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HISTORY OF THE GREAT AMERICAN FORTUNES
BY GUSTAVUS MYERS
AUTHOR OF "THE HISTORY OF TAMMANY HALL," "HISTORY OF PUBLIC
FRANCHISES IN NEW YORK CITY," ETC.
VOL. II
GREAT FORTUNES FROM RAILROADS
I. THE SEIZURE OF THE PUBLIC DOMAIN
II. A NECESSARY CONTRAST
III. THE BEGINNINGS OF THE VANDERBILT FORTUNE
IV. THE ONRUSH OF THE VANDERBILT FORTUNE
V. THE VANDERBILT FORTUNE INCREASES MANIFOLD
VI. THE ENTAILING OF THE VANDERBILT FORTUNE
VII. THE VANDERBILT FORTUNE IN THE PRESENT GENERATION
VIII. FURTHER ASPECTS OF THE VANDERBILT FORTUNE
IX. THE RISE OR THE GOULD FORTUNE
X. THE SECOND STAGE OF THE GOULD FORTUNE
XI. THE GOULD FORTUNE BOUNDS FORWARD
XII. THE GOULD FORTUNE AND SOME ANTECEDENT FACTORS
XIII. FURTHER ASPECTS OF THE VANDERBILT FORTUNE 260
PART III
THE GREAT FORTUNES FROM RAILROADS
CHAPTER I
THE SEIZURE OF THE PUBLIC DOMAIN
Before setting out to relate in detail the narrative of the amassing
of the great individual fortunes from railroads, it is advisable to
present a preliminary survey of the concatenating circumstances
leading up to the time when these vast fortunes were rolled together.
Without this explanation, this work would be deficient in clarity,
and would leave unelucidated many important points, the absence of
which might puzzle or vex the reader.
Although industrial establishments, as exemplified by mills,
factories and shops, much preceded the construction of railroads, yet
the next great group of fortunes to develop after, and along with,
those from land were the fortunes plucked from the control and
manipulation of railroad systems.
THE LAGGING FACTORY FORTUNES.
Under the first stages of the old chaotic competitive system, in
which factory warred against factory, and an intense struggle for
survival and ascendency enveloped the whole tense sphere of
manufacturing, no striking industrial fortunes were made.
Fortunate was that factory owner regarded who could claim $250,000
clear. All of those modern and complex factors offering such
unbounded opportunities for gathering in spoils mounting into the
hundreds of millions 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 capitalization as embodied in
the fictitious issues of immense quantities of bonds and stocks was
not yet a part of the devices of the factory owner, although it was a
fixed plan of the bankers and insurance companies.
The factory owner was the supreme type of that sheer individualism
which had burst forth from the restraints of feudalism. He stood
alone fighting his commercial contests with persistent personal
doggedness. Beneath his occasional benevolence and his religious
professions was a wild ardor in the checkmating or bankruptcy of his
competitors. These were his enemies; he fought them with every
mercantile weapon, and they him; and none gave quarter.
Apart from the destructive character of this incessant warfare,
dooming many of the combatants, other intervening factors had the
tendency of holding back the factory owners' quick progress--
obstacles and drawbacks copiously described in later and more
appropriate parts of this work.
MIGHT OF THE RAILROAD OWNERS.
In contrast to the slow, almost creeping pace of the factory owners
in the race for wealth, the railroad owners sprang at once into the
lists of mighty wealth-possessers, armed with the most comprehensive
and 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 of the railroads and the owners. The one might
construct, but it often happened that by means of cunning, fraud and
corruption, the builders were superseded by another set of men who
vaulted into possession.
Looking back and summing up the course of events for a series of
years, it may be said that there was created over night a number of
entities empowered with extraordinary and far-reaching rights and
powers of ownership.
These entities were called corporations, and were called into being
by law. Beginning as creatures of law, the very rights, privileges
and properties obtained by means of law, soon enabled them to become
the dictators and masters of law. The title was in the corporation,
not in the individual; hence the men who controlled the corporation
swayed the substance of power and ownership. The 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 policies and property. By
adroit manipulation, intimidation, superior knavery, and the corrupt
domination of law, it was always easy for those who understood the
science of rigging the stock market, and that of strategic
undermining, to wrest the control away from weak, or (treating the
word in a commercial sense) incompetent, holders. This has been long
shown by a succession of examples.
THE LEGALIZING OF CUNNING
Thus this situation, so singularly conflicting with the theoretical
majesty of the law, was frequently presented: A band of men styling
themselves a corporation received a perpetual charter with the most
sweeping rights 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 differed little in reality from the methods
during medieval times when any baron could take another baron's
castle and land by armed force, and it remained his until a stronger
man came along and proved his title likewise.
Long before the railroad had been accepted commercially as a feasible
undertaking, the trading and land-owning classes, as has been
repeatedly pointed out, had demonstrated very successfully how the
forms of government could be perverted to enrich themselves at the
expense of the working population.
Taxation laws, as we have seen, were so devised that the burden in a
direct way fell lightly on the shipping, manufacturing, trading,
banking and land-owning classes, while indirectly it was shoved
almost wholly upon the workers, whether in shop, factory or on farm.
Furthermore, the constant response of Government, municipal, State
and National, to property interests, has been touched upon; 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 scale, and effected
summarily cruel laws permitting landlords to evict tenants for non-
payment of rent. These and many other partial and grievously
discriminative laws have been referred to, as also the refusal of
Government to interfere in the slightest with the commercial frauds
and impositions constantly practiced, with all their resulting great
extortions, upon the defenceless masses.
Of the long-prevailing frauds on the part of the capitalists in
acquiring large tracts of public land, some significant facts have
been brought out in preceding chapters. Those facts, however, are only
a few of a mass. When the United States 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
legislatures claimed jurisdiction, until, one after another, they
ceded it to the National Government. With the Louisiana purchase, in
1805, the area of public domain was enormously extended, and
consecutively so later after the Mexican war.
THE LAND LAWS AGAINST THE POOR
From the very beginning of the government, the land laws were
arranged to discriminate against the poor settler. Instead of laws
providing simple and inexpensive ways for the poor to get land, the
laws were distorted into a highly effective mechanism by which
companies of capitalists, and individual capitalists, 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 composed of Northern, Eastern and
Southern traders and bankers. The evidence shows that they employed
bribery and corruption on a great scale, either in getting favorable
laws passed, or in evading such laws as were on the statute books by
means of the systematic purchase of the connivance of Land Office
officials.
By act of Congress, passed on April 21, 1792, the Ohio Land Company,
for example, received 100,000 acres, and in the same year it bought
892,900 acres for $642,856.66. But this sum was not paid in money.
The bankers and traders composing the company had purchased, at a
heavy discount, certificates of public debt and army land warrants,
and were allowed to tender these as payment. [Footnote: U. S. Senate
Executive Documents, Second Session, Nineteenth 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 interest, on the land. [Footnote: U. S.
Senate Documents, First Session, Twenty-fourth Congress, 1835-36,
Doc. No. 216: 16.] The land companies always took care to select the
very best lands. The Government documents of the time are full of
remonstrances from legislatures and individuals complaining of these
seizures, under form of law, of the most valuable areas. The tracts
thus appropriated comprised timber and mineral, as well as
agricultural, land.
VAST TRACTS SECURED BY BRIBERY.
One of the most scandalous land-company transactions was that
involving a group of Southern and Boston capitalists. In January,
1795, the Georgia Legislature, by special act, sold millions of acres
in different parts of the State of Georgia to four 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 passed a rescinding act, declaring
the act of the preceding year void, on the ground of its having been
obtained by "improper influence." In 1803 the tracts in question were
transferred by the Georgia Legislature to the United States
Government.
The Georgia Mississippi Land Company was one of the four companies.
In the meantime, this company had sold its tract, for ten cents an
acre, to the New England Mississippi Land Company. Although committee
after committee of Congress reported that the New England Mississippi
Land Company had paid little or no actual part of the purchase price,
yet that company, headed by some of the foremost Boston capitalists,
lobbied in Congress for eleven years for an act giving it a large
indemnity. Finally, in 1814, Congress passed an indemnification act,
under which the eminent Bostonians, after 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 the grant was rescinded,
both houses of the Georgia Legislature marched in solemn state to the
Capitol front and burned the deed.] The ground upon which this
appropriation was made by Congress was that the Supreme Court of the
United States had decided that, irrespective of the methods used to
obtain the grant from the Georgia Legislature, the grant, once made,
was in the nature of a contract which could not be revoked or
impaired by subsequent legislation. This was the first of a long line
of court decisions validating grants and franchises of all kinds
secured by bribery and fraud.
It was probably the scandal arising from the bribery of the Georgia
Legislature that caused popular ferment, and crystallized a demand
for altered laws. In 1796 Congress declared its intention to abandon
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 thereafter to
be sold in small quantities on credit. Could the mechanic or farmer
demand a better law? Did it not hold out the opportunity to the
poorest to get land for which payment could be gradually made?
But this law worked even better to the advantage of the capitalist
class than the old. By bribing the land officials the capitalists
were able to cause the choicest lands to be fraudulently withheld,
and entered by dummies. In this way, vast tracts were acquired.
Apparently the land entries were made by a large number of intending
settlers, but these were merely the intermediaries by which
capitalists secured great tracts in the 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 they owed. [Footnote: On Sept. 30, 1822, "credit purchasers"
owed the Government: In Ohio, $1,260,870.87; in Indiana,
$1,212,815.28; in Illinois, $841,302.80; in Missouri, $734,108.87; in
Alabama, $5,760,728.01; in Mississippi, $684,093.50; and in Michigan,
$50,584.82--a total of nearly $10,550,000. (Executive Reports, First
Session, Eighteenth Congress, 1824, Report No. 61.) Most of these
creditors were capitalist land speculators.]
The capitalists of the period contrived to use the land laws wholly
to their own advantage and profit. In 1824, the Illinois Legislature
memorialized Congress to change the existing laws. Under them, it
recited, the best selections of land had 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, Doc. No. 25.] Other legislatures petitioned similarly. Yet,
notwithstanding the fact that United States officials and committees
of Congress were continually unearthing great frauds, no real change
for the benefit of the poor settler was made.
GREAT EXTENT OF THE LAND FRAUDS.
The land frauds were great and incessant. In a long report, the
United States Senate Committee on Public Lands, reporting on June 20,
1834, declared that the evidence it had taken established the fact
that in Ohio and elsewhere, combinations of capitalist speculators,
at 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 the land later at exorbitant prices. It showed how, in order to
accomplish these frauds, they had bought up United States Land Office
Registers and Receivers. [Footnote 8: U. S. Senate Documents, First
Session, Twenty-third Congress, 1833-34, Vol. vi, Doc. No. 461:1-91.]
Another exhaustive report was handed in by the United States Senate
Committee on Lands, on March 3, 1835. Many of the speculators, it
said, filled high offices in States where public lands bought by them
were located; others were people of "wealth and intelligence." All 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 lands, is to corrupt the land officers, by a secret
understanding between the parties that they are to receive a certain
portion of the profits." [Footnote: U. S. Senate Documents, Second
Session, Twenty-third Congress, Vol. iv, Doc. No. 151: 2.] The
committee continued:
The States of Alabama, Mississippi and Louisiana have been the
principal theatre of speculations and frauds in buying up the public
lands, and dividing the most enormous profits between the members of
the different companies and speculators. The committee refers to the
depositions of numerous respectable witnesses to attest the various
ramifications of these speculations and frauds, and the means by
which they have been carried into effect.... [Footnote: Ibid., 3]
Describing the great frauds in Louisiana, Benjamin F. Linton, U. S.
District Attorney for the Western District of Louisiana, wrote, on
August 25, 1835, to President Jackson: "Governments, like
corporations, are considered without souls, and according to the code
of some people's morality, should be swindled and cheated on every
occasion." Linton gave this picture of "a notorious speculator who
has an immense extent of claims":
He could be seen followed to and from the land office by crowds of
free negroes, Indians and Spaniards, and the very lowest dregs of
society, in the counties of Opelousas and Rapides, with their
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 evidence?
Simply upon the evidence of the parties themselves who desire to make
the entry! [Footnote: U. S. Senate Documents, Second Session, Twenty-
fourth Congress, 1836-37, Vol. ii, Doc. No. 168: 5.]
The "credit" system was gradually abandoned by the Government, but
the auction system was retained for decades. In 1847, the Government
was still selling large tracts at $1.25 an acre, nominally to
settlers, actually to capitalist speculators or investors. More than
two million acres had been sold every 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
shows," the committee stated, "that those who claimed the land as
settlers, are either the tools of speculators, to sequester the best
lands for them... or the claim is made on speculation to sell out."
[Footnote: Reports of Committees, First Session, Thirtieth Congress,
1847-48, Vol. iii, Report No. 732:6.]
The policy of granting enormous tracts of land to corporations was
revived for the benefit of canal and railroad companies. The first
railroad company to get a land grant from Congress was the Illinois
Central, in 1850. It received as a gift 2,595,053 acres of land in
Illinois. Actual settlers had to pay the company from $5 to $15 an
acre.
Large areas of land bought from the Indian tribes by the Government,
almost at once became the property of canal or railroad corporations
by the process of Government grants. A Congressional document in 1840
(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
tribes were paid either by grants of land elsewhere, or in money and
merchandise. For those 442,866,370 acres they received exchange land
valued at $53,757,400, and money and merchandise amounting to
$31,331,403.
THE SWAYING OF GOVERNMENT.
The trading, banking and landed class had learned well the old, all-
important policy of having a Government fully susceptible to their
interests, whether the governing officials 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
objects. At all events, the propertied classes, in the main, secured
what they wanted. And, as fast as their interests changed, so did the
acts and dicta of Government change.
While the political economists were busy promulgating the doctrine
that it was not the province of Government to embark in any
enterprise other than that of purely governing--a doctrine precisely
suiting the traders and borrowed from their demands--the commercial
classes, early 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 fine, they found that it was to their interest to have the
States put through canal projects on the ground that these would
"stimulate trade." The canals were built, but the commercial classes
in some instances made the blunder of allowing the ownership to rest
in the people.
Never again was this mistake repeated. If it proved so easy to get
legislatures and Congress to appropriate millions of the public funds
for undertakings profitable to commerce, why would it not be equally
simple to secure the appropriation plus the perpetual title? Why be
satisfied with one portion, when the whole was within reach?
True, the popular vote was to be reckoned with; it was a time when
the people scanned the tax levy with far greater scrutiny than now;
and they were not disposed to put up the public funds only that
private individuals might reap the exclusive benefit. But there was a
way of tricking and circumventing the electorate. 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, and with an adroitness revealing that the
capitalist class had learned much by experience, not only in reaching
out for powers that the previous generation would not have dared to
grant, but in being able to make plastic to its own purposes the
electorate that believed itself to be the mainspring of political
power.
GRANTS TO CANAL CORPORATIONS.
The first great canal, built in response to the demands of the
commercial class, was the Erie Canal, completed in 1825. This
waterway was constructed at public expense, and was owned by New York
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 opportunity
or possibility for the exercise of the usual capitalist methods of
fraudulent diversion of land, or of over-capitalization and
exorbitant rates with which to pay dividends on fictitious stock.
Very significantly, from about the very time when the Erie Canal was
finished, the era of the private canal company, financed by the
Government, began. One after another, canal companies came forward to
solicit public funds and land grants. These companies neither had any
capital of their own, nor was capital necessary. The machinery of
Government, both National and State, was used to supply them with
capital.
The Chesapeake and Ohio Canal Company received, up to 1839, the sum
of $2,500,000 in funds appropriated by the United States Government,
and $7,197,000 from the State of Maryland.
In 1824 the United States Government began giving land grants for
canal projects. The customary method was the granting by Congress of
certain areas of land to various States, to be expressly given to
designated canal companies. The States in donating them, sometimes
sold them to the canal companies at the nominal rate of $1.25 an
acre. The commuting of these payments was often obtained later by
corrupt legislation.
From 1924 to 1834, the Wabash and Erie Canal Company obtained land
grants from the Government amounting to 826,300 acres. The Miami and
Dayton Canal Company secured from the Government, in 1828 and 1833, a
total grant of 333,826 acres. The 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
Congress in 1828 of 500,000 acres of public land for general canal
purposes, the land grants given by the National Government to aid
canal companies, totalled 4,224,073.06 acres, mostly in Indiana,
Ohio, Illinois, Wisconsin and Michigan.
Whatever political corruption accompanied the building of such State-
owned canals as the Erie Canal, the primary and fundamental object
was to construct. In the case of the private canal companies, the
primary and fundamental object was to plunder. The capitalists
controlling these companies were bent upon getting rich quickly; it
was to their interest to delay the work as 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 appropriations, whether in money, or land which
could be sold for money, were stolen in sundry indirect ways by the
various sets of capitalist directors. The many documents of the
Maryland Legislature, and the messages of the successive Governors of
Maryland, do not tell the full story of how the Chesapeake and Ohio
Canal project was looted, but they give abundantly enough
information.
THE GRANTS FRAUDULENTLY MANIPULATED
Many of the canal companies, so richly endowed by the Government with
great land grants, made little attempt to build canals. What some of
them did was to turn about and defraud the Government out of
incalculably valuable mineral deposits which were never included in
the original grants.
In his annual report for 1885, Commisioner Sparks, of the United
States General Land Office told (House Executive Documents, 1885-86,
Vol. II) how, by 1885, the Portage Lake "canal" 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 of fraudulent surveys, and doubtless by official
corruption, caused at least one hundred thousand acres of its grant
to be surveyed in the very richest copper lands of Wisconsin.
The grants originally made by Congress were meant to cover swamp
lands--that is, lands not particularly valuable for agricultural
uses, but which had a certain value for other purposes. Mineral lands
were strictly excluded. Such was the law: the practice was very
different. The facility with which capitalists caused the most
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 selected both
without and within such limits were interdicted lands on the copper
range" (p. 189). Those stolen copper deposits were never recovered by
the Government nor was any attempt made to forfeit them. They
comprise to-day part of the great copper mines of the Copper Trust,
owned largely by the Standard Oil Company.
The St. Mary's Falls Canal Company likewise stole large areas of rich
copper deposits. This fact was clearly revealed in various official
reports, and particularly in the suit, a few years ago, of Chandler
vs. Calumet and Hecla Mining Company (U. S. Reports, Vol. 149, 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's
decision, favoring the Calumet and Hecla Mining Company, this
significant note (so illustrative of the capitalist connections of
the judiciary), appears: "Mr. Justice Brown, being interested in the
result, did not sit in this case and took no part in its decision."
Whatever superficial or partial writers may say of the benevolent
origin of railroads, the fact is that railroad construction was
ushered in by a widespread corruption of legislators that put to
shame the previous debauchery in getting bank charters. In nearly
every work on the subject the assertion is dwelt upon that railroad
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 built, but
unwilling to part with their hard-wrung taxes, their splendid public
domain, and their rights only that a few men, part gamblers and part
men of energy and foresight, should divert the entire donation to
their own aggrandizement. For this attitude the railroad promoters
had an alluring category of arguments ready.
CASH THE GREAT PERSUADER
Through the public press, and in speeches and pamphlets, the people
were assured in the most seductive and extravagant language that
railroads were imperative in developing the resources of the country;
that they would be a mighty boon and an immeasurable stimulant to
progress. These arguments had much weight, especially 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 questioned by their constituents as to
why they had voted such great subsidies, such immense land grants and
such sweeping and unprecedented privileges to private corporations,
could fall back upon the justification (and a legitimate one it
seemed) that to get the railroads built, public encouragement and aid
were necessary.
Many of the projectors of railroads were small tradesmen, landlords,
mill owners, merchants, bankers, associated politicians and lawyers.
Not infrequently, however, did it happen that some charters and
grants were obtained by politicians and lawyers who, at best, 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 millions, while perhaps
they could not pay their board bill. An arrangement with a printer to
turn out stock issues on credit was easy; with the promise of batches
of this stock, they would then get a sufficient number of legislators
to vote a charter, money and land.
After that, the future was rosy. Bankers, either in the United States
or abroad, could always be found to buy out the franchise or finance
it. In fact, the bankers, who themselves were well schooled in the
art of bribery and other forms of corruption, [Footnote: "Schooled in
the art of bribery."--In previous chapters many facts have been
brought out showing the extent of corrupt methods used by the
bankers. The great scandal caused in Pennsylvania in 1840 by the
revelations of the persistent bribery carried on by 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 Representatives commented: "It is hard to
come to the conclusion that men of refined education, and high and
honorable character, would wink at such things, yet the conclusion is
unavoidable." [Pa. House Journal, 1842, Vol. ii, Appendix, 172-531.]
were often outwitted by this class of adventurers, and were only too
glad to treat with them as associates, on the recognized commercial
principle that success was the test of men's mettle, and that the
qualities productive of such success must be immediately availed of.
In other instances a number of tradesmen and landowners would
organize a company having, let us say, $250,000 among them. If they
had proceeded to build a railroad with this sum, not many miles of
rail would have been laid before they would have found themselves
hopelessly bankrupt.
Their wisdom was that of their class; they knew a far better method.
This was to use the powers of government, and make the public provide
the necessary means. In the process of construction 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 the whole body, they
could get millions in public loans, vast areas of land given
outright, and a succession of privileges worth, in the long run,
hundreds upon hundreds of millions of dollars.
A WELTER OF CORRUPTION.
So the onslaught of corruption began and continued. Corruption in
Ohio was so notorious that it formed a bitter part of the discussion
in the Ohio Constitutional Convention of 1850-51. The delegates were
droning along over insertions devised to increase corporation power.
Suddenly rose Delegate Charles 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
Capitol at his own expense, to watch the representatives of the
people, and to lobby against the potent influences of the
corporation. But corporations have the money, and it is to their
interest to expend it to secure the passage of partial laws."
[Footnote: Ohio Convention Debates, 1850-51, ii: 174.]
Two years later, at one of the sessions of the Massachusetts
Constitutional Convention, Delegate Walker, of North Brookfield, made
a similar statement as to conditions in that State. "I ask any man to
say," he asked, "if he believes that any measure 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 stockholders in incorporated companies. This is a fact
of very grave importance." [Footnote: Debates in the Massachusetts
Convention, 1853, iii: 59.] Two-thirds of the property in
Massachusetts, Delegate Walker pointed out, was owned by
corporations.
In 1857 an acrimonious debate ensued in the Iowa Constitutional
Convention over an attempt to give further extraordinary power to the
railroads. Already the State of Iowa had incurred $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 carried through by improper influences, which the
people, if left alone, would, upon mature reflection, never have
adopted." [Footnote: Constitutional Debates, Iowa, 1857, ii: 777.]
IMPOTENCE OF THE PEOPLE.
These are but a very few of the many instances of the debauching of
every legislature in the United States. No matter how furiously the
people protested at this giving away of their resources and rights,
the capitalists were able to thwart their will on every occasion. In
one case a State legislature had been so prodigal that the people of
the State demanded a Constitutional provision forbidding 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 proceeded to have laws passed, and
bribe county and municipal officials all over the State to issue
bonds and to give them terminal sites and other valuable privileges
for nothing. In every such case the railroad owners in subsequent
years sneaked legislation through in practically every State, or
resorted to subterfuges, by which they were relieved from having to
pay back those loans.
Hundreds of millions of dollars, exacted from the people in taxation,
were turned over to the railroad corporations, and little of it was
ever returned. As for the land grants to railroads, they reached
colossal proportions. From 1850 to 1872 Congress gave not less than
155,504,994.59 acres of the public domain either direct to railroad
corporations, or to the various States, to be transferred to those
corporations.
Much of this immense area was given on the condition that unless the
railroads were built, the grants were to be forfeited. But the
capitalists found no difficulty in getting a thoroughly corrupt
Congress to extend the period of construction in cases where the
construction had not been done. Of the 155,000,000 acres, a
considerable portion of it valuable 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, xxi:44).
In many of the railroad grants it was provided that in case the
railroad lines were not completed within certain specified times, the
lands unsold or unpatented should revert to the United States. The
decision of the Supreme Court of the United States practically made
these provisions nugatory, and indirectly legalized the crassest
frauds.
The original grants excluded mineral lands, but by a subsequent
fraudulent official construction, coal and iron were declared not to
be covered by the term mineral.
Commissioner Sparks of the U. S. General Land Office estimated in
1885 that, in addition to the tens of millions of acres the railroad
corporations had secured by fraud 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
land of the United States recoverable to the public domain." (House
Executive Docs., First Session, Forty-ninth Congress, 1885-86,
ii:184.) It has never been recovered.]
That Congress, not less than the legislatures, was honeycombed with
corruption is all too evident from the disclosures of many
investigations--disclosures to which we shall have pertinent occasion
to refer later on. Not only did the railroad corporations loot in a
gigantic way under forms of law, but they so craftily drafted the
laws of both Nation and the States that fraud at all times was easy.
DEFRAUDING THE NATION OF TAXES.
Not merely were these huge areas of land obtained by fraud, but after
they were secured, fraud was further used to evade taxation. And by
donations of land is not meant only that for intended railroad use or
which could be sold by the railroads. In some cases, notably that of
the Union Pacific Railroad, 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 from the public
resources. No sooner had they obtained their grants, than the
railroad corporations had law after law passed removing this
restriction or that reservation until they became absolute masters of
hundreds of millions of acres of land which a brief time before had
been national property.
"These enormous tracts," wrote (in 1886) William A. Phillips, a
member of the Committee on Public Lands of the Forty-third Congress,
referring to the railroad grants, "are in their disposition subject
to the will of the railroad companies. They can dispose of them in
enormous tracts if they please, and there is not a single safeguard
to secure this portion of the national domain to cultivating
yeomanry." The whole machinery of legislation 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
defray the expense of surveying. This they took care not to pay, or
only to pay as fast as they could sell tracts to some purchasers, on
which occasions they paid the surveying fee and obtained deeds for
the portion they sold. In this way they have held millions of acres
for speculative purposes, waiting for a rise in prices, without
taxation, while the farmers in adjacent lands paid taxes." [Footnote:
"Labor, Land and Law": 338-339.]
Phillips passes this fact by with a casual mention, as though it were
one of no great significance.
It is a fact well worthy of elaboration. Precisely as the
aristocracies in the Old World had gotten their estates by force and
fraud, and then had the laws so arranged 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 railroad
and other interests have not only put through laws relieving from
direct taxation the land acquired by fraud, but also other forms of
property based upon fraud.
This survey, however, would be prejudicial and one-sided were not the
fact strongly pointed out that the railroad capitalists were by no
means the only land-graspers. Not a single part of the capitalist
class was there which could in any way profit from the theft of
public domain that did not wallow in corruption and fraud.
The very laws seemingly passed to secure to the poor settler a
homestead at a reasonable price were, as Henry M. Teller, Secretary
of the Interior, put it, perverted into "agencies by which the
capitalists 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 response
to a U. S. Senate resolution for information, William A. J. Sparks,
Commissioner of the General Land Office, gave statistics showing an
enormous number of fraudulent land entries, and continued:
"It was the ease with which frauds could be perpetrated under
existing laws, and the immunity offered by a hasty issue of patents,
that encouraged the making of fictitious and fraudulent entries. The
certainty of a thorough investigation would restrain such practices,
but fraud and great fraud must inevitably exist so long as the
opportunity for fraud is preserved in the laws, and so long as it is
hoped by the procurers and promoters of fraud that examinations may
be impeded or suppressed." If, Commissioner Sparks urged, the
preŽmption, 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 small resources" to populate the West that the Desert Land Law
was apparently enacted; and many a pathetic and enthusiastic speech
was made in Congress as this act was ostentatiously going through.
Under this law, it was claimed, a man could establish himself upon
six hundred and forty acres of land and, upon irrigating a portion of
it, and paying $1.25 an acre, could secure a title. For once, it
seemed, Congress was looking out for the interests of the man of few
dollars.
VAST THEFTS OF LAND.
But plaudits were too hasty. To the utter surprise of the people the
law began to work in a perverse direction. Its provisions had read
well enough on a casual scrutiny. Where lay the trouble? It lay in
just a few words deftly thrown in, which the crowd did not notice.
This law, acclaimed as one of great benefit to every man aspiring 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 grazing lands),
had their dummies get patents from the Government and then transfer
the lands. In this way the cattlemen became possessed of enormous
areas; and to-day these tracts thus gotten by fraud are securely held
intact, forming what may be called great estates, for on many of them
live the owners in expansive baronial style.
In numerous instances, law was entirely dispensed with. Vast tracts
of land were boldly appropriated by sheep and cattle rangers who had
not even a pretense of title. Enclosing these lands with fences, the
rangers 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 generally prevented and made practically impossible
outside the proximity of towns, through the unlawful control of the
country, maintained by cattle companies."--U. S. Senate Docs., 1885-
86, Vol. viii, No. 134:4 and 5.
Acting Commissioner Harrison of the General Land Office, reporting on
March 14, 1884, to Secretary of the Interior Teller, showed in detail
the vast extent of the unlawful fencing of public lands. In the
Arkansas Valley in Colorado at least 1,000,000 acres of public domain
were illegally seized. The Prairie Cattle Company, composed of 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 reported having fencing
on the public lands. Among the companies and persons reported as
having 'immense' or 'very large' areas inclosed . . . are the
Dubuque, Cimarron and Renello Cattle [companies] in Colorado; the
Marquis de Morales in Colorado; the Wyoming Cattle Company (Scotch)
in Wyoming; and the Rankin Live Stock Company in Nebraska.
"There is a large number of cases where inclosures range from 1,000
to 25,000 acres and upwards.
"The reports of special agents show that the fraudulent entries of
public land within the enclosures are extensively made by the
procurement and in the interest of stockmen, largely 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. vi, Doc. No. 127:2.] Murder after murder was
committed. In this usurpation the august Supreme Court of the United
States upheld them. And the grounds of the decision were what?
The very extraordinary dictum that a settler could not claim any
right of preŽmption on public lands in possession of another who had
enclosed, settled upon and improved them. This was the very reverse
of every known declaration of common 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 were ever ready to enforce the law literally against the
underlings and penniless, they were as active in fabricating tortuous
constructions coinciding not always, but nearly always, with the
demands and interests of the capitalist class.
It has long been the fashion on the part of a certain prevalent
school of writers and publicists to excoriate this or that man, this
or that corporation, as the ringleader in the orgy of corruption and
oppression. This practice, arising partly from passionate or ill-
considered judgment, and in part from ignorance of the subject, has
been the cause of much misunderstanding, popular and academic.
No one section of the capitalist class can be held solely
responsible; nor were the morals and ethics of any one division
different from those of the others. The whole capitalist class was
coated with the same tar. Shipping merchants, traders in general,
landholders, banking and railroad corporations, factory owners,
cattle syndicates, public utility companies, mining magnates, lumber
corporations--all were participants in various ways in the subverting
of the functions of government to their own fraudulent ends at the
expense of the whole producing class.
While the railroad corporations were looting the public treasury and
the public domain, and vesting in themselves arbitrary powers of
taxation and proscription, all of the other segments of the
capitalist class were, at the same time, enriching themselves 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 the public domain; throughout
certain parts of the West and in the South were far-stretching,
magnificent forests covered with the growth of centuries. To want and
to get them were the same thing, with a Government in power
representative of capitalism.
SPOLIATION ON A GREAT SCALE.
The "poor settler" catspaw was again made use of. At the behest of
the lumber corporations, or of adventurers or politicians who saw a
facile way of becoming multimillionaires by the simple passage of an
act, the "Stone and Timber Act" was passed in 1878 by Congress. An
amendment passed 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 reasonable sum. Was ever a finer, a more
glorious chance presented? Here was the way open for any individual
homesteader to get one hundred and sixty acres of timber land for the
low price of $2.50 an acre. Congress was overwhelmed with outbursts
of panegyrics for its wisdom and public spirit.
Soon, however, a cry of rage went up from the duped public. And the
cause? The law, like the Desert Land Law, it turned out, was filled
with cunningly-drawn clauses sanctioning the worst 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, supplied with the funds to buy,
and then each, after having paid $2.50 per acre for one hundred and
sixty acres, immediately transferred his or her allotment to the
lumber corporations.
Thus, for $2.50 an acre, the lumber syndicates obtained vast tracts
of the finest lands worth, at the least, according to Government
agents, $100 an acre, at a time, thirty-five years ago, when lumber
was not nearly so costly as now.
The next development was characteristic of the progress of onsweeping
capitalism. Just as the traders, bankers, factory owners, mining and
railroad magnates had come into their possessions largely (in varying
degrees) by fraud, and then upon the strength of 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 and other high offices. They,
as did their associates in the other branches of the capitalist
class, helped to make and unmake judges, governors, legislatures and
Presidents; and at least one, Russell A. Alger, became a member of
the President's Cabinet in 1897.
Under this one law,--the Stone and Timber Act--irrespective of other
complaisant laws, not less than $57,000,000 has been stolen in the
last seven years alone from the Government, according to a statement
made in Congress by Representative Hitchcock, of Nebraska, on May 5,
1908. He declared that 8,000,000 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 people of
the United States at an advance of seventy per cent. This theft of
$57,000,000 simply represented the years from 1901 to 1908; it is
probable that the entire thefts for 10,395,689.96 acres sold during
the whole series of years since the Stone and Timber Act was passed
reaches a much vaster amount.
Stupendous as was the extent of the nation's resources already
appropriated by 1876, more remained to be seized. The Government
still owned 40,000,000 acres 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, especially in Alabama, was
filled with great coal and iron deposits,--a fact of which certain
capitalists were well aware, although the general public did not know
it.
During the Civil War nothing could be attempted in the war-ravaged
South. That conflict over, a group of capitalists set about to get
that land, or at least the valuable part of 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 members of Congress in getting through the charters
and subsidies of the Union Pacific railroad and other railroads.
Congress, for the sake of appearance, had to be circumspect.
THE "CASH SALES" ACT.
By 1876, however, the public agitation had died away. The time was
propitious. Congress rushed through a bill carefully worded for the
purpose. The lands were ordered sold in unlimited areas for cash. No
pretense was made of restricting the 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 get millions of acres of the coveted iron, coal and timber lands
for practically nothing. At that very time the Government was selling
coal lands in Colorado at $10 to $20 an acre, and it was recognized
that even that price was absurdly low.
Hardly was this "cash sales" law passed, than the besieging
capitalists pounced upon these Southern lands and scooped in eight
millions of acres of coal, iron and timber lands intrinsically worth
(speaking commercially) hundreds of millions of dollars. The fortunes
of not a few railroad and industrial 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 benefit of capitalists," and "that fraud was used in sneaking it
through Congress."] Hundreds of millions of dollars in capitalist
bonds and stock, representing in effect mortgages on which the people
perpetually have to pay heavy interest, are to-day based upon the
value of the lands then fraudulently seized.
Fraud was so continuous and widespread that we can here give only a
few succinct and scattering instances. "The present system of laws,"
reported a special Congressional Committee appointed in 1883 to
investigate what had become of the once vast public domain, "seem to
invite fraud. You cannot turn to a single state paper or public
document where the subject is mentioned before the year 1883, from
the message of the 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 corporations to acquire outlying regions
of public land in mass, by whatever means, legal or illegal." In the
same report he further stated, "At the outset of my administration I
was confronted with overwhelming evidence that the public domain was
made the prey of unscrupulous speculation and the worst forms of land
monopoly." [Footnote: Report of the Commissioner of the General Land
Office for October, 1885: 48 and 79.]
THE "EXCHANGE OF LAND" LAW. Not pausing to deal with a multitude of
other laws the purport and effect of all of which were the same--to
give the railroad and 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 final masterly
strokes of the railroad magnates in possessing themselves of many of
such of the last remaining valuable public lands as were open to
spoliation.
This happened in 1900. What were styled the land-grant railroads,
that is to say, the railroad corporations which received subsidies in
both money and land from the Government, were allotted land in
alternate sections. The Union Pacific manipulated Congress to "loan"
it about $27,000,000 and give it outright 13,000,000 acres of land.
The Central 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 the six railroads enumerated, had made a cash
appropriation to those six of not less than about $140,000,000. But
the corruptly obtained donations from the Government were far from
being all of the bounty. Throughout the country, States, cities and
counties contributed presents in the form of franchises, financial
assistance, land and terminal sites.
The land grants, especially in the West, were so enormous that
Parsons compares them as follows: Those in Minnesota would make two
States the size of Massachusetts; in Kansas they were equal to two
States the size of Connecticut and New Jersey; in Iowa 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 land grants in the State of Washington
were about equivalent to the area of the same three States. Three
States the size of New Hampshire could be carved out of the railroad
grants in California. [Footnote: "The Railways, the Trusts and the
People": 137.]
The alternate sections embraced in these States might be good or
useless land; the value depended upon the locality. They might be the
richest and finest of agricultural grazing, mineral or timber land or
barren wastes and rocky mountain tops.
For a while the railroad corporations appeared satisfied with their
appropriations and allotments. But as time passed, and the powers of
government became more and more directed by them, this plan naturally
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 be
encountered in putting through another process of plundering. All
that was necessary was to go through the formality of ordering
Congress to pass an act allowing them to exchange bad, for good,
lands.
This, however, could not be done too openly. The people must be
blinded by an appearance of conserving public interests. The
opportunity came when the Forest Reservation Bill was introduced in
Congress--a bill to establish national forest reservations. No better
vehicle could have been 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 turn, floods and destruction of
life, property and of agriculture. Part of the lands to be taken for
the forest reservations included territory settled upon; it was
argued as proper, therefore, that the evicted homesteaders should be
indemnified by having the choice of lands elsewhere.
So far, the measure looked well. But when it went to the conference
committee of the two houses of Congress, the railroad representatives
artfully slipped in the 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 timber lands,
arid hills and mountain tops covered with perpetual snow, for
millions of the richest lands still remaining in the Government's
much diminished hold.
So secretly was this transaction consummated that the public knew
nothing about it; the subsidized newspapers printed not a word; it
went through in absolute silence. The first protest raised was that
of Senator Pettigrew, of South Dakota, in the United States Senate on
May 31, 1900. In a vigorous speech he disclosed the vast thefts going
on under this act. Congress, under the 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
patented the top of Mount Tacoma, with its perpetual snow and the
rocky crags of the mountains elsewhere, which had been embraced
within the forest reservation, could now swap these worthless lands,
every acre, for the best valley and grazing lands owned by the
Government, and thus the Northern Pacific acquired about two million
acres more of mineral, forest and farming lands."]
COAL LANDS EXPROPRIATED
Not merely were the capitalist interests allowed to plunder the
public domain from the people under these various acts, but another
act was passed by Congress, the "Coal Land Act," purposely drawn to
permit the railroads to appropriate great stretches of coal deposits.
"Already," wrote President Roosevelt in a message to Congress urging
the repeal of the Stone and Timber Act, the Desert Land Law, the Coal
Land Act and similar enactments, "probably one-half of the total area
of high-grade coals in the West has passed under private control.
Including both lignite and the coal areas, these private holdings
aggregate not less than 30,000,000 acres 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 our very eyes. A controversy, in 1909, between
Secretary of the Interior Ballinger and U. S. Chief Forester Gifford
Pinchot brought a great scandal to a head. It was revealed that
several powerful syndicates of capitalists had filed fraudulent
claims to Alaskan coal lands, the value of which is estimated to be
from $75,000,000 to $1,000,000,000. At the present writing their
claims, it is announced, are being investigated by the Government.
The charge has been made that Secretary of the Interior Ballinger,
after leaving the Land Commissioner's office--a post formerly held by
him--became the attorney for the most powerful of these syndicates.
At a recent session of the Irrigation Congress at Spokane,
Washington, Gov. Pardee of California charged that the timber, the
minerals and the soil had long since become the booty of corporations
whose political control of public servants was notorious.]
The thefts of the public domain have continued, without intermission,
up to this present day, and doubtless will not cease until every
available acre is appropriated.
A recent report of H. H. Schwartz, chief of the field service of the
Department of the Interior, to Secretary Garfield, of that
Department, showed that in the two years from 1906 to 1908 alone,
approximately $110,000,000 worth of public land 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 capitalist corporations in obtaining
vast mineral deposits in Alaska, and incalculably rich water power
sites in Montana and elsewhere, constitute one of the great current
public scandals. It will be described fully elsewhere in this work.
Overlooking the petty, confusing details of the last seventy years,
and focusing attention upon the large developments, this is the
striking result beheld: A century ago no railroads existed; to-day
the railroads not only own stupendous natural resources, expropriated
from the people, but, in conjunction with allied 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 had the law been enforced, would have been
adjudged criminals and consigned to prison. And now, in the blazing
power of their wealth, these same men or their successors are
uncrowned kings, swaying the full powers of government, giving
imperial orders that Congress, legislatures, conventions and people
must obey.
AN ARRAY OF COMMANDING FACTS.
But this is not the only commanding fact. A much more important one
lies in the astonishing ease with which the masses of the people have
been discriminated against, exploited and oppressed. Theoretically
the power of government resides in the people, down to the humblest
voter. This power, however, has been made the instrument for
enslaving the very people supposed to be the wielders of political
action.
While Congress, the legislatures and the executive and administrative
officials have been industriously giving away public domain, public
funds and perpetual rights to railroad and other corporations, they
have almost entirely ignored the interests of the general run of
people.
The more capitalists they created, the harder it became for the poor
to get settler's land on the public domain. Congress continued
passing acts by which, in most cases, the land was turned over to
corporations. Intending settlers had to buy it at exorbitant prices.
This took place in nearly all of the States and Territories. Large
numbers of people could not afford to pay the price demanded by the
railroads, 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 official reports consistently relate the same conditions.
[Footnote: "The tract books of my office show," reported Commissioner
Sparks, "that available public lands are already largely covered by
entries, selections and claims of various kinds." The actual settler
was compelled to buy up these claims, if, indeed, he was permitted to
settle on the land.--U. S. Senate Ex. Docs., 1885-86, Vol. viii, Doc.
No. 134:4.]
At the same time, while being excluded from soil which had been
national property, the working and farming class were subjected to
either neglect or onerous laws. As a class, the capitalists had no
difficulty at any time in securing whatever laws they needed; if
persuasion by argument was not effective, bribery was. Moreover, over
and above corrupt purchase 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 promptly. But
millions of workers would be in enforced idleness and destitution,
and no move was made to throw open public lands to them, or
appropriate money, or start public works. Such a proposed policy was
considered "paternalism"--a catchword of the times implying that
Governmental care should not be exercised for the unfortunate, the
weak and the helpless.
And here was the anomaly of the so-called American democratic
Government. It was held legitimate and necessary that capital should
be encouraged, but illegitimate to look out for the interests of the
non-propertied. The capitalists were very few; the non-propertied,
holding nominally 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 believing that the
Government represented them. Whether Federalist or anti-Federalist,
Whig, Republican or Democratic party was in power, the capitalist
class went forward victoriously and invincibly, the proof of which is
seen in its present almost limitless power and possessions.