Monopolies and the People

by D. C. Cloud

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.

In addition to the road from Sioux City to Omaha, and for the purpose of getting all the land and money possible out of the government, the conspirators organized another company, under the laws of Nebraska, to-wit: The Fremont, Elkhorn, & Missouri Valley company, and built a road running from Missouri Valley to Fremont, in Nebraska—about fifty miles,—and these two roads, from Sioux City to Missouri Valley, and from Missouri Valley to Fremont, are now called the Sioux City & Pacific. We do not know who were the incorporators of the Fremont, Elkhorn, & Missouri Valley company, but we find among the present directors, John I. Blair, D. C. Blair, and ex-congressman John B. Alley. The two companies are consolidated. The grant of one hundred sections of land, and bonds to the amount of $16,000 per mile, with the privilege of issuing first mortgage bonds to the amount of $16,000 per mile, altogether comprise one of the most remunerative jobs ever conceived and consummated by incorporating, stockholding and "direct"-ing congressmen in the companies receiving the aid. When it is remembered that the actual cost of the construction of the road was less than $30,000 per mile (as shown by the Railroad Manual), and that it is of no value to the government because of its course, save for carrying local mails (its entire earnings for government transportation being less than $1,000 per annum), it will not be uncharitable to conclude that this fat little slice of the Pacific railroad job was put through congress, and nursed and petted by government for the exclusive benefit of congressmen, their friends and relatives.

We do not deny the right to congressmen to become and remain stockholders and directors in railroad corporations, but we do deny their right to vote lands and money to companies in which they are stockholders and directors. They are elected to represent the people, to attend to and protect the public interests. When they form themselves into companies and vote the lands and moneys of the people to themselves, they violate their trust, and instead of protecting the people, plunder them, and divide the spoils. To give these unjust practices some color of right, or in some manner to excuse themselves for thus appropriating the wealth of the country and dividing it with their friends, they assert in the laws thus enacted that it is done to aid in the construction of railroads, and "to secure the safe and speedy transmission of the mails, troops, munitions of war, and government supplies," &c. It is no part of the duties of congressmen to construct railroads, nor are the people under obligations to furnish them the means for that purpose. When members of congress form themselves into private companies, and to procure the means for prosecuting their private enterprises, agree to divide among themselves a part of the money and property belonging to the public, because the position they occupy enables them to do so, they manifest the same disregard for the rights of others, and the same disregard of law that is shown by the class of men who follow theft and robbery for a livelihood.