Part 6 (1/2)

Under the system of congressional legislation that now obtains, the laboring and producing cla.s.ses are being rapidly reduced to a state of servitude that would grace the most despotic government.

CHAPTER XII.

THE RIGHT OF EMINENT DOMAIN.--UNCONSt.i.tUTIONALITY OF MUNIc.i.p.aL AID TO RAILROADS.

The question of taxation for the benefit of private corporations has agitated the public mind since the construction of railroads became one of the admitted necessities of the country. For the purpose of justifying and legalizing governmental aid to railroad corporations, in the various forms in which such aid has been afforded, the doctrine has obtained among the advocates of the measure that railroads are public highways, as well as a public necessity; and such being the fact, that aid in the shape of grants, taxes, and subsidies, are legal, legitimate, and proper. They draw an argument in favor of this doctrine, from the fact that legislatures, state and national, have provided by law for the condemnation of private property, for the use of the companies, respectively, upon paying the a.s.sessed value thereof; and that thus the right of eminent domain is vested in these corporations; that the right of _eminent domain_ is an attribute of sovereignty, and that the granting of this attribute to corporations imparts to them the character of public highways. They reason that because they are public highways, and the companies owning them are common carriers, taxes may be legally levied and collected for the exclusive use of these companies. They claim that because the United States, states, counties, cities, towns, and towns.h.i.+ps, have authority to construct, or to aid in constructing, common highways, they have the same right to construct, or aid in constructing, railroads.

If it were not that precedent has tended to sustain this ”false doctrine,” we would not think it profitable to combat it. The only point in the argument in favor of this doctrine that has any real foundation, is, that railroad companies are allowed to locate their roads where they please, upon payment of the damages a.s.sessed in the manner prescribed by statute. The answer to this is, that railroads could not be built, unless the companies had permission to pa.s.s over the lands of private citizens. If the t.i.tle from each land owner could be procured only by negotiation and purchase, no railroad could be constructed, for the reason that a direct or continuous line for a road could rarely be secured. Railroads are constructed to aid in the transportation of freight and pa.s.sengers from one part of the country to another; to promote commerce throughout the whole country; to supply the wants of a people, just as a mill or factory supplies the wants of a particular locality. The miller constructs his dam across a stream, and, under the statutes of most of the states, he can procure the condemnation of the land of his neighbor overflowed by his dam, to his own use, upon payment of the damages a.s.sessed. It is not a condemnation for the use of the public, but for the use and benefit of the owner of the mill. The mill itself, while it is owned by a private individual, and can be sold and transferred by him at any time, is also a public benefit. Can it be said that the right of eminent domain attaches to the mill or its owner? So with railroads: They are owned by private companies--are built and controlled by them; they are of public benefit, but not owned or controlled by the public or by the state, or local authority, as in the case of public highways. Their private owners can sell them, with all their franchises, rights, and privileges. The rules for their operation, rates of charges, and all other matters affecting their government, are exclusively under the control of the parties owning them. Only that the companies may become the owners of the necessary grounds over which to build their roads, have legislatures provided that they may enter upon lands owned by private persons, and upon the payment of the appraised value thereof, appropriate a narrow strip (the width being fixed by statute) for the purpose of locating their road upon it. It is not condemned for public use, as in the case of a public highway, or where land is needed for public buildings, or any other public purpose. The a.s.sessed value is not paid by the government, or from the public fund, nor by individuals for the public; but by the private corporation out of its own purse, and for its own gain.

This is what is called, by the advocates of the measure, ”the right of eminent domain,” a right that only belongs to the supreme government.

This power cannot be exercised by local or subordinate governments, unless it is delegated to them by the supreme or superior government.

While the courts in some of the states, Iowa included, have, by decisions, made this right of eminent domain attach to railroad companies, it cannot be supported on principle. To allow it to obtain is to clothe private corporations with the attributes of sovereignty. But conceding that this right attaches to these corporations, upon no principle of const.i.tutional law or justice can the right to levy taxes upon private citizens to aid in the construction of railroads, either by acts of congress, by state statutes, or by local munic.i.p.al government, be supported. And it matters not in what form these taxes are imposed upon the people, whether in the shape of munic.i.p.al subscriptions of stock, to be paid by a.s.sessments upon the people; by donations of land or money, to be repaid by imposing a larger price upon lands sold to the citizen; by indirect taxation, or by special local elections held in cities, towns, or counties,--the compulsory taxation of the property of individuals, under our system of government, can only be imposed for governmental or public purposes. Taxes are levied for the support of the government in all its departments; for the construction and repairing of highways; for the building of school houses and all other edifices of a public character; for the support of schools; for the necessities of local munic.i.p.al governments, and for other objects having the public weal for their sole consideration. These taxes are legitimate and proper, because the ends sought to be reached by such taxation are for the use and benefit of the whole people, and for the protection of their rights. For all of these purposes the legislature can provide an uniform system of taxation. But when the government attempts to compel A to pay a tax to a.s.sist B and C in building a railroad, it enters upon the exercise of a despotic and oppressive power, that is in conflict with the letter and spirit of our const.i.tutions, both state and national.

The legislature, by the pa.s.sage of such a statute, says, in substance, to the taxpayer: ”A company is formed for the purpose of building a railroad which pa.s.ses through the county in which you reside. This company has not sufficient means for constructing and stocking its road.

That the necessary means may be furnished to it for that purpose, you must pay a tax upon your property, amounting to one-tenth or one-twentieth of its value; this amount you must donate to the company.

True, you will have no interest in this road when it is completed; you will not be a stockholder; you cannot ride in its cars, or s.h.i.+p your freights over the road, without paying the same price as other persons.

It may cause you to sacrifice a part of your property to pay this tax, but the road will be of great advantage to the public, and you must make this donation to help the enterprise.” The consequences flowing from this unjust and oppressive system of taxation are appalling. It has no foundation in right or justice. The legislature has no inherent right to impose taxes for any purpose. The authority to levy taxes is dependent upon the power delegated by the people as contained in the fundamental law. In a republic even a majority of the people do not possess the inherent right to tax the minority for private purposes. Such taxation can be imposed by no other government than a despotic one, where the will of the despot is the supreme law, and where might rather than right is the controlling power. So conscious are the advocates of this species of taxation of the fact that taxes can be levied for public purposes alone, that they deem it all-important to connect and blend in one--the right of eminent domain and taxation.

But this position is not tenable. Bouvier defines the term, ”Eminent Domain,” as follows: ”The right which the people or government retains over the estate of individuals, to resume the same for public use.”

Taxes are defined to be burdens or charges imposed by the legislative power of a state, upon persons or property, to raise money for public purposes. It will be seen that there is a wide distinction between the taxing power and the right of eminent domain: that while they both appropriate private property for public uses, they differ in degree.

While the right of eminent domain takes from the private citizen the absolute t.i.tle to property upon just and fair compensation, taxation exacts from each property owner a contribution for the support of the government, or for the benefit of the public, without any other compensation than the protection the government affords him in life, liberty, and property. Contribution for this purpose is a duty imposed upon all who are under the protection of government. A complete power to procure a regular and adequate supply of revenue forms an indispensable article in our const.i.tution; and provisions for levying and collecting this revenue is a charge laid upon the legislative department. The levy and collection of all taxes deemed necessary for the administration of the government and for the public good, is an incident of sovereignty; but this does not extend to the levy and collection of taxes to aid private interests or enterprises. The taxing power is limited; the needs of the public fix this limit. When this is pa.s.sed, the citizen is subject to continual plunder. The value of his property is destroyed; he is but a trustee holding his property subject to the will of an arbitrary power, that can at any moment call for a part or all of it. He had entered into a governmental contract for the purpose of appealing to the strong arm of const.i.tutional law when his rights are a.s.sailed, but finds, instead of the protection he had reason to expect, an irresponsible, arbitrary, power, compelling him to divide his property with railroad corporations, or other private parties, without any consideration; not only without consideration, but the taxes illegally and forcibly taken from him are used to build up and protect a monopoly that is blasting the fruit of his labor, while it is as surely destroying const.i.tutional and republican government. His property is taken from him by what can only be termed a superior, despotic, power, and appropriated without his consent for the benefit of a private corporation.

It is not difficult to distinguish what are proper objects of public support and for which taxes can be levied and collected from those that are not, if we keep in sight the fundamental or organic law. In the formation of a republic no new rights are created. The adoption of a const.i.tution is but declaratory of pre-existing rights and laws; its object is to define and limit the powers of the government, and to guard and protect the rights of the citizens. An eminent jurist, in speaking of the const.i.tution, uses the following clear and forcible language: ”It is not the beginning of a community, nor the origin of private rights; it is not the fountain of law, nor the incipient state of government; it is not the cause, but the consequence, of personal and political freedom; it grants no rights to the people, but is the creation of their power, the instrument of their convenience, designed for their protection in the enjoyment of the rights and powers which they possessed before the const.i.tution was made; it is but the frame-work of the political government, and necessarily based upon the pre-existing condition of laws, rights, habits, and modes of thought. There is nothing primitive in it; it is all derived from a known source. It pre-supposes an organized society, law, order, property, personal freedom, a love of political liberty, and enough of cultivated intelligence to know how to guard it against the encroachments of tyranny. A written const.i.tution is, in every instance, a _limitation_ upon the powers of the government in the hands of agents, for there never was a written republican const.i.tution which delegated to functionaries all the _latent powers_ which lie _dormant_ in every nation, and are boundless in extent, and incapable of definitions.”

Keeping in mind the distinction existing between measures of a governmental or public nature, and those that are private, and applying the above quoted definition of const.i.tutional power, we cannot find it difficult to determine what are, and what are not, const.i.tutional levies and collection of taxes.

Another thought having weight in connection with the const.i.tutional right to tax the people in aid of railroads, is, that minorities have the right to live, and to own and enjoy property; and the majority has no right to compel the minority to contribute aid to railroad corporations. It has always been conceded that in a republican government the majority should rule, and that their will expressed in a const.i.tutional and legal manner should be the law of the land; yet no one claiming to respect const.i.tutional law will contend that this will of the majority can act outside, or independent of, const.i.tutional restrictions. If this doctrine should obtain, const.i.tutional government is at an end; private rights are destroyed, and the unrestricted will of a bare majority becomes supreme; all the guarantees of the const.i.tution are annulled; life, liberty, and property, are all dependent upon the popular will; const.i.tutional safeguards are destroyed, and the stability of the government is lost. The first step in this direction is fraught with the greatest danger. When the restrictions embodied in the const.i.tution are overridden and disregarded in one instance it affords a precedent for a second step in the same direction. Acquiescence in encroachments upon const.i.tutional restriction by the people, undermine and absolutely destroy republican inst.i.tutions and the government itself. If, for the accomplishment of some private purpose, a community, a state, or the general government disregard the provisions of the const.i.tution, and a.s.sume powers not granted them by that instrument, they arbitrarily act the part of the absolute tyrant. And it makes no difference whether the course pursued, or the measure adopted, proves beneficial to the public, or oppressive. In the fact that it is the usurpation of an unauthorized power, lies the danger. The disregard of the limits fixed by the const.i.tution, in the administration of the government, destroys the only guarantee the people have for the protection of their private rights. Among all the unconst.i.tutional measures which now obtain throughout the country, the affording of aid to railroads, by the government, state and national, has proved the most burdensome to the people. Of this cla.s.s of subsidies, that afforded by local, munic.i.p.al subscription, with or without a vote of the people, has caused the greatest injury. A local or munic.i.p.al government can lawfully impose taxes for the support of its administration, and for contribution to the general comfort and happiness of the people. It can tax for the purpose of laying out and constructing streets and public highways, because these objects are intended to be, and in fact are, open to the use of the whole people; all can use them on equal terms; they are made for the benefit of the public; each citizen has undertaken to contribute his just proportion of the expense of providing for the common, public benefit. But when a county, a city, town, or towns.h.i.+p, organized for the convenience of the people, and to more effectually protect their rights, attempts to become a stockholder in a railroad corporation, it attempts the exercise of a power it does not and cannot possess under the const.i.tution. Munic.i.p.al corporations were not created for the purposes of private speculation or private gain, but for purely and strictly government purposes. No power is granted (nor can it be implied) to county judges, commissioners, or supervisors, nor to towns.h.i.+p trustees, or city boards, to take stock in railroad corporations, or to issue bonds of the munic.i.p.ality in payment for such stock, for the reason that such power is not necessary for the administration of these several governments, and does not come within the limit of the powers granted by the people. We know there are many decisions of courts sustaining the position that munic.i.p.al corporations can become stockholders in railroads, and may issue bonds in payment therefor, and that it is within the scope of the powers vested in such corporations to levy taxes for the payment of the bonds so issued; but we have yet to see a decision that is sustained by any provision of the const.i.tution. Many of these decisions admit that the right to subscribe stock is not contained in the const.i.tution, and cannot be justified on const.i.tutional grounds. Of these decisions we shall speak hereafter, and we leave them for the present. We insist that there is no authority in the const.i.tutions, state or national, under which any department of any of the governments can become stockholders in a railroad corporation; nor is the right to take such stock in accordance with the genius or spirit of republican government. The distinction that exists between cities and towns acting under charters, and counties, towns.h.i.+ps, school and road districts, is marked, and should be kept in mind in considering the nature of the powers possessed by each. County, towns.h.i.+p, school, and road district organizations are necessary in the administration of the laws of the state. They are at most but _quasi_ corporations; all their powers are derived from, and executed under, the general statutes of the state. They have no special grants or privileges, but are the chosen means for executing state laws. In the distribution of the powers and duties vested in and imposed upon the state governments, the duties of administering the local affairs of the counties, towns.h.i.+ps, and districts, are delegated to, and imposed upon, these _quasi_ corporations respectively. They can only exercise such powers as are necessary for the accomplishment of the objects of their creation. Their acts are the acts of the state government as applied to their respective localities. They are not clothed with any extraordinary power; nor can the state government delegate to them a power it does not itself possess. When the const.i.tution of a state (as in the case of Iowa and other states) prohibits the state from subscribing stock, loaning its credit, or issuing its bonds to private corporations, we would at once conclude that it could not delegate authority to one of its subordinate departments to do an act forbidden to itself by the const.i.tution. But this is what it has done, if these _quasi_ corporations possess the power to afford aid to railroad or other private enterprises. Munic.i.p.al corporations, such as cities, towns, &c., act under special charters, and in some respects are sovereign. But they are governed and controlled as absolutely by the provisions of their charters, as is the state by its const.i.tution. They can only act within the scope of their delegated powers, and in all doubtful questions the presumption is against their right and in favor of the public, for the reason that only special privileges are conferred upon them. Nor can the legislature confer upon them privileges or powers not possessed by itself under the const.i.tution. It is then absolutely certain that neither counties, cities, nor towns can aid private corporations, or become stockholders in such corporations, unless the power has been delegated to them by the state legislature. It is equally certain that unless the state, in its sovereign capacity, possesses this power, it cannot delegate it to either counties or cities, and that when the const.i.tution of a state forbids the exercise of a power, it includes the legislature, all the departments of the state government, all counties, cities, and towns, and all the people. All these corporations are agencies in the administration of the affairs of the public. Being political in their nature, they are entirely distinct from private corporations organized for the purpose of pecuniary profit. They are established for public purposes exclusively. Judge Dillon, in his valuable work on munic.i.p.al corporations, says that ”They can exercise the following powers, and no others: First, those granted in express words. Second, those necessarily or fairly implied, or incident to the powers expressly granted. Third, those essential to the declared objects and purposes of the corporation--not simply convenient, but indispensable.” The same author, in treating upon aid to railroads, while admitting that the current of judicial decision is in favor of the principle that in the absence of special const.i.tutional restrictive provisions, it is competent for the legislature to grant this power to munic.i.p.al corporations, says that ”Notwithstanding the opinions of so many learned and eminent judges, there remains serious thought as to the soundness of the principle, viewed simply as one of const.i.tutional law. Regarded in the light of its effects, however, there is little hesitation in affirming that this invention to aid private enterprises has proved itself baneful in the last degree,” and he adds: ”Taxes, it is everywhere agreed, can only be imposed for public objects, and taxation to aid in building the roads of private railway companies is hardly consistent with a proper respect for the inviolability of private property and individual rights. Fraud usually accompanies its exercise, and extravagant indebtedness is the result, and sooner or later the power will be denied either by const.i.tutional provision (as in Pennsylvania, Ohio, and Illinois, it already is) or by legislative enactment.”

As we are now dealing with const.i.tutional rights, and not with judicial decisions, we think we have fully shown that public or munic.i.p.al corporations have no authority under the const.i.tution to aid railroads by subscription of stock, or the issue of bonds, and that no authority exists for taxing the people to pay for such stock or bonds; and if it be true that counties and cities are not, and cannot be, clothed with the power to aid in the prosecution of private enterprises, it is equally true that the legislature cannot delegate to the majority of the voters of a county, city, towns.h.i.+p, or district, the authority to tax the minority for the same purpose. Legislatures cannot create new powers; they can only exercise such as they possess under the const.i.tution. The powers not delegated by the people in the fundamental law, are retained by them. If the people are sovereign, they are the source of power, and all that is not vested in some department of the government remains vested exclusively in the sovereign. If the legislative, executive, or judicial department of the government can act independently of the restrictions and prohibitions contained in the const.i.tution, then the will of the servants of the people is the supreme law, and the sovereign power supposed to reside in the people is destroyed, and const.i.tutional government is at an end. Oppressive taxation imposed without authority, for private and selfish ends, if persisted in, will eventually subvert our republican inst.i.tutions. This, and other unconst.i.tutional legislation, to some of which we have already referred, has caused such a departure from the old landmarks that it is questionable if we now have, in fact, a republican government. Under the rules adopted in legislation, and the pliant decisions of courts, const.i.tutions are made to yield to the demands of combinations, stock-jobbers, and private corporations, until we cease, as a people, to revere and respect these safeguards of our liberty.

CHAPTER XIII.

THE FATAL POLICY OF MORTGAGING CITIES AND COUNTIES FOR THE CONSTRUCTION OF RAILROADS.

The justification for the munificent grants and lavish taxation of the people in aid of railroads has been, that these roads afford the necessary facilities for transportation of freight, promote speedy communication throughout the country, provide ready markets for the products of husbandry, increase the value of property in their vicinity, and a.s.sist in improving and developing the new portions of our country.

While some, or all, of these objects may have been in a degree promoted, the little good thus accomplished has been more than counterbalanced by the evils uniformly attending this species of aid to railroads. What are the evils incident to the general incorporation acts, and local taxation in favor of railroads?

_First._ They take from the individual the natural and const.i.tutional right of owning and controlling his own property, and license the agents of a county, city, or town, to inc.u.mber his property with a debt, without his consent and against his protest.

_Second._ The policy engenders a rivalry between different localities, causing reckless extravagance and the creation of an immense indebtedness by public corporations. This indebtedness not unfrequently r.e.t.a.r.ds the settlement of the locality expected to be benefited, and depreciates instead of enhancing the value of property, for the constant and compulsory drain of the resources of the place in payment of the debt thus created can leave nothing but barrenness behind, the rule being, with but few exceptions, that non-residents hold the evidences of the indebtedness, and as a consequence, payment must be made to distant creditors. If one thinks that this is overdrawing the picture, let him examine the condition of those counties and cities that years ago loaned their credit to railroad companies, or subscribed to their capital stock. Localities less favorably situated, with fewer natural advantages, fewer miles of railroad, and with less productive countries tributary to their growth, have far outstripped their bonded neighbors in wealth, improvements, and the increased value of their property.

Persons who are seeking locations dread and shun these bond-_cursed_ localities, and seek homes elsewhere. New counties far outstrip these old ones in improvement and wealth; new towns and cities spring up and destroy the business of these old bond-ridden ones, and the latter, instead of receiving the antic.i.p.ated and promised increase of wealth, show a paralyzed industry and depreciated property. Localities that fifteen or twenty years ago gave promise of a prosperous future, are less wealthy, less prosperous, and in some instances less populous than when they subscribed stock, and issued bonds to railroads. For years to come, the wealth and industry of these places must suffer from the incubus of enormous taxes levied for the payment of bonds issued under the mistaken idea that great benefit was to result from the indebtedness.

_Third._ It places the pecuniary interests of all of the people of the counties and cities creating this kind of indebtedness in the hands of unscrupulous and relentless non-resident creditors, mainly Wall Street stock-jobbers, who obtained it at large discounts, often at one-fourth its par value, and who own not only the county and city bonds, but control the railroads in aid of which they were issued, and so by constantly collecting from the people the oppressive taxes required to pay the interest and princ.i.p.al of these bonds, withdrawing the amounts so collected from circulation and sending it to the east without leaving, or ever having paid any equivalent, they are constantly impoveris.h.i.+ng the people with the very means which were to have been sources of prosperity.