HOW WALL STREET BUILDS RAILROADS--A HOT-BED OF CORRUPTION.
We have attempted to show the controlling influence of these railroad
corporations upon the legislative and executive departments of the
government, and have placed before the reader the danger to republican
institutions and liberties of the people, resulting from this influence.
In this connection it remains for us to treat of the influence of these
corporations upon the judiciary of the country. Before proceeding to
this branch of the subject we desire to direct the reader's attention to
some alarming facts respecting these corporations, hitherto only alluded
to, and the disastrous results which must follow their present
management.
We have already shown that railroads, in stocks and bonds, represent
capital to about three times their actual value, and that because of
this, the people are compelled to pay rates of transportation ruinous to
the agricultural interest of the country. We have shown the relations
existing between the men who manage these corporations and the Wall
street gamblers, with their manner of issuing and putting upon the
market fictitious or "watered" stock. The idea generally prevailing is,
that the enormous wealth which these monopolies represent is real. In
fact, about two-thirds of it is pure fiction. It is _manufactured_, and
by reckless and dishonest men, who stop at nothing, and who care not for
the prosperity of the nation, or of the government, when their own
interests are in view. They drain the country of its wealth, concentrate
it in Wall street, and there spend it in stock and gold gambling; and
this hot-bed of corruption which has no counterpart, save in the
infernal regions, has raised such a combination throughout the country
as to control the whole financial policy, and compels even the secretary
of the treasury to yield to its demands. The public and private wealth
of the country is being rapidly destroyed by these corporations, and all
departments of government are compelled to do them homage.
We have shown that the railroads of the country are in the hands of
unscrupulous men, whose sole interest in transportation is the money it
can extort from the public. This must be so from the manner in which
roads are built and controlled. Formerly railroads were paid for from
the proceeds of paid-up capital. The men who became stockholders were
interested in making good and cheap roads, and in operating them
honestly and economically. These men were free from the scandal of
watering stock, issuing and selling bonds to an unlimited amount, and
were not partners in the iniquitous Wall street speculations which have
become the bane of the country. In Appleton's Railroad and Steamboat
Companion, published in 1849, we find a statement of the cost of
railroads then constructed. The roads then constructed were supplied
with rails that cost less than those now in use, but the road-beds in
most cases, in the eastern states, cost much more than those constructed
at more recent periods. Some of them were lines of solid masonry,
supporting lateral or string timbers, throughout the entire length, and
the rails were placed upon these timbers. Others were constructed upon
the plan now in use, costing less than half the cost of the others. The
roads in the eastern states, built upon the plan first named, cost as
follows: In Massachusetts and the other New England states, $24,000 per
mile. In New York, $26,000. In New Jersey and Pennsylvania, $40,000. In
Michigan, Ohio, and Indiana, where the roads were built upon the modern
plan, $11,000. Of course, the small cost in these last named states is
attributable in part, to the nature of the country through which they
pass. The facilities for building railroads at the present time more
than counterbalance the additional cost of iron, and no good reason can
be shown why the actual cost of roads at this time should exceed that of
the more substantially constructed roads built thirty or forty years
ago. But at the present time the building of railroads from the proceeds
of paid-up stock is not generally practiced. A different rule prevails.
The general rule now is to get grants of land, government, state, and
local subsidies, in amounts sufficient to organize a company and
commence the work of construction, then to issue and sell bonds, secured
by mortgage upon the roads to be constructed, and from the proceeds
construct the roads. Then stock certificates representing paid-up
capital are issued, when in fact, all that has been paid is the local
subscriptions obtained by managers from persons located along the lines
of roads. The roads having been built on borrowed capital, the stock
represents nothing but an opportunity for dishonest speculation. A
"railroad" now means, to a large majority of those who are engaged in
projecting and creating it, nothing but a fraudulent device for
extorting money from the public under cover of developing the country
and rendering great public benefit to the nation. After the roads are
built, the men who have built the same, and issued and sold the bonds,
issue to themselves certificates of stock, no part of which they have
paid up, and go into Wall street to unload, that is, to sell their
stock. If it be in good demand it will bear "watering." More stock is
issued and sold, and by this process men who were worth nothing, but who
were so fortunate as to get the control of certain railroad companies
without having invested to the amount of a dollar, suddenly become
immensely rich. The value of the road to those who have paid up their
stock, but are not included in the ring, is destroyed; the road is
loaded with a debt that destroys its value. This new method of
construction meets with favor among a large class of men in all parts of
the country, who have combined to aid each other. All that is lacking on
their part to take absolute control of the whole country and government
is a consolidation of all the railroads of the country under one
management. At this time, six or eight great combinations, with a half
dozen men at their head, manage the railroad interest of the country.
They are extending their power and it may not be long until all will be
consolidated in one, which would give this monopoly absolute control,
not only of the markets, but of the whole legislation of the country in
matters affecting their interests. With packed legislatures, state and
national; with paid or intimidated judges, and with civil service of
several thousand cunning clerks, and able-bodied brakemen, conductors,
and switch tenders, they would be in that position most to be dreaded by
all lovers of liberty--a powerful and enormously rich corporation,
surrounded by a weak, timid, and helpless public. While we were still
engaged in singing paeans over the glorious institutions of our happy
country, we would suddenly find that our institutions had disappeared,
and that we had, riveted around our necks, a worse despotism than we
ever lamented for the down-trodden of other lands. This is really no
imaginary picture as all will see who remember the stronghold,
absolutely inaccessible to the law, which Fisk and Gould erected, and
for a time maintained in New York; or the military operations of the
employes of the Erie on the Susquehana road, and who have followed, with
any attention, the helpless struggles of the government of the United
States--formerly supposed quite able to take care of itself--in the foul
toils of the Union Pacific railroad. These corporations foreshadow what
must follow when a perfect consolidation is effected. Now at
non-competing points they extort from shippers such enormous rates for
transportation as absorb almost the entire value of the farm products;
while from points at which there are competing lines of road they will
carry at greatly reduced rates. They will charge no more for carrying
freight one thousand miles from a point where there is a competing road,
than for carrying one-tenth of that distance, where there is no
competition. When they have the power, and hold the shipper at their
mercy, they virtually rob him. What is true of their course where there
is no competition, will become the universal rule, when a perfect
consolidation of the whole railroad interest is effected. Add to this
the control of the finances of the country (which they are now rapidly
securing) and their rule becomes absolute over the whole people, and all
departments of the government. If the reader has followed us thus far,
he will have observed that the corporate interest of the country has
assumed a position in antagonism to the people; that it has a secure
hold upon the industrial and financial interests, and that, to a great
extent, it already controls the action of the legislative and executive
departments of the government, state and national.