We have attempted to show that all the railroads in the country are owned, controlled, and operated in the interest of eastern capitalists, with their headquarters in New York or Boston; and that the only interest these capitalists have in the producer is to extort from him all they can get, even at the risk of ruining the whole country. These monopolists, taking advantage of the great privileges granted them, and of the necessities of the agricultural and producing classes, have combined, and defying all competition, as well as the legal restrictions sought to be placed upon them, are now, and for some time past have been, charging such unjust rates for transportation as to render the farm products of the west of little or no value. Corn, worth from sixty to seventy cents in New York, is worth only from fifteen to twenty-five in Iowa—two-thirds of its eastern value being absorbed in charges for transportation, storage, &c. Wheat, worth from $1.50 to $2.00 in New York, is worth but from ninety cents to $1.25 in Iowa, the difference being absorbed in charges for transportation, storage, commissions, and in passing it through elevators. It will be seen that these monopolists who have combined for that purpose are systematically robbing the farmer of about one-half of his crop. After he has labored diligently during the season, and harvested his crops and prepared them for market, because of the privileges granted to these monopolists he must divide with them, giving them one-half, or let it go to waste, and suffer his family to want for the necessaries of life. The combination against him is so perfect he is without remedy. All other means of transportation have been superseded by railroads, and he is powerless to resist. The banditti who raid upon the country, and levy tribute upon the inhabitants by force, are no greater robbers or oppressors than these monopolists. Indeed the wrongs practiced by the former are less to be dreaded than those practiced by the latter. The people, supported by natural and common law, as well as by statutes, can rid the country of the bandit; but the monopolist has become so powerful that he defies the people, moulds the statutes and decisions of courts to suit himself, and compels the whole country to submit to his extortions. No one would wish those engaged in transporting freights from the west to the east to lose money in the business. On the contrary, the people desire that railroad carriers should receive a fair and liberal compensation in their business, and upon the capital invested. But when it costs but $30,000 per mile to construct and stock the railroads, and when for the purpose of illegitimate gain the persons owning and controlling them water the stock, and add to the actual cost fictitious and imaginary items, that it may appear that these roads have cost fifty or sixty thousand dollars per mile, then issue to themselves or their agents bonds to meet these fictitious amounts, and annually pay to themselves the interest on these bonds, and to increase the value of these bonds declare dividends upon the whole stock, it will readily be seen why the producer does complain of the high rates now charged for transporting his products to market. These companies make it impossible to do an honest business and show dividends, or ever pay the interest upon the bonds they have issued. If it be true that the charges for freights cannot be reduced on railroads, two things are demonstrated: First, that the published statements of the costs of carrying upon railroads are untrue; and second, that railroads have entirely failed to supply the necessities of the country. If we are to depend upon railroads to carry the agricultural products of the country to the seaboard, all hope of competing with other countries in European markets is at an end. If the cost of carrying a bushel of wheat from Iowa to New York is to remain as at present, one of two alternatives is presented. Either the producer must sell at ruinous rates, or a home market must be found for his crop; for the large amount charged for carrying it to the coast, added to the ocean freight, destroys all hope of a foreign market, save in times of failure of crops elsewhere. We now complain of our lack of shipping upon the ocean, and of the fact that the balance of trade is against us. With our large annual product of cereals, meats, cotton, and yield of precious metals, the balance of trade is in favor of England; and American shipping, once the equal of England's, is now classed with only third and fourth rate nations. One of the chief causes of this deplorable state of affairs is the absolute control obtained by these petted monopolists over our inland commerce, and their tyrannical extortions in rates for transportation.
We have spoken of the rates of charges from the west to the east. We need not go into details in this matter, for every farmer knows from experience what proportion of his crop railroads demand as their share. If he does not, let him look at his crib of corn, worth in New York from seventy-five cents to one dollar per bushel, and in Iowa from fifteen to twenty cents. Three-fourths of his crop is what these corporations, these great blessings to the country, as they claim to be, demand of him for carrying his one-fourth to market, provided he will, at his own proper cost, load his whole crop at the place of shipment, and unload it when it reaches its destination; or, what is worse for him, permit it to go into the company's storehouse. While this state of things lasts, it is not a question as to how much the producer is increasing in wealth, but how long will he be able to pay his taxes and keep his family from starving? If he is in debt, he is without hope of paying. No king, emperor, or despotic sultan, would dare to extort from his subjects three-fourths of the productions of their toil; yet this oligarchy, composed of men who, from long practice, have come to look upon the people as their vassals, and the fruits of their labor as lawful spoils, demand and receive as their toll from one-half to three-fourths of the entire farm products of the country. The consolidation is now so perfect, that these railroad kings can dictate to the people how much they shall receive for their products, and how much they must pay for transporting it to market. Any one of the railroad kings of New York, by a telegraphic dispatch to the west, can depress the price of grain one, five, or ten, cents per bushel. The order is made at headquarters, and in one hour from the time it is made the farmer in the west who is about to sell his one thousand dollars' worth of wheat must take nine hundred dollars for it, because this railroad king has sent word west that he must have another one hundred dollars added to the already enormous charges for transportation. Unless this combination can be broken up and destroyed, and they who own, manage, and control the carrying trade of the country forced to act honestly, there is no prosperous future for the laboring and producing portion of the people; they must remain bond-servants and vassals of this railroad oligarchy now controlling the country.
Another evil resulting from this railroad system, directly affecting the producer, is the elevator and warehouse system, put in operation, supported by, and prosecuted in the interest of, this monopoly. As a necessity in shipping and handling grain and other farm products, there must be at shipping points, as well as at the great grain depots, warehouses, storehouses, and elevators. If these were owned and controlled by individuals, unrestricted by railroad companies, they would be of great benefit to the producer; but such is not the fact. Go to any way-station on the roads, or to any of the more prominent points, as well as to the great grain depots, and you will find an arbitrary and oppressive rule adopted, which demands of the producer a further dividend from his products. At unimportant points and way-stations, the warehouses and elevators are built upon the company's depot grounds, and, if not owned by the company, are built under an agreement that there shall be a division of the receipts; and in order to make it mutual, the elevator company, or warehouseman is to charge certain rates on all grain passing through their hands; and the railroad company is to receive on board their cars no grain that has not paid its duty to the elevator or storehouse. Whether it is stored or not, whether it passes through the elevator or not, this arbitrary toll or levy must be paid before it can be shipped. If the farmer deliver it directly on board the cars of the company, he must pay these charges the same as though he had delivered it to the warehouseman. He cannot avoid this extortion, for the only possible way he has to get his grain to market is to ship it over the road, and this he cannot do unless he pays this charge. But by far the greatest imposition is practiced at the great grain depots at Chicago, New York, and other cities. The immense daily receipts at these great depots demand immense warehouse and elevator facilities. Large numbers of elevators and warehouses were provided and used—formerly by individuals; and while warehousemen dealt individually with the public, there was but little abuse; competition was sufficient to insure reasonable charges. The owner of grain, upon its arrival at its destination, could avail himself of any competition among warehousemen, and select such as his judgment approved or his interest prompted.
But a different rule now obtains. These railroads do not stop half way. Their combination for carrying the product of the country is perfect; but another combination will afford them an opportunity for extorting from the producer an additional portion of his crop in the shape of storage. To effect this object, the different warehouse companies in the principal grain marts have consolidated or "pooled" all their interests, and in combination with the railroad companies have pursued, and are pursuing, a course of extortion which is oppressive upon the producer. When his grain reaches its destination, it must go into a warehouse; he is in a worse situation now than when he shipped it; then he had the option to keep it, or submit to the first levy in favor of the warehouseman; but he is now entirely helpless in the hands of the ring formed to rob him. Without asking his consent his grain is taken to such warehouse as the railroad agent directs; it is seized by the warehousemen and stored at such ruinous rates as to compel him to sell at once, or have the small portion of the crop which he sowed and harvested, and which thus far the railroad combination has graciously allowed him to retain, absorbed by elevator and warehouse charges. He is obliged to use all these agencies or let the crop go to waste on his hands; and these agencies are all owned and controlled by this vast, this gigantic corporate power, created, enriched, and protected by state and national legislation, and constantly guarded by the decisions of the courts, state and national. Indeed, the old despotic maxim, "The king can do no wrong," that his acts cannot be questioned, seems to have descended to these monopolies. They are protected by government, and, as the case now stands, their servants, the people, must be content, because all hope of relief from efficient action on the part of either the legislative or judicial departments of the government is denied them.
CHAPTER XV.
A NEW AND FALSE PRINCIPLE IN HYDRAULICS—WATERED STOCK—ITS UNLAWFUL PROFITS THE SOURCE OF EXTORTIONATE TARIFFS—THE "FAST DISPATCH" SWINDLE.
We have attempted to show some of the oppressions of the present railroad system upon the agricultural interests of the country, and, at the close of our last chapter, were treating of freights, warehouse charges, &c. Closely connected with these latter charges is another abusive and fraudulent practice, which threatens not only to still further oppress the people, but also to more closely combine the power now so rapidly and surely destroying our republic. I refer to what is known as "Dispatch Companies." To fully understand the object and effect of these companies it will be necessary to look a little further into the management of railroads, and the methods adopted in their balance sheets for showing the cost of their construction, the amounts of paid-up capital, and their total indebtedness. These balance sheets do not present the truth in any instance, and have not that purpose, being only an exhibit that will apparently justify the many extortions and deceptions practiced by these corporations. The actual cost of constructing and stocking the roads is not given; instead, we have the cost as represented by the stock and bonds issued and watered. For a clear understanding of this book-keeping, let us examine the cost of some of the roads as the same is given to the public, and compare it with the actual cost as shown by other evidence. The "Central Pacific" will do for one illustration.
The Central Pacific is eight hundred and eighty-one miles in length. The cost of the road as given is $120,432,717, or $136,700 per mile. The actual cost per mile, taking the whole length of the road into consideration, was less than one-half the amount reported. This information we get through reliable channels, and is undoubtedly correct. The evidence induces the belief that the cost was less than $50,000 per mile, and less than $50,000,000 for the whole road. The company report a capital stock of $54,283,190, and a funded debt of $82,208,000. They also report the liabilities of the road at $136,491,190, being more than $80,000,000 above the actual cost, and $16,000,000 more than the reported cost. The stock of this company was watered to so great an extent, that to pay the interest on the funded debt, and declare a dividend on the stock, and pay operating expenses, and other contingencies, the road must earn at least fifty per cent per annum. Or to put it in plain language, the company must defraud the public in unjust and extortionate charges.