CHAPTER XIV.

THE IMPOVERISHING TRANSPORTATION SYSTEM.--THE WAREHOUSE CONSPIRACY.

One of the great evils resulting from this bonded subsidy system of

building railroads, is that it gives to those who manage them the

control of the whole carrying trade of the country, and enables them to

impoverish the great agricultural population of the west and south. The

wealth of the United States lies in its agricultural products. The

greater portion of the people are engaged in agricultural pursuits. Good

markets and cheap freights are of the utmost importance to agriculture.

However abundant may be the crops, unless a market can be reached

without a sacrifice of one-half the product in the shape of freights and

commissions the husbandman will be impoverished. If the farmers, the

tillers of the soil, do not receive a fair remuneration for their work,

all other industrial interests will suffer with them; anything that

tends to deprive the producer of the value of his product, tends to the

impoverishment of the whole country. Any system of laws, regulations, by

government, or combinations of men, or corporations, that are oppressive

to the producer, oppress the whole people. It matters not whether these

oppressions are in taxes, tariffs, or charges for transportation of the

farm product; no matter in what shape it comes, the result is the same.

The great oppression now being practiced upon the people is in the

enormous charges made by railroad companies for carrying freight. The

charters, grants, subsidies, and privileges given to these companies

have enabled them to organize a powerful monopoly, through which they

demand and receive for transporting meats, grains, and other farm

products from the west to the eastern markets, at least one-half the

value thereof. The charges of these monopolies are arbitrary, and often

fixed by the value of the different kinds of grain carried by them. For

instance, they charge one-third more per ton for carrying wheat from the

west to the east than for corn and oats; it being worth more in market,

they ask a larger dividend from it. It can be carried as cheaply as oats

or corn, but, because of its value, will bear a greater charge, and

still leave one-half of its value for the producer. There is no good

reason why a railroad company should charge thirty cents per hundred for

carrying wheat from Muscatine (Iowa) to Chicago, when it charges but

twenty cents for carrying oats and corn over the same road, the same

distance. Yet such is the fact. Those who are in the interest of these

monopolists talk about cheap freights; they argue that railroads can

transport freights much cheaper than it can be done over ordinary

highways. Let us turn again to the Railroad Manual, and see how the

matter is treated. Says the author: "The cost of transporting Indian

corn and wheat over ordinary highways will equal twenty cents per ton

per mile. At such a rate, the former will bear transportation only 125

miles to a market where its value is equal to seventy-five cents per

bushel; the latter only 250 miles when its value is $1.50 per bushel.

With such highways only, our most valuable cereals will have no

commercial value outside of a circle having a _radii_ of 125 miles and

250 miles, respectively. Upon a railroad the cost of transportation

equals one and one-fourth cents per ton per mile. With such a work,

consequently, the circle within which corn and wheat, at the price

named, will have a marketable value, will be drawn upon a _radii_ of

1,600 and 3,200 miles respectively. The arc of a circle with a _radius_

of 125 miles is 49,087 square miles; that of a circle drawn upon a

_radius_ of 1,600 miles is about 160 times greater, or 8,042,406 square

miles. Such a difference, enormous as it is, only measures the value of

the new agencies employed in transportation, and the results achieved

compared with the old."

Here the fact is acknowledged that freights can be transported over

railroads for one and one-fourth cents per ton per mile. At this rate, a

ton of freight transported from Muscatine, Iowa, to Chicago, would cost

less than $2.50. This is what the advocates of aid to railroad companies

publish to the world as a fact, and from it deduce the argument in favor

of increased facilities for their construction, with greater privileges

to be granted to the companies constructing them. The same rate of

charges for transportation from the state of Iowa to the city of New

York would not amount to more than from twelve to fifteen dollars per

ton, and would allow the producer a fair price for his product. But

while it is admitted that the above stated amount will compensate the

railroads for transporting freights, the amounts actually charged range

from twenty-five to fifty dollars per ton from Iowa to Chicago, with a

proportionate increase to New York and other eastern cities. Where

commerce is open to competition, a fair remunerative price for carrying

freights is all that is demanded or paid. If the railroads of the

country were not owned and controlled by the same combinations; if they

in any degree answered the ends anticipated by the public when their

charters were granted and privileges were bestowed upon the companies

constructing them, these excessive charges would not be made or paid.

We have attempted to show that all the railroads in the country are

owned, controlled, and operated in the interest of eastern capitalists,

with their headquarters in New York or Boston; and that the only

interest these capitalists have in the producer is to extort from him

all they can get, even at the risk of ruining the whole country. These

monopolists, taking advantage of the great privileges granted them, and

of the necessities of the agricultural and producing classes, have

combined, and defying all competition, as well as the legal restrictions

sought to be placed upon them, are now, and for some time past have

been, charging such unjust rates for transportation as to render the

farm products of the west of little or no value. Corn, worth from sixty

to seventy cents in New York, is worth only from fifteen to twenty-five

in Iowa--two-thirds of its eastern value being absorbed in charges for

transportation, storage, &c. Wheat, worth from $1.50 to $2.00 in New

York, is worth but from ninety cents to $1.25 in Iowa, the difference

being absorbed in charges for transportation, storage, commissions, and

in passing it through elevators. It will be seen that these monopolists

who have combined for that purpose are systematically robbing the farmer

of about one-half of his crop. After he has labored diligently during

the season, and harvested his crops and prepared them for market,

because of the privileges granted to these monopolists he must divide

with them, giving them one-half, or let it go to waste, and suffer his

family to want for the necessaries of life. The combination against him

is so perfect he is without remedy. All other means of transportation

have been superseded by railroads, and he is powerless to resist. The

banditti who raid upon the country, and levy tribute upon the

inhabitants by force, are no greater robbers or oppressors than these

monopolists. Indeed the wrongs practiced by the former are less to be

dreaded than those practiced by the latter. The people, supported by

natural and common law, as well as by statutes, can rid the country of

the bandit; but the monopolist has become so powerful that he defies the

people, moulds the statutes and decisions of courts to suit himself, and

compels the whole country to submit to his extortions. No one would wish

those engaged in transporting freights from the west to the east to lose

money in the business. On the contrary, the people desire that railroad

carriers should receive a fair and liberal compensation in their

business, and upon the capital invested. But when it costs but $30,000

per mile to construct and stock the railroads, and when for the purpose

of illegitimate gain the persons owning and controlling them water the

stock, and add to the actual cost fictitious and imaginary items, that

it may appear that these roads have cost fifty or sixty thousand dollars

per mile, then issue to themselves or their agents bonds to meet these

fictitious amounts, and annually pay to themselves the interest on these

bonds, and to increase the value of these bonds declare dividends upon

the whole stock, it will readily be seen why the producer does complain

of the high rates now charged for transporting his products to market.

These companies make it impossible to do an honest business and show

dividends, or ever pay the interest upon the bonds they have issued. If

it be true that the charges for freights cannot be reduced on railroads,

two things are demonstrated: First, that the published statements of the

costs of carrying upon railroads are untrue; and second, that railroads

have entirely failed to supply the necessities of the country. If we are

to depend upon railroads to carry the agricultural products of the

country to the seaboard, all hope of competing with other countries in

European markets is at an end. If the cost of carrying a bushel of wheat

from Iowa to New York is to remain as at present, one of two

alternatives is presented. Either the producer must sell at ruinous

rates, or a home market must be found for his crop; for the large amount

charged for carrying it to the coast, added to the ocean freight,

destroys all hope of a foreign market, save in times of failure of crops

elsewhere. We now complain of our lack of shipping upon the ocean, and

of the fact that the balance of trade is against us. With our large

annual product of cereals, meats, cotton, and yield of precious metals,

the balance of trade is in favor of England; and American shipping, once

the equal of England's, is now classed with only third and fourth rate

nations. One of the chief causes of this deplorable state of affairs is

the absolute control obtained by these petted monopolists over our

inland commerce, and their tyrannical extortions in rates for

transportation.

We have spoken of the rates of charges from the west to the east. We

need not go into details in this matter, for every farmer knows from

experience what proportion of his crop railroads demand as their share.

If he does not, let him look at his crib of corn, worth in New York from

seventy-five cents to one dollar per bushel, and in Iowa from fifteen to

twenty cents. Three-fourths of his crop is what these corporations,

_these great blessings to the country_, as they claim to be, demand of

him for carrying his one-fourth to market, provided he will, at his own

proper cost, load his whole crop at the place of shipment, and unload it

when it reaches its destination; or, what is worse for him, permit it to

go into the company's storehouse. While this state of things lasts, it

is not a question as to how much the producer is increasing in wealth,

but how long will he be able to pay his taxes and keep his family from

starving? If he is in debt, he is without hope of paying. No king,

emperor, or despotic sultan, would dare to extort from his subjects

three-fourths of the productions of their toil; yet this oligarchy,

composed of men who, from long practice, have come to look upon the

people as their vassals, and the fruits of their labor as lawful spoils,

demand and receive as their toll from one-half to three-fourths of the

entire farm products of the country. The consolidation is now so

perfect, that these railroad kings can dictate to the people how much

they shall receive for their products, and how much they must pay for

transporting it to market. Any one of the railroad kings of New York, by

a telegraphic dispatch to the west, can depress the price of grain one,

five, or ten, cents per bushel. The order is made at headquarters, and

in one hour from the time it is made the farmer in the west who is about

to sell his one thousand dollars' worth of wheat must take nine hundred

dollars for it, because this railroad king has sent word west that he

must have another one hundred dollars added to the already enormous

charges for transportation. Unless this combination can be broken up and

destroyed, and they who own, manage, and control the carrying trade of

the country forced to act honestly, there is no prosperous future for

the laboring and producing portion of the people; they must remain

bond-servants and vassals of this railroad oligarchy now controlling the

country.

Another evil resulting from this railroad system, directly affecting the

producer, is the elevator and warehouse system, put in operation,

supported by, and prosecuted in the interest of, this monopoly. As a

necessity in shipping and handling grain and other farm products, there

must be at shipping points, as well as at the great grain depots,

warehouses, storehouses, and elevators. If these were owned and

controlled by individuals, unrestricted by railroad companies, they

would be of great benefit to the producer; but such is not the fact. Go

to any way-station on the roads, or to any of the more prominent points,

as well as to the great grain depots, and you will find an arbitrary and

oppressive rule adopted, which demands of the producer a further

dividend from his products. At unimportant points and way-stations, the

warehouses and elevators are built upon the company's depot grounds,

and, if not owned by the company, are built under an agreement that

there shall be a division of the receipts; and in order to make it

mutual, the elevator company, or warehouseman is to charge certain rates

on all grain passing through their hands; and the railroad company is to

receive on board their cars no grain that has not paid its duty to the

elevator or storehouse. Whether it is stored or not, whether it passes

through the elevator or not, this arbitrary toll or levy must be paid

before it can be shipped. If the farmer deliver it directly on board the

cars of the company, he must pay these charges the same as though he had

delivered it to the warehouseman. He cannot avoid this extortion, for

the only possible way he has to get his grain to market is to ship it

over the road, and this he cannot do unless he pays this charge. But by

far the greatest imposition is practiced at the great grain depots at

Chicago, New York, and other cities. The immense daily receipts at these

great depots demand immense warehouse and elevator facilities. Large

numbers of elevators and warehouses were provided and used--formerly by

individuals; and while warehousemen dealt individually with the public,

there was but little abuse; competition was sufficient to insure

reasonable charges. The owner of grain, upon its arrival at its

destination, could avail himself of any competition among warehousemen,

and select such as his judgment approved or his interest prompted.

But a different rule now obtains. These railroads do not stop half way.

Their combination for carrying the product of the country is perfect;

but another combination will afford them an opportunity for extorting

from the producer an additional portion of his crop in the shape of

storage. To effect this object, the different warehouse companies in the

principal grain marts have consolidated or "pooled" all their interests,

and in combination with the railroad companies have pursued, and are

pursuing, a course of extortion which is oppressive upon the producer.

When his grain reaches its destination, it must go into a warehouse; he

is in a worse situation now than when he shipped it; then he had the

option to keep it, or submit to the first levy in favor of the

warehouseman; but he is now entirely helpless in the hands of the _ring_

formed to rob him. Without asking his consent his grain is taken to such

warehouse as the railroad agent directs; it is seized by the

warehousemen and stored at such ruinous rates as to compel him to sell

at once, or have the small portion of the crop which he sowed and

harvested, and which thus far the railroad combination has graciously

allowed him to retain, absorbed by elevator and warehouse charges. He is

obliged to use all these agencies or let the crop go to waste on his

hands; and these agencies are all owned and controlled by this vast,

this gigantic corporate power, created, enriched, and protected by state

and national legislation, and constantly guarded by the decisions of the

courts, state and national. Indeed, the old despotic maxim, "The king

can do no wrong," that his acts cannot be questioned, seems to have

descended to these monopolies. They are protected by government, and, as

the case now stands, _their servants, the people_, must be content,

because all hope of relief from efficient action on the part of either

the legislative or judicial departments of the government is denied

them.

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