THE MONOPOLISTS "HELP THEMSELVES."
The Pacific companies are such a deep mine of iniquity, we must sink our
shaft somewhat deeper if we would see the true quality of the
corruption. In order to fully comprehend the injustice done to the
people, it will be necessary to examine the further legislation of
congress in their favor.
A perusal of the act from which we have quoted will convince the reader
that these companies received all that was necessary for the successful
completion and operation of their road, and its numerous branches, and
to enable them to extort from the government and the people all that the
most grasping and avaricious could desire. But, like Oliver Twist, they
still asked "for more," and they got it; not in more lands and money,
but in being relieved, by act of congress, from the restrictions and
duties imposed upon them by their charter.
The act of congress chartering the Union Pacific railroad, and its
numerous branches, was amended by the act of July 2, 1864, in many
particulars, to some of which we have already referred. The fourth
section amends the third section of the original charter by increasing
the number of sections of land granted per mile to said road, from ten
to twenty, and allowing the selection of the lands to be made within
twenty miles of the line of the road, instead of ten, as provided in the
original charter; and also provides that the secretary of the interior
shall withdraw from sale and pre-emption all the land within twenty-five
miles of the line of the road, until the company has selected its twenty
sections. The original charter limited the withdrawal to fifteen miles.
The amendment also qualified the term "mineral lands," contained in the
original act, so as to except from the lands reserved by the government
all coal and iron lands; thus enabling the company to select coal and
iron lands to the full amount of twenty sections per mile, giving to
said railroad company, or companies, a monopoly of the coal trade in a
country where coal is, and will continue to be, the greatest
desideratum; and the same section gives the company the right to use, in
fact grants to the company, all the timber found on each side of the
road within ten miles thereof. The company can, under its charter, take
all the timber from the land it does not select, and then take its
twenty sections in coal lands, when they can be found. This it has done,
and in addition, bought of the government other large tracts of coal
land; not in the name of the company, perhaps, but in the name of the
individual stockholders. By this means, all who settle along the line,
in the vicinity of this Union Pacific road, are placed in the power of
this great corporation, and must pay it for fuel and transportation
whatever sum may be demanded, because the charter does not restrict the
company in the matter of charges for transportation.
Section seventeen of the original charter provided that twenty-five per
centum of the subsidy bonds should be retained by the government until
the entire line of the road was completed. Section seven, of the act of
July 2, 1864, repealed this provision.
Other amendments are made for the benefit of the corporation, as to time
and manner of payment; but as it is not our intention to examine all of
its provisions in detail, we pass to the tenth section.
By the original charter, the subsidy bonds issued to the company were to
be and remain first mortgage bonds upon the road and property of the
company, the company paying six per cent interest (payable
semi-annually) on said bonds, and the principal in thirty years. The
tenth section of the amendment reads as follows:--
"That section five of said act be so modified and amended that the Union
Pacific railroad company, the Central Pacific railroad company, and any
other companies authorized to participate in the construction of said
road, may, on the completion of each section of said road, as provided
in this act, and the act to which this act is an amendment, issue their
first mortgage bonds on their respective railroad and telegraph lines,
to an amount not exceeding the bonds of the United States, and of even
tenor, time of maturity, rate and character of interest, with the bonds
authorized to be issued to said railroad companies, respectively. And
the lien of the United States bonds shall be subordinate to that of the
bonds of any or either of said companies, hereby authorized to be issued
on their respective roads, property, and equipments, except as to the
sixth section of said act, to which this is an amendment, relating to
the transmission of dispatches, and the transportation of mails, troops,
munitions of war, supplies, and public stores, for the United States."
By this amendment, the public money appropriated to private
corporations, to the amount of about $65,000,000, for which security had
been taken, on all the property of the companies, was left in the hands
of the companies without any security; or, in other words, the servants
of the people made an absolute gift of this great sum of money. The
history of the country, in connection with railroad corporations,
demonstrates the fact that these corporations by "watering" their stock,
and other characteristic management, show, if they so desire it, no
margin from the business of their roads. They permit the interest on
their bonds to accumulate, until a foreclosure and sale on first
mortgage bonds are necessary, and then, under a new name, but with the
same persons as stockholders, the road is bought in and becomes
profitable. In this case the amount of $65,000,000, and the accrued
interest must be first paid, or the property of the corporation must be
sold, and the public money advanced by the government will be lost. Even
at the present time (as we shall show hereafter) the people are paying
the interest on these subsidy bonds, and the only security they have for
its repayment is the _honor_ of the company; for all precedents prove
that as a rule second mortgage bonds, when a large sum of first mortgage
bonds is to be paid, are of no real value.
Sections fifteen and sixteen provide for a division of earnings, and a
consolidation of the various companies. Sections eighteen, nineteen, and
twenty, provide for the admission of the Burlington & Missouri river
railroad company as a branch of the Union Pacific, with a grant of land
in Nebraska. But the greatest outrage upon the rights and interests of
the people, in this Pacific railroad law, will be found in the
seventeenth section of this amendment. By the original act, the Union
Pacific company was required to construct a branch, road from Sioux City
(on the most direct and practicable route) to some point on its road to
be fixed by the president of the United States (but not beyond the
one-hundredth parallel) when a railroad should be constructed through
Minnesota or Iowa to Sioux City. This new road was to unite with and
form a part of the great monopoly, and was to receive the same amount of
lands, and subsidy bonds, per mile, as the main line received. The
building of this road from Sioux City west, to a proper point of
connection with the main line, would have cost but little,
comparatively, because of the favorable character of the country through
which it would pass.
For some reason, unknown to the public, it was decided to make a change
in respect to this branch, not only as to its location, but also as to
the company whose _duty_ it should be to build it. To effect this
object, this seventeenth section contains the following provisions:--
"That so much of section fourteen of said act as relates to a branch
from Sioux City, be, and the same is hereby, amended so as to read as
follows: That whenever a line of railroad shall be completed through the
state of Iowa, or Minnesota, to Sioux City, such company now organized,
or as may be hereafter organized, under the laws of Iowa, Minnesota,
Dakota, or Nebraska, as the president of the United States, by its
request, may designate, or approve for the purpose, shall construct and
operate a line of railroad and telegraph from Sioux City, upon the most
direct and practicable route to such point on, and so as to connect
with, the Iowa branch of the Union Pacific railroad, as such company may
select, and on the same terms and conditions as are provided in this
act, and the act to which this is an amendment, for the construction of
said Union Pacific railroad and telegraph line, and branches; and said
company shall complete the same at the rate of fifty miles per year.
Provided, that said Union Pacific railroad company shall be, and is
hereby, released from the construction of said branch. And said company
constructing said branch shall not be entitled to receive, in bonds, an
amount larger than the said Union Pacific railroad company would be
entitled to receive if it had constructed the branch under this act, and
the act to which this is an amendment; but said company shall be
entitled to receive alternate sections of land for ten miles in width on
each side of the same, along the whole length of said branch; and
provided further, that if a railroad shall not be completed to Sioux
City, across Iowa or Minnesota, within eighteen months from the date of
this act, then said company designated by the president as aforesaid,
may commence and complete the construction of said branch, as
contemplated by the provisions of this act. Provided, however, that if
the company so designated by the president as aforesaid, shall not
complete the said branch from Sioux City to the Pacific railroad within
ten years from the passage of this act, then, and in that case, all of
the railroad that shall have been constructed by said company, shall be
forfeited to, and become the property of, the United States."
Now if the reader will take a late map, having the lines of railroads
upon it, he will discover that a road from Sioux City to Columbus, in
Nebraska, would be about one hundred miles in length, on a line running
nearly west; and at this latter point it would intersect and unite with
the Iowa branch of the Union Pacific; or a line running southwest for a
less distance would unite with the Union Pacific at Fremont, in
Nebraska. In the original charter it was contemplated to occupy one of
these lines, and, in fact, a branch road was commenced from Sioux City
to Fremont. The directors of this branch and the Union Pacific are in
part the same, to-wit: Oakes Ames, of Boston, and G. M. Dodge, of Iowa.
It would seem that this road, running southwest to Fremont, and there
uniting with the Pacific, would afford all necessary facilities for
securing the transportation of the mails, troops, &c., and that upon no
pretext whatever could another grant of land and subsidy bonds be asked.
Yet congress thought otherwise, and in the section last quoted
authorized any company organized under the laws of Iowa, Minnesota,
Dakota, or Nebraska, that might be designated by the president of the
United States, on application to him for that purpose, to construct a
railroad to unite with the Union Pacific, leaving it with the new
company to fix the point at which it would so unite, but requiring it to
commence at Sioux City. Taking advantage of this act, two companies, the
Sioux City & Missouri Valley, and the Chicago & Northwestern,
constructed a line of road from Sioux City to Council Bluffs, there to
unite with the Pacific; the Sioux City & Missouri Valley constructing
the road from Sioux City to Missouri Valley, and the Chicago &
Northwestern from Missouri Valley to Council Bluffs. This line of road
was constructed ostensibly as a part of the Pacific road. It is presumed
to run west. Look at the map and you will see that from Sioux City to
Council Bluffs, instead of going west, it runs on a line east of south,
to the extent of thirty miles, Council Bluffs being thirty miles east of
Sioux City. The company constructing this last named road received from
the government a grant of one hundred sections of land per each mile,
and $16,000 in subsidy bonds for each mile of road. This road runs along
the east side of the Missouri river, and in truth, is of no use as a
route for the transportation of mails, troops, &c., unless the
government prefers to use the longest, least expeditious, and most
expensive line of road. Indeed, it seems to be a road that is under the
especial care and protection of congress. It is called in the Railroad
Manual, "The Sioux City & Pacific Railroad." It was a "nice and fat"
job. It has one feature not often found in these railroad jobs carried
through congress. It appears to have been gotten up for the benefit of
congressmen. After repeated efforts to learn who were the incorporators
of this company, we addressed a letter to the secretary of state of
Iowa, and received the following answer:--
DES MOINES, December 7, 1872.
DEAR SIR:--In answer to yours of the 6th inst., I will say that there
is no line of railroad from Sioux City to Council Bluffs, run as one
road, or by one company. The Sioux City and Pacific railroad runs from
Sioux City to Missouri Valley, and the Chicago and Northwestern (Cedar
Rapids and Missouri River) from Missouri Valley to Council Bluffs. The
corporators of the Sioux City and Pacific company were L. B. Crocker,
M. K. Jessup, James F. Wilson, A. W. Hubbard, Chas. A. Lombard, Frank
Schuchardt, W. B. Allison, and John I. Blair.
Yours truly,
ED. WRIGHT,
_Secretary of State_.
Among the present directors are to be found the names of Oakes Ames,
John I. Blair, D. C. Blair, and G. M. Dodge. Ames was a member of the
late congress, and G. M. Dodge is an ex-member. Among the directors of
the Cedar Rapids & Missouri river company appear the names of John B.
Alley, and James F. Wilson, who were members of congress when the act of
July, 1864, was passed, amending the charter of the Union Pacific, and
making the large grants to the company designated by the president to
build the Sioux City branch of the Union Pacific railroad. Wm. B.
Allison has been a member of congress almost continuously from 1860 to
the present time.
This Sioux City branch seems to have been a special favorite with
certain congressmen. It received the lion's share of lands, getting five
times as many sections per mile as the main lines, and this, too, for
the purpose of building a railroad running east of south, instead of
west--the direction of the main line--following the course of the
Missouri river on the east side thereof for the entire length of this
branch, and crossing on the bridge to the Nebraska shore at Omaha.
In addition to the road from Sioux City to Omaha, and for the purpose of
getting all the land and money possible out of the government, the
conspirators organized another company, under the laws of Nebraska,
to-wit: The Fremont, Elkhorn, & Missouri Valley company, and built a
road running from Missouri Valley to Fremont, in Nebraska--about fifty
miles,--and these two roads, from Sioux City to Missouri Valley, and
from Missouri Valley to Fremont, are now called the Sioux City &
Pacific. We do not know who were the incorporators of the Fremont,
Elkhorn, & Missouri Valley company, but we find among the present
directors, John I. Blair, D. C. Blair, and ex-congressman John B. Alley.
The two companies are consolidated. The grant of one hundred sections of
land, and bonds to the amount of $16,000 per mile, with the privilege
of issuing first mortgage bonds to the amount of $16,000 per mile,
altogether comprise one of the most remunerative jobs ever conceived and
consummated by incorporating, stockholding and "direct"-ing congressmen
in the companies receiving the aid. When it is remembered that the
actual cost of the construction of the road was less than $30,000 per
mile (as shown by the _Railroad Manual_), and that it is of no value to
the government because of its course, save for carrying local mails (its
entire earnings for government transportation being less than $1,000 per
annum), it will not be uncharitable to conclude that this _fat_ little
slice of the Pacific railroad job was put through congress, and nursed
and petted by government for the exclusive benefit of congressmen, their
friends and relatives.
We do not deny the right to congressmen to become and remain
stockholders and directors in railroad corporations, but we do deny
their right to vote lands and money to companies in which they are
stockholders and directors. They are elected to represent the people, to
attend to and protect the public interests. When they form themselves
into companies and vote the lands and moneys of the people to
themselves, they violate their trust, and instead of protecting the
people, plunder them, and divide the spoils. To give these unjust
practices some color of right, or in some manner to excuse themselves
for thus appropriating the wealth of the country and dividing it with
their friends, they assert in the laws thus enacted that it is done to
aid in the construction of railroads, and "to secure the safe and speedy
transmission of the mails, troops, munitions of war, and government
supplies," &c. It is no part of the duties of congressmen to construct
railroads, nor are the people under obligations to furnish them the
means for that purpose. When members of congress form themselves into
private companies, and to procure the means for prosecuting their
private enterprises, agree to divide among themselves a part of the
money and property belonging to the public, because the position they
occupy enables them to do so, they manifest the same disregard for the
rights of others, and the same disregard of law that is shown by the
class of men who follow theft and robbery for a livelihood.
But let us follow still further the course of this Pacific railroad
company. It would occupy too much space, and weary the reader were we to
state in detail all the acts of congress passed in aid of this gigantic
combination. In speaking of the Pacific railroad we are apt to look upon
it as simply a line of road extending from the Missouri river to the
Pacific ocean; to consider its great length; the character of the
country through which it passes; the sparse settlements; the necessity
for direct and speedy communication between the Atlantic and Pacific
states, and we yield a ready assent to the action of congress in voting
lands and subsidy bonds for its construction. But when we find that the
charters of the Union Pacific and Central Pacific companies, and their
various amendments, together with the several acts of congress making
many other companies branches of the Pacific road, virtually
consolidates all the railroads between the cities of St. Louis and St.
Paul on the Mississippi river, and all the railroads running west from
Chicago, into one vast corporation, uniting all in one track from Fort
Kearney to the Pacific ocean, the people will begin to realize that
while they thought congress was appropriating lands and moneys solely
for the purpose of opening a highway across the territories, it was in
fact aiding a combination of men and corporations in their attempt to
control the commerce of the great west; and when we further learn that
this great railroad interest is already virtually consolidated, and that
the whole people are placed at the mercy of this great monopoly, we see
at a glance the extent of the power vested in it by act of congress.
Among the railroad companies that are included in this combination are
the following: Chicago & Northwestern; Iowa Falls & Sioux City; Cedar
Rapids & Missouri River; Leavenworth, Atchinson, & Northwestern; Kansas
Pacific; Union Pacific; Burlington & Missouri River; Sioux City &
Pacific; Missouri River; Chicago, Iowa, & Nebraska; Hannibal & St.
Joseph; and the St. Paul and Sioux City. Most of the above roads
received grants of lands; some of them received subsidy bonds,
ostensibly for the public benefit, but in reality for the purpose of
combining in one the interests of all these combinations. Whatever may
have been the intention of congress in granting exclusive privileges to
these companies and permitting them to unite, the effect has been to
fasten upon the great west a monopoly, that for all time to come will be
an instrument of oppression. With its vast power and wealth it can but
control the fortune of the laboring and producing classes inhabiting the
richest portion of our common country. The further fact that this great
corporate power is the particular pet of congressmen, and that among its
directors and stockholders are members and ex-members of congress,
render the hope of any change in favor of the people remote, if at all
attainable. If the reader is desirous of learning who are the directors
and managers of the Pacific railroad and branches, he has only to
consult _Poor's Railroad Manual_ for 1872-3. He will find among the
present directors the men who, in congress, voted the lands and
subsidies to the companies in which they are now directors, and also,
that some of these directors are now holding the office of congressmen
and of United State's senators.
By the acts of congress granting and amending the charters of the
Pacific railroad companies and branches, it is made the duty of the
president of the United States to appoint five directors, "who shall be
denominated directors on the part of the government," and these acts
forbid such directors being stockholders in said Pacific railroad
companies. It is made the duty of these government directors to exercise
a general supervision of the Pacific road and branches, and to report
its condition from time to time to the secretary of the interior. In
contemplation of law they are to have no pecuniary interest in the
companies or in the roads. The present government directors are B. F.
Wade, of Ohio; Hiram Price, and J. F. Wilson, of Iowa; J. C. S.
Harrison, of Indiana; and D. S. Ruddock, of Connecticut. By act of
congress of June 2d, 1864, the Cedar Rapids & Missouri River railroad
was authorized to connect with the Iowa branch of the Union Pacific
road, and sections fifteen and sixteen of the acts of July 2d, 1864,
place all roads connecting with the Union Pacific on an equality as to
charges for freights and passengers, and permits them to consolidate if
they elect so to do. The Cedar Rapids & Missouri River company has
leased its road to the Chicago & Northwestern company, and it is
operated in connection with the Union Pacific, uniting with it at
Council Bluffs, and it virtually becomes a branch of the Union Pacific
road. The reader can look over the list of directors, as shown in the
_Railroad Manual_ before referred to, and learn if any of the government
directors of the Union Pacific are directors in the Cedar Rapids &
Missouri River company. The reports made of the cost, condition, and
other matters connected with Pacific railroad enterprises, disclose such
utter disregard of the rights and interests of the people, and such a
gross betrayal of the public good for the benefit of a ring (in part a
congressional ring) as to leave it without precedent.
The fact that the men who formed this ring have become a powerful
moneyed aristocracy, able by their votes and influence in congress to
convert the public lands and money to their own use, and are now boldly
taxing the people with the interest on the money appropriated to build
up these oppressive monopolies, should arouse the country to a sense of
its imminent peril.