We have shown that the railroads of the country are in the hands of unscrupulous men, whose sole interest in transportation is the money it can extort from the public. This must be so from the manner in which roads are built and controlled. Formerly railroads were paid for from the proceeds of paid-up capital. The men who became stockholders were interested in making good and cheap roads, and in operating them honestly and economically. These men were free from the scandal of watering stock, issuing and selling bonds to an unlimited amount, and were not partners in the iniquitous Wall street speculations which have become the bane of the country. In Appleton's Railroad and Steamboat Companion, published in 1849, we find a statement of the cost of railroads then constructed. The roads then constructed were supplied with rails that cost less than those now in use, but the road-beds in most cases, in the eastern states, cost much more than those constructed at more recent periods. Some of them were lines of solid masonry, supporting lateral or string timbers, throughout the entire length, and the rails were placed upon these timbers. Others were constructed upon the plan now in use, costing less than half the cost of the others. The roads in the eastern states, built upon the plan first named, cost as follows: In Massachusetts and the other New England states, $24,000 per mile. In New York, $26,000. In New Jersey and Pennsylvania, $40,000. In Michigan, Ohio, and Indiana, where the roads were built upon the modern plan, $11,000. Of course, the small cost in these last named states is attributable in part, to the nature of the country through which they pass. The facilities for building railroads at the present time more than counterbalance the additional cost of iron, and no good reason can be shown why the actual cost of roads at this time should exceed that of the more substantially constructed roads built thirty or forty years ago. But at the present time the building of railroads from the proceeds of paid-up stock is not generally practiced. A different rule prevails. The general rule now is to get grants of land, government, state, and local subsidies, in amounts sufficient to organize a company and commence the work of construction, then to issue and sell bonds, secured by mortgage upon the roads to be constructed, and from the proceeds construct the roads. Then stock certificates representing paid-up capital are issued, when in fact, all that has been paid is the local subscriptions obtained by managers from persons located along the lines of roads. The roads having been built on borrowed capital, the stock represents nothing but an opportunity for dishonest speculation. A "railroad" now means, to a large majority of those who are engaged in projecting and creating it, nothing but a fraudulent device for extorting money from the public under cover of developing the country and rendering great public benefit to the nation. After the roads are built, the men who have built the same, and issued and sold the bonds, issue to themselves certificates of stock, no part of which they have paid up, and go into Wall street to unload, that is, to sell their stock. If it be in good demand it will bear "watering." More stock is issued and sold, and by this process men who were worth nothing, but who were so fortunate as to get the control of certain railroad companies without having invested to the amount of a dollar, suddenly become immensely rich. The value of the road to those who have paid up their stock, but are not included in the ring, is destroyed; the road is loaded with a debt that destroys its value. This new method of construction meets with favor among a large class of men in all parts of the country, who have combined to aid each other. All that is lacking on their part to take absolute control of the whole country and government is a consolidation of all the railroads of the country under one management. At this time, six or eight great combinations, with a half dozen men at their head, manage the railroad interest of the country. They are extending their power and it may not be long until all will be consolidated in one, which would give this monopoly absolute control, not only of the markets, but of the whole legislation of the country in matters affecting their interests. With packed legislatures, state and national; with paid or intimidated judges, and with civil service of several thousand cunning clerks, and able-bodied brakemen, conductors, and switch tenders, they would be in that position most to be dreaded by all lovers of liberty—a powerful and enormously rich corporation, surrounded by a weak, timid, and helpless public. While we were still engaged in singing pæans over the glorious institutions of our happy country, we would suddenly find that our institutions had disappeared, and that we had, riveted around our necks, a worse despotism than we ever lamented for the down-trodden of other lands. This is really no imaginary picture as all will see who remember the stronghold, absolutely inaccessible to the law, which Fisk and Gould erected, and for a time maintained in New York; or the military operations of the employes of the Erie on the Susquehana road, and who have followed, with any attention, the helpless struggles of the government of the United States—formerly supposed quite able to take care of itself—in the foul toils of the Union Pacific railroad. These corporations foreshadow what must follow when a perfect consolidation is effected. Now at non-competing points they extort from shippers such enormous rates for transportation as absorb almost the entire value of the farm products; while from points at which there are competing lines of road they will carry at greatly reduced rates. They will charge no more for carrying freight one thousand miles from a point where there is a competing road, than for carrying one-tenth of that distance, where there is no competition. When they have the power, and hold the shipper at their mercy, they virtually rob him. What is true of their course where there is no competition, will become the universal rule, when a perfect consolidation of the whole railroad interest is effected. Add to this the control of the finances of the country (which they are now rapidly securing) and their rule becomes absolute over the whole people, and all departments of the government. If the reader has followed us thus far, he will have observed that the corporate interest of the country has assumed a position in antagonism to the people; that it has a secure hold upon the industrial and financial interests, and that, to a great extent, it already controls the action of the legislative and executive departments of the government, state and national.
CHAPTER XXII.
THE SUPREME BENCH INVADED—ITS DECISIONS REVIEWED.
We are aware that many look upon the final decisions of courts with a degree of awe and respect which is almost reverential. The railroad companies of the country, with all their paid attorneys, are now extremely jealous in their efforts to convince the public that the supreme court of the United States is a body of the greatest jurists the world ever produced; that their decisions are pre-eminently able, and that it is disloyal, if not rank treason, to call them in question, or to even criticise them. While we feel bound to recognize the decisions of courts as binding until they are reversed, we claim that it is not only the right, but the duty of every citizen of the republic to examine these decisions, and to approve or condemn, as to his judgment shall seem right. We examine, and approve or condemn, acts of congress and state legislatures; we discuss the motives of legislators, and when acts have been passed which are not acceptable, their repeal has been demanded. Not unfrequently repeals have been effected soon after their enactment, either because of patent defects, or because the people condemned them. History has proven that the election of a man to congress, or to the legislature, does not clothe him with wisdom, not always with honesty, but that the frailties of humanity affected him as it did others. The same rule applies to courts and judges. They are made of the same flesh and blood, and are subject to the same infirmities as other men. Their knowledge is not perfect; their judgment is not infallible, nor are their official decisions always pure and free from bias. Instances are not wanting where judges have been impeached, and removed for dishonest practices. They have been and still are being influenced by popular feeling, by certain interests, and are always more or less controlled by education and association. Their decisions are often reversed, and they sometimes reverse their own decisions.
If we want examples of a corrupt bench, we can refer to the city of New York, where certain judges have been impeached, and removed from office. Of partisan judges, we find them in Louisiana, Alabama, Arkansas, Kansas, and many other states. Of ambitious judges, those who, while acting in their official capacity, enter into political contests, and use their judicial positions to secure other preferment, we need only to look over the history of any of the states, and to the highest court in the nation. Judges of the supreme court of the United States are found identified with political parties; entering the lists as candidates for higher distinction; and while they are holding high and responsible offices, to which they have been appointed for life, they are seen mixing with politicians as partizans, and seeking nominations. Judges whose judicial decisions have been controlled by public sentiment, can be found in Iowa, Illinois, Indiana, and Wisconsin. Judges who have reversed their own decisions, can be found in any state in the Union, and we have recent examples in the supreme court of the United States. Such being the facts, it is not strange that railroads, and other great corporations, should, to a very considerable extent, influence the actions and decisions of courts. We feel warranted in saying, that the decisions of courts, more than everything else combined, have promoted the rapid strides made by railroad corporations toward a complete destruction of republican institutions. The pernicious practice of solving all doubtful points in favor of these corporations by the "judicial construction" of statutes, or what might be called "judicial legislation," has been of vastly more benefit to them than all the grants received from legislative bodies. Legislatures do not possess the power to grant to any individual, company, or corporation, exclusive rights or privileges, unless such power is conferred by the constitution. The rule formerly obtained, that in cases where the rights of the public and that of an individual or corporation came in conflict, an act of the legislature of doubtful authority would be construed in favor of the people. The reason for this rule of construction is obvious. The people are sovereign. All the powers not delegated to the government, or to some department of it, were retained by the people. Hence, when a question was presented involving a doubt of its constitutionality, and a decision in favor of the individual or corporation would deprive the people of any of their reserved rights, it was resolved in favor of the sovereign people. The act was held to be unconstitutional because the legislature could not exceed the scope of the authority conferred upon it. The constitution was a limitation upon legislation.
In a former chapter we have attempted to show the distinction between the power of the states and general government under the constitution; to demonstrate that the power of states was supreme in all matters save in those expressly conferred upon the general government by the constitution, and that for this reason the constitution of the United States should be strictly construed. We are warranted in saying that this rule obtained until questions involving the interests of railroads began to present themselves for the decisions of the supreme court of the United States. When these questions began to arise, a different rule was demanded by the companies, and by a gradual departure the supreme court has reversed this old and just rule, and now the will of that court must be treated as the supreme law of the land. Judicial legislation has usurped the place of judicial investigation, and the people are without remedy, unless a return can be had to constitutional rule. There is now a general complaint throughout the whole land, because of the recent interpretation given by the United States courts to the constitution; their disregard of statutes, constitutions, and decisions of state courts, which have reached a point which virtually makes the will of the supreme court superior to all constitutional and statute law. During the war, the power and jurisdiction of the United States courts were enlarged, and special powers were conferred upon them to meet the exigencies of the time. From that period to the present, these courts, by judicial construction of their power under the constitution and new interpretations of that instrument, and by judicial legislation, have gradually extended their jurisdiction, until there seems to be no constitutional or legal barrier to their decisions. Questions connected with railroad companies have increased rapidly. Conflicts have arisen between the public and these corporations; they have multiplied in the federal courts, and, as a general rule, have been decided in favor of the companies. In some instances, upon questions arising exclusively under the constitution and statutes of a state, the judges of the federal courts have disregarded the action of the people of the state, overridden their state constitutions and statutes, and pronounced the decisions of the state courts invalid, and refused to be bound by them, substituting their own conclusions in the interest of these monopolies. To prove this, let us compare some of the earlier decisions of these courts with those of more recent date, citing cases where the powers, rights, and privileges of corporations were involved, and where conflicts arose between the government of states and of the nation. In the early years of our republic, questions connected with corporate rights were submitted to the supreme court of the United States; they were ably argued by the best constitutional lawyers of the nation, and were carefully considered and decided by the courts. Upon the question as to whether state courts were inferior, the supreme court of the United States decided that they were not. The same court, on a question raised as to the authority of the legislature of a state to grant to private parties exclusive rights to certain property in Georgia, held, that the real party in interest was the people, and that it was only when the legislature acted within the power conferred, that their acts were valid; that it was the peculiar province of the legislature to prescribe general rules for the government of society, but not to apply those rules to individuals of society.
The question as to the rights, powers, and privileges, of corporations, came before the supreme court of the United States, and was fully examined and decided, in 1819, in what is known as the "Dartmouth College Case." The charter for the college had been granted by the king of England for educational purposes. It was in no sense a corporation for pecuniary profit. Without the consent of the trustees of the college, the legislature of New Hampshire amended the charter in a manner not acceptable to the trustees. They refused to recognize the change made. A suit was instituted, and the case was taken to the supreme court for a decision. The point at issue was whether the college was a public or private corporation; and, also, as to the extent of the power the state legislature possessed over its charter. It is not our purpose to examine all the points raised and decided in that case, but only to notice such as refer to the nature of corporations and the power of the state governments to control them. In deciding these questions, the court seems to have looked at the objects for which corporations were intended. The court says; "A corporation, being a mere creation of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or incidental to its very existence. These are such as are supposed best calculated to affect the object for which it was created. * * *
"The objects for which corporations are created are universally such as the government wishes to promote. They are deemed beneficial to the country, and this benefit constitutes the consideration, and, in most cases, the sole consideration of the grant." * * "From the fact, then, that a charter of incorporation has been granted, nothing can be implied which changes the character of the institution, or transfers to the government any new power over it. The character of civil institutions does not grow out of their incorporation, but out of the manner in which they are founded, and the objects for which they are created. The right to change them is not founded on their being incorporated, but on their being the instruments of government created for its purposes. The same institution, created for the same objects, though not incorporated, would be public institutions, and, of course, controllable by the legislature. The incorporating act neither gives nor prevents this control."