislators, on being questi

t, were impecunious sharpers. Their greatest asset was a devious knowledge of how to get something for nothing. With a grandiloquent front and a superb bluff they would organize a company to build a railroad from this to that point; an undertaking costing milli

y the United States Bank for many years, was only one of many such scandals throughout the United States. One of the most characteristic phases of the reports of the various legislative investigating committees was the ironical astonishment that they almost invariably expressed at the "superior class" being responsible for the continuous bribery. Thus, in reporting in 1840, that $130,000 had been used in bribery in Pennsylvania by the United States Bank, an investigating committee of the Pennsylvania House of R

s say, $250,000 among them. If they had proceeded to build a railroad with this sum, not many

the $250,000 would have been only a mite. But it was quite enough to bribe a legislature. By expending this sum in purchasing a majority of an important committee, and a sufficient number of

R OF CO

les Reemelin and exclaimed: "Corporations always have their lobby members in and around the halls of legislation to watch and secure their interests. Not so with the people-they cannot act with that directness and system that a corporation can. No individual will take it upon himself to go to the Ca

sure of legislation could be carried in this State, which was generally offensive to the corporations of the Commonwealth? It is very rarely the case that we do not have a majority in the legislature who are either presidents, directors or stock

rred $12,000,000 in debts in aiding railroad corporations. "I fear," said Delegate Traer, "that it is very often the case that these votes (on appropriations for railroads) are ca

E OF THE

orbidding the bonding of the State for railroad purposes. The Constitutional Convention adopted this provision. But the members had scarcely gone to their homes before the people discovered how they had been duped. The amendment barred the State from giving loans, but (and here was the trick) it did not forbid counties and municipalities from doing so. Thereupon the railroad capitalists

ver returned. As for the land grants to railroads, they reached colossal proportions. From 1850 to 1872 Congress gave not less than 155,504

luable mineral, coal, timber and agricultural land, only 607,741 acres were forfeited by act of Congress, and even much of these were restored to the railroads by judicial decisions. [Footnote: The principal of these decisions was that of the Supreme Court of the United States in the case of Schluenberg vs. Harriman (Wallace's Supreme Court Reports

ubsequent fraudulent official construction, coal and i

ud under form of law, they had overdrawn ten million acres, "which vast amount has been treated by the corporations as their absolute property, but is really public l

tigations-disclosures to which we shall have pertinent occasion to refer later on. Not only did the railroad corporations loot in a

THE NATIO

ailroad, authority was given to the railroad by acts passed in 1862 and 1864 to take all of the material, such as stone, timber, etc., needed for construction, from the public lands. So, in addition to the money and lands, much of the essential material for building the railroads was supplied fr

islation was not only used to exclude the farmer from getting the land, and to centralize its ownership in corporations, but was additionally employed in relieving these corporations from taxation on the land thus obtained by fraud. "To avoid taxation," Phillips goes on, "the railroad land grant companies had an amendment enacted into law to the effect that they should not obtain their patents until they had paid a small fee to de

a casual mention, as though it w

anged as to exempt those estates from taxation, so has the money aristocracy of the United States proceeded on the same plan. As we shall see, however, the railro

lroad capitalists were by no means the only land-graspers. Not a single part of the capitalist class was the

italists secures large and valuable areas of the public land at little expense." [Footnote: Report of the Secretary of the Interior for 1883. Reporting to Secretary of the Interior Lamar, in respon

mpeded or suppressed." If, Commissioner Sparks urged, the pre?mption, commuted-homestead, timber-land, and desert-land laws were repealed, then, "the illegal appropriation of the remaining public lands would be reduced to a minimum."-U. S. Senate Documents, First Session, Forty-ninth Congress, 1885-1886, Vol. viii, Doc. No. 134:4.] The poor were always the decoys with which the capitalists of the day managed to bag their game. It was to aid and encourage "the man of sm

HEFTS

iring for a home and land, was arranged so that the capitalist cattle syndicates could get immense areas. The lever was the omission of any provision requiring actual settlement. The livestock corporations thereupon sent in their swarms of dummies to the "desert" lands (many of which, in reality, were not desert but excellent gr

claimed them as their own, and hired armed guards to drive off intruders, and kill if necessary. [Footnote: "Within the cattle region," reported Commissioner Sparks, "it is notorious that actual settlements are gen

Scotch capitalists, had fenced in more than a million acres in Colorado, and a large number of other cattle companies in Colorado had seized areas ranging from 20,000 to 200,000 acres. "In Kansas," Harrison went on, "entire counties are reported as [illegally] fenced. In Wyoming, one hundred and twenty-five cattle companies are repor

s where inclosures range from 1,

gely for the purpose of controlling the sources of water supply."-"Unauthorized Fencing of Public Lands," U. S. Senate Docs., First Session, Forty-eighth Congress, 1883-84, Vol.

and of statute law. No court, supreme or inferior, had ever held that because the proceeds of theft were improved or were refurbished a bit, the sufferer was thereby estopped from recovery. This decision showed anew how, while the courts

or that corporation, as the ringleader in the orgy of corruption and oppression. This practice, arising partly from passionate or i

s coated with the same tar. Shipping merchants, traders in general, landholders, banking and railroad corporations, factory owners, cattle syndicates, public utility companies, mining mag

lves in the same way or similar ways. The railroads were much denounced; but wherein did their methods differ from those of the cattle syndicates, the industrial magnates or the lumber corporations? The lumber barons wanted their predacious share of t

N ON A GR

in 1892 made frauds still easier. This measure was another of those benevolent-looking laws which, on its face, extended opportunities for the homesteader. No longer, it was plausibly set forth, could any man say that the Government denied him the right to get public land for a reasona

st forms of spoliation. Entire trainloads of people, acting in collusion with the land grabbers, were transported by the lumber syndicates into the richest timber regions of the West,

nest lands worth, at the least, according to Government agents, $100 an acre,

those possessions had caused themselves to be elected or appointed to powerful offices in the Government, State or National, so now some of the lumber barons used a part of the millions obtained by fraud to purchase their way into the United States Senate an

acres had been sold for $20,000,000, while the Department of the Interior had admitted in writing that the actual aggregate value of the land, at prevailing commercial prices, was $77,000,000. These lands, he asserted, had passed into the hands of the Lumber Trust, and their products were sold to the peo

of land in the South, mainly in Alabama, Louisiana, Florida, Arkansas and Mississippi. Much of this area was valuable timber land, and a part of it, especial

f it. At about the time that they had their plans primed to juggle a bill through Congress, an unfortunate situation arose. A rancid public scandal ensued from the bribery of m

SH SALE

e sale to a certain acreage so that all any individual could buy was enough for his own use. Anyone, if he chose, could buy a million or ten million acres, provided he had the cash to pay $1.25 an acre. The way was easy for capitalists to

magnates were instantly and hugely increased by this fraudulent transaction. [Footnote: "Fraudulent transaction," House Ex. Doc. 47, Part iv, Forty-sixth Congress, Third Session, speaks of the phrasing of the act as a mere subterfuge for despoilment; that the act was passed specifically "for the benefi

e President to the report of the Commissioner of the Land Office, but what statements of 'fraud' in connection with the disposition of public lands are found." [Footnote: House Ex. Doc. 47: 356.] A little later, Commissioner Sparks of the General Land Office pointed out that "the near approach of the period when the United States will have no land to dispose of has stimulated the exertions of capitalists and corpor

other corporations a succession of colossal gifts and other special privileges-laws, many of which will be referred to later-we shall pass on to one of the f

Pacific got nearly $26,000,000 and received 9,000,000 acres. To the Northern Pacific 47,000,000 acres were given; to the Kansas Pacific, 12,100,000; to the Southern Pacific about 18,000,000 acres. From 1850 the National Government had granted subsidies to more than fifty railroads, and, in addition to the great territorial possessions given to th

the extent of the railroad grants was larger than Connecticut and Rhode Island, and the grants in Michigan and Wisconsin nearly as large; in Montana the grant to one railroad alone would equal the whole of Maryland, New Jersey and Massachusetts. The l

e value depended upon the locality. They might be the richest and finest of agric

ally occurred: Why not exchange the bad, for good, land? Having found it so easy to possess themselves of so vast and valuable an area of former public domain, they calculated that no difficulty would b

found for the project traveling in disguise. This bill was everywhere looked upon as a wise and statesmanlike measure for the preservation of forests; capitalist interests, in the pursuit of immediate profit, had ruthlessly denuded and destroyed immense forest stretches, causing, in

e four unobtrusive words, "or any other claimant." This quartet of words allowed the railway magnates to exchange millions of acres of desert and of denuded tim

he complete domination of the railroads, took no action to stop it. Only when the fraud was fully accomplished did the railroads allow Congress to go through the forms of deferring to public interests by repealing the law. [Footnote: In a letter to the author Senator Pettigrew instances the case of the Northern Pacific Railroad. "The Northern Pacific," he writes, "having pat

NDS EXP

cres of coal fields." These urgings fell flat on a Congress that included many members who had got their millions by reason of these identical laws, and which, as a body, was fully under the control of the dominant class of the day- the Capitalist class. The oligarchy of wealth was triumphantly, gluttonously in power; it was ingenuous folly to expect it to yield where it could vanquish, and concede where it could despoil. [Footnote: Nor did it yield. Roosevelt's denunciations in no way affected the steady expropriating process. In the current seizure (1909) of vast coal areas in Alaska, the long-continuing process can be seen at work under

f California charged that the timber, the minerals and the soil had long since becom

intermission, up to this present day, and doubtless wi

nd in States, principally west of the Mississippi River, had been fraudulently acquired by capitalist corporations and individuals. This report disclosed more than thirty-two thousand cases of land fraud. The frauds on the part of various

ied capitalist interests, they dictate what the lot, political, economic and social, of the American people shall be. All of this transformation has come about within a relatively short period, much of it in our own time. But a little while ago the railroad projectors begged and implored, tricked and bribed; and

OF COMMAN

e been discriminated against, exploited and oppressed. Theoretically the power of government resides in the people, down to the humblest

dustriously giving away public domain, public funds and perpetual rights to railroad and oth

s, and consequently were compelled to herd in industrial centers. They were deliberately shut off from possession of the land. This situation was already acute twenty-five years ago. "The area of arable land open to settlement," pointed out Secretary of the Interior Teller in a circular letter of May 22, 1883, "is not great when compared with the increasing demand and is rapidly decreasing." All other offic

of votes was the feeling ingrained in legislators by the concerted teachings of society that the man of property should be looked up to; that he was superior to the common herd; that his interests were paramount and demanded nursing and protection. Whenever a commercial crisis occurred, the capitalists secured a ready hearing and their measures were passed p

lly the overwhelming voting power, were many. Government was nothing more or less than a device for the nascent capitalist class to work out its inevitable purposes, yet the majority of the people, on whom the powers of class government severely fell, were constantly deluded into