CHAPTER I

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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.

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