Читать книгу Monopolies and the People - D. C. Cloud - Страница 14

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The Pacific companies are such a deep mine of iniquity, we must sink our shaft somewhat deeper if we would see the true quality of the corruption. In order to fully comprehend the injustice done to the people, it will be necessary to examine the further legislation of congress in their favor.

A perusal of the act from which we have quoted will convince the reader that these companies received all that was necessary for the successful completion and operation of their road, and its numerous branches, and to enable them to extort from the government and the people all that the most grasping and avaricious could desire. But, like Oliver Twist, they still asked "for more," and they got it; not in more lands and money, but in being relieved, by act of congress, from the restrictions and duties imposed upon them by their charter.

The act of congress chartering the Union Pacific railroad, and its numerous branches, was amended by the act of July 2, 1864, in many particulars, to some of which we have already referred. The fourth section amends the third section of the original charter by increasing the number of sections of land granted per mile to said road, from ten to twenty, and allowing the selection of the lands to be made within twenty miles of the line of the road, instead of ten, as provided in the original charter; and also provides that the secretary of the interior shall withdraw from sale and pre-emption all the land within twenty-five miles of the line of the road, until the company has selected its twenty sections. The original charter limited the withdrawal to fifteen miles. The amendment also qualified the term "mineral lands," contained in the original act, so as to except from the lands reserved by the government all coal and iron lands; thus enabling the company to select coal and iron lands to the full amount of twenty sections per mile, giving to said railroad company, or companies, a monopoly of the coal trade in a country where coal is, and will continue to be, the greatest desideratum; and the same section gives the company the right to use, in fact grants to the company, all the timber found on each side of the road within ten miles thereof. The company can, under its charter, take all the timber from the land it does not select, and then take its twenty sections in coal lands, when they can be found. This it has done, and in addition, bought of the government other large tracts of coal land; not in the name of the company, perhaps, but in the name of the individual stockholders. By this means, all who settle along the line, in the vicinity of this Union Pacific road, are placed in the power of this great corporation, and must pay it for fuel and transportation whatever sum may be demanded, because the charter does not restrict the company in the matter of charges for transportation.

Section seventeen of the original charter provided that twenty-five per centum of the subsidy bonds should be retained by the government until the entire line of the road was completed. Section seven, of the act of July 2, 1864, repealed this provision.

Other amendments are made for the benefit of the corporation, as to time and manner of payment; but as it is not our intention to examine all of its provisions in detail, we pass to the tenth section.

By the original charter, the subsidy bonds issued to the company were to be and remain first mortgage bonds upon the road and property of the company, the company paying six per cent interest (payable semi-annually) on said bonds, and the principal in thirty years. The tenth section of the amendment reads as follows:—

"That section five of said act be so modified and amended that the Union Pacific railroad company, the Central Pacific railroad company, and any other companies authorized to participate in the construction of said road, may, on the completion of each section of said road, as provided in this act, and the act to which this act is an amendment, issue their first mortgage bonds on their respective railroad and telegraph lines, to an amount not exceeding the bonds of the United States, and of even tenor, time of maturity, rate and character of interest, with the bonds authorized to be issued to said railroad companies, respectively. And the lien of the United States bonds shall be subordinate to that of the bonds of any or either of said companies, hereby authorized to be issued on their respective roads, property, and equipments, except as to the sixth section of said act, to which this is an amendment, relating to the transmission of dispatches, and the transportation of mails, troops, munitions of war, supplies, and public stores, for the United States."

By this amendment, the public money appropriated to private corporations, to the amount of about $65,000,000, for which security had been taken, on all the property of the companies, was left in the hands of the companies without any security; or, in other words, the servants of the people made an absolute gift of this great sum of money. The history of the country, in connection with railroad corporations, demonstrates the fact that these corporations by "watering" their stock, and other characteristic management, show, if they so desire it, no margin from the business of their roads. They permit the interest on their bonds to accumulate, until a foreclosure and sale on first mortgage bonds are necessary, and then, under a new name, but with the same persons as stockholders, the road is bought in and becomes profitable. In this case the amount of $65,000,000, and the accrued interest must be first paid, or the property of the corporation must be sold, and the public money advanced by the government will be lost. Even at the present time (as we shall show hereafter) the people are paying the interest on these subsidy bonds, and the only security they have for its repayment is the honor of the company; for all precedents prove that as a rule second mortgage bonds, when a large sum of first mortgage bonds is to be paid, are of no real value.

Sections fifteen and sixteen provide for a division of earnings, and a consolidation of the various companies. Sections eighteen, nineteen, and twenty, provide for the admission of the Burlington & Missouri river railroad company as a branch of the Union Pacific, with a grant of land in Nebraska. But the greatest outrage upon the rights and interests of the people, in this Pacific railroad law, will be found in the seventeenth section of this amendment. By the original act, the Union Pacific company was required to construct a branch, road from Sioux City (on the most direct and practicable route) to some point on its road to be fixed by the president of the United States (but not beyond the one-hundredth parallel) when a railroad should be constructed through Minnesota or Iowa to Sioux City. This new road was to unite with and form a part of the great monopoly, and was to receive the same amount of lands, and subsidy bonds, per mile, as the main line received. The building of this road from Sioux City west, to a proper point of connection with the main line, would have cost but little, comparatively, because of the favorable character of the country through which it would pass.

For some reason, unknown to the public, it was decided to make a change in respect to this branch, not only as to its location, but also as to the company whose duty it should be to build it. To effect this object, this seventeenth section contains the following provisions:—

"That so much of section fourteen of said act as relates to a branch from Sioux City, be, and the same is hereby, amended so as to read as follows: That whenever a line of railroad shall be completed through the state of Iowa, or Minnesota, to Sioux City, such company now organized, or as may be hereafter organized, under the laws of Iowa, Minnesota, Dakota, or Nebraska, as the president of the United States, by its request, may designate, or approve for the purpose, shall construct and operate a line of railroad and telegraph from Sioux City, upon the most direct and practicable route to such point on, and so as to connect with, the Iowa branch of the Union Pacific railroad, as such company may select, and on the same terms and conditions as are provided in this act, and the act to which this is an amendment, for the construction of said Union Pacific railroad and telegraph line, and branches; and said company shall complete the same at the rate of fifty miles per year. Provided, that said Union Pacific railroad company shall be, and is hereby, released from the construction of said branch. And said company constructing said branch shall not be entitled to receive, in bonds, an amount larger than the said Union Pacific railroad company would be entitled to receive if it had constructed the branch under this act, and the act to which this is an amendment; but said company shall be entitled to receive alternate sections of land for ten miles in width on each side of the same, along the whole length of said branch; and provided further, that if a railroad shall not be completed to Sioux City, across Iowa or Minnesota, within eighteen months from the date of this act, then said company designated by the president as aforesaid, may commence and complete the construction of said branch, as contemplated by the provisions of this act. Provided, however, that if the company so designated by the president as aforesaid, shall not complete the said branch from Sioux City to the Pacific railroad within ten years from the passage of this act, then, and in that case, all of the railroad that shall have been constructed by said company, shall be forfeited to, and become the property of, the United States."

Now if the reader will take a late map, having the lines of railroads upon it, he will discover that a road from Sioux City to Columbus, in Nebraska, would be about one hundred miles in length, on a line running nearly west; and at this latter point it would intersect and unite with the Iowa branch of the Union Pacific; or a line running southwest for a less distance would unite with the Union Pacific at Fremont, in Nebraska. In the original charter it was contemplated to occupy one of these lines, and, in fact, a branch road was commenced from Sioux City to Fremont. The directors of this branch and the Union Pacific are in part the same, to-wit: Oakes Ames, of Boston, and G. M. Dodge, of Iowa. It would seem that this road, running southwest to Fremont, and there uniting with the Pacific, would afford all necessary facilities for securing the transportation of the mails, troops, &c., and that upon no pretext whatever could another grant of land and subsidy bonds be asked. Yet congress thought otherwise, and in the section last quoted authorized any company organized under the laws of Iowa, Minnesota, Dakota, or Nebraska, that might be designated by the president of the United States, on application to him for that purpose, to construct a railroad to unite with the Union Pacific, leaving it with the new company to fix the point at which it would so unite, but requiring it to commence at Sioux City. Taking advantage of this act, two companies, the Sioux City & Missouri Valley, and the Chicago & Northwestern, constructed a line of road from Sioux City to Council Bluffs, there to unite with the Pacific; the Sioux City & Missouri Valley constructing the road from Sioux City to Missouri Valley, and the Chicago & Northwestern from Missouri Valley to Council Bluffs. This line of road was constructed ostensibly as a part of the Pacific road. It is presumed to run west. Look at the map and you will see that from Sioux City to Council Bluffs, instead of going west, it runs on a line east of south, to the extent of thirty miles, Council Bluffs being thirty miles east of Sioux City. The company constructing this last named road received from the government a grant of one hundred sections of land per each mile, and $16,000 in subsidy bonds for each mile of road. This road runs along the east side of the Missouri river, and in truth, is of no use as a route for the transportation of mails, troops, &c., unless the government prefers to use the longest, least expeditious, and most expensive line of road. Indeed, it seems to be a road that is under the especial care and protection of congress. It is called in the Railroad Manual, "The Sioux City & Pacific Railroad." It was a "nice and fat" job. It has one feature not often found in these railroad jobs carried through congress. It appears to have been gotten up for the benefit of congressmen. After repeated efforts to learn who were the incorporators of this company, we addressed a letter to the secretary of state of Iowa, and received the following answer:—

Des Moines, December 7, 1872.

Dear Sir:—In answer to yours of the 6th inst., I will say that there is no line of railroad from Sioux City to Council Bluffs, run as one road, or by one company. The Sioux City and Pacific railroad runs from Sioux City to Missouri Valley, and the Chicago and Northwestern (Cedar Rapids and Missouri River) from Missouri Valley to Council Bluffs. The corporators of the Sioux City and Pacific company were L. B. Crocker, M. K. Jessup, James F. Wilson, A. W. Hubbard, Chas. A. Lombard, Frank Schuchardt, W. B. Allison, and John I. Blair.

Yours truly,

Ed. Wright,

Secretary of State.

Among the present directors are to be found the names of Oakes Ames, John I. Blair, D. C. Blair, and G. M. Dodge. Ames was a member of the late congress, and G. M. Dodge is an ex-member. Among the directors of the Cedar Rapids & Missouri river company appear the names of John B. Alley, and James F. Wilson, who were members of congress when the act of July, 1864, was passed, amending the charter of the Union Pacific, and making the large grants to the company designated by the president to build the Sioux City branch of the Union Pacific railroad. Wm. B. Allison has been a member of congress almost continuously from 1860 to the present time.

This Sioux City branch seems to have been a special favorite with certain congressmen. It received the lion's share of lands, getting five times as many sections per mile as the main lines, and this, too, for the purpose of building a railroad running east of south, instead of west—the direction of the main line—following the course of the Missouri river on the east side thereof for the entire length of this branch, and crossing on the bridge to the Nebraska shore at Omaha.