The Pendleton act left large discretion in the hands of the President. It authorized the appointment of a commission of three who should prepare and put into effect suitable rules for carrying out the law. The act also provided that government offices should be arranged in classes and that entrance to any class should be obtained by competitive examination; that no person should be removed from the service for refusing to contribute to political funds; and that examinations should be held in one or more places in each state and territory where candidates appeared. The system was to be inaugurated in customs districts and post offices where the number of employees was as many as fifty, but could be extended later under direction of the President. The soliciting or receiving of contributions by federal officials of all grades, for political purposes, was forbidden. With the exceptions just mentioned, officers could be removed from office as before, but the purpose of removal was now gone. Since the appointee to the vacancy must be the successful competitor in an examination, the chief who removed an officer could not replace him with a personal friend or party worker.
The first commission was headed by Dorman B. Eaton. The work of grading officials and placing them within the protection of the law began at once, and by the close of President Arthur's term nearly 16,000 were classified. Fortunately, the work of the commission was carried on sensibly and slowly, and no backward steps had to be taken.
The attitude of Congress toward tariff revision illustrates many of the characteristics of congressional action during the early eighties. In his first message to Congress, Arthur said that the surplus for the year was $100,000,000, and therefore urged the reduction of the internal revenue taxes and the revision of the tariff. In May, 1882, Congress authorized a tariff commission to investigate and report, and in conformity with the law Arthur appointed its nine members. All of them were protectionists and the chairman, John L. Hayes, was secretary of the Wool Manufacturers' Association. After holding hearings in more than a score of cities and examining some hundreds of witnesses, the commission recommended reductions varying from nothing in some cases to forty or fifty per cent. in others. The average reduction was twenty to twenty-five per cent.
Using the report as a foundation, the Senate drew up a tariff measure, added it to a House bill which provided for a reduction of the internal revenues, and passed the combination. Meanwhile, lobbyists poured into Washington to guard the interests of the producers of lumber, pig-iron, sugar and other materials upon which the tariff might be reduced. When the Senate bill reached the House it contained lower duties than the protectionist members desired. The latter, although in possession of the organization of the House, were not strong enough to restore higher rates, but under the shrewd management of Thomas B. Reed, one of their number, they were able to refer the bill to a conference committee of the two houses which contained seven strong protectionists out of ten members. Reed admitted that the proceedings were "unusual in their nature and very forcible in their character" but he felt that a change in the tariff had been promised and that the only way to bring it about in the face of Democratic opposition was to settle the details "in the quiet of a conference committee." A "great emergency" having arisen, he would take extraordinary measures. The bill produced under these circumstances reduced the internal revenue taxes, lowered some of the tariff duties and raised others, but left the general level at the point where it had been at the close of the war.The Nation, favorable to reform, scornfully characterized the act as "taking a shaving off the duty on iron wire, and adding it to the duty on glue!" Senator Sherman, a protectionist member of the conference committee, wrote an account of the whole procedure many years afterward. After commending the spirit and proposals of the tariff commission and mentioning the successful efforts of many persons to have their individual interests looked out for, he expressed a regret that he did not defeat the bill, as he could have done in view of the evenly balanced party situation in the Senate at that time.
The election of 1880 is well treated by Sparks, Stanwood, Andrews, and Rhodes. Senator G.F. Hoar, the chairman of the Republican nominating convention, has a valuable chapter in hisAutobiography of Seventy Years. Such newspapers as the New YorkTimesandTribuneare invaluable for a discussion of the conventions.
The events of the administration, such as the tariff debates, the passage of the civil service law and others are discussed in the special works mentioned in Chapter V. Consult also: Edward Stanwood,J.G. Blaine; T.C. Platt,Autobiography; and A.R. Conkling,Life and Letters of Roscoe Conkling. The _Annual Cyclopaedia _contains several excellent articles on the tariff (1882, 1883), civil service reform (1883), star route trials (1882, 1883). H.C. Thomas,The Return of the Democratic Party to Power in 1884(1919), contains useful chapters on Garfield and Arthur.
* * * * *
[1] For Platt's account of the annual reunion and banquet of the three hundred and six—"The Old Guard"—seeAutobiography, 115.
[2] Garfield's early career as a canal boy led to such campaign songs as the following:
He early learned to paddle well his own forlorn canoe,Upon Ohio's grand canal he held the hellum true.And now the people shout to him: "Lo! 't is for you we wait.We want to see Jim Garfield guide our glorious ship of state."
[3] William Windom, of Minn., was Secretary of the Treasury; E.T. Lincoln, of Ill., Secretary of War; Wayne MacVeagh, of Pa., Attorney-General; T.L. James, of N.Y., Postmaster-General; W.H. Hunt, of La., Secretary of the Navy; S.J. Kirkwood, of Ia., Secretary of the Interior.
[4] The death of the President emphasized the need of a presidential succession law. Under an act of 1792, the president and vice-president were succeeded by the president of the Senate and the speaker of the House. When Garfield died, the Senate had not yet elected a presiding officer and the House had not met. The death of Arthur would have left the country without a legal head. The Presidential Succession Act of 1886 remedied the fault by providing for the succession of the cabinet in order, beginning with the Secretary of State. The presiding officers of the Senate and House were omitted, because they might not be of the dominant party.
[5] The cabinet was composed of F.T. Frelinghuysen, N.J., Secretary ofState; C.J. Folger, N.Y., Secretary of the Treasury; R.T. Lincoln, Ill.,Secretary of War; B.H. Brewster, Pa., Attorney-General; T.O. Howe, Wis.,Postmaster-General; W.E. Chandler, N.H., Secretary of the Navy; H.M.Teller, Colo., Secretary of the Interior.
[6] Above, p. 145.
[7] Some thoroughly unselfish members of Congress like Senator Hoar, however, believed the bill a justifiable one and voted for it. See Hoar,Autobiography, II, chapter VIII.
The election of 1880 was memorable only for the type of politics with which that contest was so inextricably involved. The party leaders were second-rate men; the platforms, except for that of the Greenback party, were as lacking in definiteness as the most timid office-seeker could desire; in brief, it was a cross-section of American professional politics at its worst. The election of 1884 was a distinct, although not a complete contrast. It was not a campaign of platforms, but like the election of 1824 it was a battle of men. Two genuine leaders, each representing a distinct type of politics, contended for an opportunity to try out a philosophy of government in the executive chair. In 1880 the conventions were the chief interest—the campaign was dull. The campaign of 1884, on the other hand, was one of the most remarkable in our history.
It will be remembered that the year 1882 had been characterized by political upheavals. In Pennsylvania the Greenbackers had demanded that currency be issued only by the central government—not by the national banks—and that measures be taken to curb monopolies; the independent Republicans had revolted against Cameron, and demanded civil service reform and the overthrow of bossism; and the Democrats had elected a governor of the reformer type, Robert E. Pattison. Massachusetts Republicans had gasped the day after the election to find that "Ben" Butler, who bore a questionable reputation as a politician, as a soldier and as a man, had been elected by a combination of Greenbackers and Democrats on a reform program. In New York the Democrats had taken advantage of a factional quarrel among their opponents to elect as governor a man who had achieved a reputation as a reformer—Grover Cleveland. That some of the states which had been Democratic in 1882, had become Republican again in 1883 illustrates the unstable character of the politics of the time.
The beginning of the convention season of 1884 gave hint of the vigorous campaign ahead. An Anti-Monopoly party nominated Benjamin F. Butler, who was also supported by the Greenbackers. The Prohibitionists presented a ticket headed by John P. St. John. The action of the Republican convention, which met at Chicago on June 3, proved to be the turning point in the campaign. President Arthur was frankly a candidate for another term, but he did not have the united support of the professional politicians and was distrusted by most of the reform element. Nor had his veto of the Chinese immigration bill and the rivers and harbors act tended to increase his popularity. Most enthusiastic, confident and vociferous were the supporters of James G. Blaine, of Maine. The independent element hoped to nominate Senator Edmunds, of Vermont, and was particularly disturbed at the character of the workers for the "Man from Maine." His campaign manager, Stephen B. Elkins, had been charged with a discreditable connection with the star-route scandals; men of the Platt type were urging that it was now Blaine's "turn"; and Powell Clayton, an Arkansas carpet-bagger of ill-repute, was the Blaine candidate for the position of temporary chairman of the convention.
Before a candidate was chosen the delegates turned to the adoption of the platform. This was of the usual type but was an advance over that of 1880 in several respects. It committed the party to a protective tariff and advocated an interstate commerce law and the extension of civil service reform.
The balloting for candidates proved that Blaine was clearly the choice of the convention. The mere mention of his name threw the delegates into storms of applause and even on the first ballot he received votes from every state in the union save five. On the fourth ballot he received an overwhelming majority and became the nominee. John A. Logan of Illinois, a prominent politician and soldier, was nominated for the Vice-Presidency—a tail to the ticket, in the opinion of the Democrats, which was designed to "Wag Invitation to the Soldier Vote." The choice of Blaine was variously received by the different factions in the convention. The Pacific coast delegates, in a special train, went from Chicago to Augusta, Maine, before starting for home, in order personally to pledge their support to the candidate. On the other hand, Theodore Roosevelt disgustedly remarked that he was going to a cattle-ranch in the West to stay he knew not how long. George William Curtis sadly declared that he had been present at the birth of the Republican party and feared that he was to be a witness of its death. Other reformers were no less disaffected.
The outspoken Republican opposition to Blaine gave infinite aid and comfort to the Democrats whose convention, coming a month later, could take advantage of the growing schism in the opposition. During the interval between the two conventions the growing sentiment in favor of the nomination of Grover Cleveland received the additional impetus of independent Republican support. The Democratic party was still an object of suspicion to them, but they were ready to run the risks of even a Democratic administration, if a leader of proved integrity should be nominated, and Cleveland seemed to them to meet the demands of the times. The first work of the convention, which met in Chicago on July 8, was the adoption of a reform platform. Characterizing the opposition party as a "reminiscence," it condemned Republican misrule, and promised reform; it proposed a revision of the tariff that would be fair to all interests, and reductions which would promote industry, do no harm to labor and raise sufficient revenue; and it briefly advocated "honest" civil service reform.
The enthusiasm which the independent Republicans were manifesting for Cleveland was balanced by the hostility of elements within his party. As Governor he had exercised his veto power with complete disregard for the effect on his own political future. He had, for example, vetoed a popular measure reducing fares on the New York City elevated railroad, basing his objections on the ground that the bill violated the provisions of the fundamental railroad law of the state. He was opposed by Tammany Hall, led by John Kelley, who declared that the labor element disliked him. Kelley's reputation, however, was such that his hostility seemed like a compliment and gave force to General Bragg's assertion, in seconding the nomination of Cleveland, that his friends "love him most for the enemies he has made." The first ballot proved that the Governor was stronger than his competitors, Senator Bayard, Allen G. Thurman, Samuel J. Randall and several men of lesser importance, and on the second ballot he received the nomination.
The choice of Cleveland gave the independent movement more than the expected impetus. The New YorkTimesat once crossed the line into the Cleveland camp andHarpers Weekly, long a supporter of the Republicans, the BostonHerald, SpringfieldRepublican, New YorkEvening Post,The Nation, the ChicagoTimesand a host of less important ones followed. A conference of Independents in New York City, which was composed of five hundred delegates and which enlisted the support of such men as Carl Schurz, George William Curtis, Henry C. Lea, Charles J. Bonaparte, Moorfield Storey and President Seelye of Amherst College, gave striking evidence of the revolt which Blaine's nomination had aroused. Curtis said in the conference, that the chief issue of the campaign was moral rather than political. The New YorkTimesdeclared that the issue was a personal one. Some of the better element, however, like Senator Hoar, earnestly urged the election of Blaine, while Senator Edmunds refused either to aid or oppose his party. Others, like Roosevelt, were unable to give ungrudging support, but felt that reform would be better promoted by working within the party than by withdrawing. It is obvious that Blaine and Cleveland, not the platforms of the parties, had become the issue of the campaign.
James G. Blaine was born in Pennsylvania in 1830, was educated at Washington College in his native state, later moved to Augusta, Maine, and purchased an interest in the KennebecJournal. On assuming his journalistic duties he familiarized himself with the politics of the state and became powerful in local, and later in federal affairs. He was a member of the first Republican convention and was chairman of the state Republican committee for more than twenty years, from which point of vantage he had a prevailing influence in Maine politics. He served in the state and federal legislatures as well as in Garfield's cabinet and was a prominent candidate for the presidential nomination in 1876 and in 1880.
Grover Cleveland, although only seven years younger than Blaine, was relatively inexperienced on the stage of national affairs. He was born in New Jersey, the son of a Presbyterian minister, grew up with little education, was salesman in a village store and later clerk in a law office, at the age of eighteen. Although he had been sheriff of Erie County, it was not until 1881, when he became mayor of Buffalo, that he took an important part in politics, and here his record as the business-like "veto mayor" was such as to carry him into the governor's chair a year later. The huge majority which he received in the gubernatorial contest was not wholly due to his own strength—doubtless factional quarrels among the Republicans assisted him—but the prominence which this election gave him and his conduct as Governor made inevitable his candidacy for higher office.
Few men could have been nominated who would have presented a more complete contrast than Blaine and Cleveland. In personality Blaine was magnetic, approachable, high-strung, possessed of a vivid imagination and of a marvellous memory for facts, names and faces. Over him men went "insane in pairs," either devotedly admiring or completely distrusting him. Cleveland was almost devoid of personal charm except to his most intimate associates. He was brusque and tactless, unimaginative, plodding, commonplace in his tastes and in the elements of his character. Men threw their hats in the air and cheered themselves hoarse at the name of Blaine; to Cleveland's courage, earnestness and honesty, they gave a tribute of admiration. When the campaign was at fever heat, Blaine was lifting crowds of eager listeners to the mountain peaks of enthusiasm; Cleveland was in the governor's room in Albany, phlegmatically plodding away at the business of his office. He was too heavy, unimaginative, direct, to indulge in flights of oratory. Yet scarcely anything that Blaine said still lives, while some of Cleveland's phrases have passed into the language of every-day.
No less a contrast existed between Blaine and Cleveland as political characters. The former's experience in the machinery of politics, in the disposal of its loaves and fishes, has already been mentioned. Of that part of politics, Cleveland had had no experience. It is said that he never was in Washington, except for a single day, until he went there to become President. Both were bold and active fighters, but Blaine was a strategist, a manager and a diplomat, while Cleveland could merely state the policy which he desired to see put into effect, and then crash ahead. Blaine had the instinct for the popular thing, was never ahead of his party, was surrounded by his followers; Cleveland saw the thing which he felt a moral imperative to accomplish and was far in advance of his fellows. The Republican was popular among the professional political element in his party and was supported by it; the Democrat never was. Cleveland openly declared his attitude on controverted issues, in words that admitted of no ambiguity and at times when only silence or soft words would save him from defeat. Blaine lacked the moral courage and the indifference to immediate results which were necessary for so exalted an action. Cleveland had more of the reformer in his nature, and had so keen a sense of responsibility and duty that his political career was a succession of battles against things that seemed wrong to him. Blaine accepted the party standards as they were; he belonged to the past, to the policies and political morality of war and reconstruction; Cleveland belonged to the transition from reconstruction to the twentieth century.
The particular thing, however, that came out of Blaine's past to dog his foot-steps, give him the enmity of the Independents—better known as the "Mugwumps"—and, doubtless, to defeat him, was a series of transactions exposed in the Mulligan letters. In order to understand these, it is necessary to inquire into events that occurred fifteen years before the overturn of 1884. In April, 1869, a bill favorable to the Little Rock and Fort Smith Railroad—an Arkansas land-grant enterprise—was before the House of Representatives. Blaine was Speaker. As the session was near its close and the bill seemed likely to be lost, its friends bespoke Blaine's assistance. He suggested that a certain point of order be raised, which would facilitate the passage of the measure, and also asked General John A. Logan to raise the point. Logan did so, Blaine sustained him and the act was passed. Nearly three months later, Warren Fisher, Jr., a Boston business man, asked Blaine to participate in the affairs of the Little Rock Railroad. Blaine signified his readiness, closing his letter with the words, "I do not feel that I shall prove a dead-head in the enterprise if I once embark in it. I see various channels in which I know I can be useful." When Blaine's enemies got hold of this, they declared that he intended to use his position as Speaker to further the interests of the road, as he had done at the time of the famous point of order; his friends asserted that he intended merely to sell the securities of the road to investors. Whether one of these contentions is true, or both, he did sell considerable amounts of the securities of the road to Maine friends, getting a "handsome commission." Considerable correspondence passed between Blaine and Fisher from 1869 to 1872 when their relations ended. Blaine understood that all their correspondence was mutually surrendered.
In the spring of 1876, the presidential campaign was on the horizon and Blaine was a prominent candidate for the Republican nomination. Meanwhile ugly rumors were flying about concerning the connection of certain members of Congress, Blaine among them, with questionable railroad transactions, and he arose in the House to deny the charges. He did not discuss the matter fully, as he did not wish his Maine constituents to know that he had received a large commission for selling Little Rock securities. Gossip grew, however, and a congressional investigation resulted in May, 1876. Blaine was one of the witnesses, but was doubtless anxious to bring the investigation to an end, since it clearly reduced his chances of receiving the nomination. Presently gossip said that Warren Fisher and James Mulligan were going to testify. Mulligan had been confidential clerk to one of Mrs. Blaine's brothers and later to Fisher. When Mulligan began his testimony it appeared that he intended to lay before the committee a package of letters that had passed between Blaine and Fisher, and thereupon, at Blaine's whispered request, one of the members of the committee procured an adjournment for the day. That evening Blaine found Mulligan at the latter's hotel and prevailed on him to surrender the letters temporarily, in order that Blaine might read and then return them. Blaine thereupon consulted two lawyers and on their advice he refused to restore the package to Mulligan. Merely to keep silence, however, was to admit guilt. Blaine, therefore, arose one day in the House of Representatives and holding the letters in his hand read selections and defended himself in a remarkable burst of emotional oratory. At the climax of this defence he elicited from the chairman of the committee of investigation an unwilling admission that the committee had suppressed a dispatch which Blaine declared would exonerate him. Blaine was triumphant, his friends sure that he had cleared himself and the matter dropped for the time. Further investigation was prevented by Blaine's refusal to produce the letters even before the committee and by his sudden illness shortly afterward. His election to the Senate soon took him out of the jurisdiction of the House committee and no action resulted.
The nomination of Blaine in 1884 was a fresh breeze on the half-dead embers of the Mulligan letters.Harper's Weeklyand other periodicals published them with damaging explanatory remarks. Campaign committees spread them abroad in pamphlet form. Attention was directed to such phrases as "I do not feel that I shall prove a dead-head" and "I see various channels in which I know I can be useful." Hostile cartoonists used the phrases with an infinite variety of innuendo. But the most powerful evidence was still to come. On September 15, 1884, Fisher and Mulligan made public additional letters which Blaine had not possessed at the time of his defence in 1876. The most damaging of these was one in which Blaine had drawn up a letter completely exonerating himself, which he asked Fisher to sign and make public as his own. Blaine had marked his request "confidential" and had written at the bottom "Burn this letter." Fisher had neither written the letter which was requested nor burned Blaine's. Meanwhile it was recalled that Blaine had earlier characterized the reformers as "upstarts, conceited, foolish, vain" and as "noisy but not numerous, pharisaical but not practical, ambitious but not wise," and the already intemperate campaign became more personal than ever.
Thomas Nast's able pencil caricatured Blaine inHarper's Weeklyas a magnetic candidate too heavy for the party elephant to carry;Puckportrayed him as the "tattooed man" covered all over with "Little Rock," "Mulligan Letters" and the like.Lifedescribed him as a
Take all I can gettery,Mulligan lettery,Solid for Blaine old man.
Nor was the contest of scurrility entirely one-sided.Judgecaricatured Cleveland in hideous cartoons. The New YorkTribunedescribed him as a small man "everywhere except on the hay-scales." Beginning in Buffalo rumors spread all over the country that Cleveland was an habitual drunkard and libertine. As is the way of such gossip, its magnitude grew until the Governor appeared in the guise of a monster of immorality. The editor of theIndependentwent himself to Buffalo and ran the rumors to their sources. He came to the conclusion that Cleveland as a young man had been guilty of an illicit connection, that he had made amends for the wrong which he had done and had since lived a blameless life. Such religious periodicals as theUnitarian Review, however, continued to describe him as a "debauchee" and "roué." Nearly a thousand clergymen gathered in New York declared him a synonym of "incapacity and incontinency." Much was made, also, of the fact that Cleveland had not served in the war, and John Sherman denounced him as having no sympathy for the Union cause. It did little good in the heated condition of partisan discussion to point out that young Cleveland had two brothers in the service, that he was urgently needed to support his widowed mother and her six other children, and that he borrowed money to obtain a substitute to take the field. On the other side,Harper's Weeklydwelt upon the Mulligan scandal;The Nation, while deploring the incident in Cleveland's past, considered even so grave a mistake as less important than Blaine's, since the latter's vices were those by which "governments are overthrown, states brought to naught, and the haunts of commerce turned into dens of thieves."
As the campaign neared an end it appeared that the result would turn upon New York, Connecticut, New Jersey, and Indiana, and especially upon the first of these. In New York several elements combined to make the situation doubtful and interesting. Tammany's dislike of Cleveland was well-known, but open opposition, at least, was quelled before election day. Roscoe Conkling, still influential despite his retirement, refused to take the stump in behalf of Blaine, declaring that he did not engage in "criminal practice." The Republicans also feared the competition of the Prohibitionists, because they attracted some Republicans who refused to vote for Blaine and could not bring themselves to support a Democrat. On the eve of the election an incident occurred which would have been of no importance if it had not been for the closeness of the contest. As Blaine was returning from a speaking tour in the West, he was given a reception in New York by a delegation of clergymen. The spokesman of the group, the Reverend Dr. Burchard, referred to the Democrats as the party of "Rum, Romanism and Rebellion." Blaine, weary from his tour, failed to notice the indiscreet remark, but the opposition seized upon it and used it to discredit him in the eyes of the Irish. On the same evening a dinner at Delmonico's at which many wealthy men were present, provided material for the charge that the Republican candidate was the choice of the rich classes.
Early returns on election night indicated that the Democrats had carried the South and all the doubtful states, with the possible exception of New York. There the result was so close that some days elapsed before a final decision could be made. Excitement was intense; and business almost stopped, so absorbed were people in the returns. At length it was officially decided that Cleveland had received 1,149 more votes than Blaine and by this narrow margin the Democrats carried New York, and with it the election.
Contemporary explanations of Blaine's defeat were indicated by a transparency carried in a Democratic procession which celebrated the victory:
TheWorldSays the Independents Did ItTheTribuneSays the Stalwarts Did ItTheSunSays Burchard Did ItBlaine Says St. John Did ItTheodore Roosevelt Says It Was the Soft Soap Dinner[1]We Say Blaine's Character Did ItBut We Don't Care What Did ItIt's Done.
None of these explanations took into account the strength of Cleveland, but the closeness of the result made all of them important. From the vantage ground of later times, however, it could be seen that greater forces were at work. By 1884 the day had passed when political contests could be won on Civil War issues. The younger voters had no recollections of Gettysburg and felt no animosity toward the Democratic South. Moreover, Cleveland's success was the culmination of a long-continued demand for reform, which he satisfied better than Blaine.
The opening of the first Democratic administration since Buchanan's time excited great interest in every detail of Cleveland's activities and characteristics.[2] Moreover, many who had voted for him distrusted his party and were apprehensive lest it turn out that a mistake had been made in placing such great confidence in one man. The more stiffly partisan Republicans firmly believed that Democratic success meant a triumphant South, with the "rebels" again in the saddle. Sherman declared that Cleveland's choice of southern advisors was a "reproach to the civilization of the age," and Joseph B. Foraker, speaking in an Ohio campaign, found that the people wished to hear Cleveland "flayed" and wanted plenty of "hot stuff."
The President's early acts indicated that the partisans were unduly disturbed. His inaugural address was characterized by straightforward earnestness. The exploitation of western lands by fraudulent claimants was sharply halted. The cabinet, while inexperienced, contained several able men, of whom Thomas F. Bayard, Secretary of State, William C. Whitney, Secretary of the Navy, and L.Q.C. Lamar, the Secretary of the Interior, were best known.[3]
The first great obstacle that Cleveland faced was well portrayed by one of Nast's cartoons, in which the President, with an "Independent" club in his hand, was approaching a snarling, open-jawed tiger, which represented the office-seeking classes. The drawing was entitled "Beware! For He is Very Hungry and Very Thirsty." It was not difficult to foresee grave trouble ahead in connection with the civil service. The Democrats had been out of power for twenty-four years, the offices were full of Republicans, about 100,000 positions were at the disposal of the administration, and current political practice looked with indifference upon the use of these places as rewards for party work. Hordes of office-seekers descended upon congressmen, in order to get introductions to department chiefs; they filled the waiting rooms of cabinet officers; they besieged Cleveland. Disappointed applicants and displaced officers added to the clamor and confusion.
The President's policy, as it worked out in practice, was a compromise between his ideals and the wishes of the party leaders. He earnestly approved the Pendleton act and desired to carry out both its letter and its spirit. He removed office holders who were offensively partisan and who used their positions for political purposes. He gave the South a larger share in the activities of the government, both in the cabinet and in the diplomatic and other branches of the service. When the term of a Republican office holder expired he filled the place with a fit Democrat, if one could be found, in order to equalize the share of the two parties in the patronage. Nearly half of the diplomatic and consular appointments went to southerners, and eventually most of the Republicans were supplanted.
The displacement of so many officials gave the Republicans an opportunity to attempt to discredit the President in the eyes of his mugwump supporters. An amended law of 1869 gave the Senate a certain control over removals, although the constant practice of early times had been to give the executive a free hand. Moreover the law had fallen into disuse—or, as the President put it—into "innocuous desuetude." The case on which the Senate chose to force the issue was the removal of George M. Duskin, United States District Attorney in Alabama, and the nomination of John D. Burnett in his place. The Senate called upon the Attorney-General to transmit all papers relating to the removal; the President directed him to refuse, on the ground that papers of such a sort were not official papers, to which the Senate had a right, and also on the ground that the power of removal was vested, by the Constitution, in the president alone. In the meantime it had been hinted to Cleveland that his nominations would be confirmed without difficulty if it were acknowledged that the suspensions were the usual partisan removals. To do this would, of course, make his reform utterances look hypocritical and he refused to comply:
I … dispute the right of the Senate … in any way save through the judicial process of trial on impeachment, to review or reverse the acts of the Executive in the suspension, during the recess of the Senate, of Federal officials.
As he was immovable and was taking precisely the position that such Republican leaders as President Grant had previously taken, the Senate was obliged to give way. Although it relieved its feelings by censuring the Attorney-General, it later repealed the remains of the Tenure of Office act of 1869, leaving victory with the President.
In connection with the less important offices Cleveland was forced to compromise between the desirable and the practicable. Most of the postmasters were changed, although in New York City an efficient officer was retained who had originally been appointed by Garfield. All the internal revenue collectors and nearly all the collectors of customs were replaced. On the other hand, the classified service was somewhat extended by the inclusion of the railway mail service, a change which, with other increases, enlarged the classified lists by 12,000 offices.
It seems evident that Cleveland pressed reform far enough to alienate the politicians but not so far as to satisfy the reformers. When he withstood Democratic clamor for office, the Independents applauded, and the spoilsmen in his own party accused him of treason. When he listened to the demands of the partisans, the reformers became disgusted and many of them returned to their former party allegiance. Eugene Field expressed Republican exultation at the dissension in the enemy's ranks:
… the Mugwump scorned the Democrat's wail,And flirting its false fantastic tail,It spread its wings and it soared away,And left the Democrat in dismay,Too hoo!
Aside from the President, official Washington seems to have had but little real interest in reform. The Vice-President, Hendricks, was a partisan of the old school, and so many members of Congress were out of sympathy with the system that they attempted to annul the law by refusing appropriations for its continuance. On the whole a fair judgment was that of Charles Francis Adams, a Republican, who thought that Cleveland showed himself as much in advance of both parties as it was wise for a leader of one of them to be.
In addition to further improvements in the civil service laws, Cleveland was interested in a long list of reforms which he placed before Congress in his first message: the improvement of the diplomatic and consular service; the reduction of the tariff; the repeal of the Bland-Allison silver-coinage act; the development of the navy, which he characterized as a "shabby ornament" and a naval reminder "of the days that are past"; better care of the Indians; and a means of preventing individuals from acquiring large areas of the public lands. The fact that Hayes and Arthur had urged similar reforms showed how little Cleveland differed from his Republican predecessors. It was not likely, however, that the program would be carried out, for Congress was not in a reforming mood and the Republicans controlled the upper house so that they could block any attempt at constructive policies.
The latent hostility which many of the Civil War veterans felt toward the Democratic party was fanned into flame by Cleveland's attitude toward pension legislation. The sympathy of the country for its disabled soldiers had early resulted in a system of pensions for disability if due either to wounds or to disease contracted in the service. Early in the seventies the number of pensioners had seemed to have reached a maximum. Two new centers of agitation, however, had appeared, the Grand Army of the Republic and the pension agent. The former was originally a social organization but later it took a hand in the campaign for new pension legislation. The agents were persons familiar with the laws, who busied themselves in finding possible pensioners and getting their claims established. The agitation of the subject had resulted in the arrears act of 1879, which gave the claimant back-pensions from the day of his discharge from the army to the date of filing his claim, regardless of the time when his disability began. As the average first payment to the pensioner under this act was about $1,000, the number of claims filed had grown enormously and the pension agents had enjoyed a rich harvest. The next step was the dependent pensions bill, which granted a pension to all who had served three months, were dependent on their daily toil, and were incapable of earning their livelihood, whether the incapacity was due to wounds and disease or not. President Cleveland's veto of the measure aroused a hostility which was deepened by his attitude toward private pension acts.
For some time it had been customary to pass special acts providing pensions for persons whose claims had already been rejected by the pension bureau as defective or fraudulent. So little attention was paid to private bills in Congress that 1454 of them passed between 1885 and 1889, generally without debate and often even without the presence of a quorum of members. Two hours on a day in April, 1886, sufficed for the passage of five hundred such bills. Nobody would now deny that many were frauds, pure and simple. Cleveland was too frugal and conscientious to pass such bills without examination and he began to veto some of the worst of them. Each veto message explained the grounds for his dissent, sometimes patiently, sometimes with a sharp sarcasm that must have made the victim writhe. In one case where a widow sought a pension because of the death of her soldier husband it was discovered that he had been accidentally shot by a neighbor while hunting. Another claimant was one who had enlisted at the close of the war, served nine days, had been admitted to the hospital with measles and then mustered out. Fifteen years later he claimed a pension. The President vetoed the bill, scoffing at the applicant's "valiant service" and "terrific encounter with the measles." Altogether he vetoed about two hundred and thirty private bills. Time after time he expressed his sympathy with the deserving pensioner and his desire to purge the list of dishonorable names, and many applauded his courageous efforts. Nevertheless, his pension policy presented an opportunity for hostile criticism which his Republican opponents were not slow to embrace. His efforts in behalf of pension reform were said to originate in hostility to the old soldiers and in lack of sympathy with the northern cause. In 1887 it even became necessary for him to withdraw his acceptance of an invitation to attend a meeting of the Grand Army in St. Louis, because of danger that he might be subjected to downright insult.[4]
Before the hostility due to the pension vetoes had subsided, Adjutant-General Drum called the attention of the President to the fact that flags taken from Confederate regiments by Union soldiers during the war and also certain flags formerly belonging to northern troops had for many years lain packed in boxes in the attic and cellar of the War Department. At his suggestion Cleveland ordered the return of these trophies to the states which the regiments had represented. Although recommended by Drum as a "graceful act," it was looked upon by the old soldiers with the utmost wrath. The commander of the Grand Army called upon Heaven to avenge so wicked an order and such politicians as Governor Foraker of Ohio gained temporary prominence by their bitter condemnation of it. Eventually the clamor was so great that the President rescinded the order on the ground that the final disposition of the flags was within the sphere of action of Congress only. In February, 1905, however, Congress passed a resolution providing for the return of the flags and the exchange was effected without excitement.
For the reasons already mentioned, little legislation was passed during President Cleveland's administration that was of permanent importance. An exception was the Interstate Commerce Act, which is a subject for later discussion. A Presidential Succession Act, which has earlier been described, provided for the succession of the members of the cabinet in case of the removal or death of the president and vice-president. The Electoral Count Act placed on the states the burden of deciding contests arising from the choice of presidential electors. When more than one set of electoral returns come from a state, each purporting to be legal, Congress must decide which shall be counted. Of some importance, too, was the establishment of the Department of Agriculture in 1889 and the inclusion of its secretary in the cabinet. The admission of the Dakotas, Montana and Washington as states took place in the same year. The improvement of the navy, begun so auspiciously by Secretary Chandler under President Arthur, was continued with enthusiasm and vigor, and the vessels constructed formed an important part of our navy.
Of less popular interest than many of the political questions, but of more lasting importance, was the rapid reduction of the public land supply. The purpose of the Homestead law of 1862 had been to supply land at low rates and in small amounts tobona fidesettlers, but the beneficent design of the nation had been somewhat nullified by the constant evasion of the spirit of the laws. Squatters had occupied land without reference to legal forms; cattlemen had fenced in large tracts for their own use and forcibly resisted attempts to oust them; by hook and by crook individuals and companies had got large areas into their possession and held them for speculative returns. Western public opinion looked upon many such violations with equanimity until the supply of land began to grow small. Then came the demand for the opening of the Indian reservations, which comprised 250,000 square miles in 1885. The Dawes act of 1887 provided for individual ownership of small amounts of land by the Indians instead of tribal ownership in large reservations. By this means a considerable amount of good land was made available for settlement by whites. The dwindling supply of western land also called attention to certain delinquencies on the part of the railway companies. Many of them had been granted enormous amounts of land on certain conditions, such as that specified parts of the roads be constructed within a given time. This agreement, with others, was frequently broken, and question arose as to whether the companies should be forced to forfeit their claims. Cleveland turned to the problem with energy and forced the return of some millions of acres. Nevertheless, the fact that it was becoming necessary to be less prodigal with the public land indicated that the supply was no longer inexhaustible, and led the President in his last annual message to urge that the remaining supply be husbanded with great care. Congress was not alert to the demands of the time, however, and no effective steps were taken for many years.
H.C. Thomas,The Return of the Democratic Party to Power in 1884(1919), is most complete and scholarly on the subject; Sparks, Curtis, Dewey, and Stanwood continue useful; H.T. Peck,Twenty Years of the Republic, 1885-1905(1907), is illuminating and interesting; H.J. Ford,Cleveland Era(1919), is brief; the files ofThe NationandHarper's Weeklyare essential, while those of the New YorkSun, Evening PostandTribuneadd a few points. The Mulligan letters are reprinted inHarper's Weekly(1884, 643-646).
On the administration, consult the general texts and the special volumes mentioned in chapter V; G.F. Parker,Recollections of Grover Cleveland(1909); andPolitical Science Quarterly(June, 1918), "Official Characteristics of President Cleveland," give something on the personal side; J.L. Whittle,Grover Cleveland(1896), is by an English admirer; Cleveland's own side of one of his controversies is in Grover Cleveland,Presidential Problems(1904); on Blaine, Edward Stanwood,James G. Blaine(1905). TheAnnual Cyclopaediahas useful biographical articles.
* * * * *
[1] A reference to the Dorsey dinner at which Arthur told how Indiana was carried.
[2] His marriage to Miss Frances Folsom, which occurred in 1886, occasioned lively interest.
[3] Other members were: Daniel Manning, N.Y., Secretary of the Treasury; William C. Endicott, Mass., Secretary of War; A.H. Garland, Ark., Attorney-General; William F. Vilas, Wis., Postmaster-General.
[4] President Cleveland also frequently used his veto power to prevent the passage of appropriations for federal buildings which he deemed unnecessary.
The most significant legislative act of President Cleveland's administration was due primarily neither to him nor to the great political parties. It concerned the relation between the government and the railroads, and the force which led to its passage originated outside of Congress. The growth of the transportation system, therefore, the economic benefits which resulted, the complaints which arose and the means through which the complaints found voice were subjects of primary importance.
Beginning with the construction of the Baltimore and Ohio Railroad about 1830, the extension of the railways went forward with increasing rapidity so that they soon formed a veritable network: between 1830 and 1850 over 7,000 miles were laid; by 1860 the total was 30,000 miles; the Civil War and the financial depression of 1873 retarded progress somewhat, but such delays were temporary, and by 1890 the total exceeded 160,000 miles. In the earlier decades most construction took place in the Northeast, where capital was most plentiful and population most dense. Later activity in the Northeast was devoted to building "feeders" or branch lines. In the South, the relatively smaller progress which had been made before the war had been undone for the most part by the wear and tear of the conflict, but the twenty-five years afterward saw greatly renewed construction. The most surprising expansion took place in Texas where the 711 miles of 1870 were increased to 8,754 by 1890. In the Middle West, roads were rapidly built just before the war and immediately after it, and the first connection with the Pacific Coast, as has been shown, was made in 1869.
[Illustration:Railroad Mileage, 1860-1910, in thousands of miles]
Many of the circumstances accompanying this rapid expansion were novel and important. Beginning with a federal grant to the Illinois Central, for example, in the middle of the century, both the nation and the states assisted the roads by gifts of millions of acres of land. It was to the advantage of the companies to procure the grants on the best possible terms, and they exerted constant pressure upon congressmen whose votes and influence they desired. Frequently the agents of the roads were thoroughly unscrupulous, and such scandals as that connected with the Credit Mobilier were the result. More important still, the fact that the federal and state governments had aided the railroads so greatly gave them a strong justification for investigating and regulating the activities of the companies.
Mechanical inventions and improvements had no small part in the development of the transportation system. The early tracks, constructed of wood beams on which were fastened iron strips, and sometimes described as barrel-hoops tacked to laths, were replaced by iron, and still later by heavy steel rails. By 1890 about eighty per cent. of the mileage was composed of steel. Heavy rails were accompanied by improved roadbeds, heavier equipment and greater speed. A simple improvement was the gradual adoption of a standard gauge—four feet eight and a half inches—which replaced the earlier lack of uniformity. The process was substantially completed by the middle eighties, when many thousands of miles in the South were standardized. On the Louisville and Nashville, for example, a force of 8,763 men made the change on 1,806 miles of track in a single day. The inauguration of "standard" time also took place during the eighties. Hitherto there had been a wide variety of time standards and different roads even in the same city despatched their trains on different systems. In 1883 the country was divided into five vertical zones each approximately fifteen degrees or, in sun-time, an hour wide. Both the roads and the public then conformed to the standard time of the zone in which they were.
[Illustration:Map of the United States showing railroads in 1870]
Of greater importance was the consolidation of large numbers of small lines into the extensive systems which are now familiar. The first roads covered such short distances that numerous bothersome transfers of passengers, freight and baggage from the end of one line to the beginning of the next were necessary on every considerable journey. No fewer than five companies, for example, divided the three hundred miles between Albany and Buffalo, no one of them operating more than seventy-six miles. In 1853, these five with five others were consolidated into the New York Central Railroad. Sixteen years later, in 1869, the Central combined with the Hudson River, and soon afterwards procured substantial control of the Lake Shore and Michigan Southern, the Rock Island, and the Chicago and Northwestern. As the result of this process a single group of men directed the interests of a system of railroads from New York through Chicago to Omaha. The Pennsylvania Railroad began with a short line from Philadelphia to the Susquehanna River, picked up smaller roads here and there—eventually one hundred and thirty-eight of them, representing two hundred and fifty-six separate corporations—reached out through the Middle West to Cincinnati, Chicago and St. Louis, and in 1871 controlled over three thousand miles of track, with an annual income of over forty million dollars. In the eighties a railroad war in northern New England started the consolidation of the Boston and Maine system.
The beneficial results of the growth of the transportation facilities of the nation were immediate and revolutionary. The fact that average freight rates were cut in halves between 1867 and 1890 helped make possible the economic readjustments after the Civil War to a degree that is not likely to be overestimated. Not only did railway construction supply work for large numbers of laborers and help bring about an ever greater westward migration, but it opened a market for the huge agricultural surplus of the Middle West. Without the market in the cities of the populous Atlantic Coast and Europe, the expansion of the West would have been impossible. Moreover, the railways brought coal, ore, cotton, wool and other raw materials to the Northeast, and thus enabled that section to develop its manufacturing interests.
[Illustration:Map of the United States showing railroads in 1890]
Despite the admittedly great benefits resulting from the railroad system, there was a rising tide of complaint on the part of the public in regard to some aspects of its construction and management. It was objected, for example, that many of the western roads especially were purely speculative undertakings. Lines were sometimes built into new territory where competition did not exist and where, consequently, the rates could be kept at a high point. The Chicago, Burlington and Quincy presented such a case in 1856. Profits were so great as to embarrass the company, since the payment of large dividends was sure to arouse the hostility of the farmers who paid the freight rates. "This, indeed," declared the biographer of one of the presidents of the road, "was the time of glad, confident morning, never again to occur in the history of railroad-building in the United States." Sometimes lines were driven into territory which was already sufficiently supplied with transportation facilities, in order to compel the company already on the ground to buy out the new road. If, as time went on, traffic enough for both roads did not appear, they had to be kept alive through the imposition of high rates; otherwise, one of them failed and the investors suffered a loss. The opportunities for profit, however, were so numerous that the amount of capital reported invested in railways increased by $3,200,000,000 during the five years preceding 1885.
A practice which was productive of much wrong-doing and which was suggestive of more dishonesty than could be proved, related to the letting of contracts for the construction of new lines. The directors of a road frequently formed part or all of the board of directors of a construction company. In their capacity as railroad directors they voted advantageous contracts to themselves in their other capacity, giving no opportunity to independent construction companies who might agree to build at a lower cost. As the cost of construction was part of the debt of the road, the directors were adding generously to their own wealth, while the company was being saddled with an increased burden. It cost only $58,000,000, for example, to build the Central Pacific, but a construction company was paid $120,000,000 for its services. When John Murray Forbes was investigating the Chicago, Burlington and Quincy he found that the president of the road was paying himself a salary as president of a construction company, out of the railroad's funds, without the supervision of the treasurer or any one else, and without any auditing of his accounts. Moreover, six of the twelve members of the board of directors were also members of the construction company. Such an attempt to "run with the hare and hunt with the hounds" was suggestive, to say the least, of great possibilities of profit to the directors and a constant invitation to unnecessary construction.
Another grievance against the railways was the reckless, irresponsible and arrogant management under which some of them operated. An eminent expert testified before an investigating commission in 1885 that Jay Gould once sold $40,000,000 of Erie Railway stock and pocketed the proceeds himself. Most of the energy of the officers of some roads was expended in deceiving and cheating competitors. "Railroad financiering" became a "by-word for whatever is financially loose, corrupt and dishonest." If certain roads demonstrated by successful operation that honest methods were better in the long run, their probity received scant advertisement in comparison with the unscrupulous practices of their less respectable neighbors. It is to be remembered, also, that the growth of the railway system had been so rapid and so huge that it was impossible to meet the demand for trained administrators. Naturally, men possessed of little or no technical understanding of transportation problems could not provide highly responsible management.
The dishonest manipulation of the issues and sales of railroad stocks is a practice that was not confined solely to the twenty-five years after the Civil War, but the numerous examples of it which occurred during that period aggravated the exasperation which has already been mentioned. Daniel Drew, the treasurer of the Erie Railway in 1866, furnished an excellent illustration of this type of activity. Drew had in his possession a large amount of Erie stock which had been secretly issued to him in return for a loan to the company. The stock in the market was selling near par and still rising. Drew instructed his agents to make contracts for the future delivery of stock at prices current at the time when the contracts were made. When the time came for fulfilling his contracts, Drew suddenly threw the secret stock on the market, drove general market prices on Erie stock down from ninety-five to fifty, bought at the low figure, and sold at the high price which was called for in the contracts made by his agents. The effect of such sharp dealing on investors, the railroad or the public seems not to have entered into the calculation. Indeed, the Erie and many another road was looked upon by its owners merely as a convenient piece of machinery for producing fortunes.
Gould, Drew and other railroad men of their time were also expert in the practice of "stock-watering." This consists in expanding the nominal capitalization of an enterprise without an equivalent addition to the actual capital. The rates which the railway has to charge the public tend to increase by approximately whatever dividends are paid on the water.[1] Then, as later, when a road was prospering greatly it would sometimes declare a "stock dividend," that is, give its stockholders additional stock in proportion to what they already owned. The addition would frequently be water. Its purpose might be to cover up the great profits made by the company. If, on a million dollars' worth of stock, it was paying ten per cent. dividends, the public might demand lower freight and passenger rates; but if the stock were doubled and earnings remained stationary, then the dividends would appear as five per cent.—an amount to which there could be no objection. H.V. Poor, the railroad expert, declared before a commission of investigation in 1885 that the New York Central Railroad was carrying $48,000,000 of water, on which it had paid eight per cent. dividends for fifteen years. He also estimated that of the seven and a half billions of indebtedness which the roads of the country were carrying in 1883, two billions represented water. Others thought that the proportion of water was greater. In any case the unnecessary burden upon business to provide dividends for the watered stock was an item of some magnitude. The investor, however, looked upon stock-watering with other eyes. The building of a new road was a speculation; the profits might be large, to be sure, but there might in many cases be a loss. In order to tempt money into railroad enterprises, therefore, inducements in the form of generous stock bonuses were necessary.
The rate wars of the seventies gave wide advertisement to another aspect of railroad history. The most famous of these contests had their origin in the grain-carrying trade from the Lakes to the sea-board. The entry of the Baltimore and Ohio and the Grand Trunk into Chicago in 1874, stimulated a four-cornered competition among these roads and the Pennsylvania and New York Central for the traffic between the upper Mississippi Valley and the coast. Rates on grain and other products were cut, and cut again; freight charges dropped to a figure which wiped out profits; yet it was impossible for any line to drop out of the competition until exhaustion forced all to do so. A railroad can not suspend business when profits disappear, for fixed expenses continue and the depreciation of the value of the property, especially of the stations, tracks and rolling stock, is extreme. Since the rate wars were clearly bringing ruin in their train, rate agreements and pooling arrangements were devised. The latter took several forms. Sometimes a group of competing roads agreed to divide the business among the competitors on the basis of an agreed-upon percentage. Another plan was to pool earnings at the close of a period and divide according to a prearranged ratio. Sometimes destructive competition was prevented by a division of the territory, each company being allowed a free hand in its own field. In general, pooling agreements were likely to break down, although a southern pool organized by Albert Fink on a very extensive scale lasted for many years and was thought to have had a vital influence in eliminating rate-wars. Their efficacy depended mainly on good faith, and good faith was a rarity among railroad officials in the seventies and eighties. In the eyes of the public, rate agreements and pools were vicious conspiracies which left the rights and well-being of the private shipper completely out of the calculation.
Still another indictment of the railways resulted from their participation in politics. It was inevitable, of course, that the roads should be drawn into the field of legislation—the grants of public land, for example, helped bring about the result. It early seemed advantageous to attempt to influence state legislatures to pass favorable laws, and it seemed a necessity to bring pressure to bear in order to protect the roads from hostile acts. The methods used by the railway agents in their political activity naturally varied all the way from legitimate agitation to crude and subtle forms of bribery. An insidious method of influencing both law-making and litigation was the pass system. Under it the roads were accustomed to give free transportation to a long list of federal and state judges, legislators and politicians. For a judge to accept such favors from a corporation which might at any time be haled before his court, and for a legislator to receive a gift from a body that was constantly in need of legislative attention is now held to be improper in the extreme. But in those days a less sensitive public opinion felt hardly a qualm. That the practice was likely to arouse an unconscious bias in the minds of public officials is hardly debatable. The more crude forms of bribery, too, were not uncommon. It was testified before a committee of investigation that the Erie Railway Company in one year expended $700,000 as a corruption fund and for legal expenses, carrying the amount on the books in the "India-rubber account." The manipulation of the courts of New York by the Erie and the New York Central during the late sixties was nothing short of a scandal. Alliances between political rings and railroad officials for the purpose of caring for their mutual interests were so common that reformers questioned whether the American people could be said to possess self-government in actuality. Immediately after the Civil War, Charles Francis Adams, an acute student of transportation, declared that it was scarcely an exaggeration to say that the state legislatures were becoming a species of irregular boards of railroad direction. The evils of the alliance between the roads and politics were not, of course, due entirely to the former. The receiver of a pass shared with the giver the evil of the system. Many a legislator was corrupt; more shared in practices which were little removed from dishonorable. Adams, for example, gives an account of his experiences, as a director of the Union Pacific, in dealing with a United States senator in 1884. The congressman was ready to take excellent care of railroad corporations which retained him as counsel, but was a corrupt and ill-mannered bully toward the Union Pacific, which had not employed him.[2]
The most constant grievance was discrimination—that the roads varied their rates for the benefit or detriment of especial types of freight, of individuals and of entire localities. Through business between competing points was carried at a low figure, while the roads recouped themselves by charging heavily in towns where competition was absent. Shippers complained that rates between St. Paul and Chicago, for example, where competition existed were hardly more than half the charges to places at a similar distance where a single road was in a position to demand what it pleased. Manufacturers in Rochester could send goods to New York City and reship them to Cincinnati, back through Rochester, for less than the rate direct to their destination. Yet the direct haul was seven hundred miles shorter than the indirect. Secret arrangements were commonly made with favored shippers by which they secured lower rates than their competitors. When it became evident that transportation cost entered into the price of substantially everything which the ordinary citizen consumed, and when it was considered that a slight rise in railroad rates might easily amount to a heavy tax on a shipper or an entire region, it was seen that uniformity of rates was a matter of the utmost concern.
In brief, then, it was complained that the growth of the transportation system had placed enormous power in the hands of a small group of men, many of whom had indicated by their selfishness, arrogance and questionable practices that they ought not to be entrusted with so great a measure of authority.
The best example of the American railroad president after the war was Commodore Cornelius Vanderbilt. Vanderbilt began his career by ferrying passengers and freight between Staten Island and New York City. Later he turned his attention to shipping, in which he made a fortune, and planned the operation of steamships on a large scale. Becoming interested in railroading, he clearly perceived the importance of the western trade and the necessity of consolidation. Vanderbilt was a man of vision, a man who combined magnitude of plan with the vigorous grasp of the practical details necessary for the realization of his ambitions. He was buoyant, energetic, confident, ambitious, determined, despotic. Unhampered by modern conceptions of public duty, undeterred by the hostility of powerful opponents, with eyes fixed upon the combination and control of a great transportation system, Vanderbilt entered courageously upon bitter struggles for supremacy which involved the misuse of the courts, the control of the New York state legislature and a thousand charges of corrupt influence and bribery, but he welded railroads together, replaced wood and iron with steel, and constructed tracks and terminals. At his death in 1877 he left a huge fortune and bequeathed to his successors a great, consolidated railroad enterprise, skillfully and successfully administered. The great weakness of Commodore Vanderbilt and his associates, and of those who later imitated his work was their fundamental conception of the railroad as a private venture. Success consisted in bigness, great profits, crushing or buying out competitors, and administering the business for the best good of the few owners, regardless of the interests of the region through which the railway passed. Vanderbilt and many of his contemporaries were men of business sagacity and foresight, but their ethical outlook was restricted and their sense of public responsibility not well developed.
So considerable a list of grievances naturally bestirred the people to seek relief at the hands of their legislators. Two lines of action were followed. In Massachusetts, as early as 1869, a state commission was formed with purely advisory powers. Under the able leadership of Charles Francis Adams it attained great influence and worked effectively for the elimination of railroad abuses through conference and the weight of public opinion. In Illinois, on the other hand, reliance was placed upon compulsory action. The state constitution of 1870 declared the railroads to be public highways and required the legislature to fix rates for the carriage of freight and passengers, and to pass laws to correct abuses connected with the railways and grain warehouses. In compliance with the constitution the state passed the necessary legislation and placed their execution in the hands of a commission with considerable power. Other western states followed the Illinois model.
On the national scale the agitation for government action began with the minor parties. In 1872 the Labor Reformers demanded fair rates and no discrimination; in 1876 the Prohibitionists called for lower rates; in 1880 the Greenbackers stood for fair and uniform rates; four years later they urged laws which would put an end to pooling, stock-watering and discrimination, and in the same year the Republicans promised an act to regulate commerce if they were elected. The most effective force behind the demand for railroad regulation was the Patrons of Husbandry, better known as the "Grange." This society was founded by O.H. Kelley, a government clerk in Washington, in 1867. Its initial purpose was the organization of the agricultural classes for social and intellectual improvement, but later it engaged in the effort to correct transportation abuses and to arouse cooperation among the farmers in other ways. The movement grew astonishingly, especially in the Middle West, where its membership reached nearly 759,000 in 1875.
Transportation conditions in the West had not reached the relatively stable situation which characterized those of the East. In the West much new work was being done, with the attendant evils of construction companies and unnecessary and speculative undertakings. Much of the railroad stock was in the hands of eastern investors whom the western farmers pictured as living in idle ease on swollen incomes, careless of the high rates and unfair discriminations under which the farmer groaned. The constantly falling prices, which influenced the West in so many other ways, served to heighten the discontent with any abuse which increased the farmer's burden. Moreover, the western states had contributed huge amounts of land to help build the railways and they were not minded to give up the hold which their generosity had justified.
Impelled, then, by such force as the Grange and similar organizations supplied, the western states proceeded to the adoption of laws whose purposes ordinarily included railroad rate-making by the legislature or by a commission, the doing away with such abuses as discrimination, and the prohibition of free passes. The railroads promptly opposed the laws and carried the battle to the courts. The so-called "Granger Cases" resulted. Three of these were representative of the general trend of the decisions.
The famous case Munnv.Illinois, which was decided by the Supreme Court in 1876 was possibly the most vital case in the history of the regulation of public service corporations after the Civil War. The legislature of Illinois, in conformity with the state constitution of 1870, had passed a law fixing maximum charges for the storage of grain in warehouses. The owners of a certain warehouse refused compliance with the law on the ground that it was contrary to the Constitution and hence null and void. They argued that when the state fixed rates it deprived the owners of the right to set higher charges and so, in effect, deprived them of their property, in defiance of that portion of the Fourteenth Amendment forbidding a state to "deprive any person of life, liberty, or property, without due process of law."
On examination of the history of the control of such enterprises, the Court found that it had been customary in England for many centuries and in this country from the beginning, to regulate rates on ferries, charges at inns, and similar public enterprises, and that it had never been thought that such action deprived persons of property without due process of law. In other words, the established common law, at the time of the passage of the Fourteenth Amendment, did not look upon rate regulation as a deprivation of property. The Court, therefore, declared the Illinois warehouse law constitutional, and in doing so made the following statement:
Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created.
While the Munn case was before the Court, the case Peikv.the Chicago and Northwestern Railway Company was raising a question which struck at the heart of the chief practical impediment in the way of state control of transportation. The central question in the litigation was whether the legislature of Wisconsin could lawfully regulate rates on railroads inside the state. Since the bulk of the traffic on most roads crosses state borders at one time or another in its transit, the regulation of rates within a state normally affects interstate commerce. But the regulation of interstate commerce is vested in Congress by the terms of the Constitution. The railroad was quick to take advantage of the division of power between the states and the nation. Indeed, when fighting state legislation, the roads earnestly emphasized the exclusive power of Congress over interstate commerce; but when fighting national regulation, they equally deprecated any interference with the reserved rights of the states. Acting in accordance with its established practice, the Court decided that the state was authorized to regulate rates within its borders, even though such regulation indirectly affected persons outside, until Congress passed legislation concerning interstate commerce. Obviously this decision allowed the states to work out their railroad problems unhampered, and constituted one of the chief victories for the Grangers.
In 1886, however, the Court overturned some of the principles which had been established in the Munn and Peik cases. The new development came about in connection with the Wabash railroad. It appeared that the road had been carrying freight from Peoria, Illinois, to New York for smaller rates than were charged from Gilman to New York, despite the fact that Peoria was eighty-six miles farther away. Since Illinois law forbade a road to levy a greater charge for a short haul than for a long one, a suit was instituted and carried to the Supreme Court. The company held that the Illinois legislation affected interstate commerce and hence trenched upon the constitutional power of Congress. This time the Court upheld the road. It decided that the transportation of goods from Illinois to New York was commerce among the states, that such commerce was subject to regulation by Congress exclusively, and that the Illinois statute was void. It seemed, then, that state regulation was a broken reed on which nobody could safely lean, and attention thereupon turned to the federal government.