Monopolies and the People

by D. C. Cloud

A part of the third section reads as follows:—

"That there be, and is hereby, granted to the said company, for the purpose of aiding in the construction of said railroad and telegraph line, and to secure the safe and speedy transportation of the mails, troops, munitions of war, and public stores thereon, every alternate section of land, designated by odd numbers, to the amount of five alternate sections per mile, on each side of said road, on the line thereof, and within the limits of ten miles on each side of said road, not sold, reserved, or otherwise disposed of, by the United States, and to which a pre-emption or homestead claim may not have attached at the time the line of said road is definitely fixed. Provided, that all mineral lands shall be exempted from the operation of this act; but when it shall contain timber, the timber is hereby granted to said company."

By the act of congress of July 2, 1864, this act was so amended as to grant ten alternate sections on each side of the road, and to grant to the company the iron and coal found within ten miles of the road. The reader will notice the reasons given for this grant. 1st. To aid in the construction of the road; a legitimate reason. 2d. To secure the safe and speedy transportation of the mail, troops, munitions of war, &c. Twenty sections of land per mile are given to the company for the purpose of securing the safe and speedy transportation of troops, and above enumerated articles. It has been said that a poor reason is better than no reason. Of all poor reasons given for an act, this appears to be one of the weakest. The reader will not be able to discover its force. As we progress, we will find that from its inception this Pacific railroad charter, and amendments, were "conceived in sin, and brought forth in iniquity;" that, in its provisions and grants, it presents a state of facts which stamps the whole scheme as a base fraud upon the public, planned by men who were seeking to enrich themselves at the expense of their country; and that congress, either from inattention to the interests of the people, or because the spoils were to be divided, granted the company the precise charter that was to enable it to plunder the public without hindrance.

That we may not be regarded as treating the subject captiously, let us concede that the reason given was a good one, and that the grant of lands would give security to the transportation of the mails; still the thought presents itself that a grant of lands to the value of $15,500 per mile would be ample aid for the people to give to this company, in the construction of its road. It is not a government work, owned by the public, operated and controlled by the government. It is a private enterprise, and while all persons see the necessity of a railroad connection between the Atlantic and Pacific states, but few will indorse the policy of the government giving to this private company more aid in lands and money than the entire cost of the road, or more than it would have cost if built by private capital. And when it is found that this large grant is made without any equivalent, that not even the mails, troops, or munitions of war, can be transported over the road without the payment of just such rates as this private corporation chooses to charge, the conclusion is inevitable that the good, not of the public, but of the corporation, was the controlling motive in affording it aid; that the untold millions of subsidy bonds, and vast tracts of land wrongfully taken from the public, and given to this company, was but placing the interests of the whole people, in their social and business intercourse across the continent, at the mercy of a soulless corporation.

The donations we have already noticed are the "right of way;" the right to take all building material within ten miles of the road, and the grant of twenty sections of land per mile. But this is not all. Section five of the act provides: "That for the purposes herein mentioned, the secretary of the treasury shall, upon the certificate, in writing, of said commissioners, of the completion and equipment of forty consecutive miles of said railroad and telegraph line, in accordance with the provisions of this act, issue to said company bonds of the United States of one thousand dollars each, payable in thirty years after date, bearing six per centum per annum interest (said interest payable semi-annually) which interest may be paid in United States treasury notes, or in any other money or currency which the United States have, or shall, declare lawful money, and legal tender, to the amount of sixteen of said bonds per mile; and to secure the repayment to the United States, as hereinafter provided, of the amount of said bonds so issued and delivered to said company, together with all interest thereon which shall have been paid by the United States, the issue of said bonds and delivery to the company shall ipse facto constitute a first mortgage on the whole line of the railroad and telegraph, together with the rolling stock, fixtures, and property of every kind and description, and in consideration of which said bonds may have been issued." As we shall hereafter see, this section was amended by act of July 2d, 1864, so as to allow the company to issue its own bonds to the same amount per mile issued by the government, and to subrogate the government bonds to those issued by the company, thus making the bonds issued by the company the first mortgage bonds.

Section six provides for the transmission of messages by telegraph, and the transportation of the mails, troops, munitions of war, supplies, and public stores for the government, giving it the preference at all times, "at fair and reasonable rates of compensation, and not to exceed the amount paid by private parties for the same kind of service."

Section eleven reads as follows:—

"That for three hundred miles of said road, most mountainous and difficult of construction, to-wit: One hundred and fifty miles westwardly from the eastern base of the Rocky mountains, and one hundred and fifty miles eastwardly from the western base of the Sierra Nevada mountains, said points to be fixed by the president of the United States, the bonds to be issued in aid of the construction thereof shall treble the number per mile hereinbefore provided, and the same shall be issued, and the lands herein granted be set apart, upon the construction of every twenty miles thereof, upon certificate of the commissioners as aforesaid, that twenty consecutive miles of the same are completed; and between the sections last named, of one hundred and fifty miles each, the bonds to be issued to aid in the construction thereof shall be double the number per mile first mentioned, and the same shall be issued, and the lands herein granted be set apart, upon the construction of every twenty miles thereof, upon the certificate of the commissioners as aforesaid, that twenty consecutive miles of the same are completed; provided that no more than fifty thousand of said bonds shall be issued under this act to aid in constructing the main line of said railroad and telegraph."

This vast amount of bonds was issued to the main line of the road, which, as will be seen by an examination of the first section of the act, terminates at the western boundary of Nevada territory. This company, under its charter, gets $50,000,000 in bonds; its charter does not authorize it to construct the whole road to the Pacific, but to the western boundary of Nevada, where it meets the Central Pacific railroad, built by a company chartered by the legislature of California. Fifty millions in bonds, with the privilege of subrogating the security for their payment to a like amount issued by the company as first mortgage bonds on the road, with the grant of lands above named, the right of way, and the right to all building material within ten miles of the line of the road; this is deemed a fair provision for one company. In order that no charge of selfishness, or want of charity, should be brought against congress, it next turned its attention to other companies. Perhaps it was thought promotive of the interest of this corporate power, now controlling the government, that there should be unity of action and purpose; that its strength should be so great, and its ramifications so extensive, that neither private persons nor the public would dare to resist its demands. The necessity for a railroad from the Atlantic to the Pacific states was not the only consideration influencing the law-making power of the country. This fact is clearly apparent from the provisions of the charter, for numerous branch or spike roads are included in the charter, and provided for in the land grants and subsidy bonds.

Let us look at the "Central Pacific railroad company," of California. This company received its charter from that state, was duly organized, and as we are informed, was at work on its road when the charter was granted by congress to the "Union Pacific." But congress, not to show partiality, in the ninth section of the charter of the Union Pacific, provides for the Central Pacific as follows:—