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 thatright. 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 constitutions 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 passage 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 passed (which I opposed) authorizing townships, towns, and cities, to vote a tax, not exceeding five per cent of their assessed valuation, to aid in the construction of railroads. At this session I succeeded in securing the passage of an act (chapter 90, acts of Thirteenth General Assembly) 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 passed 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 The five per cent tax law was repealed, and an act (chapter 26 of public laws) was passed, making the census board (now executive council) a board of assessment of railroad property. Under this act a new plan of assessing this kind of property was adopted, and a much larger revenue derived therefrom than heretofore. A freight and passenger tariff bill (known as the O'Donnel bill) passed 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 passes. But they sent passes to all the senators who votedagainstthe bill. The passes from the Chicago, Rock Island, & Pacific railroad company were accompanied with a private note, stating that free passes 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 ofdelegates, numbered over twelve hundred members, representing, it was said, some seventy thousand farmers of Iowa. The meeting of this "Grange" lasted a week, and passed strong resolutions urging the legislature to enact a passenger and freight tariff law, and also presented an official petition 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 title 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 passengers to three and one-half (3½) 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 title 10, in the following words:—
"Sec.6. All contracts, stipulations, and conditions, regarding the right of controlling and regulating the charges for freight and passengers 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 assembly 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 space you generously allow me in your valuable work. Time and space 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 institutions 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 McNutt.
Mr. McNutt 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 constitutional 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 substituting a personal for a constitutional 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 menwho take and give bribes in aid of the people's oppressors; their natural rights denied them; the guarantees of the constitution 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 therepublic. The result is not uncertain. Legislatures and courts must restore to the people their constitutional 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,MUSTbe recognized, by all classes, as the supreme law of this republic.
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 constitutional 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 faithfullyperformed 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 accumulated 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 associated 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 reflectupon 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 astraw man, and that near $5,000,000 were to be divided among the directors as the profit on this contract, and, as engineer, he protested against it. Yet these government directors, whose sole duty it was to look after and protect the interests of the government and the people, failed to discover and report these abuses to the secretary of the interior; or, if the same and the Credit Mobilier transactions were so reported, then the influence of these corporations controlled the department of the secretary. The truth is, the position of these government directors was such that, without a total disregard of the statutes, and their duties under it, it was not possible to keep all knowledge of these gross abuses from the department. But one conclusion can be drawn from the facts, which is, that the government directors, influenced by these powerful monopolies, were unfaithful to the trust confided to them by the president.
Under the statute, the secretary of the interior has the general control of the issue of bonds, certificates for lands, rights of way, &c. The government directors were bound to report to him. If the duties imposed under the law had been faithfully discharged by him, the great abuses practiced by the Pacific railroad companies would have been prevented. The Hoxie contract, the Ames Credit Mobilier contract, and the Davis contract, were all made for about double the cost of building the respective sections of the road covered by these contracts, the actual cost of these respective sections being $50,720,957, and the amounts allowed the contractors being $93,546,387. In this amount is concluded $1,104,000, which was a duplicate payment allowed Ames for work done, and once paid for, under the Hoxie contract. These three jobs put into the pocket of the Credit Mobilier company a net profitof $43,929,337, a large part of which was in subsidy bonds issued by government. These bonds could only issue after the approval, by the secretary of the interior, of the report of the government directors. If the secretary had discharged his duty, or if the interest of the people, which he was supposed to be protecting, and not the interest of these companies, had controlled his action,duplicate bondswould not have been issued at the rate of $16,000 per mile, for more than fifty miles of the road. Nor would certificates for land have issued to the companies while they were openly cheating, defrauding, and robbing the government and people. Let the reader look at the laws of congress chartering the roads, with the different amendments, and learn the duties of the secretary of the interior respecting their construction and the issuing of bonds and land certificates, and he will conclude that the secretary was ignorant of what the law made it his duty to know—that he was inexcusably negligent in the discharge of his duty, or what is most probable, that the same potent influences that controlled congress in aiding these companies, found their way successfully to the chief parlor of the interior department. Without the secretary's approval of the companies' work and accounts, they could not possibly have committed such gross frauds upon the government.
If additional proof of the fact that the secretary of the interior was influenced by, and used his official position to assist the railroad corporations, in the raids upon the treasury, was needed, we have it in his action relative to the homestead and pre-emption rights of settlers upon the public lands, within the limits fixed by congress for the selection of lands by the different railroad companies. In all cases where lands have been granted to railroad companies, lands to which pre-emption rights attached at the time the line of the road was fixed have been saved to the pre-emption and homestead claimants. In many instances the railroad companies have not been able to find, within the limits fixed, the amount of lands granted to them belonging to the government. This has caused them to make war upon pre-emption and homestead claimants. If these claimants could be forced from their lands, some millions of acres would be thus seized by, and allowed to, the railroad companies. The practice of going upon the public land under the pre-emption and homestead acts had become so common, that these claims had been recognized by the public and the government as vesting in the claimant a title, which could only be defeated by his failure to comply with the provisions of the law respecting the perfection of his title. No one, save where two or more pre-emption claimants were contending for the same tract, could interfere; nor is there any provision of statute by which railroad companies can call in question the pre-emption or homestead right. In the absence of any contest between pre-emptors, the claimant has only to show a substantial compliance with the law, pay the required amount, and obtain his title. So, also, in regard to homestead rights. Nor did any difficulty arise until railroad companies began to interfere. The acts granting lands to railroad companies made no provision for the selection by them of lands held by pre-emption or homestead claimants at the time the lines of their roads were fixed, and subsequently abandoned. The companies applied to the secretary of the interior, and procured from him a construction of the statutes, giving them the right to select as railroad lands all such so abandoned. This was the first decision in their favor, and committed the secretary to their interest.
A war upon pre-emption and homestead claimants was begun, and the representation to the department that a claimant had abandoned his claim was sure to pass the title to one hundred and sixty acres to the company. But something more must be done to get hold of the claimed land. The question as to the regularity and validity of the settler's claim is raised by the companies, and then they apply again to the secretary of the interior. While the statute respects and protects the occupancy and rights of the claimant, the secretary, to aid the railroad companies, interpolates the word, "valid," and holds that if the claim is invalid, the railroad companies can drive off the claimant and take his land. The action of the department gave the companies an advantage over the claimant which was almost equivalent to the destruction of his claim. Many claimants became alarmed, and did just what the companies desired,—they abandoned their claims to their oppressors, and the companies made large gains. But the claimants were not yet entirely in the power of their oppressors, and resort is again had to the department, and the settlers are placed entirely at the mercy of these monopolies. The interior department issued an order under date of June 22, 1872, allowing railroad companies to contest the right of pre-emption and homestead claimants to their quarter-sections. While the act of congress absolutely prohibited railroad companies from interfering with the rights of these claimants, the interior department, in the interest of these giant monopolies, in violation of the statute, by interpolation and a forced construction of the law, allowed these corporations to appear and dispute the claim of the poor pioneer who had gone in advance of railroads, and pre-empted a small tract of land for a home for his family, before the company disputing his right was organized, or had thought of locating a railroad in his vicinity. The pre-emption and homestead laws were passed for the benefit of the actual settlers of the country. If they get their lands, they pay the government the price fixed by law; but if the railroad companies get these lands, they aid in building up and strengthening a monopoly already too great for the welfare of the country. The department having lent its powerful aid to this monopoly, and, by unjust rulings, interpolations, and decisions, assisted in turning these poor men adrift and depriving them of their lands and years of toil, already more than one million of acres that of right, and under the law, properly interpreted and administered, would have belonged to actual settlers, have become the property of these railroad companies. Claimants are becoming alarmed at the action of the department, and are leaving their lands, choosing to lose their claims and the years of toil expended upon them, rather than defend against these companies, backed by the department.
To still further show thequasicollusion between the department and these great corporations, let us look at the circular issued to the different land offices from the department in June, 1872. The circular says:—
"A pre-emption or homestead claim of record is of courseprima facieevidence of a valid right; yet it may occur that such a claim has a fraudulent inception. When such is thecase, the claim is of course voidab initio, and does not defeat the right of the railroad. In view of these rulings the following is communicated for your information and government, to the end that the rights of all parties may be protected, and the spirit of thegrantsfully complied with:—
"1st. In relation to pre-emption claims, the pre-emption law requires that a person must be over the age of twenty-one years, or the head of a family, a citizen of the United States, or a person who has filed a declaration to become such, and also that a person may file a pre-emption claim for such land as he may have settled upon, thus imposing conditions as pre-requisite to the initiation of a claim.
"2d. In relation to homestead claims, the law requires that a person must be over twenty-one years of age, or the head of a family, a citizen of the United States, or one who has declared his intention to become such, and under the first and third sections of the amendatory act of March 21, 1864, the persons claiming the benefit of said sections must make settlement upon the tracts before they can obtain the benefit of said sections. Therefore, as the fraudulent character of the pre-emption or homestead claim in its inception may be brought in question, it is right that the parties in interest should have an opportunity in all cases to be heard. With this view you are required,—
"3d. When application is made by a railroad company to select tracts which are covered by existing pre-emption or homestead claims at the date of the right of the road attaching, but subsequently relinquished or abandoned, to allow the company to file such proof as they may have in support of their right to the land, or to have hearings for the purpose, and should the evidence be satisfactory you will permit the selections.
"4th. When any person applies to enter a tract of such lands, claiming the right to do so by such prior abandoned claim, you will order a hearing, notifying the railroad company, as well as the pre-emption or homestead claimant, so that they may produce such evidence in support of their right as they may have to furnish. Your inquiry must be directed to the personal qualifications of the original claimant, and his compliance with the law prior to filing an entry; and I desire to enjoin upon you the necessity of excluding all testimony not material to showing the facts upon the subject of inquiry. You will, however, be careful that all such facts are brought out, and if necessary to this end you will yourselves examine and question the witnesses. You will in all cases give the parties interested personal notice of the time and place of hearing, when their whereabouts are known, or they can be reached by such notice. In other cases you will cause the notice of contest to be published at least once a week for four weeks in the newspaper having the largest circulation in the vicinity of the land. Parties initiating a contest must provide for defraying the expenses thereof, but when the case comes before you for trial you can apportion the expenses according to the equities of each case. Your particular attention is called to the fact that in some of the earlier railroad grants, lands covered by homestead claims, which may subsequently be cancelled, are not exempted from the operation of the grant. Therefore, in such cases, the tracts revert to the grant, and you will recognize no application for these lands by other parties, but will pay due regard to the rights of the grantees. You will in no case allow pre-emption filing, or homestead entry on this class of lands, without instructions from this office."
This circular, in the interest of railroad companies, is signed by Willis Drummond, commissioner, and directed to registers and receivers of district land offices. While the acts of congress exclude from the grants to railroad companies all lands held by pre-emption and homestead claims, the secretary of the interior says it meansvalidclaims. He then declares all claims invalid or fraudulent when there has not been a literal compliance with the statute. If the pre-emptor filed his claim one day or one week before he commenced his occupation, his claim, as against the railroad company, is fraudulent. Or, if for some cause, after having complied with all preliminaries, he should leave his claim for a day or a week, it could be treated as abandoned, and his right would be lost. These rulings, in favor of railroad companies, and adverse to the settlers, having been made, the companies were not slow intaking advantage of them. Men who supposed their claims to be valid, who had invested their all in improving them, have had their validity questioned, or have been charged with abandonment. The first intimation a settler has, is a notice to appear and defend the home of his family against the claim of a powerful corporation that is seeking to take it from him. He must submit to the alternative of losing his home at once, or of protracted, expensive litigation, with the assurance that he is combatting a powerful adversary before a tribunal that has already prejudged his case in favor of his opponent. All that the railroad companies need do to defraud the settler is to satisfy the register or receiver that, under the rulings of the department we have quoted, the settler's claim is invalid, or that he has abandoned it.
We draw no fancy sketch. The circular speaks for itself, and the large number of men who have been compelled to leave their pre-emption and homestead claims, with the constantly increasing quarter-sections of land that are being added to the railroad grants, attest the truth of our statements. We are not aware of any law of the United States recognizing the right of railroad companies to become parties in a contest concerning a homestead or pre-emption right. Nor do we believe that the interior department of the government can legally authorize these companies to become claimants for lands held by settlers under act of congress. If any question arises between two pre-emption claimants, the commissioner of the general land office decides the dispute. If any question is raised as to whether the claimant is entitled to his pre-emption, there are, under the acts of congress, but two parties to the controversy—the claimant himself and the interior department. The order allowing railroad companies to appear as parties, and by virtue of numerical strength and immense wealth and influence, to overpower the settler, is doing him injustice, as well as degrading a high official position, and sustains our charge that these railroad companies influence the interior department of the government. We think we have shown that the whole strength of this department is used in favor of these great monopolies, and against the interests of the people.While we do not charge the officers of this department of government with intentional wrong, we do charge that this great corporate power, which has such unlimited influence over the legislative department of the government, has virtually taken control of the department of the interior in cases where its interests can be subserved by the influence of the department.
The influence of this great corporate power does not spend all its force at the interior department, but it is seen handing in its card at the white house.
While we claim that railroads and other corporations have, to a considerable extent, influenced the distinguished occupants of the presidential chair, we do not wish to be understood as intimating that any of our chief magistrates have acted corruptly. We simply assert that this great corporate interest has secured favorable action from our presidents when they have been appealed to. As will be seen by their perusal, the acts of congress chartering the Pacific railroad and branches, imposed certain duties upon the president in connection with their location and construction. In the discharge of these duties the wishes of the companies were in all cases complied with, and in some instances to the injury and at the cost of the government and the public, and under circumstances leaving no doubt that the president acted wholly upon the representations of the companies.
In the act of July, 1864, the Union Pacific charter was so amended as to permit any company organized under the laws of Iowa, Minnesota, Nebraska, or Dakota, and designated by the president of the United States, to construct a railroad from Sioux City, Iowa, to connect with the Union Pacific road at some point not farther west than the one-hundredth degree of longitude. A company was organized under the laws of Iowa to build a railroad from Sioux City to Missouri Valley in the same state, the latter point being some thirty miles east of Sioux City, and seventy or more miles south. Another company was organized to build a railroad from Missouri Valley to Fremont, in Nebraska, the latter place being a point on theUnion Pacific. These companies were incorporated by a few men, among whom were several members of congress who had aided in the passage of the act of July, 1864. Through the influence of one of the incorporators, then a member of congress, now of the United States senate, the president designated these companies as the companies to build the Sioux City branch of the Union Pacific, and their roads, representing two sides of a triangle, were adopted as the branch road. The road is known as the Sioux City & Pacific. A road running westerly from Sioux City to Fremont would be about seventy-five miles in length. The road, as constructed between these two points, is, as given in the Railroad Manual, one hundred and seven miles. The act of congress required the road to be constructed on the most direct and practicable route. This road received the same privileges, subsidies, and grants, as the main line, with an addition of eighty sections of land per mile. Now it cannot be presumed that the president, acting on his own judgment, uninfluenced by the railroad company, would have designated these companies, and these roads, as the Sioux City branch of the Union Pacific road, with one hundred sections of land and $16,000 subsidy bonds for every mile of the road. We have given this instance to show the direct influence of this corporate power over the president. This great influence, so dangerous to the welfare of the country, is indirect in its action. Vast numbers of men have their funds invested in railroad stocks and bonds. They engage in Wall street speculations; they buy and sell stocks and bonds; they operate in gold and values, and have no interest in common with the laboring and producing classes of the country. These corporations own and control property worth billions of dollars; they rule the finances of the country; they have tens of thousands of men in their employ; as they increase in strength and wealth, they are constantly striving for greater powers and privileges. Their lobbyists and retainers surround every department of the government. When public offices are to be filled, they unite in favor of men in their interest; and when decisions are to be made upon questions affecting their rights and obligations, they take care that their friends shall be in position tomake or shape these decisions. The president, with his appointing power, if influenced in their favor, becomes an important ally. In his appointments to office, it is not to be expected that he can personally know the qualifications and views of every nominee. He must of necessity rely upon others, to a great extent, in making his selections. Next to legislative action in their favor, railroad companies are most deeply interested in the judicial decisions affecting their interests. Judges are apt to be influenced by the same motives that prevail with other men. Years spent by men as railroad attorneys, or as attorneys for any other great interest, will, to a certain extent, control their reasoning and decisions upon questions coming before them should they be promoted to the bench. In close relation with, and next in importance to the decisions of courts, on points affecting this great corporate interest, are the rulings and decisions of the attorney general of the United States. If these important offices can be filled by persons whose past pursuits have demonstrated that they entertain views favorable to the interests of these companies, an important gain is made at the start in their favor. To secure such appointments, all and every influence at the command of these corporations are brought to bear upon the president. The services of the most influential men, in congress and out, are engaged; the names of the candidates selected are presented for the consideration of the president, and their appointment urged by the whole railroad and corporate interest of the country. The president, following a long established precedent, usually appoints the persons who are most strongly recommended. This fact is well understood by these corporate interests and hence their vigilance and activity. We do not say that the president, in yielding to this tremendous pressure, acts from improper motives. We simply assert that this pressure is used, and that it is scarcely to be resisted.
The fact that judges of ability and integrity differ in their construction of the constitution and laws, is well understood by the men who lead and control the corporate interests of the country; as also the further fact that the time is not distant when the question whether the people or railroad corporations shall govern, must be determined. To prepare for this issuethey use their great influence to have the important positions in the government occupied by their friends. To a considerable extent they have succeeded.
Mr. Ackerman, of North Carolina, was attorney general. He was what might be termed a strict constructionist. His views were conservative. As the legal adviser of the executive department, his opinions were adverse to the interests of the railroad companies on certain questions submitted to him. At the request of the president he resigned, and Judge Williams, of Oregon, was appointed in his stead. No one will question the integrity of the present attorney general. Yet it was a well-known fact that, at the date of his appointment, he was one of the attorneys of the Northern Pacific railroad company; that he was fully committed to the railroad interests, and that his appointment was urged by railroad men in all parts of the country. By his appointment a friend of these corporations became a member of the cabinet, and an important ally is present whenever questions affecting their interests are discussed in executive council.
A question of the greatest importance to these corporations was the construction to be given to the statutes of the United States, and especially the "Legal Tender Act." The first of the legal tender acts was passed July, 1862. This was followed by other acts increasing the amounts of legal tender issues. Prior to the passage of these acts, railroad corporations had issued and sold many millions of bonds, and stipulated that both principal and interest should be paid in gold. Soon after the issue of legal tender bills their value depreciated, and from that time to the present there has been, and still is, a wide margin between their value and coin. If these railroad companies could pay their bond indebtedness with legal tender at par, a saving of from ten to fifteen dollars could be effected on every hundred so paid. In the year 1869, the question whether this act was retroactive in its operation or effect was presented to the supreme court. The court was then composed of eight justices. When the case involving this question was presented to and decided by the court, but seven of the justices were on the bench. Of these, four, including the chief justice, were of the opinion that the statute did not affect contracts made before its passage, and decided that these railroad companies must pay their bonds in coin according to the contract. This decision was not acceptable to this vast corporate power. It was condemned by railroad men throughout the country. The president was approached on the subject, and his great influence was besought in the matter. Four of the justices (one-half of the court) having held adversely to the corporations, a full bench could not reverse their decision. To effect a reversal, one of the four must change his opinion, or the number of justices must be increased. The latter alternative was decided to be the more feasible, and the president asked congress to increase their number tonine. The reason urged was, that upon important questions, before a full bench, the court might be equally divided, and important questions would remain undetermined. The railroad interest was fully represented in the lobby at Washington, and congress provided for an additional justice. About this time one of the justices retired from the bench, making a vacancy, and rendering it necessary for the president to appoint two new justices. This was a grand opportunity for the railroad interest. If men who were identified with them could be appointed, the decision on the "Legal Tender Act" could be reversed, and they could save from ten to fifteen millions of dollars on every hundred million of dollars due from them. Not only could they save this amount, but in future, as the members of the court are appointed during life or good behavior, they would have no apprehensions of a decision against their interest. At once the president was importuned to appoint William Strong, of Pennsylvania—a man who was fully identified with them by education and employment, he being attorney for the Pennsylvania railroad company—and Joseph P. Bradley, of New Jersey, who was also identified with this interest, he being the attorney of the greatest railroad corporation in that state. Neither of these men had any national reputation, but all at once the city of Washington, as well as the whole country, was enlightened as to their great judicial worth, and railroad men throughout the country were urging their appointment. It was publicly announced, and not contradicted, that they were in favor of reversing the decision of the court on the legal tenderact, and their appointment was urged for this reason. This influence controlled the president. These gentlemen were nominated by him, and their appointment was confirmed by the senate in 1870. The decision on the legal tender act was reversed, and railroad men were happy. As we shall attempt to show, when we treat of the controlling influence of these corporations upon the finances of the country, this reversal was most baneful to the country, and detrimental to the best interests of the people. We do not wish to be understood as accusing the president of being governed by improper motives in the appointments of Messrs. Strong and Bradley to the supreme bench; but we do mean that the railroad interests, by concert of action, procured these appointments; it being known, or at least well understood, that these appointments would insure a reversal of the decision, as we have recounted, and that by such reversal their interests would be greatly subserved. Nor do we wish to be understood as accusing the persons so appointed of lacking the requisite ability for the honorable stations for which they were selected, or that their decisions were governed by personal considerations, or that they reversed said former decision to specially subserve the interests of railroad corporations. We have long since come to the conclusion that judges of courts, like other men, are influenced by surrounding circumstances; that they are not infallible, and that it is no unusual thing for the most eminent judges to differ upon questions submitted for their decision. While these decisions are honestly made, they are often controlled or dictated by extra judicial considerations. As we shall have occasion hereafter to examine this subject when treating of the intimate and controlling relations between these corporations and the courts of the country, we are content to leave the case of their influence with the executive department to the proof submitted in these three appointments of Williams, Bradley, and Strong.
We now beg to call the reader's attention to the financial operations of the monopolists, and the course resorted to by them to control the finances of the country. There are now (January, 1873) seventy thousand one hundred and seventy-eight miles of railroad completed in the United States and territories. At an expense of $35,000 per mile, the total cost of these roads is $2,456,230,000. The cost as given by the companies is $3,436,638,749, or $48,970 per mile. In contemplation of law, and as reported, this cost is represented by stock certificates, and is supposed to be paid up. If the roads cost but $35,000 per mile, then $980,408,749, of the stock certificates (that amount being the excess over actual cost), have only an imaginary value. In addition to the stock certificates, representing the above sum of $3,456,230,749, the railroad companies have issued and put upon the market their bonds to the amount of $2,800,000,000, thus making their roads represent the enormous sum ofsix billions two hundred and thirty-six millions six hundred and thirty-eight thousand seven hundred and forty-nine dollars, or eighty-eight thousand eight hundred and seventy-two dollars per mile. The only real value all these bonds and certificates of stock represent, is the railroads. These we have put at $35,000 per mile. Of course some lines of road exceed this valuation; but an examination of the actual cost, as reported by the engineers of the respective roads, will show that much the largest portion of the roads have cost less. Now let us look at the amount of the capital represented by a few of these roads, as reported in theRailroad Manual, andThe Stockholder. The Chicago, Burlington, & Quincy is reputed to be one of the best and most prudently managed roads in thecountry. This road represents in stock and bonds the sum of $32,845,880, or $43,292 per mile. On the other extreme we will take the Central Pacific, which represents the sum of $182,208,000, or $130,000 per mile. The Atlantic & Great Western (an organization of the N. Y., Penn., & Ohio) represents the sum of $109,000,000, or $256,000 per mile. The Cedar Rapids & Missouri River railroad represents $11,334,000, or $41,000 per mile. The Chicago, Rock Island, & Pacific represents the sum of $25,717,000, or $56,667 per mile. The Erie represents the sum of $112,935,710, or $125,750 per mile. The New York Central & Hudson River railroad represents $104,660,049, or $142,656 per mile. The Union Pacific represents $112,911,512, or $109,507 per mile. We give the above as samples of the amounts represented by the different roads. In some other instances the stocks are "watered" more, and in others less than in the roads above named. Taking all the roads in the country, and adding together the stock and bonds issued, they represent $3,800,408,749 more than their actual cost. It will not be out of place here to state that the only resource these railroad companies have for the payment of interest and dividends on their stock and bonds, representing the sum of $6,236,638,749, is the earnings of their roads. While a low rate of charges would pay fair dividends on the actual cost of the roads, yet in order to pay dividends on their "watered" stock, and interest on their bonds, oppressive and extortionate rates must be charged and collected. The men who control these great monopolies, viz: Col. Scott, who controls roads representing about $700,000,000; Vanderbilt, who controls about as great an interest; Drew, Gould, and some few others of the principal railroad men, care but little about the prosperity of the country, or the profits made by their roads, save as a basis for their Wall street speculations. The roads serve as a basis for financial operations. Like the old "wild cat" banks that issued bills without regard to stock or capital, so the roads controlled by these railroad monarchs are loaded with "watered" stock and bonds, until their value as roads are destroyed, and passengers and shippers are oppressively taxed for the purpose of giving some sort of market value to the bonds and "watered" stock with which Wallstreet is flooded. The issuing of stock certificates goes on, and will continue as long as dividends can be declared. At the present time the railroads of the country collectively represent about three times their value, or actual cost. If the people were not taxed on "watered" stock and bonds, dishonestly issued, the rates charged for transportation would be but little more than one-third the figures of the present tariff. The vast wealth claimed by railroad corporations is about two-thirds pure fiction, and but for the extortions practiced upon the public, their stocks and bonds, beyond the value of their roads, would not be considered in market; but so long as interest at the rate of six, eight, and ten per cent can be drawn from the public, they are marketable. These stocks and bonds are owned or controlled by the men who not only manage the railroad interests, but also the bond and stock market of the country. Being the leading spirits among Wall street brokers, using their railroads for the purpose of aiding in their stock-jobbing speculations, by compelling them to earn interest on all of the worthless stocks and bonds they put upon the market, a fictitious value is given to them. Having their principal place of business in the commercial metropolis of the country, being able whenever their interests demand it to "corner" the money of the country, it could be hardly expected that the treasury department of the government would escape their control. If a conflict should arise between the secretary of the treasury and these vast monopolies, the question of which side would come off victorious could not be doubtful.
The circulating medium of the country is, in legal tender notes, $356,000,000. That of national banks, excluding their reserves, is less than $300,000,000. This currency is scattered over the country—a small portion of it in foreign countries. No coin is in circulation, most of it being locked up by Wall street brokers, in the interest of these railroad corporations. Many of the national banks of the country are owned by railroad men. In addition to the immense earnings of the railroads, which under the present system are concentrated in the city of New York, almost the entire amount of stock and bonds issued by railroad companies is either owned or represented in Wall street, and as occasion demands is put upon the market. Thus the whole of this corporate influence can be used at any time in a financial conflict with the government. It has been and is still being used against the government. Under the revenue laws of the country, import duties are paid in coin. A part of the sum thus realized is applied in payment of the national debt. There is no good reason why the secretary of the treasury should not apply this sum directly in payment of government bonds. Such a policy would tend toward the resumption of specie payment, making the money of the people of equal value with that used by the government. This would not suit railroad companies. So long as a margin can be preserved between coin and currency (and for their purposes the wider the better) under the decision of the supreme court they can discharge their bond indebtedness, contracted to be paid in gold, with depreciated paper at par, and save the margin. In order that a margin may be continued, instead of making direct payment of government bonds to the direct holders thereof, the secretary of the treasury is required to sell gold in New York, and purchase or liquidate the bonds with the proceeds of these sales. It is noticeable in all cases of the sale of coin, that Wall street brokers are the purchasers, and usually at less than the quoted market value. By this means the interests of these railroad managers are subserved in more than one particular. Their brokers purchase and corner the coin sold, and prevent it going into circulation, and the margin between coin and currency is preserved. The day for the resumption of specie payment is kept in the distant future. The importing merchant must buy gold of the brokers (who are the railroad managers) at its market value, to pay government duties on their imports, and thus the companies make the difference between the price paid and the price obtained. When some favorite railroad stocks are to be forced upon the market, these brokers, who can do so at pleasure, supply the money market, and sell the stocks at a large profit; and when the object is to reduce the value of stocks, they withdraw from circulation a sufficient amount of the currency to cause a stringency in the market, until their end is accomplished. Controlling absolutely the gold market, as well asthe secretary of the treasury in his financial operations, they have only to corner a few millions of currency to make the entire commerce of the country subserve their special purposes. With all of their interests united, all their business concentrated in Wall street and controlled by six or eight leading men, they regulate the finances, fix the value of the produce of the country, and hold the producers of the great west in a state of vassalage which has no precedent, even in despotic countries. The secretary of the national treasury, who is supposed to control the financial department of government, is in fact the servant of these men, and whatever policy is beneficial to their interests must be adopted by the government. To the uninitiated it may appear impossible for a few men in New York to exercise a controlling influence over the financial policy of the nation, but if we remember that all the wealth of these corporations, actual and fictitious, is concentrated in that city, or controlled by men doing business there, and that an immense stream of money, received by these corporations from passengers and shippers, is constantly flowing into Wall street from all parts of the country, we can understand their power and appreciate their influence. The fact that it requires more than twice as much money to pay the interest on the bonds issued by these corporations, and dividends on their stock, as would pay the interest on the national debt, is significant. When private corporations combine their interests and become so powerful as to require an annual expenditure of more than twice the amount expended by the United States government, and when their revenues more than quadruple those of the government, they must of necessity exercise a controlling influence over the financial and industrial interests of the country. This fact is now being demonstrated by a combination of the railroad corporations of the country, as the people know to their cost.
It will be proper here to detail themodus operandiof these railroad companies at their headquarters in Wall street. We read of large operations in stocks and bonds, as well as in gold, and are apt to conclude that sales and purchases are made by regular transfers in a fair and legitimate manner. Such is not the case. Among the initiated sales are pure fiction in many cases, and in others it is but purchasing or selling the chance of an advance or decline in the price of stocks, bonds, or coin. To call these transactions by their right name—they are nothing but gambling. If legitimate sales are made, it is with outside parties, or to the uninitiated. The corporation rings congregated in Wall street, calling themselves bankers and brokers, sell to, or purchase stocks from, each other, without delivery or even payment, all the money passing between the seller and purchaser being the margin between the price agreed to be paid and the market reports at the time fixed for delivery. To illustrate, let us suppose that certain railroad stock is quoted at ninety-three cents, or seven per cent below par. A, who believes that there will be no further rise in the price, but that the same will decline, offers B $10,000 of this stock at ninety-one cents, to be delivered in three days. He has no stock, but believing it will decline to ninety cents or less, within the time fixed for delivery, he expects to buy at a still lower rate than he has agreed to sell, or to borrow it for a consideration if the decline does not meet his anticipations. Or he will settle his contract with B by paying him the difference between the market value at the time of delivery and the price at which he agreed to sell. The same process is gone through if the sale is made with the expectation of the stock advancing in price. A agrees to purchase of B four days after the date, $15,000 in stock at ninety-five cents, being an advance of two per cent on the market price on the day of sale. The stock does not advance, and at the time for delivery A pays B the margin between two cents on the dollar, and the market price. No stock has passed between them. It was a fight between a "bull" and a "bear" for the margin.
Nearly all of the financial operations of Wall street brokers are of a like character. Some of them involve immense amounts. One man makes a fortune, and another becomes bankrupt in a day. Wall street is the place where men of all creeds and nationalities meet to engage in this kind of gambling traffic. Men run about the streets—into the "gold room," the "clearing house," their faces flushed, their whole person excited, their appearance "distorted, hair dishevelled," theirvoices hoarse, all intent on making money, not in a legitimate way, but by the chance of a rise or fall in gold, bonds, and stock. Let us see some of the terms used by them in their business. The rings operating in stocks are divided into two classes—"bulls" and "bears." They have the advantage of the real bear and bull in this: they can change from one to the other as the occasion serves. Daniel Drew, Col. Scott, and Commodore Vanderbilt can be bulls to-day and bears to-morrow, as their interests dictate. The object of thebullsis to advance the price of stocks; that of thebearsto depreciate. They thrive most when the people generally are in want, or when some public calamity unsettles commerce. They oftentimes devise means to bring on a panic, that they may break the market and buy favorite stocks at low rates. They do not care how much the community may suffer, or how many men engaged in legitimate business may be ruined, provided their own interests are served. We take fromAppleton's Journala description of some of their terms, and their manner of doing business:—
"The terms, 'long' and 'short' are of respective application to the 'bull' and 'bear' parties. The bulls are always 'long' of stock, and the bears are always 'short.' The speculator who has stock on hand which he bought with expectation of selling at higher prices, is on the bull side, and, in the parlance of the street, is 'long.' A bear seldom has stock on hand. His business is to sell 'short'—that is, to sell property which he has not got, intending to buy and deliver when prices are lower. Generally, the stock is to be delivered the day after it is sold, but quite often the bear does not buy it for a month or two, or three months. How, then, can he deliver it in twenty-four hours? By borrowing it from another person. There is in Wall street a regular system of borrowing stock. The borrower, who represents the speculator, procures the stock from another broker, to whom he gives a check as security for the stock borrowed. This transaction is good for one day only, but it may be renewed for the next day, and then the next, and thus several weeks may pass before the stock is really purchased for delivery. Meantime the seller, if he belongs to a clique, or 'pool,' is trying every day to depress prices, in order that hemay buy the stock at a lower figure than that at which he sold it. This is the operation known as 'hammering the market,' and a very exciting one it sometimes is. But the bears are sometimes badly 'squeezed,' and then they make a rush to 'cover.' When the bulls learn that there is a large 'short' interest in a particular stock, they put their heads together and get up a 'corner.' When a stock is said to be 'cornered,' the meaning is that it is controlled by a clique. The clique hold enough of it to control the market, and exact such terms as may be desired. An upward movement is suddenly developed, and then the bears, who have sold 'short,' in expectation of lower prices, become alarmed, and begin to buy. In the majority of cases, the men who work the advance are the very ones who bought what the bears sold, and they are now selling it to them at higher figures for delivery back to themselves. 'Twisting' is the process of making the bears pay high prices for what they probably sold at low prices, and 'covering' is the operation of buying stock to close 'short' contracts. Once in a while a stock is so closely 'cornered' that it can only be borrowed at an enormous interest for a day's use—perhaps at a rate that exceeds a thousand per cent per annum. An operation of this sort is the worst squeeze of all; and it is not to be wondered at, that, as the gentlemen of the stock exchange say, the bears generally squeal under it. One shrewd manipulator of stock is known to have cleared $50,000 in one day, by loaning a fancy stock that he had 'cornered.' But the same gentleman sometimes gets into a 'corner' prepared by others. It is commonly understood that he was fleeced to the amount of $2,000,000 during the lively 'Northwest' gale a few weeks since. 'Puts' and 'calls' are terms of more than ordinary difficulty for the uninitiated to understand. A proposes to 'put' to B, that is, to deliver to him, a certain amount of a certain stock at a certain time, at a price agreed upon when the contract is made, and gives B a bonus of one, two, or three per cent, as the case may be, for the privilege. This is a 'put.' If the stock does not decline in value to an amount exceeding the sum given to B, A cannot make anything by the transaction; and, unless he chooses to deliver the stock, he is not obliged to do so. If it falls more than the amount, A makes agood profit, for B, having accepted the bonus, is bound to take it, even though it may be selling five or ten cents below the price at which he agreed to take it. A 'call' is pretty much the same thing, with this difference: A gives B a hundred or a thousand dollars, or whatever sum may be agreed upon, for the privilege of 'calling' from B a certain amount of stock within a given number of days. If it advances, A may 'call' it and make money. If it declines, he need not 'call' it, but of course the bonus he gave to B is forfeit. There are times when the business in 'puts' and 'calls' is quite large, and a great deal of money is made by it; but, like all other kinds of speculation, it is dangerous to the inexperienced. 'Scoop' is a term less familiar to the public than any of the foregoing. This 'scoop game' is a very common one, and is played in this way: A clique of speculators, let us suppose, wish to get possession of a good deal of some particular stock, which they have reason to believe will soon advance in price; but of course they want to get it cheap, and they accomplish their object by starting a break in the stock. This is done by offering it at low figures. They instruct their brokers to offer small quantities under the market price, and to keep on offering lower and lower, until other holders of the same stock who are not in their confidence become alarmed, and sell out at the best price they can get. In the meantime the clique have other brokers buying all the stock that is offered, and thus they get possession of a large amount of stock at low prices, which they can probably sell, a few days later, at a large profit. This 'scoop game' is one of the most profitable that the Wall street gentlemen play. The process of 'washing'—a very good one in its ordinary sense—is often employed in Wall street. 'Washing' is a peculiar operation there, very peculiar indeed, and the outsiders ought to keep as far as possible from the suds. A clique is as necessary to it as to the 'scoop' business. There is a stock on the list, for instance, that the public persist in letting alone, and the holders of it want to stir up some excitement in this stock, and induce the public to buy it. How do they proceed? Their plan is quite simple: Several brokers—let us suppose four—are employed to 'wash' the stagnant stock. No. 1 offers to sell; No. 2 takeswhat is offered. No. 3 wants to buy; No. 4 sells him all he wants. This is kept up for a few days, the price rising steadily as the 'wash' proceeds; but not one share is actually sold. The innocent outsider, supposing these fictitious transactions to be real, and thinking there is a chance to make a turn in the stock, goes in as a buyer himself. Ten to one he will never get as much for the stock as he paid, for it falls stagnant when the speculators have got it off their hands. 'Coppering' is a term recently introduced, but very well understood in the street. It means operating in a direction contrary to that of another. For example, one buys a particular stock, believing that it will advance; another man, observing that the first has not been lucky in his operations, sells this particular stock, believing it will decline. Or the first may sell a particular stock 'short,' and the second, calculating on the other's ill luck, will buy. This sort of speculation is carried on only among the smaller class of operators, and may be set down as sheer gambling. A 'straddle' is a double privilege, entitling the purchaser to either 'put' or 'call' a stock. The bonus is generally the amount paid for the single privilege of 'put' or 'call.' A 'margin' is the money deposited with the broker through whom the stocks are purchased, as a security against a sudden depreciation. The amount is generally about ten per cent of the par value of the stock. 'Margins' are the rocks on which many adventurers on the uncertain waters of speculation are utterly wrecked. 'Carrying' means holding stock in anticipation of higher prices. Often a stock is 'carried' for six months, but generally the time is not more than two months, and frequently not more than a week. Quick turns is the rule of a majority of speculators. 'Watering' is the operation of suddenly increasing the capital stock of a company. Wall street was thoroughly familiarized with it by the reckless Erie managers, who earned a notoriety that certainly honorable men would not covet. It is very dangerous to the holders of the stock previously in the market."
The foregoing discloses the manner in which these corporations, through their managers, play the doubleroleof operating railroads and operating in Wall street. To outsiders there seems to be but little difference between what is known everywhere as downright gambling, and Wall street operations. The gambler who risks his half-dollar on a game at cards is punished for violating the law; but these Wall street operations, which are but games of chance, are dignified with the name of "speculations." Honorable men, reputed Christian men—Jew and Gentile—all engage in them. While they prey upon the producer in operating their roads, they prey upon the unsuspecting public in their stock operations; and, by way of variety, occasionally devour each other. Controlling, as they do, the means of transporting the products of the country to market, as well as the coin of the country and the stock market in Wall street, they are prepared to get up a "corner" on any marketable commodity—upon the currency of the country, and upon gold. In fact, they may have all the coin of the country under their control, save the amount held in the treasury of the government. The monthly reports of the secretary of the treasury show that while there was the amount of about $100,000,000 in the treasury one year ago, there is but about two-thirds of that amount now. The reports of sales show that these Wall street operators have cornered about one-third of the gold held by government within the last year. This cornering process goes on, and is now reduced to a system. Suppose the secretary sells, in the month of January, 1873, in New York, $6,000,000 in coin. It is all bought and cornered by the brokers. The importing merchants require but $3,000,000 during the same month to pay duties. The difference, $3,000,000, is locked up in Wall street. This transaction, in a greater or less degree, is repeated each month, and while the amount of gold in the treasury is decreasing, that controlled by railroad brokers is increasing. The treasury weakens, and these gambling rings and combinations strengthen. It is only a question of time, under the present system, when the treasury will be obliged to replenish itself by purchases from the brokers. So completely are the finances of the country under their control, the secretary of the treasury is obliged to keep a large surplus of coin on hand to meet emergencies. In order to prevent a panic, he is obliged to sell coin monthly, and whether the financial condition of the treasury or of the country will warrant it or not, he is obliged to pay some portion ofthe national debt as an excuse for selling coin. These corporate rings are laboring to control the gold of the country, and thus prevent the resumption of specie payment. To make resumption impossible, they "bull" gold as well as stock, and thus force gold sales by the secretary. The sooner they can deplete the national treasury, the sooner can they become masters of the situation. They now hold the secretary of the treasury at their mercy, and compel him to serve their selfish purposes. When they achieve their final victory (and achieve it they will under the present system) they can, without hindrance, fix the value of gold, and extort from the people and the government just such premiums as they please to ask for it. They can render specie payment impossible, and thus reap the full benefit of the "Legal Tender Decision."