Monopolies and the People Part 8

This committee, knowing my record on this question, did not do me the honor of a personal visit, but they sent me a letter (still in my possession), to which I replied through the public press, strongly opposing their movement, and, after reciting a portion of the facts herein recapitulated, earnestly requested them to let the Doud Amendment alone; for I believed it to be one of the wisest measures ever enacted by our legislature, and, having been one of its foremost advocates in that body, I would still defend it. The effort to call an extra session failed, and the railroad managers in the north, finding their efforts, in that instance, vain, after frightening the people nearly a year, concluded to go to work again, and so the building of that road went on to completion.

We had now succeeded in making the question of control a matter of contract between the state and the companies above named; so that, so far as they are concerned, no person or authority can question that _right_. Some of these roads being parallel lines across the state, the limitation of their charges will virtually control the others.

I have always maintained that the state, by virtue of her sovereignty, possesses the right to regulate and limit railroad charges, whenever the public necessity, or the public welfare requires such limitation, without any special reservation in any charter or contract. But inasmuch as eminent counsel denied it, I was one of the original prompters and friends of the "Doud Amendment." I was this for the further reason, also, that history teaches me that when the interpretation of const.i.tutions or doubtful laws, in cases where the poor and humble were on one side and wealth and power on the other side, that interpretation has been almost invariably on the side of wealth and power.

During the session of 1870, the question of regulating and taxing railroads came up again; but nothing was done except the pa.s.sage of a law authorizing the state treasurer to levy a tax on their gross receipts, as follows: On the first $3,000 or part thereof, per mile, one per centum; on receipts over $3,000, and under $6,000, two per centum; and on the excess of $6,000 per mile, three per centum. An act was also pa.s.sed (which I opposed) authorizing towns.h.i.+ps, towns, and cities, to vote a tax, not exceeding five per cent of their a.s.sessed valuation, to aid in the construction of railroads. At this session I succeeded in securing the pa.s.sage of an act (chapter 90, acts of Thirteenth General a.s.sembly) providing that taxes levied by order of any court to pay judgments on county or city bonded indebtedness, no penalty but legal interest shall be collected.

At the session of 1872, the questions of railroad tariffs, taxation, and control, came up again with increased interest. We pa.s.sed an act (chapter 12 of public laws) making the work, &c., of laborers and mechanics a lien upon the road bed, right of way, &c., of railroads, thus securing them in their pay for labor done or materials furnished.

The five per cent tax law was repealed, and an act (chapter 26 of public laws) was pa.s.sed, making the census board (now executive council) a board of a.s.sessment of railroad property. Under this act a new plan of a.s.sessing this kind of property was adopted, and a much larger revenue derived therefrom than heretofore. A freight and pa.s.senger tariff bill (known as the O'Donnel bill) pa.s.sed the house, but failed in the senate.

Those of us, in the senate, who voted for the bill, were remembered by the railroad managers when we met in adjourned session last winter, (January 15th, 1873) by leaving us out of the list of senators whom they favored with free pa.s.ses. But they sent pa.s.ses to all the senators who voted _against_ the bill. The pa.s.ses from the Chicago, Rock Island, & Pacific railroad company were accompanied with a private note, stating that free pa.s.ses were not now given generally, "_but only to their friends_."

The adjourned session of 1873 was for the special purpose of considering and enacting the new code, which the three commissioners had now spent nearly three years upon. Our time was limited by joint resolution to thirty days; and yet, during a considerable portion of our limited time, the railroad question occupied our attention. While we were in session, an extraordinary convention, or gathering of farmers, known as the "State Grange of the Patrons of Husbandry," met in Des Moines. This body was composed of the officers called Masters and Past Masters of the subordinate granges, or lodges, of a new secret society of agriculturists scattered throughout the state. This State Grange, or convention of delegates, numbered over twelve hundred members, representing, it was said, some seventy thousand farmers of Iowa. The meeting of this "Grange" lasted a week, and pa.s.sed strong resolutions urging the legislature to enact a pa.s.senger and freight tariff law, and also presented an official pet.i.tion to that effect.

The members of the senate in favor of such a law prepared twelve sections (mainly from the old O'Donnel bill) to be inserted in chapter 5 of t.i.tle 10, of the proposed code, and I was chosen to offer them in the senate, at the proper time. This I did, and the first section was adopted almost before the railroad men could rally their forces. This section limits the fare for pa.s.sengers to three and one-half (3) cents per mile. But the other sections, which fixed a maximum rate for the transportation of all kinds of grain, produce, lumber, manufactures, and commodities, were lost by a tie vote, the president of the senate, Lieutenant Governor Bulis, refusing to vote, which was equivalent to voting against the sections. These sections were afterwards fixed to the chapter by the House, with an additional section, known as the "Keables Amendment," but were again lost in the senate for want of two votes.

The commissioners had omitted from the proposed new code all the so-called "Doud Amendments," and reservations of control by the state over railway corporations, on the ground that they were local or special provisions not to be included in a code of general laws. But some of us thought that those reservations of control, and special contracts, were of too important a character to the people of Iowa to be entirely ignored, and so I prepared an amendment to chapter 5, of t.i.tle 10, in the following words:--

"SEC. 6. All contracts, stipulations, and conditions, regarding the right of controlling and regulating the charges for freight and pa.s.sengers upon railroads, heretofore made, in granting lands or other property, or franchises to railroad corporations, are expressly reserved, continued, and perpetuated, in full force and effect, to be exercised by the general a.s.sembly whenever the public good and the public necessity requires such exercise thereof." This was adopted.

I have thus hastily sketched the history of railroad legislation in our state, and yet perhaps I have exceeded the s.p.a.ce you generously allow me in your valuable work. Time and s.p.a.ce would not permit me to detail the skill exercised or the means used to defeat every act of legislation looking toward the control of railway corporations.

To-day both the people and the government of this nation are, to a great degree, under the control of the consolidated money capital of the country, and a few individuals are at the head of this capital. These are men, mainly, who regard republican or democratic inst.i.tutions as too unstable for the security of wealth, and have no real love for our form of government. It remains to be seen what the people will do in the coming crisis. I have faith in the people.

Yours truly, SAMUEL Mc.n.u.tT.

Mr. Mc.n.u.tt tells what he knows, and gives us a correct idea of the means resorted to by these corporations to thwart the will of the people. In view of the vast wealth of these corporations, their combination and consolidation, with their absolute control of congress and state legislatures, and the centralization of power in themselves, we may well inquire whether our const.i.tutional guarantees have not been so long disregarded as to be virtually destroyed. The question at issue between the people and these corporations is clearly marked and defined. This great railroad oligarchy is gradually but surely overturning the principles upon which our government is founded. It is subst.i.tuting a personal for a const.i.tutional government, and to achieve its purposes, it brings to bear its vast wealth and influence; it bribes and buys legislators, and maintains throughout the country a vast army of employes, many of whom occupy high official position under the government. It now boldly proclaims the doctrine, that the interests of this great government, and of railroads, are one!

On the other side of the question are the people, who begin to realize the oppressions of this oligarchy. They find themselves burdened with taxes; the value of the produce of the country consumed in unjust railroad charges; the halls of congress and of state legislatures cursed by the presence of men who take and give bribes in aid of the people's oppressors; their natural rights denied them; the guarantees of the const.i.tution disregarded; all doubtful points decided in favor of the power that is reducing them to slavery, and making their property and the fruits of their labor of no value. They begin to realize that the final struggle must soon come, and that the question will be whether the people, the sovereign people, or their oppressors are to be the future rulers of the _republic_. The result is not uncertain. Legislatures and courts must restore to the people their const.i.tutional rights. If these are denied, then, other means failing, the people, who are sovereign, _must take their rights by revolution_. The self-evident truth that all men are equal, that they have equal rights to enjoy and possess property, and to the protection of those rights in the courts, and that all should bear their proportionate share of the public burdens, MUST be recognized, by all cla.s.ses, as the supreme law of this republic.

CHAPTER XVIII.

THE "TRAIL OF THE SERPENT" IN THE INTERIOR DEPARTMENT.

We have attempted to show the controlling influence of railroad corporations over the legislative department of the government, and its effect upon the people, without following it through all its various forms, our object being to present what we deemed sufficient evidence to direct the public mind to the great and growing evils resulting from this influence. We now desire to refer to the influence of these corporations over the executive department of the government.

The administration of the laws being confided to the executive department of the government, their impartial and honest administration is of the greatest importance to the people. Congress, without the const.i.tutional right, having granted charters and made large grants of lands and bonds to railroad companies, it became necessary that the executive department should have some kind of supervision over the companies. In the issuing of bonds and certificates for land grants; the transportation of mails, troops, etc.; the appointment of government directors, inspectors, and engineers; the transmission of telegraphic dispatches, and respecting many other matters connected with these corporations, special duties were imposed upon the president and members of his cabinet. The government directors, under the statute, had a place on all business committees of the Union Pacific railroad company. They were government officers, appointed by the president, and were to report, from time to time, upon the progress of the work, and condition of the roads. They were prohibited from owning stock, or being personally interested in the roads. Their reports were to be made to the secretary of the interior. If these government directors had faithfully performed the duties laid upon them by the law, the contract of the directors of the railroad company with the Credit Mobilier company could not have taken place without their knowledge, which fact should at once have been communicated to the secretary of the interior. Nor could the directors of the railroad have organized themselves into a Credit Mobilier company and contracted with themselves to rob the government and defraud the people, without the knowledge of the government directors. And, unless we concede that they were totally unfit for the discharge of the duties imposed upon them by statute--"more sinned against than sinning"--we must conclude that they had full knowledge of all the abuses being practiced by the railroad companies, and failed to discharge their official duties. The national reputation these government directors had achieved in the halls of congress, and elsewhere, precludes the idea of their being ignorant of what they should have known, and we are forced to conclude that they had this guilty knowledge of the frauds being perpetrated upon the government and the people. Their action in the premises can only be explained on the ground that they were subject to the same railroad influences which have controlled congress and state legislatures. If their action was not governed by corrupt motives and pecuniary considerations, that persuasive influence which emanates from these corporations, blinded their minds and warped their judgments to such an extent as to induce them to wink at the frauds of the companies in the construction of their roads and the prosecution of the business connected therewith. Recent investigations show that some of those directors were controlled in their actions by pecuniary considerations; that these corporations have been able to purchase the influence of the men selected by the president to protect the public interest, and that, by reason of such purchase, the sum of $16,000 per mile, in government bonds, has been duplicated on fifty-eight miles of the Pacific road. Other abuses, such as the defective construction of the roads, unlawful payment by the government of engineering expenses, dishonest returns of the cost of the roads, and other minor but important abuses of the privileges granted to these companies, were permitted by these government directors without objection, showing, beyond all reasonable doubt, that their duties, prescribed by acts of congress, were of secondary importance when the interests of the corporations or of these government directors were to be considered.

While the reckless and dishonest transactions of the company directors were such as to call out a protest from an honest engineer employed on the road, prompting him to resign his position as chief engineer rather than be a party to fraud and scandal, these government directors seem to have remained silent and inactive. A contract had been entered into with a man by the name of Hoxie, who had neither personal means, nor position to command any considerable amount of capital, for the construction of a portion of the Union Pacific road. While this contract did not possess all the peculiarities of the contract with the Credit Mobilier, it was such an outrage upon right and justice, as to elicit from the chief engineer, Peter A. Dey, the following letter, addressed to General John A. Dix, after having tendered his resignation as chief engineer of the Union Pacific road, to General Dix, who was then president of the company. Mr. Dey says:--

"My views of the Pacific railroad are peculiar. I look upon its managers as trustees of the bounty of congress. I cannot willingly see them take a step in the incipiency of the project, that will, I believe, if followed out, swell the cost of construction so much that by the time the work reaches the mountains the representative capital will be acc.u.mulated so much that, at the very time when the company will have need for all its resources, of capital as well as of credit, its securities will not be negotiable in the market. From my very boyhood I have a.s.sociated Mr. Cisco and yourself with Mr. Bronson and Mr. Flagg, men whose integrity, purity, and singleness of purpose have made them marked men in the generation in which they lived. Of course, my opinion remains unchanged. You are, doubtless, uninformed how disproportionate the amount to be paid is to the work contracted for. I need not expatiate upon the sincerity of my course, when you reflect upon the fact that I have resigned the best position in my profession this country has ever offered to any man.

"With respect.

"PETER A. DEY."

Mr. Dey protested against the extravagant amount agreed to be paid Hoxie. The cost of the sections of the road contracted to Hoxie was $7,806,181. The amount agreed to be paid Hoxie for the work was $12,974,416. Mr. Dey saw that this man Hoxie was a _straw man_, and that near $5,000,000 were to be divided among the directors as the profit on this contract, and, as engineer, he protested against it. Yet these government directors, whose sole duty it was to look after and protect the interests of the government and the people, failed to discover and report these abuses to the secretary of the interior; or, if the same and the Credit Mobilier transactions were so reported, then the influence of these corporations controlled the department of the secretary. The truth is, the position of these government directors was such that, without a total disregard of the statutes, and their duties under it, it was not possible to keep all knowledge of these gross abuses from the department. But one conclusion can be drawn from the facts, which is, that the government directors, influenced by these powerful monopolies, were unfaithful to the trust confided to them by the president.

Under the statute, the secretary of the interior has the general control of the issue of bonds, certificates for lands, rights of way, &c. The government directors were bound to report to him. If the duties imposed under the law had been faithfully discharged by him, the great abuses practiced by the Pacific railroad companies would have been prevented.

The Hoxie contract, the Ames Credit Mobilier contract, and the Davis contract, were all made for about double the cost of building the respective sections of the road covered by these contracts, the actual cost of these respective sections being $50,720,957, and the amounts allowed the contractors being $93,546,387. In this amount is concluded $1,104,000, which was a duplicate payment allowed Ames for work done, and once paid for, under the Hoxie contract. These three jobs put into the pocket of the Credit Mobilier company a net profit of $43,929,337, a large part of which was in subsidy bonds issued by government. These bonds could only issue after the approval, by the secretary of the interior, of the report of the government directors. If the secretary had discharged his duty, or if the interest of the people, which he was supposed to be protecting, and not the interest of these companies, had controlled his action, _duplicate bonds_ would not have been issued at the rate of $16,000 per mile, for more than fifty miles of the road. Nor would certificates for land have issued to the companies while they were openly cheating, defrauding, and robbing the government and people. Let the reader look at the laws of congress chartering the roads, with the different amendments, and learn the duties of the secretary of the interior respecting their construction and the issuing of bonds and land certificates, and he will conclude that the secretary was ignorant of what the law made it his duty to know--that he was inexcusably negligent in the discharge of his duty, or what is most probable, that the same potent influences that controlled congress in aiding these companies, found their way successfully to the chief parlor of the interior department. Without the secretary's approval of the companies' work and accounts, they could not possibly have committed such gross frauds upon the government.

If additional proof of the fact that the secretary of the interior was influenced by, and used his official position to a.s.sist the railroad corporations, in the raids upon the treasury, was needed, we have it in his action relative to the homestead and pre-emption rights of settlers upon the public lands, within the limits fixed by congress for the selection of lands by the different railroad companies. In all cases where lands have been granted to railroad companies, lands to which pre-emption rights attached at the time the line of the road was fixed have been saved to the pre-emption and homestead claimants. In many instances the railroad companies have not been able to find, within the limits fixed, the amount of lands granted to them belonging to the government. This has caused them to make war upon pre-emption and homestead claimants. If these claimants could be forced from their lands, some millions of acres would be thus seized by, and allowed to, the railroad companies. The practice of going upon the public land under the pre-emption and homestead acts had become so common, that these claims had been recognized by the public and the government as vesting in the claimant a t.i.tle, which could only be defeated by his failure to comply with the provisions of the law respecting the perfection of his t.i.tle. No one, save where two or more pre-emption claimants were contending for the same tract, could interfere; nor is there any provision of statute by which railroad companies can call in question the pre-emption or homestead right. In the absence of any contest between pre-emptors, the claimant has only to show a substantial compliance with the law, pay the required amount, and obtain his t.i.tle.

So, also, in regard to homestead rights. Nor did any difficulty arise until railroad companies began to interfere. The acts granting lands to railroad companies made no provision for the selection by them of lands held by pre-emption or homestead claimants at the time the lines of their roads were fixed, and subsequently abandoned. The companies applied to the secretary of the interior, and procured from him a construction of the statutes, giving them the right to select as railroad lands all such so abandoned. This was the first decision in their favor, and committed the secretary to their interest.

A war upon pre-emption and homestead claimants was begun, and the representation to the department that a claimant had abandoned his claim was sure to pa.s.s the t.i.tle to one hundred and sixty acres to the company. But something more must be done to get hold of the claimed land. The question as to the regularity and validity of the settler's claim is raised by the companies, and then they apply again to the secretary of the interior. While the statute respects and protects the occupancy and rights of the claimant, the secretary, to aid the railroad companies, interpolates the word, "valid," and holds that if the claim is invalid, the railroad companies can drive off the claimant and take his land. The action of the department gave the companies an advantage over the claimant which was almost equivalent to the destruction of his claim. Many claimants became alarmed, and did just what the companies desired,--they abandoned their claims to their oppressors, and the companies made large gains. But the claimants were not yet entirely in the power of their oppressors, and resort is again had to the department, and the settlers are placed entirely at the mercy of these monopolies. The interior department issued an order under date of June 22, 1872, allowing railroad companies to contest the right of pre-emption and homestead claimants to their quarter-sections. While the act of congress absolutely prohibited railroad companies from interfering with the rights of these claimants, the interior department, in the interest of these giant monopolies, in violation of the statute, by interpolation and a forced construction of the law, allowed these corporations to appear and dispute the claim of the poor pioneer who had gone in advance of railroads, and pre-empted a small tract of land for a home for his family, before the company disputing his right was organized, or had thought of locating a railroad in his vicinity. The pre-emption and homestead laws were pa.s.sed for the benefit of the actual settlers of the country. If they get their lands, they pay the government the price fixed by law; but if the railroad companies get these lands, they aid in building up and strengthening a monopoly already too great for the welfare of the country. The department having lent its powerful aid to this monopoly, and, by unjust rulings, interpolations, and decisions, a.s.sisted in turning these poor men adrift and depriving them of their lands and years of toil, already more than one million of acres that of right, and under the law, properly interpreted and administered, would have belonged to actual settlers, have become the property of these railroad companies. Claimants are becoming alarmed at the action of the department, and are leaving their lands, choosing to lose their claims and the years of toil expended upon them, rather than defend against these companies, backed by the department.

To still further show the _quasi_ collusion between the department and these great corporations, let us look at the circular issued to the different land offices from the department in June, 1872. The circular says:--

"A pre-emption or homestead claim of record is of course _prima facie_ evidence of a valid right; yet it may occur that such a claim has a fraudulent inception. When such is the case, the claim is of course void _ab initio_, and does not defeat the right of the railroad. In view of these rulings the following is communicated for your information and government, to the end that the rights of all parties may be protected, and the spirit of the _grants_ fully complied with:--

"1st. In relation to pre-emption claims, the pre-emption law requires that a person must be over the age of twenty-one years, or the head of a family, a citizen of the United States, or a person who has filed a declaration to become such, and also that a person may file a pre-emption claim for such land as he may have settled upon, thus imposing conditions as pre-requisite to the initiation of a claim.

"2d. In relation to homestead claims, the law requires that a person must be over twenty-one years of age, or the head of a family, a citizen of the United States, or one who has declared his intention to become such, and under the first and third sections of the amendatory act of March 21, 1864, the persons claiming the benefit of said sections must make settlement upon the tracts before they can obtain the benefit of said sections. Therefore, as the fraudulent character of the pre-emption or homestead claim in its inception may be brought in question, it is right that the parties in interest should have an opportunity in all cases to be heard. With this view you are required,--

"3d. When application is made by a railroad company to select tracts which are covered by existing pre-emption or homestead claims at the date of the right of the road attaching, but subsequently relinquished or abandoned, to allow the company to file such proof as they may have in support of their right to the land, or to have hearings for the purpose, and should the evidence be satisfactory you will permit the selections.

"4th. When any person applies to enter a tract of such lands, claiming the right to do so by such prior abandoned claim, you will order a hearing, notifying the railroad company, as well as the pre-emption or homestead claimant, so that they may produce such evidence in support of their right as they may have to furnish. Your inquiry must be directed to the personal qualifications of the original claimant, and his compliance with the law prior to filing an entry; and I desire to enjoin upon you the necessity of excluding all testimony not material to showing the facts upon the subject of inquiry. You will, however, be careful that all such facts are brought out, and if necessary to this end you will yourselves examine and question the witnesses. You will in all cases give the parties interested personal notice of the time and place of hearing, when their whereabouts are known, or they can be reached by such notice. In other cases you will cause the notice of contest to be published at least once a week for four weeks in the newspaper having the largest circulation in the vicinity of the land.

Parties initiating a contest must provide for defraying the expenses thereof, but when the case comes before you for trial you can apportion the expenses according to the equities of each case. Your particular attention is called to the fact that in some of the earlier railroad grants, lands covered by homestead claims, which may subsequently be cancelled, are not exempted from the operation of the grant. Therefore, in such cases, the tracts revert to the grant, and you will recognize no application for these lands by other parties, but will pay due regard to the rights of the grantees. You will in no case allow pre-emption filing, or homestead entry on this cla.s.s of lands, without instructions from this office."

This circular, in the interest of railroad companies, is signed by Willis Drummond, commissioner, and directed to registers and receivers of district land offices. While the acts of congress exclude from the grants to railroad companies all lands held by pre-emption and homestead claims, the secretary of the interior says it means _valid_ claims. He then declares all claims invalid or fraudulent when there has not been a literal compliance with the statute. If the pre-emptor filed his claim one day or one week before he commenced his occupation, his claim, as against the railroad company, is fraudulent. Or, if for some cause, after having complied with all preliminaries, he should leave his claim for a day or a week, it could be treated as abandoned, and his right would be lost. These rulings, in favor of railroad companies, and adverse to the settlers, having been made, the companies were not slow in taking advantage of them. Men who supposed their claims to be valid, who had invested their all in improving them, have had their validity questioned, or have been charged with abandonment. The first intimation a settler has, is a notice to appear and defend the home of his family against the claim of a powerful corporation that is seeking to take it from him. He must submit to the alternative of losing his home at once, or of protracted, expensive litigation, with the a.s.surance that he is combatting a powerful adversary before a tribunal that has already prejudged his case in favor of his opponent. All that the railroad companies need do to defraud the settler is to satisfy the register or receiver that, under the rulings of the department we have quoted, the settler's claim is invalid, or that he has abandoned it.

We draw no fancy sketch. The circular speaks for itself, and the large number of men who have been compelled to leave their pre-emption and homestead claims, with the constantly increasing quarter-sections of land that are being added to the railroad grants, attest the truth of our statements. We are not aware of any law of the United States recognizing the right of railroad companies to become parties in a contest concerning a homestead or pre-emption right. Nor do we believe that the interior department of the government can legally authorize these companies to become claimants for lands held by settlers under act of congress. If any question arises between two pre-emption claimants, the commissioner of the general land office decides the dispute. If any question is raised as to whether the claimant is ent.i.tled to his pre-emption, there are, under the acts of congress, but two parties to the controversy--the claimant himself and the interior department. The order allowing railroad companies to appear as parties, and by virtue of numerical strength and immense wealth and influence, to overpower the settler, is doing him injustice, as well as degrading a high official position, and sustains our charge that these railroad companies influence the interior department of the government. We think we have shown that the whole strength of this department is used in favor of these great monopolies, and against the interests of the people. While we do not charge the officers of this department of government with intentional wrong, we do charge that this great corporate power, which has such unlimited influence over the legislative department of the government, has virtually taken control of the department of the interior in cases where its interests can be subserved by the influence of the department.

CHAPTER XIX.

THE MONOPOLISTS AT THE DOOR OF THE WHITE HOUSE.

The influence of this great corporate power does not spend all its force at the interior department, but it is seen handing in its card at the white house.

While we claim that railroads and other corporations have, to a considerable extent, influenced the distinguished occupants of the presidential chair, we do not wish to be understood as intimating that any of our chief magistrates have acted corruptly. We simply a.s.sert that this great corporate interest has secured favorable action from our presidents when they have been appealed to. As will be seen by their perusal, the acts of congress chartering the Pacific railroad and branches, imposed certain duties upon the president in connection with their location and construction. In the discharge of these duties the wishes of the companies were in all cases complied with, and in some instances to the injury and at the cost of the government and the public, and under circ.u.mstances leaving no doubt that the president acted wholly upon the representations of the companies.

In the act of July, 1864, the Union Pacific charter was so amended as to permit any company organized under the laws of Iowa, Minnesota, Nebraska, or Dakota, and designated by the president of the United States, to construct a railroad from Sioux City, Iowa, to connect with the Union Pacific road at some point not farther west than the one-hundredth degree of longitude. A company was organized under the laws of Iowa to build a railroad from Sioux City to Missouri Valley in the same state, the latter point being some thirty miles east of Sioux City, and seventy or more miles south. Another company was organized to build a railroad from Missouri Valley to Fremont, in Nebraska, the latter place being a point on the Union Pacific. These companies were incorporated by a few men, among whom were several members of congress who had aided in the pa.s.sage of the act of July, 1864. Through the influence of one of the incorporators, then a member of congress, now of the United States senate, the president designated these companies as the companies to build the Sioux City branch of the Union Pacific, and their roads, representing two sides of a triangle, were adopted as the branch road. The road is known as the Sioux City & Pacific. A road running westerly from Sioux City to Fremont would be about seventy-five miles in length. The road, as constructed between these two points, is, as given in the Railroad Manual, one hundred and seven miles. The act of congress required the road to be constructed on the most direct and practicable route. This road received the same privileges, subsidies, and grants, as the main line, with an addition of eighty sections of land per mile. Now it cannot be presumed that the president, acting on his own judgment, uninfluenced by the railroad company, would have designated these companies, and these roads, as the Sioux City branch of the Union Pacific road, with one hundred sections of land and $16,000 subsidy bonds for every mile of the road. We have given this instance to show the direct influence of this corporate power over the president.

This great influence, so dangerous to the welfare of the country, is indirect in its action. Vast numbers of men have their funds invested in railroad stocks and bonds. They engage in Wall street speculations; they buy and sell stocks and bonds; they operate in gold and values, and have no interest in common with the laboring and producing cla.s.ses of the country. These corporations own and control property worth billions of dollars; they rule the finances of the country; they have tens of thousands of men in their employ; as they increase in strength and wealth, they are constantly striving for greater powers and privileges.

Their lobbyists and retainers surround every department of the government. When public offices are to be filled, they unite in favor of men in their interest; and when decisions are to be made upon questions affecting their rights and obligations, they take care that their friends shall be in position to make or shape these decisions. The president, with his appointing power, if influenced in their favor, becomes an important ally. In his appointments to office, it is not to be expected that he can personally know the qualifications and views of every nominee. He must of necessity rely upon others, to a great extent, in making his selections. Next to legislative action in their favor, railroad companies are most deeply interested in the judicial decisions affecting their interests. Judges are apt to be influenced by the same motives that prevail with other men. Years spent by men as railroad attorneys, or as attorneys for any other great interest, will, to a certain extent, control their reasoning and decisions upon questions coming before them should they be promoted to the bench. In close relation with, and next in importance to the decisions of courts, on points affecting this great corporate interest, are the rulings and decisions of the attorney general of the United States. If these important offices can be filled by persons whose past pursuits have demonstrated that they entertain views favorable to the interests of these companies, an important gain is made at the start in their favor.

To secure such appointments, all and every influence at the command of these corporations are brought to bear upon the president. The services of the most influential men, in congress and out, are engaged; the names of the candidates selected are presented for the consideration of the president, and their appointment urged by the whole railroad and corporate interest of the country. The president, following a long established precedent, usually appoints the persons who are most strongly recommended. This fact is well understood by these corporate interests and hence their vigilance and activity. We do not say that the president, in yielding to this tremendous pressure, acts from improper motives. We simply a.s.sert that this pressure is used, and that it is scarcely to be resisted.

The fact that judges of ability and integrity differ in their construction of the const.i.tution and laws, is well understood by the men who lead and control the corporate interests of the country; as also the further fact that the time is not distant when the question whether the people or railroad corporations shall govern, must be determined. To prepare for this issue they use their great influence to have the important positions in the government occupied by their friends. To a considerable extent they have succeeded.

Mr. Ackerman, of North Carolina, was attorney general. He was what might be termed a strict constructionist. His views were conservative. As the legal adviser of the executive department, his opinions were adverse to the interests of the railroad companies on certain questions submitted to him. At the request of the president he resigned, and Judge Williams, of Oregon, was appointed in his stead. No one will question the integrity of the present attorney general. Yet it was a well-known fact that, at the date of his appointment, he was one of the attorneys of the Northern Pacific railroad company; that he was fully committed to the railroad interests, and that his appointment was urged by railroad men in all parts of the country. By his appointment a friend of these corporations became a member of the cabinet, and an important ally is present whenever questions affecting their interests are discussed in executive council.

A question of the greatest importance to these corporations was the construction to be given to the statutes of the United States, and especially the "Legal Tender Act." The first of the legal tender acts was pa.s.sed July, 1862. This was followed by other acts increasing the amounts of legal tender issues. Prior to the pa.s.sage of these acts, railroad corporations had issued and sold many millions of bonds, and stipulated that both princ.i.p.al and interest should be paid in gold. Soon after the issue of legal tender bills their value depreciated, and from that time to the present there has been, and still is, a wide margin between their value and coin. If these railroad companies could pay their bond indebtedness with legal tender at par, a saving of from ten to fifteen dollars could be effected on every hundred so paid. In the year 1869, the question whether this act was retroactive in its operation or effect was presented to the supreme court. The court was then composed of eight justices. When the case involving this question was presented to and decided by the court, but seven of the justices were on the bench. Of these, four, including the chief justice, were of the opinion that the statute did not affect contracts made before its pa.s.sage, and decided that these railroad companies must pay their bonds in coin according to the contract. This decision was not acceptable to this vast corporate power. It was condemned by railroad men throughout the country. The president was approached on the subject, and his great influence was besought in the matter. Four of the justices (one-half of the court) having held adversely to the corporations, a full bench could not reverse their decision. To effect a reversal, one of the four must change his opinion, or the number of justices must be increased. The latter alternative was decided to be the more feasible, and the president asked congress to increase their number to _nine_. The reason urged was, that upon important questions, before a full bench, the court might be equally divided, and important questions would remain undetermined. The railroad interest was fully represented in the lobby at Was.h.i.+ngton, and congress provided for an additional justice. About this time one of the justices retired from the bench, making a vacancy, and rendering it necessary for the president to appoint two new justices. This was a grand opportunity for the railroad interest. If men who were identified with them could be appointed, the decision on the "Legal Tender Act" could be reversed, and they could save from ten to fifteen millions of dollars on every hundred million of dollars due from them. Not only could they save this amount, but in future, as the members of the court are appointed during life or good behavior, they would have no apprehensions of a decision against their interest. At once the president was importuned to appoint William Strong, of Pennsylvania--a man who was fully identified with them by education and employment, he being attorney for the Pennsylvania railroad company--and Joseph P. Bradley, of New Jersey, who was also identified with this interest, he being the attorney of the greatest railroad corporation in that state. Neither of these men had any national reputation, but all at once the city of Was.h.i.+ngton, as well as the whole country, was enlightened as to their great judicial worth, and railroad men throughout the country were urging their appointment. It was publicly announced, and not contradicted, that they were in favor of reversing the decision of the court on the legal tender act, and their appointment was urged for this reason. This influence controlled the president. These gentlemen were nominated by him, and their appointment was confirmed by the senate in 1870. The decision on the legal tender act was reversed, and railroad men were happy. As we shall attempt to show, when we treat of the controlling influence of these corporations upon the finances of the country, this reversal was most baneful to the country, and detrimental to the best interests of the people. We do not wish to be understood as accusing the president of being governed by improper motives in the appointments of Messrs. Strong and Bradley to the supreme bench; but we do mean that the railroad interests, by concert of action, procured these appointments; it being known, or at least well understood, that these appointments would insure a reversal of the decision, as we have recounted, and that by such reversal their interests would be greatly subserved. Nor do we wish to be understood as accusing the persons so appointed of lacking the requisite ability for the honorable stations for which they were selected, or that their decisions were governed by personal considerations, or that they reversed said former decision to specially subserve the interests of railroad corporations. We have long since come to the conclusion that judges of courts, like other men, are influenced by surrounding circ.u.mstances; that they are not infallible, and that it is no unusual thing for the most eminent judges to differ upon questions submitted for their decision. While these decisions are honestly made, they are often controlled or dictated by extra judicial considerations. As we shall have occasion hereafter to examine this subject when treating of the intimate and controlling relations between these corporations and the courts of the country, we are content to leave the case of their influence with the executive department to the proof submitted in these three appointments of Williams, Bradley, and Strong.