In this group of Philadelphia capitalist were men who were reckoned as very astute business lights—George M. Pullman, Thomas Dolan, one of the street railway syndicate whose briberies of legislatures and common councils, and whose manipulation of street railways in Philadelphia and other cities were so notorious a scandal; John Wanamaker, combining piety and sharp business;—these were three of them. But they were no match for the much more powerful and wily Vanderbilt-Morgan forces. They were compelled under resistless pressure to throw over their Reading stock at a great loss to themselves. Most of it was promptly bought up by J. P. Morgan and Company and the Vanderbilts, who then leisurely arranged a division of the spoils between themselves.
This transaction (strict interpreters of the law would have styled it a conspiracy) opened a facile way for a number of extremely important changes. The Vanderbilts and the Morgan interests apportioned between them much of the ownership of the Philadelphia and Reading Railroad with its vast ownership of coal deposits and its coal carrying traffic. [Footnote: An investigation, in 1905, showed that the "Baltimore and Ohio Railroad and the New York Central and Hudson River Railroad owned about 43.3 per cent. of the entire capital stock of the Philadelphia and Reading Railroad Company." "Report on Discriminations and Monopolies in Coal and Oil, Interstate Commerce Commission, January 25, 1907": 46.] The New York, New Haven and Hartford Railroad grasped the New York and New England Railroad from the Reading's broken hold, and there were further far-reaching changes militating to increase the railroad, and other, possessions of both parties. [Footnote: A good account of this expropriating transaction is that of Wolcott Drew, "The Reading Crash in 1903" in "Moody's Magazine" (a leading financial periodical), issue of January, 1907.] It was but another of the many instances of the supreme capitalists driving out the smaller fry and seizing the property which they had previously seized by fraud. [Footnote: One of the particularly indisputable examples of the glaring fraud by which immense areas of coal fields were originally obtained was that of the disposition of the estate of John Nicholson.
Dying in December, 1800, Nicholson left an estate embracing land, the extent of which was variously estimated at from three to five million acres. Some of the Pennsylvania legislative documents place the area at from three to four million acres, while others, notably a report in 1842, by the judiciary committee of the Pennsylvania House of Representatives, state that it was 5,000,000 acres. Nicholson was a leading figure in the Pennsylvania Land Company which had obtained most of its vast land possessions by fraud. Some of Nicholson's landed estate lay in Virginia, Kentucky, North Carolina, South Carolina, Georgia and other States, but the bulk of it was in Pennsylvania, and included extensive regions containing the very richest coal deposits.
The State of Pennsylvania held a lien upon Nicholson's estate for unpaid taxes amounting to $300,000. Notwithstanding this lien, different individuals and corporations contrived to get hold of practically the whole of the estate in dispute. How they did it is told in many legislative documents; the fraud and theft connected with it were a great scandal in Pennsylvania for forty-five years. We will quote only one of these documents. Writing on January 24, 1842, to William Elwell, chairman of the Judiciary Committee of the Pennsylvania House of Representatives, Judge J. B. Anthony, of the Nicholson Court (a court especially established to pass upon questions arising from the disposition of the estate), said:
"On the 11th of April, 1825, an act passed the Governor to appoint agents to discover and sell the Nicholson lands at auction, for which they were allowed twenty-five per cent. A Special Board of Property was also formed to compromise and settle with claimants. From what has come to my knowledge in relation to this Act, I am satisfied that the commonwealth was seriously injured by the manner in which it was carried out by some of the agents. It was made use of principally for the benefit of land speculators; and the very small sums received by the State treasurer for large and valuable tracts sold and compromised, show that the cunning and astute land jobbers could easily overreach the Board of Property at Harrisburg. … Many instances of gross fraud might be enumerated, but it would serve no useful purpose." Judge Anthony further said that "very many of the most influential, astute and intelligent inhabitants" and "gentlemen of high standing" were participants in the frauds.—Pennsylvania House Journal, 1842, Vol. ii, Doc. No. 127: 700-704.]
The Vanderbilts' ownership of a large part of the shares of railroads, which, in turn, own and control the coal mines, may be summed up as follows: Through the Lake Shore Railroad, which they have owned almost absolutely, they own, or until recently did own, $30,000,000 of shares in the Philadelphia and Reading Railroad with its stupendous anthracite coal deposits, and they owned, for a long time, large amounts of stock in the Lehigh Valley Railroad with its unmined coal deposits of 400,000,000 tons. In 1908 they disposed of their Lehigh Valley Railroad ownings, receiving an equivalent in either money or some other form of property. The ownership of the Delaware, Lackawana and Western Railroad with its equally large unmined coal deposits is divided between the Vanderbilt family and the Standard Oil interests. The Vanderbilts, according to the latest official reports, also own heavy interests in the Delaware and Hudson Railroad, the New York, Ontario and Western Railroad, $12,500,000 of stock in the Chesapeake and Ohio Railroad, and large amounts of stock in other coal mining and coal carrying railroads. [Footnote: See Special Report No. 1 of the Interstate Commerce Commission on Intercorporate Relationship of Railroads: 39. Also Carl Snyder's "American Railways as Investments": 473.]
Here, then is another important step in the acquisition of a large part of the country's resources by the Vanderbilts. A recapitulation will not be out of place. His first millions obtained by blackmailing, Commodore Vanderbilt then uses those millions to buy a railroad. By further fraudulent methods, based upon bribery of lawmaking bodies, he obtains more railroads and more wealth. His son, following his methods, adds other railroads to the inventory, and converts tens of millions of fraudulently-acquired millions into interest-bearing Government, State, city and other bonds. The third generation (in point of order from the founder) continues the methods of the father and grandfather, gets hold of still more railroads, and emerges as one of the powers owning the great coal deposits of Pennsylvania.
THE DICTATION OF THE COAL FIELDS.
The Vanderbilt and Morgan interest at once increased the price of anthracite coal, adding to it $1.25 to $1.35 a ton. In 1900 they appeared in the open with a new and gigantic plan of consolidation by which they were able to control almost absolutely the production and prices. That the Vanderbilt family and the Morgan interests were the main parties to this combination was well established. [Footnote: Final Report of the U. S. Industrial Commission, 1902, xix: 462-463.] Already high, a still heavier increase of price at once was put on the 40,000,000 tons of anthracite then produced, and the price was successively raised until consumers were taxed seven times the cost of production and transportation.
The population was completely at the mercy of a few magnates; each year, as the winter drew on, the Coal Trust increased its price. In the needs and suffering of millions of people it found a ready means of laying on fresher and heavier tribute. By the mandate of the Coal Trust, housekeepers were taxed $70,000,000 in extra impositions a year, in addition to the $40,000,000 annually extorted by the exorbitant prices of previous years. At a stroke the magnates were able to confiscate by successive grabs the labor of the people of the United States at will. Neither was there any redress; for those same magnates controlled all of the ramifications of Government.