Part 7 (2/2)

THE STRONG GRASP OF CONSOLIDATED CAPITAL ON AMERICAN LEGISLATION--BEECHER ON ”REFORMATION OR REVOLUTION”--”HISTORY OF RAILWAY LEGISLATION IN IOWA.”

However much we may boast of our purity, patriotism, and political integrity, the history of the legislation of the United States, both state and national, proves that legislators, like other men, are subject to temptation, and that they do not always successfully resist the tempter. It is not a pleasant truth to acknowledge, that the acquisition of money is the controlling motive in the American mind; yet it is a truth. Nor is it pleasing to admit that corporations control the legislation of our nation and state; but the fact is too patent to be denied. Nor will any one who, without prejudice, examines the history of legislation upon the subject of railroads, deny that legislators have been controlled in their acts by the desire, and from the prospect of receiving personal pecuniary benefit by the pa.s.sage of acts granting special favors to railroad companies. If the instances of corrupt legislation were rare, or if the persons who acted from personal considerations, rather than for the public good, were few in number, we would not feel justified in devoting time to the discussion of the subject. But when this species of legislation becomes the rule, and legislation in favor of the people the exception, as has been the case for years past, we feel fully justified in calling the reader's attention to the matter.

If we were asked what acts pa.s.sed by the forty-second congress were of benefit to the people, we would be expected to answer that the internal revenue and tariff laws had been modified, and a part of their burdens lifted from the people; but nothing else of benefit to the public. If, however, we were to look through the acts of this congress, we would find almost all conceivable acts in favor of corporations, companies, and individuals, granting special privileges, which, in almost every instance, might be characterized a ”congressional job.” Patent right extensions; grants to railroad companies; for the sale of Indian reservations; amendments to railroad charters, bridge charters, and other like interests, have monopolized the time of the national legislature not consumed in investigating alleged irregularities of some of its members. As a rule, lobbyists and rings have shaped and controlled legislation for years, and have const.i.tuted themselves one of the established inst.i.tutions at the national capital. The successful lobbyist demands and receives for his services larger pay than the salary of congressmen. These men never appear at Was.h.i.+ngton unless they have a congressional job on hand. To them the ear of the average congressman is always open. A measure without any merit, save to advance the interest of a patentee, or contractor, or a railroad company, will become a law, while measures of interest to the whole people are suffered to slumber, and die at the close of the session from sheer neglect. It is known to congressmen that these lobbyists are paid to influence legislation by the parties interested, and that dishonest and corrupt means are resorted to for the accomplishment of the object they have undertaken; that they are a species of brokers whose business it is to beg and buy congressional votes for some pet scheme; to do acts which in former times would have disgraced all parties concerned, but who are now looked upon as a necessary part of the legislative machinery. Of course those interests that can employ the greatest number of these _congressional brokers_, and wield the greatest influence throughout the country, are in the best shape to secure favorable legislation. No one interest in the country, nor all other interests combined, are as powerful as the railroad interest. Railroad corporations, by constantly asking and receiving, have acquired such strength as to control legislation in all cases where their interests are affected. With a net-work of roads throughout the country; with a large capital at command; with an organization perfect in all its parts; controlled by a few leading spirits like Scott, Vanderbilt, Gould, Jay, Tracy, and a dozen others, the whole strength and wealth of this corporate power can be put into operation at any moment, and congressmen are bought and sold by it like any article of merchandise.

We have already shown the value of the railroad property in the United States, and some of the practices of companies, and their abuse of the privileges granted them. We are now treating of their influence upon legislators and legislation, and of the great power their wealth and combination secure for the purpose of controlling legislation. In this connection we must not forget that the vast sums owed by railroad companies in the United States, for which their bonds have been issued and sold, is a powerful persuasion for legislation in their favor.

We look upon the national debt as being enormous, and are apt to complain of the burdens it imposes; but great as it is, these railroad corporations, after showing a paid-up capital equal to the cost of all the roads in the country, less $865,357,195, show a bonded indebtedness of $2,874,149,667, being two billions over and above the entire cost of all the roads in the United States, showing that the total amount chargeable against the railroads of the country, exclusive of floating debts, is the sum of $5,169,129,664. This vast sum, amounting to more than one-third in value of the entire taxable property of the nation, is concentrated in these corporations, whose interests are at war with the people's. Controlled as it is by a few leading men, who have their partners, agents, and servants everywhere, it is not strange that the champions of these monopolists should be found in congress. The power of this great monopoly is felt in the nomination and election of congressmen. One-third of the wealth of the nation combined under the control of a few men is a dangerous power in a republic. When the object sought to be accomplished by this power has been to take control of the government, and administer all its departments in the interest of anti-republican inst.i.tutions, to build up monopolies, and trample upon the rights of the people, it has had no trouble to secure the number of congressmen sufficient for its purposes. In proof of this a.s.sertion we have only to look at the history of congressional legislation upon the subject of railroads as shown in a former part of this work. We cannot shut our eyes to the fact that the consolidation and combination of wealth and influence of railroad companies have procured the pa.s.sage of acts of congress under, and by means of which, these corporations have added largely to their wealth, and strengthened themselves for the desperate struggle soon to come between them and the people. Mr. Henry Ward Beecher has had his attention drawn to some of the more alarming phases of our present political condition. In a recent address delivered in St. Louis, he used the following language:

”I must, however, make haste to say, that among the dangers of the times, is one which has developed out of the prodigious rapidity of the acc.u.mulation of enormous and consolidated wealth. If I stand in the city of New York and look southward, I see a railroad--the Pennsylvania Central, that runs across the continent with all its connections. Its leases and branches represent a capital of some hundreds of millions of dollars. If I turn my eyes to the north, I see the Erie, where many hundreds of millions dollars lie. If still further to the north, I see the great New York Central, that represents hundreds of millions of dollars. These three roads represent thousands of millions of consolidated capital. Now suppose, in any emergency the railroad interest demands--suppose there were some great national question which demanded that the president of the United States should be a man, and the senate should be composed of men playing into the hands of the great national railroads' concentrated capitalists, what power is there on the continent that could for a moment resist them? It is not a great many years since it would seem almost atrocious to have suggested that thought. But legislatures have been bought and sold, until we think no more about it than of selling so many sheep and cattle. Does any body suppose that if it were a national interest that these vast corporations were seeking to subserve, that there is any legislature on this continent that could not be crushed or bought out by this despot, compared with which even slavery itself were a small danger. One of the greatest humiliations of a nation that is justly proud of so many things, is that disaster which has fallen upon our congress. When we see the slimy track of the monster, we may justly ask: 'What are we coming to?' There has got to be a public sentiment created on this subject, or we will be swept away by a common ruin. I tell you that the shadow that is already cast upon the land is prodigious. I do not believe in the sociologists, in the international, nor the communists; but when I see what rich men, as cla.s.ses, are doing with our legislatures, what laws they have pa.s.sed, what disregard there is to the great common interest, I fear that the time will come when the workingmen will rise up and say, that they have no appeal to courts, no appeal to legislatures; that they are bought and owned by consolidated capital, and when that time comes, unless it brings reformation, it will bring revolution; and if any such time does come, I do not hesitate to say I will stand by the common people for the encouragement of the working people, and against the wealth of the consolidated capital of the land.”

This great consolidated railroad interest now has its champions in the halls of congress. In the senate is Dorsey, president of the Arkansas Central railroad. Patterson, senator-elect from South Carolina, is a railroad man. Jones, of Nevada, Allison, of Iowa, Mitch.e.l.l, of Oregon, Carpenter, of Wisconsin, and Windom, of Minnesota, and others are recognized as reliable railroad men. In the house we have Brooks, Kelly, Schofield, and many more who have proved their fealty to this great monopoly on many occasions. In addition to the friends of these corporations in the legislative halls, paid lobbyists throng the capital, supplied with stocks and money, to be used ”where it will do the most good.” This money is supplied by the railroad companies for purchasing votes for favorite measures, and the recent startling developments show that this fund does not lie idle. All this has resulted in corrupt legislation. Congressmen have aided in procuring grants and special privileges to companies of which they are members, and other congressmen have listened to the arguments of lobbyists, and sacrificed the best interests of the people to promote the interests of these monopolies.

The influence of railroad companies over legislation is not confined to the general government. It develops its full strength in state legislatures. There it manifests itself openly. Railroad companies nominate and elect their own men for the avowed purpose of securing the enactment of laws favorable to themselves. Railroad directors, stockholders, and attorneys are elected to the legislature because their interests are adverse to those of the people; they are selected to defeat all legislation tending to protect or relieve the people from the oppression of these corporations. Paid lobbyists are kept in attendance during the legislative session for the same purpose. Free pa.s.ses are given to legislators as cheap bribes, and money and railroad stock and bonds are placed ”where they will do the most good” to the railroad interest. By the use of all these means, majorities in the interest of railroad companies are secured, or such strong minorities as will prevent unfriendly legislation. As a fact, now a part of the history of the country, the legislatures of many of the states are in the interest of, and controlled by, these corporations. They shape all public legislation, and rule the affairs of the state. The people are taxed and robbed by their own legislatures. Immense sums of money, or state bonds, are donated to these corporations, and the people are taxed to pay them, while the railroad property is practically exempt from taxation. The legislature of the state of Louisiana donated to a single railroad company $3,000,000, and guaranteed the bonds of the same company for about as much more. The legislature of the state of Alabama has voted to different railroad companies many millions of dollars. The same is true of Georgia, Texas, North and South Carolina, and many other states. In some of these states men who were elected to represent the people, and who were pledged in their interest, have openly sold themselves to this railroad monopoly. For a consideration paid to them they have a.s.sisted in bankrupting their states, and reducing the people who trusted and honored them to a state of servitude, scarcely less oppressive than the old system of African slavery. The value of property is destroyed by excessive taxation, and the political and judicial power of the states is handed over to railroad men, who, by combining their interests, have created a great central power, antagonistic to the people, and destructive of republican inst.i.tutions. In the northern states it has been found impossible to procure just legislation where the interests of railroads and of the people conflict. In addition to the license given to railroad companies, by legislative grants and special privileges, to plunder the people, legislators, in violation of const.i.tutional provisions, and of every principle of justice, have persistently refused to require of these corporations their just proportion of taxes, and have just as persistently provided for taxing the people to aid railroad corporations. Take the state of Indiana as an ill.u.s.tration. Counties, cities, and towns have been burdened for years with unjust taxation because of legislation in favor of local aid to railroads. In that state there are now three thousand five hundred and twenty-nine miles of railroads, representing about $100,000,000. For the purposes of taxation, all of this railroad property represents but $10,000,000. Some of these roads, for the purposes of taxation, are appraised at $3,000 per mile, and some as low as $500, and $400. While the property of individuals is appraised at about one-third of its estimated value, this railroad property does not pay taxes upon more than one-tenth part of its estimated value, and when at a recent session of the legislature an effort was made to amend the statute so as to make taxation more equal, it was defeated by the railroad men in the legislature, supported as they were by the strong lobby whom they had paid to be in attendance.

The history of railroad legislation in the state of Iowa is of the same glaring character. We have the pleasure of laying before our readers the following succinct history of this Iowa legislation, from the pen of Hon. Samuel Mc.n.u.tt, who, for the last ten years, has been a member of the legislature (six years in the house and four years in the senate), and who kindly furnishes this communication at our request.

HISTORY OF RAILWAY LEGISLATION IN IOWA.

HON. D. C. CLOUD, Muscatine, Iowa:--

DEAR SIR: The progress of the railroad question is remarkable in our own state. As a member of the Iowa legislature, for ten consecutive years, I have had occasion to note that progress, and to observe the advancement of that interest from struggling infancy to vigorous growth--from feebleness to a strength that is fearful to contemplate.

The people of Iowa, through their legislature, have always been eminently friendly to the construction of railroads and the promotion of the railway interests. In proof of this, witness the whole history of our legislation; witness our magnificent land grants, subsidies, bonds, subscriptions, and taxes, to the amount of five per cent of our entire valuation, in one year, as free gifts to railroad corporations. And yet some of these corporations have cheated us as people never were cheated before. We have afforded immunities to capital invested in railroads that are not afforded to any other kind of capital in the state. Witness the hitherto almost entire exemption from taxation of that kind of property. But, more than this, we have laws regulating the charges to be made by those engaged in several of the industrial pursuits, while up to the present time there has been no law upon our statute books interfering with the charges made by railroad corporations; and only _the right_ to interfere has been claimed in cases of public necessity, where those corporations are guilty of gross extortion or unjust discrimination.

The first grant of lands to aid in the construction of railroads in our state is known as the ”Iowa Land Bill,” which pa.s.sed congress and was approved by the president, May 15th, 1856. Under this act there has been certified to the state, to aid the four original land grant roads, as follows: to the Burlington & Missouri River railroad, two hundred and eighty-seven thousand acres; to the Mississippi & Missouri (now part of the Chicago, Rock Island, & Pacific) railroad, four hundred and seventy-four thousand six hundred and seventy-five acres; to the Iowa Central (afterwards the Cedar Rapids & Missouri River) railroad, seven hundred and seventy-five thousand and ninety-five acres; and, to the Dubuque & Sioux City railroad, one million two hundred and twenty-six thousand five hundred and fifty-nine acres. On the 12th of May, 1864, congress pa.s.sed an act granting lands to aid in the construction of another railroad across the state, from the city of McGregor, westward, on or near the forty-third parallel, to Sioux City. The lands in this grant were supposed to exceed a million of acres, but were found afterwards to be less than half a million. On the 12th of July, 1862, congress authorized the diversion of a portion of the Des Moines River Improvement company's land grant to the Des Moines Valley railroad company, the amount of which I have not before me. It is safe to say that all these railroad land grants, taken together, amount to _over four millions of acres_, or nearly one-eighth of the land of the state; or, more approximately, _one acre out of every eight and a half acres_ of the entire area of Iowa has been given away to railroad corporations.

In addition to this immense subsidy, the people along the several lines contributed largely toward their construction.

On the 14th of July, 1856, the general a.s.sembly, in extra session, pa.s.sed an act conveying the land to the four first mentioned companies, upon certain conditions. Section 14 of that act (which act is the original ”charter” of those corporations), now found as section 1,311 of the Revision of 1860, reads thus: ”Said railroad companies accepting the provisions of this act shall at all times be subject to such rules and regulations as may, from time to time, be enacted by the general a.s.sembly of Iowa, not inconsistent with the provisions of this act, and the act of congress making the grant.”

Under this ”charter” the companies went to work, and when some of their roads were extended toward the interior, complaints began to arise that the railroad tariffs were so arranged as to seriously discriminate against the trade and commerce of Iowa towns and in favor of points out of and beyond the state; that these tariff rates were also so arranged as to deprive our people of a choice of markets, rendering the Mississippi river useless as a highway of trade and commerce, and compelling our people either to pay tribute to Chicago or go without a market. The evidence in this matter was of a character that could not be questioned, and although the subject was brought before the general a.s.sembly of 1864, we refused to take any action at that time, hoping that the companies which had been so liberally dealt with by our people would, upon remonstrance, deal fairly and justly by them.

When the general a.s.sembly met again, in 1866, the matter of railroad discriminations against our people had a.s.sumed a still more momentous shape. The greater portion of our time during that session was occupied with that question. Weeks after weeks were spent mainly discussing whether or not the state had the right to prevent unjust discrimination or in any way control railroad corporations as to their charges. The then attorney general (Hon. F. E. Bissell, now deceased) gave it as his official opinion that the state possessed no such right; but that in the matter of tariff charges, those corporations were above and beyond all legislative control. Whether the fact that he was a ”railroad attorney,”

as well as attorney general for the state, had anything to do with influencing his ”opinion,” is not for me to say. We had able lawyers of the very opposite opinion, but the fact of this announcement gave great encouragement to the railroad party, and was calculated to dishearten those of us who believed that the people had some rights which even corporations should respect. It was now openly declared by eminent attorneys, both in the legislature and in the powerful ”lobby” that hung around us, that in the original ”charter,” or grant, the state, while reserving the right to ”enact rules and regulations,” had either failed or neglected to reserve, in specific and ”_express terms_,” the particular right to regulate and limit tariff charges, and therefore she could not now exercise that right, and could never regain it.

Listening to these astounding claims, put forth by the attorneys for the corporations, some of us declared that if G.o.d and the good people of Iowa ever gave us a chance to reserve, in a railroad charter, the right of control, we would surely do it in such specific and ”express terms”

as even a railroad attorney could neither mystify nor explain away. The golden opportunity to do this very thing occurred in 1868. A certain state of facts existed regarding the management of the Chicago, Rock Island, & Pacific railroad company, which rendered new legislation necessary. The executive committee, headed by John F. Tracy, had issued and put upon the New York money market nearly _four million dollars'_ worth of ”watered stock,” and realized the cash for it before certain other parties were aware of what had been done. With this money the Tracy party claimed that they intended to build the road from Des Moines to Council Bluffs (the road at this time being completed only to Des Moines). The immediate result of this ”stock operation” was a bitter quarrel between the Tracy and the anti-Tracy parties of the stockholders. The Tracy party were said to be in the minority, but they had the money and the executive committee. Suits were commenced against them in the New York courts to forbid their construction of the road west of Des Moines, and to compel them to disgorge the four millions of dollars for distribution among the stockholders. In the meantime the company had forfeited their right to the land grant in consequence of the non-construction of the road beyond Des Moines, according to the terms of the original act. The consolidation of the Chicago, Rock Island, & Pacific railroad company's stock (a company organized under the laws of Illinois) with that of the Mississippi & Missouri railroad company (organized under the laws of Iowa), needed legislative sanction by the general a.s.sembly of Iowa; and further, the directors of the consolidated company wanted not only a legalizing act covering the above points, but also an extension of their term of office for one year beyond the time for which they had been elected by the stockholders.

Under this state of things, the ”Tracy party,” legally representing the consolidated company, applied to our legislature for relief and protection; and, accordingly, a bill was introduced covering the desired points, and re-granting the lands to the company under certain conditions and restrictions, which, when agreed to by the company, should remain forever _a contract_ between the state and the company.

At this juncture, one of the judges of the supreme court of New York issued a solemn injunction upon the general a.s.sembly of Iowa, forbidding that body to legislate, in any way, upon the matters I have above recited. Some of us, not having the fear of New York courts nor the majesty of Judge Cardozo before our eyes, fairly laughed at that judicial functionary's lordly impudence. We thought that the grand opportunity had now arrived when the state could justly step in and pa.s.s an act compelling the company to construct the road, for the sake of the extraordinary relief sought, and in that act _reserve, in ”express terms,”_ as a matter of _contract_, the right to control the tariff rates of at least one powerful corporation, connecting with the Pacific railroad at Council Bluffs, and thereby control the rates of other lines crossing the state with similar connections. This express reservation of right, in the form of what was known as the ”Doud Amendment,” was inserted in the act in relation to the Chicago, Rock Island, & Pacific railroad company, and will be found as the first proviso in the second section of that act (chapter 13, on page 14, Acts of Twelfth General a.s.sembly), and is in the following words: ”_Provided_, said railroad company, accepting the provisions of this act, shall at all times be subject to such rules and regulations, and rates for the transportation of freight and pa.s.sengers, as may, from time to time, be enacted by the general a.s.sembly of Iowa.”

The company, through its proper officers, accepted the terms of this act, and filed that acceptance in the office of the secretary of state, thus closing _a contract_ between the state and the company, and setting at rest forever the question of controlling and regulating the charges for freight and pa.s.sengers in favor of the state. The same proviso was afterwards inserted in the act in relation to the Des Moines Valley railroad company (chapter 57, page 63); also in the act relating to the McGregor Western railroad company (chapter 58, page 67); also, in the act relating to the Dubuque & Sioux City railroad company (chapter 124, page 164); all acts of the twelfth general a.s.sembly.

The pa.s.sage of the last named act aroused unusual commotion along the proposed railroad line from Cedar Falls, via Fort Dodge, to Sioux City, in consequence of the railroad managers declaring that not another mile of that road would ever be built until the proviso for control should be repealed. Work ceased along the line; the laborers were discharged; the people who expected a railroad through their country became alarmed.

Meetings were held at Fort Dodge, Sioux City, and other points, and extraordinary efforts were put forth to induce Governor Stone to call an extra session of the legislature for the purpose of repealing the so-called ”_Doud Amendment_.” A committee of prominent citizens was appointed to visit, in person, the members of the general a.s.sembly, and have them sign a request to the governor in favor of an extra session.

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