Part 9 (2/2)

The general rule now is to get grants of land, government, state, and local subsidies, in amounts sufficient to organize a company and commence the work of construction, then to issue and sell bonds, secured by mortgage upon the roads to be constructed, and from the proceeds construct the roads. Then stock certificates representing paid-up capital are issued, when in fact, all that has been paid is the local subscriptions obtained by managers from persons located along the lines of roads. The roads having been built on borrowed capital, the stock represents nothing but an opportunity for dishonest speculation. A ”railroad” now means, to a large majority of those who are engaged in projecting and creating it, nothing but a fraudulent device for extorting money from the public under cover of developing the country and rendering great public benefit to the nation. After the roads are built, the men who have built the same, and issued and sold the bonds, issue to themselves certificates of stock, no part of which they have paid up, and go into Wall street to unload, that is, to sell their stock. If it be in good demand it will bear ”watering.” More stock is issued and sold, and by this process men who were worth nothing, but who were so fortunate as to get the control of certain railroad companies without having invested to the amount of a dollar, suddenly become immensely rich. The value of the road to those who have paid up their stock, but are not included in the ring, is destroyed; the road is loaded with a debt that destroys its value. This new method of construction meets with favor among a large cla.s.s of men in all parts of the country, who have combined to aid each other. All that is lacking on their part to take absolute control of the whole country and government is a consolidation of all the railroads of the country under one management. At this time, six or eight great combinations, with a half dozen men at their head, manage the railroad interest of the country.

They are extending their power and it may not be long until all will be consolidated in one, which would give this monopoly absolute control, not only of the markets, but of the whole legislation of the country in matters affecting their interests. With packed legislatures, state and national; with paid or intimidated judges, and with civil service of several thousand cunning clerks, and able-bodied brakemen, conductors, and switch tenders, they would be in that position most to be dreaded by all lovers of liberty--a powerful and enormously rich corporation, surrounded by a weak, timid, and helpless public. While we were still engaged in singing paeans over the glorious inst.i.tutions of our happy country, we would suddenly find that our inst.i.tutions had disappeared, and that we had, riveted around our necks, a worse despotism than we ever lamented for the down-trodden of other lands. This is really no imaginary picture as all will see who remember the stronghold, absolutely inaccessible to the law, which Fisk and Gould erected, and for a time maintained in New York; or the military operations of the employes of the Erie on the Susquehana road, and who have followed, with any attention, the helpless struggles of the government of the United States--formerly supposed quite able to take care of itself--in the foul toils of the Union Pacific railroad. These corporations foreshadow what must follow when a perfect consolidation is effected. Now at non-competing points they extort from s.h.i.+ppers such enormous rates for transportation as absorb almost the entire value of the farm products; while from points at which there are competing lines of road they will carry at greatly reduced rates. They will charge no more for carrying freight one thousand miles from a point where there is a competing road, than for carrying one-tenth of that distance, where there is no compet.i.tion. When they have the power, and hold the s.h.i.+pper at their mercy, they virtually rob him. What is true of their course where there is no compet.i.tion, will become the universal rule, when a perfect consolidation of the whole railroad interest is effected. Add to this the control of the finances of the country (which they are now rapidly securing) and their rule becomes absolute over the whole people, and all departments of the government. If the reader has followed us thus far, he will have observed that the corporate interest of the country has a.s.sumed a position in antagonism to the people; that it has a secure hold upon the industrial and financial interests, and that, to a great extent, it already controls the action of the legislative and executive departments of the government, state and national.

CHAPTER XXII.

THE SUPREME BENCH INVADED--ITS DECISIONS REVIEWED.

We are aware that many look upon the final decisions of courts with a degree of awe and respect which is almost reverential. The railroad companies of the country, with all their paid attorneys, are now extremely jealous in their efforts to convince the public that the supreme court of the United States is a body of the greatest jurists the world ever produced; that their decisions are pre-eminently able, and that it is disloyal, if not rank treason, to call them in question, or to even criticise them. While we feel bound to recognize the decisions of courts as binding until they are reversed, we claim that it is not only the right, but the duty of every citizen of the republic to examine these decisions, and to approve or condemn, as to his judgment shall seem right. We examine, and approve or condemn, acts of congress and state legislatures; we discuss the motives of legislators, and when acts have been pa.s.sed which are not acceptable, their repeal has been demanded. Not unfrequently repeals have been effected soon after their enactment, either because of patent defects, or because the people condemned them. History has proven that the election of a man to congress, or to the legislature, does not clothe him with wisdom, not always with honesty, but that the frailties of humanity affected him as it did others. The same rule applies to courts and judges. They are made of the same flesh and blood, and are subject to the same infirmities as other men. Their knowledge is not perfect; their judgment is not infallible, nor are their official decisions always pure and free from bias. Instances are not wanting where judges have been impeached, and removed for dishonest practices. They have been and still are being influenced by popular feeling, by certain interests, and are always more or less controlled by education and a.s.sociation. Their decisions are often reversed, and they sometimes reverse their own decisions.

If we want examples of a corrupt bench, we can refer to the city of New York, where certain judges have been impeached, and removed from office.

Of partisan judges, we find them in Louisiana, Alabama, Arkansas, Kansas, and many other states. Of ambitious judges, those who, while acting in their official capacity, enter into political contests, and use their judicial positions to secure other preferment, we need only to look over the history of any of the states, and to the highest court in the nation. Judges of the supreme court of the United States are found identified with political parties; entering the lists as candidates for higher distinction; and while they are holding high and responsible offices, to which they have been appointed for life, they are seen mixing with politicians as partizans, and seeking nominations. Judges whose judicial decisions have been controlled by public sentiment, can be found in Iowa, Illinois, Indiana, and Wisconsin. Judges who have reversed their own decisions, can be found in any state in the Union, and we have recent examples in the supreme court of the United States.

Such being the facts, it is not strange that railroads, and other great corporations, should, to a very considerable extent, influence the actions and decisions of courts. We feel warranted in saying, that the decisions of courts, more than everything else combined, have promoted the rapid strides made by railroad corporations toward a complete destruction of republican inst.i.tutions. The pernicious practice of solving all doubtful points in favor of these corporations by the ”judicial construction” of statutes, or what might be called ”judicial legislation,” has been of vastly more benefit to them than all the grants received from legislative bodies. Legislatures do not possess the power to grant to any individual, company, or corporation, exclusive rights or privileges, unless such power is conferred by the const.i.tution. The rule formerly obtained, that in cases where the rights of the public and that of an individual or corporation came in conflict, an act of the legislature of doubtful authority would be construed in favor of the people. The reason for this rule of construction is obvious. The people are sovereign. All the powers not delegated to the government, or to some department of it, were retained by the people.

Hence, when a question was presented involving a doubt of its const.i.tutionality, and a decision in favor of the individual or corporation would deprive the people of any of their reserved rights, it was resolved in favor of the sovereign people. The act was held to be unconst.i.tutional because the legislature could not exceed the scope of the authority conferred upon it. The const.i.tution was a limitation upon legislation.

In a former chapter we have attempted to show the distinction between the power of the states and general government under the const.i.tution; to demonstrate that the power of states was supreme in all matters save in those expressly conferred upon the general government by the const.i.tution, and that for this reason the const.i.tution of the United States should be strictly construed. We are warranted in saying that this rule obtained until questions involving the interests of railroads began to present themselves for the decisions of the supreme court of the United States. When these questions began to arise, a different rule was demanded by the companies, and by a gradual departure the supreme court has reversed this old and just rule, and now the will of that court must be treated as the supreme law of the land. Judicial legislation has usurped the place of judicial investigation, and the people are without remedy, unless a return can be had to const.i.tutional rule. There is now a general complaint throughout the whole land, because of the recent interpretation given by the United States courts to the const.i.tution; their disregard of statutes, const.i.tutions, and decisions of state courts, which have reached a point which virtually makes the will of the supreme court superior to all const.i.tutional and statute law. During the war, the power and jurisdiction of the United States courts were enlarged, and special powers were conferred upon them to meet the exigencies of the time. From that period to the present, these courts, by judicial construction of their power under the const.i.tution and new interpretations of that instrument, and by judicial legislation, have gradually extended their jurisdiction, until there seems to be no const.i.tutional or legal barrier to their decisions.

Questions connected with railroad companies have increased rapidly.

Conflicts have arisen between the public and these corporations; they have multiplied in the federal courts, and, as a general rule, have been decided in favor of the companies. In some instances, upon questions arising exclusively under the const.i.tution and statutes of a state, the judges of the federal courts have disregarded the action of the people of the state, overridden their state const.i.tutions and statutes, and p.r.o.nounced the decisions of the state courts invalid, and refused to be bound by them, subst.i.tuting their own conclusions in the interest of these monopolies. To prove this, let us compare some of the earlier decisions of these courts with those of more recent date, citing cases where the powers, rights, and privileges of corporations were involved, and where conflicts arose between the government of states and of the nation. In the early years of our republic, questions connected with corporate rights were submitted to the supreme court of the United States; they were ably argued by the best const.i.tutional lawyers of the nation, and were carefully considered and decided by the courts. Upon the question as to whether state courts were inferior, the supreme court of the United States decided that they were not. The same court, on a question raised as to the authority of the legislature of a state to grant to private parties exclusive rights to certain property in Georgia, _held_, that the real party in interest was the people, and that it was only when the legislature acted within the power conferred, that their acts were valid; that it was the peculiar province of the legislature to prescribe general rules for the government of society, but not to apply those rules to individuals of society.

The question as to the rights, powers, and privileges, of corporations, came before the supreme court of the United States, and was fully examined and decided, in 1819, in what is known as the ”Dartmouth College Case.” The charter for the college had been granted by the king of England for educational purposes. It was in no sense a corporation for pecuniary profit. Without the consent of the trustees of the college, the legislature of New Hamps.h.i.+re amended the charter in a manner not acceptable to the trustees. They refused to recognize the change made. A suit was inst.i.tuted, and the case was taken to the supreme court for a decision. The point at issue was whether the college was a public or private corporation; and, also, as to the extent of the power the state legislature possessed over its charter. It is not our purpose to examine all the points raised and decided in that case, but only to notice such as refer to the nature of corporations and the power of the state governments to control them. In deciding these questions, the court seems to have looked at the objects for which corporations were intended. The court says; ”A corporation, being a mere creation of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or incidental to its very existence. These are such as are supposed best calculated to affect the object for which it was created. * * *

”The objects for which corporations are created are universally such as the government wishes to promote. They are deemed beneficial to the country, and this benefit const.i.tutes the consideration, and, in most cases, the sole consideration of the grant.” * * ”From the fact, then, that a charter of incorporation has been granted, nothing can be implied which changes the character of the inst.i.tution, or transfers to the government any new power over it. The character of civil inst.i.tutions does not grow out of their incorporation, but out of the manner in which they are founded, and the objects for which they are created. The right to change them is not founded on their being incorporated, but on their being the instruments of government created for its purposes. The same inst.i.tution, created for the same objects, though not incorporated, would be public inst.i.tutions, and, of course, controllable by the legislature. The incorporating act neither gives nor prevents this control.”

The doctrine above enunciated fixes the line of distinction between public and private corporations. Those created for public or governmental purposes are defined to be ”public corporations,” and those created for the advancement of private enterprises are ”private corporations.” Private corporations possess none of the attributes of sovereignty, and hence are to be treated in law as private individuals; the act of incorporation being for the purpose of affording the corporators proper facilities for transacting business. Corporations being the mere creatures of the law, they possess only those properties which the charters of their creation confer upon them. Under the decision to which we have referred, and from which we have quoted, corporations are created by statute, and are subject to the control of the power creating them. A grant from the sovereign power to an individual, or to a company, is not necessarily irrepealable, nor will it in all cases be treated as a contract. Corporations created for public or governmental purposes are binding as contracts only so far as they affect private interests, for the good reason that government cannot contract with itself.

Nor could the legislature confer exclusive privileges upon a corporation, the exercise of which would deprive the people of the rights guaranteed to them in the const.i.tution; for the reason that the attempt to clothe a corporation with such privileges would be an unauthorized act on their part. In the case of ”Providence Bank _vs_.

Billings & Pittman,” decided by the same court, in 1830, it is said that ”The great object of an incorporation is to bestow the character and properties of individuality on a collective and changing body of men.

This capacity is always given to such a body; any privileges which may exempt it from the burdens common to individuals do not flow necessarily from the charter, but must be expressed in it or they do not exist.” The doctrine obtained that corporations can take nothing by implication, and that unless the power to regulate and control them has been surrendered by the legislature, that power remains undiminished. The rule that grants of privileges to corporations are to be strictly construed, when the rights of the public are affected, is recognized in this case. We are warranted in saying that it is only since corporations have become all-powerful in the land that a different rule has obtained. Under the statutes of the United States, and as formerly held by the supreme court, a promissory note given by a citizen of a state to another citizen of the same state, but transferred to a citizen of another state, could not be sued in the United States courts, but the holder was compelled to bring his action in the state courts. This rule obtained until counties, cities, and towns began to issue their bonds to railroad companies, and was then disregarded. Railroad companies had sold and delivered these bonds to parties in Wall street, or elsewhere; they had failed to fulfil their contracts with the parties from whom they had received the bonds, and when suit was brought upon them in the state courts the bondholders were beaten. Suits were then commenced in the federal courts, the plain letter of the statute was disregarded, the established decisions of the supreme courts were overruled, state statutes and const.i.tutions were treated with contempt, the decisions of the supreme court of a state, which had been followed for years, were called ”_oscillations_,” and the interests, frauds, and deceits of railroad corporations were fully protected and sustained; not because this course was supported by the statutes or precedents, but because such a course would subserve these harmful interests. This action on the part of the supreme court was not the result of any dishonest or partisan intent, but it was made to prevent what the court was pleased to term great wrongs about to be inflicted on _innocent_ holders of bonds purchased of railroad companies. In many instances the _innocent_ bondholders were the same parties who, as railroad men, had cheated the counties and cities, and by fraud and false representation had obtained these bonds, for which no consideration has been paid to the present time. It will not be out of place here, as showing the influence of these corporations over the supreme court of the United States, to refer to the transactions that caused the first departure by the court from the settled rules of decisions on questions arising under the const.i.tutions and statutes of states, and, we may add, initiated a rule of decisions, followed to the present time, which have well nigh destroyed states rights. Under this new rule the whole country is governed by the supreme court and corporations. The people are powerless, and monopolies reign supreme. We refer to the question of aid by counties and munic.i.p.al corporations to railroads. In many of the states munic.i.p.al corporations have subscribed stock and issued their bonds to railroad companies, in some instances under express statute authority, and in others without such authority. No one is prepared to admit that compulsory payment by the citizen of a part of his property, or money, to aid a private corporation in building a railroad, is the payment of taxes for the support of government, or that the levy and collection of a tax for that purpose can be supported by any section of the const.i.tution. Yet we all know that such taxes have been, and are being, levied and collected. Judge Dillon, in his work on munic.i.p.al corporations, says: ”The courts concur, with great unanimity, in holding that there is _no implied authority_ in munic.i.p.al corporations to incur debts or borrow money in order to become subscribers to the stock of railway companies, and that such power must be conferred by _express_ grant. To become stockholders in private corporations is manifestly foreign to purposes intended to be subserved by the creation of corporate munic.i.p.alities, and the practice of bestowing powers of this kind is of recent date and origin; and hence the rule, that in order to exist, it must be specially conferred, and cannot be deduced from the ordinary munic.i.p.al grants.”

If the above quotation is good law (and this no one will deny), the recent decisions made by the supreme court cannot be supported. But in order to avoid the force and effect of this principle, and to provide for the collection of bonds illegally issued (by recent decisions), a new doctrine has been promulgated by the court which overturns state statutes, as well as the decisions of state courts. Treating of this cla.s.s of bonds, Judge Dillon says:--

”Respecting negotiable bonds issued under legislative authority, by munic.i.p.alities for such and kindred purposes, when in the hands of _bona fide_ holders, the supreme court of the United States, influenced, doubtless, by a keen sense of the injustice and odium of repudiation, has at all times displayed a strong determination effectually to enforce payment. Accordingly it has refused to follow the subsequent decisions of the state courts against the validity of such bonds, in cases where the prior rulings of the state courts had been in favor of the power to issue them; it has adopted liberal constructions of statutes and charters authorizing the creation of such debts; it has given no favor to defences based upon mere irregularities in the issue of the bonds, or non-compliance with preliminary requirements, not going to the question of the power to contract; and has held that the circuit courts of the United States were clothed with full power and authority by _mandamus_, or otherwise, to enforce the collection of judgments rendered therein on such bonds, and that this authority could not in the least be interfered with, either by the legislature or the judiciary of the states.” It will be seen that for the purpose of relieving railroad companies from their liabilities as guarantors, on bonds issued to them by munic.i.p.alities (for these bonds were uniformly so guaranteed), the supreme court of the United States has declared the statutes of states, and the decisions of state courts, absolutely null and void. In violation of both the letter and spirit of the const.i.tution, in order to compel the payment of bonds issued without authority, and in violation of every principle known to the law, it has said that these bonds must be paid because they are in the hands of _bona fide_ holders.

This same court, as we will hereafter show, when the holders of bonds issued by railroad companies were asking payment, has released the companies from their written agreement to pay in coin, and compelled the holders to take at par depreciated paper. When the bondholders are demanding payment from the people, of the bonds issued without authority, the court, in order to compel payment, nullifies state government; but when these same bondholders demand that railroad companies shall live up to their written contracts, have decided that they need not do so. It fears the stigma of repudiation when the people are called upon to pay, but when the call is made upon corporations it decided in favor of repudiation. Our author continues: ”It has upheld and protected the rights of such creditors with a firm hand, _disregarding at times, it would seem, principles which it applied in other cases, and a.s.serts the jurisdiction and authority of the federal courts with such striking energy and vigor as apparently, if not actually, to trench upon the lawful rights of states and the acknowledged powers of the state tribunals_.”

Munic.i.p.al corporations have no right to become stockholders in private corporations; acts of the legislature pretending to confer such authority are void; the officers who control and administer the munic.i.p.al government are the mere agents of the munic.i.p.ality, and can only act within the scope of the powers conferred upon them by the charter of the munic.i.p.ality they represent. Neither the const.i.tution of a state, nor of the United States, nor the charter of a munic.i.p.ality, can confer upon the nation, state, county, city, or town the authority to compel any citizen against his will to bestow any part of his money or property upon private corporations. And it matters not whether this comes in shape of a tax, an arbitrary appropriation of a fraction or of all his property or possessions to such private corporation, or by a subscription of stock to it. If the national, state, or munic.i.p.al government can in either of the above methods compel him to aid in building up and supporting private corporations, then private corporations are clothed with attributes of sovereignty, and all private citizens own and possess their property subject to the will of these corporations. If a majority of the qualified voters of a state, or particular locality, are in favor of taxing the state, or local district, to the extent of one-tenth or one-half of the a.s.sessed value of all property in the district, and investing the amount in a railroad enterprise, the minority, notwithstanding their protest and remonstrance, must submit to have their property taken from them and applied to the same object. Their const.i.tutional rights are taken from them, and our boasted free government has no real existence. By recent decisions of the supreme court of the United States, the people of the whole country are placed in that position now. Railroad corporations have been, and are now, under the fostering care and protection of this court. Statutes have been so often disregarded by it, when their interests were to be subserved, and in conflicts between the people and these monopolies the decisions have been so uniformly in favor of the latter, that it is now a question whether the government controls corporations, or corporations control the government. If a pernicious law is enacted by congress, or a state legislature, it is soon repealed.

The men who compose those bodies are constantly changing, their term of office is short, and the errors committed by them can be speedily corrected. The judges of the supreme court are appointed for life; the people have no control over them; their decisions cannot be reversed by any department of the government. A decision of the supreme court is the supreme law of the land, and cannot be reversed or amended by any other power in the land. It is superior to all statute law, and the power of the court has no limit, save that fixed in the const.i.tution and statutes of the United States, both of which must receive _their_ construction and interpretation from the court. We have already said that judges of this court are subject to the infirmities common to all men; that they are liable to be influenced by the same causes that influence others; that no matter how honest and pure they may be in their intentions and actions, their decisions were liable to be controlled by surrounding circ.u.mstances, and that the influence of this great corporate power did control them. In proof of this we need only look at their course of decisions on munic.i.p.al bonds, and on bonds given by railroad companies, before referred to, as well as their decisions upon the nature of railroad corporations. It strikes us as remarkable that the supreme court of the nation should have or entertain any doubts as to the fact that these corporations are private. Upon what principle the court can hold that railroads are public highways is not readily seen. The stock, the roads, and all other property belonging to the different railroad companies, are as much their individual or corporate property as are the furnace, the factory, or the mining interests, the property of the companies owning them. Their owners.h.i.+p is as complete as that of the private person who owns the stage and team used for carrying the mails in certain districts. The same law that governs other common carriers, governs these corporations. Government can only interfere with their business when they abuse the privileges granted in their charters.

It cannot compel them to carry the mails, save in pursuance of contracts made with them. They own the ground upon which their roads are built, and no one can travel upon these roads, or s.h.i.+p freight over them, save by the permission of the companies. While courts and legislatures have the const.i.tutional right to regulate and control these corporations, and, if need be to prevent abuses and oppressions, to declare their charters forfeited, as in cases of banks, insurance companies, and other corporations,--upon no principle of law can they declare them public corporations. If it is a fact that they are public corporations, then as a resulting consequence they are clothed with the attributes of sovereignty, and are a part of the government. If railroads are public highways for any purpose, they are for all. Until they cease to be owned and controlled by private corporations, it will hardly be claimed by any respectable court that they are public highways, in the same sense as common public roads, nor can they be until they are open to public use.

This cannot be until the public becomes the owner of these railroads.

But we are told that the supreme court has decided the question, and declared that they are public highways, no matter whether they are owned by the state or private companies. We have not seen the decision; but if such decision has been made, we are bound to accept it as the law of the land, until the same court reverses it. Yet if the court was to decide that a river was a railroad, or that a steamboat was a train of cars, while we would accept this decision as the law, we would not admit that such was the fact. We are not aware that the question as to whether railroads are public highways has ever been before the supreme court, save in connection with the right of munic.i.p.alities to subscribe stock and issue bonds therefor, and upon the question of voting taxes to aid in their construction. When these questions have been presented to the supreme court of the United States it has held that they were public highways. It is noticeable that these decisions have been made only when the interests of these corporations were to be subserved. In a recent case from Wisconsin the supreme court decided that they were public highways, and that it was just as lawful to levy taxes for railroads as _for any other public works_. The same court has decided in a large number of cases when suits were inst.i.tuted on munic.i.p.al bonds, that railroad corporations were private companies, and in all of the states where the question has arisen, we believe they have been held to be private corporations. We might cite several recent decisions of the supreme court to the same effect. In the cases of Kansas Pacific Railway Company _vs_. Prescott, Ribon _vs_. Chicago, Rock Island, & Pacific Railway Company, Putnam _vs_. New Albany & Sandusky Railway Company, and Chicago & Quincy Railway Company _vs._ the County of Otoe, tried in Was.h.i.+ngton last winter, the court virtually decided the corporations were private, and not public. The doctrine to be gathered from these decisions is, that when the interests of these corporations demand it they are to be treated as private, but when the question is as to their right to compel the people to contribute of their substance to build railroads, then the roads are public highways. If the corporations are private, and their roads are built and owned by them, the fact that these roads are private still exists, notwithstanding the courts as to the law of the case decide that they are public highways. The fact that such a decision has been made, is strong proof of the correctness of our position, that the corporations have a controlling influence over the judiciary of the country more to be dreaded by the people than all the appliances that can be brought to bear upon the legislative and executive department of the government. But in no other instance has the influence of these corporations over the supreme court of the country been made more manifest than in what is known as the ”legal tender”

decision. And we might add that no other decision of the court, and no act of any department of the government, has proved so disastrous to the people as this decision. We have already referred to the means used by these corporations to secure a majority of the supreme court favorable to their designs, and of their success in the selection of judges committed to their interests. It only remains for us to review this decision to convince the most skeptical of the fact that corporations have captured the supreme court, as well as the other departments of the government, and the effect of this decision has given to these corporations, and Wall street brokers, and gamblers, the absolute control of the finances of the country. But before coming to the decision, it will not be out of place to remark, that _money_ is always the standard of value for all commodities; that the universally adopted idea of money means coin--gold and silver--or, what is called the precious metals. Bank bills, treasury notes, bills of exchange, and all kinds of commercial paper are only valuable as the representatives of money. T

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