Part 8 (1/2)
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.