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MONOPOLIES
AND
THE PEOPLE.
BY
D. C. CLOUD,
MUSCATINE.
"THE ENUMERATION IN THE CONSTITUTION OF CERTAIN RIGHTS SHALL NOT
BE CONSTRUED TO DENY OR DISPARAGE OTHERS RETAINED BY THE PEOPLE."
"THE POWERS NOT DELEGATED TO THE UNITED STATES BY THE CONSTITUTION,
NOR PROHIBITED BY IT TO THE STATES, ARE RESERVED TO THE STATES
RESPECTIVELY, OR TO THE PEOPLE."
--Articles IX. and X. of the Constitution of the United States.
DAVENPORT, IOWA:
DAY, EGBERT, & FIDLAR.
1873.
Entered according to Act of Congress, in the year 1873.
By D. C. CLOUD,
in the Office of the Librarian of Congress, at Washington.
TO THE
Patrons of Husbandry,
WHO HAVE BECOME THE PIONEER CORPS IN THE EFFORTS BEING MADE
TO REFORM THE ABUSES NOW OPPRESSING THE COUNTRY, AND WHO ARE
EARNESTLY AND EFFICIENTLY LABORING FOR THE RESTORATION OF
THE RIGHTS OF THE PEOPLE, WITH THE HOPE THAT IT MAY AID THEM
IN THEIR PATRIOTIC WORK, THIS BOOK IS RESPECTFULLY DEDICATED
BY
THE AUTHOR.
PREFACE.
TO THE READER.
For two years past the author has awaited the auspicious moment for
presenting to the public his views upon the oppressions and abuses
practiced by corporations and combinations of men who were apparently
getting a controlling influence over the commerce, finances, and
government of the country. Recent action on the part of the people has
convinced him that his opportunity has come, and he embraces it. He has
aimed to present a true history of the operations of the different
monopolies.
Since he began the preparation of his work, some events have taken
place not noticed by him. Oakes Ames and James Brooks, two prominent
characters among railroad men, and whom he has had occasion to name,
have died. Some changes in the laws of congress have been made affecting
the interests of corporations. The law requiring the secretary of the
treasury to retain but one-half of the earnings from the government of
the Pacific roads to apply on the interest due to government on subsidy
bonds, has been repealed, and he may now retain and apply the whole
amount. Suit has also been brought against the Union Pacific company
because of its dishonest practices.
On the whole, however, combinations of corporations, and other rings
and organizations, at war with the best interests of the people, have
acquired new strength and more power within the last few months.
The reader will notice the fact, that while the author has quoted
liberally from the statutes and resolves of congress to show the great
privileges and powers conferred upon railroad companies, and
familiarized the reader with their financial and other transactions for
a clear understanding of their manner of doing business, he has not
pretended to give a full history; satisfying himself with such chapters
as would place before the public the true character of these monopolies.
The author has sought to present truthful statements of matters in
connection with the various _interests_ now so hostile to the _rights_
of the people, and he believes he has embodied the facts as they exist.
D. C. C.
MUSCATINE, Iowa, July 28, 1873.
TABLE OF CONTENTS.
CHAPTER I. PAGES.
A PRELIMINARY SURVEY, 15-18
CHAPTER II.
THE PACIFIC RAILROAD INIQUITY, 19-28
CHAPTER III.
THE MONOPOLISTS "HELP THEMSELVES," 29-39
CHAPTER IV.
HOW CONGRESS BETRAYED THE PEOPLE, 40-48
CHAPTER V.
CONGRESS BECOME A STOCK EXCHANGE, 49-55
CHAPTER VI.
HOW THE LAND GRANT RAILROADS "DEVELOPE" A COUNTRY, 56-62
CHAPTER VII.
THE CREDIT MOBILIER AND A VILLAINOUS CONTRACT, 63-80
CHAPTER VIII.
HAS CONGRESS THE POWER, UNDER THE CONSTITUTION, TO CREATE
OR ENDOW PRIVATE CORPORATIONS? 81-91
CHAPTER IX.
STATE RIGHTS AT THE BAR OF A CORRUPT CONGRESS, 92-98
CHAPTER X.
AN UNSETTLED ACCOUNT--A GUILTY DIRECTORY, 99-105
CHAPTER XI.
SOLE PURPOSES OF TAXATION, 106-111
CHAPTER XII.
THE RIGHT OF EMINENT DOMAIN--UNCONSTITUTIONALITY OF
MUNICIPAL AID TO RAILROADS, 112-122
CHAPTER XIII.
THE FATAL POLICY OF MORTGAGING CITIES AND COUNTIES FOR
THE CONSTRUCTION OF RAILROADS, 123-129
CHAPTER XIV.
THE IMPOVERISHING TRANSPORTATION SYSTEM--THE WAREHOUSE
CONSPIRACY, 130-137
CHAPTER XV.
A NEW AND FALSE PRINCIPLE IN HYDRAULICS--WATERED
STOCK--ITS UNLAWFUL PROFITS THE SOURCE OF EXTORTIONATE
TARIFFS--THE FAST DISPATCH SWINDLE, 138-146
CHAPTER XVI.
A PRIVILEGED CLASS--THE MONOPOLISTS RELIEVED OF THE
BURDENS OF TAXATION--AN OUTRAGE UPON REPUBLICAN
GOVERNMENT, 147-151
CHAPTER XVII.
THE STRONG GRASP OF CONSOLIDATED CAPITAL UPON
AMERICAN LEGISLATION--BEECHER ON "REFORMATION OR
REVOLUTION"--HISTORY OF RAILWAY LEGISLATION IN IOWA, 152-168
CHAPTER XVIII.
THE "TRAIL OF THE SERPENT" IN THE INTERIOR DEPARTMENT, 169-179
CHAPTER XIX.
THE MONOPOLISTS AT THE DOOR OF THE WHITEHOUSE, 180-185
CHAPTER XX.
THE UNITED STATES TREASURY THE VASSAL OF WALL
STREET--STOCK "OPERATIONS" EXPLAINED, 186-197
CHAPTER XXI.
HOW WALL STREET BUILDS RAILROADS--A HOT-BED OF CORRUPTION, 198-201
CHAPTER XXII.
THE SUPREME BENCH INVADED--ITS DECISIONS REVIEWED, 202-222
CHAPTER XXIII.
BANK MONOPOLISTS--THEIR CONTROL OF THE CURRENCY--A BANKRUPT
FINANCIAL POLICY, 223-230
CHAPTER XXIV.
OUR TARIFF POLICY--DOES "PROTECTION" PROTECT? 231-239
CHAPTER XXV.
PATENT RIGHTS, AND THEIR ABUSES, 240-246
CONCLUSION.
REFORMATION OR REVOLUTION--A RADICAL CHANGE DEMANDED IN
THE ADMINISTRATION OF PUBLIC AFFAIRS--CONCLUSIONS OF THE
AUTHOR, 247-326
APPENDIX.
CHAPTER I.
LEGAL TENDER DECISIONS, 329
CHAPTER II.
DISSENTING OPINION OF CHIEF JUSTICE CHASE, 330-345
CHAPTER III.
DISSENTING OPINION OF JUSTICE CLIFFORD, 346-386
CHAPTER IV.
DISSENTING OPINION OF JUSTICE FIELD, 387-430
CHAPTER V.
GOVERNMENT CONTROL OF RAILROADS, 431-453
CHAPTER VI.
THE INFLUENCE OF MONOPOLIES UPON LABOR, 454-462
ERRATA.
Page 125, third line from top, for "Then" read _These_.
153, second line from bottom, for "Gould Jay" read _Jay Gould_.
202, fourth line from top, for "jealous" read _zealous_.
238, eleventh line from top, for "1862" read 1872.
257, second line from bottom, for "to" read _by_.
272, fifteenth line from bottom, for "ultro" read _retro_.
MONOPOLIES AND THE PEOPLE.
INTRODUCTORY CHAPTER.
In treating of the topics discussed in this work, the author addresses
himself to the task with no partisan bias. His purpose is to draw aside
the veil, and let the facts speak for themselves. He writes, as he
believes, in the performance of duty. Serious dangers are threatening
the people. There is a power in the land, possessing elements
destructive not only of the industrial and producing public, but of the
very form and spirit of republican government. It will be the aim of the
author to show forth the progress and present attitude of this power in
its relations with the people, and to suggest, if not to advocate, such
measures of relief and protection as the exigency demands.
It is a fact to be admitted by every candid thinker, that of late
years, corporations, rings, and single speculators have, by united and
persistent efforts, obtained control of the government; that their
interests are guarded and protected by the legislative, executive, and
judicial departments of the government, both state and national.
The men who are thus combined in opposition to the people, do not belong
to any one political division; they are found in all parties; they are
firmly united for the purpose of grasping power; of controlling the
government in their own interest; of fastening upon the people
oppressive monopolies, and of enriching themselves at the expense of the
public. To accomplish these ends they procure donations of land, money
subsidies, protective tariffs, continue a depreciated currency, and by
arbitrary rules and by-laws of their own, hold the whole people at their
mercy. To such an extent have these monopolies been fostered and
protected, that at the present time the farmer pays in freights, taxes,
and duties, at least one-half of his farm products for their support.
A silent or passive acquiescence in, and submission to, these abuses and
oppressions, have given a controlling strength and power to monopolies
that cannot now be overcome without a united, long, and hard struggle.
These evils cannot be corrected, nor the rights of the people restored,
save by concerted action on their part, not only in securing proper
legislation, but in asserting and maintaining in their business, at
elections, and in the courts, their rights as free and independent
citizens of the United States. The taxing of the people for the purpose
of aiding private enterprises, the donation of the public land, or of
the public money, to individuals, or companies, or the enactment of laws
by which the people are compelled to pay a part of their hard-earned
substance to aid private parties in accumulating wealth, are oppressions
not to be tolerated in a republic. Yet it is true that we are now taxed
for the purpose of paying the interest on many millions of money given
or loaned to railroad corporations; that we pay large duties on goods
for the benefit of wealthy manufacturers; that extortionate rates are
exacted for transportation of products to market; that we are taxed to
build railroads for private owners, and these things are all pronounced
legal and constitutional, not because they are so, but because these
private interests have become so powerful that they control the country.
The _antiquated_ idea that the government was instituted by the people,
and for the people, has become entirely obsolete, and the new doctrine
has obtained that the whole duty of the government is to foster,
protect, and support monopolies, and that these monopolies own the
people.
In no country of the civilized world are the people more directly
connected with all the questions affecting their well being, than they
are in the United States. It follows that all should be familiar with
such measures as tend to fix and establish the general policy of the
government, not only in respect to its general administration, but
especially in those matters that directly or indirectly give to
corporations, associations, companies, or individuals, exclusive grants,
donations, or privileges, detrimental to the interests of those who are
not of the "favored few."
A republican government can only exist when it is controlled by the
people, and administered in their interest. When special, or class
legislation, for the benefit of certain limited interests, or in favor
of certain parties, becomes the rule of action in the administration of
either the state or national government, accompanied by grants of land,
money, or taxes, to be returned to the government by levies made upon
the people without their consent, that government ceases to be
republican.
In our country, with its vast extent of territory, its diverse
interests, and variety of products, and manufactures, it is but natural
for different localities and interests to ask governmental aid; nor is
it always an abuse of power for the government to give this aid. In some
instances it is the duty of the government to use its power and the
public money in matters that in some degree, at least, are in their
nature local; such, for instance, as the improvement of rivers, harbors,
&c. In these cases it is not an abuse of power, but a legitimate
exercise of the delegated authority for the benefit of the people.
But there is another species of legislation, approved by the executive
and judicial departments of the general government, and endorsed and
supported by the legislatures and courts of many of our states, that is
in its operation anti-republican and oppressive to the people. We refer
to the current special legislation in favor of railroad corporations,
our protective tariff, and the banking system, and financial policy of
the government.
No one will accuse the author of indulging in a partisan view of these
matters. The history of our country shows that men of all parties have
sought for and obtained special grants and privileges. Our aim is to
direct the attention of the reader to some of the facts connected with,
and resulting from, special legislation on the above named subjects, and
show their effect upon the people generally.
The assertion that the government is now committed to the policy of
donating the public lands to railroad corporations may be thought
untrue, yet if we look through the acts of congress for the last few
years we will find that more than two hundred million acres have been
donated to such corporations, and from the number of bills asking for
further grants introduced during the last congress these donations have
but just begun. It will not be claimed that the people asked for these
grants, or that the necessities of the government demanded them. Nor
will it be contended that the people derive any direct benefit from
them. On the contrary, the lands and the roads are owned and controlled
by private corporations, and not even the government can use these roads
for purposes of transportation without compensation. Now, these lands do
not belong to the government, but to the people. Those persons filling
the different departments of government are but the agents or servants
of the people, and have no more right to give the public lands to
railroad corporations than to tax the people and donate the money
received as taxes to these companies. The policy is bad and oppressive
in its effects. If one owns lands and employs an agent to sell it at a
given price per acre, this agent has no right to convey one-half of it
to himself and friends, and mark up the remaining half to a double
price, and leave it on the owner's hands. This is what congress has done
with the public lands, and in every instance the grants or donations
have been made to aid monopolies, corporations, and powerful companies,
who disregard the interests of the public, and use their power and these
immense gifts for the purpose of securing further grants by corrupting
legislators, judges, and executive officers. If we scale their efforts
at corruption by their apparent success, they have not always failed.
The interests of these monopolies are adverse to those of the people.
The privileges granted them are taken from the people. The wealth of the
nation, held by the government in trust for the people, has been and is
now being misapplied by the people's trustees, and given to these
anti-republican monopolies, and unless something is done to arrest this
species of dishonest and unconstitutional legislation, it is only a
question of time, and that time not distant, when this government,
called republican, will deny to the common people those _unalienable
rights_ guaranteed to them by the constitution. How is it now?
Discriminations are made against the public in favor of these monopolies
in payment of taxes, in special legislation for their benefit, and the
aid and protection afforded them by the courts.
Corporations and joint stock companies should have such legislation and
judicial aid afforded them as is necessary to give them a legal being,
and place them on an equal plane with individuals, and no more. All
privileges, immunities, and favors granted to them, beyond such as
are necessary for the above enumerated purposes, are in conflict with
the spirit and genius of our government. The granting of exclusive
privileges to individuals or companies tends to build up an aristocracy
of wealth, to array capital against labor, and to divide the people into
classes. While we have no titled aristocracy in this country, under the
fostering care of the government an aristocracy of wealth has sprung up
among us, more despotic in its nature than exists in the old world. It
holds in its grasp the labor of the country; it compels the whole people
to pay tribute to it; it is constantly asking, claiming, and receiving
additional strength at the expense of the people. So great has its power
become throughout the country as to alarm all who have considered the
subject. For the purpose of self-protection, the laboring community
throughout the country are banding together to resist this monopoly.
The Patrons of Husbandry are moving in the same direction, all feeling
assured that no time must be lost, and that the welfare of the country,
the perpetuity of our free institutions, and the privilege of owning and
enjoying the fruits of thrift and labor, without giving at least
one-half of them to support these monopolies, demand prompt, united, and
efficient action.
We propose discussing the different matter referred to in the following
order:--
I. Donations of land and government subsidies, and their effect upon the
people and the country.
II. The oppressions practiced, and unjust discriminations made by
railroad companies in the transportation, shipping, and storage of
freights.
III. The unjust system of taxation and discrimination made by
legislatures and congress in favor of railroad companies.
IV. The financial policy of the government, and the aid afforded by it
to corporations and monopolies.
V. The tendency of the courts of the country to uphold special or class
legislation in favor of monopolies and corporations, at the sacrifice of
the interests and rights of the people.
VI. The banking system of the country with its useless burdens imposed
upon the public.
VII. The policy of protective tariff, and its effect upon the people and
the interests of the country.
VIII. The evils incident to the patent laws of the country.
IX. The author will present his views respecting the means to be used
for redressing the grievances considered by him.
In treating of these different subjects, it will be our design to cite
and quote such acts of congress, of the state legislatures, and
decisions of the courts as will sustain the views presented, in order
that the reader may fully understand how these giant monopolies are in
fact aided and supported by the government; and we shall try to
demonstrate that the only way to arrest and correct these evils is by
united and persistent action on the part of the industrial and farming
communities, and that the remedy for all improper legislation for, and
governmental aid to, these monopolies is in the hands and under the
control of the people.
CHAPTER I.
A PRELIMINARY SURVEY.
Nothing in this country has contributed so much to the subversion of our
republican institutions as Land Grants made by congress to railroad
corporations, and congressional legislation in their favor. The policy
has opened a wide field for reckless speculation and corrupt
legislation. It has reversed the old rule, that "the people are
sovereign," and has given to "the favored few" the absolute control of
the nation. The reckless giving of lands to railroad corporations, by
congress, is without excuse, or even apology. When grants were first
made to states, it was pretended that railroads could not be built
without this aid. Subsequent developments exploded this idea. Take Iowa
as an example: In 1856 four leading railroads crossing the state from
east to west, received grants of lands sufficient to pay at least
one-half of the entire cost of their construction across the state, yet
they were not built until long years after the grants were made, nor
were they constructed as rapidly as roads built exclusively by private
enterprise and private capital. The effect of the grants was to retard
the settlement and development of the wealth and resources of the state,
by demanding from those who wished to settle upon the lands so granted,
an extortionate, or at least a greatly appreciated price therefor. It
does not require a great stretch of the imagination to arrive at the
conclusion that but for these grants the population and wealth of Iowa
(the taxable wealth) would be quite one-fourth greater now. The grant of
lands to certain railroad companies in Iowa reach eight thousand acres
per mile; this, at $1.25 per acre, amounts to $10,000. per mile; much
more than one-half of the actual entire cost of their construction. Yet,
as a matter-of-fact, some, if not all, of them became insolvent, and
either before, or soon after their completion, their roads were sold to
other parties--the original companies becoming bankrupt. But while the
companies became bankrupt, the officers and few stockholders who
controlled the corporation retired with immense wealth. These are the
men who, at the inception of the land grant system of building
railroads, inaugurated the theory which has since been practiced, that
all lands thus granted were to be treated as donations to the men who
controlled the roads receiving the grants. The result has been
demoralizing. It has opened a field to adventurers, stock jobbers, and
unscrupulous men, who have gone to the national capital and organized
themselves into squads, rings, and companies, for the purpose of robbing
the people. Not unfrequently the men elected by the people to look after
their interests in congress, have themselves become leaders and partners
in these raids upon the public treasurer; and so powerful are these
organizations that all the departments of government have yielded to
them, and the rule, with but few exceptions, is, to plunder the treasury
upon all occasions, and for every conceivable object. But as these
matters will be treated in detail in the following pages, we dismiss
them for the present.
The rule has been, with few exceptions, in granting lands, to provide
that the railroad company shall select alternate sections; that the
residue shall be for sale at $2.50 per acre; that it shall not be
subject to settlement under the pre-emption or homestead law. By these
provisions, those persons who enter the remaining alternate sections,
pay back to government the value of the lands donated to the railroad
company. This plan of aiding monopolies is at variance with every
principal of right and justice. The people themselves are the governing
power. They are the government. Those who fill the various offices are
not rulers, but agents and servants of the people. The public lands are
the property of the people, and these agents or servants representing
them in congress have no more right to give these lands to corporations
than to vote a part of each citizen's private fortune to the same
corporations. When, in addition to these grants, embracing territory
eight or ten times larger than the state of Iowa, large subsidies of
money are also voted to accompany the lands, the people should become
alarmed, and, if possible, arrest such abuses.
Every acre of land given to railroad companies is a direct robbery of
the people, and the fact that whenever a grant is made the people are
required to make good the amount taken from them by paying a double
price for the moiety that is left to them, but adds insult to injury.
The citizen who wishes to live upon and improve his quarter section,
instead of claiming it as a homestead, or even purchasing it at the
government price of $1.25 per acre, must pay $2.50 per acre before he
will be permitted to occupy it. Nor is this all; he must be taxed to pay
the interest on the subsidy bonds issued to the same companies that have
received the grants of land, and all the benefit he derives from these
unjust burdens imposed upon him, is the privilege of traveling upon
railroads, or of shipping his produce over them, after he has paid to
their officers whatever sum they choose to demand for the privilege.
To show more fully the extent to which the people are being plundered
under the plea of assisting railroads in their efforts to develope the
country, we desire to direct the reader's attention to some of the acts
of congress covering "railroad legislation." Let us, for an example,
take the Union and Central Pacific railroad, beginning at Council Bluffs
and terminating at San Francisco. The charter for this road was granted
in 1862, at a time when the country was at war; when it would be natural
to presume that the government had no surplus capital, and when reason
and common prudence demanded strict integrity and rigid economy in every
department. In chartering the company, all idea of economy, integrity,
or even _common honesty_ seems to have been abandoned. The demand for
the road as a national necessity in time of war, for direct
communication between the Atlantic and Pacific states, and the immense
cost of the road, with its great length, were the arguments used in
favor of liberal aid. All these reasons were plausible--perhaps valid.
They were seized upon, and the action of congress besought in the
premises by a ring that was formed for the purpose of making immense
fortunes out of the enterprise. A noticeable feature in the matter is,
that members of congress, in the senate and house, as soon as the act
was passed granting the charter, became large stockholders and managers
in the corporations. The aid granted by congress to this company was
sufficient, if honestly applied, to construct a double track road the
entire distance, and leave a large margin for distribution among the
stockholders. The act of congress granting the charter, with subsequent
amendments, opened a wide field for plunder, and the way the corporators
availed themselves of their opportunity shows that they had determined
to plunder the people of the last available dollar. A reference to this
act and amendments, as published by congress, will fully sustain all we
have asserted. Selecting the charter of this road as an apt illustration
of all others receiving aid from government, we ask the reader's
attention to some of its more remarkable features.