This large fortune, as is that of the Astors and of other extensive landlords, is not, as has been pointed out, purely one of land possessions. Far from it. The invariable rule, it might be said, has been to utilize the surplus revenues in the form of rents, in buying up controlling power in a great number and variety of corporations. The Astors are directors in a large array of corporations, and likewise virtually all of the other big landlords. The rent-racked people of the City of New York, where rents are higher proportionately than in any other city, have sweated and labored and fiercely struggled, as have the people of other cities, only to deliver up a great share of their earnings to the lords of the soil, merely for a foothold. In turn these rents have incessantly gone toward buying up railroads, factories, utility plants and always more and more land.
WHERE SURPLUS REVENUE HAS GONE.
But the singular continuity does not end here. Land acquired by political or commercial fraud has been made the lever for the commission of other frauds. The railroads now controlled by a few men, among whom the large landowners are conspicuous, were surveyed and built to a great extent by public funds, not private money. As time passes a gradual transformation takes place. Little by little, scarcely known to the people, laws are altered; the States and the Government, representing the interests of the vested class, surrender the people's rights, often even the empty forms of those rights, and great railroad systems pass into the hands of a small cabal of multimillionaires.
To give one of many instances: The Illinois Central Railroad, passing through an industrial and rich farming country, is one of the most profitable railroads in the United States. This railroad was built in the proportion of twelve parts to one by public funds, raised by taxation of the people of that State, and by prodigal gifts of public land grants. The balance represents the investments of private individuals. The cost of the road as reported by the company in 1873 was $48,331 a mile. Of this amount all that private individuals contributed was $4,930 a mile above their receipts; these latter were sums which the private owners gathered in from selling the land given to them by the State, amounting to $35,211 per mile, and the sums that they pocketed from stock waterings amounting to $8,189 a mile. "The unsold land grant," says Professor Frank Parsons, "amounted to 344,368 acres, worth probably over $5,000,000, so that those to whom the securities of the company were issued, had obtained the road at a bonus of nearly $2,000,000 above all they paid in."[165]
By this manipulation, private individuals not only got this immensely valuable railroad for practically nothing, but they received, or rather the laws (which they caused to be made) awarded them, a present of nearly four millions for their dexterity in plundering the railroad from the people. What set of men do we find now in control of this railroad, doing with it as they please? Although the State of Illinois formally retains a nominal say in its management, yet it is really owned and ruled by eight men, among whom are John Jacob Astor, and Robert Walton Goelet, associated with E. H. Harriman, Cornelius Vanderbilt and four others. John Jacob Astor is one of the directors of the Western Union Telegraph monopoly, with its annual receipts of $29,000,000 and its net profits of $8,000,000 yearly; and as for the many other corporations in which he and his family, the Goelets and the other commanding landlords hold stock, they would, if enumerated, make a formidable list.
And while on this phase, we should not overlook another salient fact which thrusts itself out for notice. We have seen how John Jacob Astor of the third generation very eagerly in 1867 invited Cornelius Vanderbilt to take over the management of the New York Central Railroad, after Vanderbilt had proved himself not less an able executive than an indefatigable and effective briber and corrupter. So long as Vanderbilt produced the profits, Astor and his fellow-directors did not care what means he used, however criminal in law and whatever their turpitude in morals. John Jacob Astor of the fourth generation repeats this performance in aligning himself, as does Goelet, with that master-hand Harriman, against whom the most specific charges of colossal looting have been brought.[166] But it would be both idle and prejudicial in the highest degree to single out for condemnation a brace of capitalists for following out a line of action so strikingly characteristic of the entire capitalist class—a class which, in the pursuit of profits, dismisses nicety of ethics and morals, and which ordains its own laws.
THE RHINELANDERS.
The wealth of the Rhinelander family is commonly placed at about $100,000,000. But this, there is excellent reason to believe, is an absurdly low approximation. Nearly a century and a half ago William and Frederick Rhinelander kept a bakeshop on William street, New York City, and during the Revolution operated a sugar factory. They also built ships and did a large commission business. It is usually set forth, in the plenitude of eulogistic biographies, that their thrift and ability were the foundation of the family's immense fortune. Little research is necessary to shatter this error. That they conducted their business in the accepted methods of the day and exercised great astuteness and frugality, is true enough, but so did a host of other merchants whose descendants are even now living in poverty. Some other explanation must be found to account for the phenomenal increase of the original small fortune and its unshaken retention.
This explanation is found partly in the fraudulent means by which, decade after decade, they secured land and water grants from venal city administrations, and in the singularly dubious arrangement by which they obtained an extremely large landed property, now having a value of tens upon tens of millions, from Trinity Church. Since the full and itemized details of these transactions have been elaborated upon in previous chapters, it is hardly necessary to repeat them. It will be recalled that, as important personages in Tammany Hall, the dominant political party in New York City, the Rhinelanders used the powers of city government to get grant after grant for virtually nothing. From Trinity Church they got a ninety-nine year lease of a large tract in what is now the very hub of the business section of New York City—which tract they subsequently bought in fee simple. Another large tract of New York City real estate came into their possession through the marriage of William C. Rhinelander, of the third generation, to a daughter of John Rutgers. This Rutgers was a lineal descendant of Anthony Rutgers, who, in 1731, obtained from the royal Governor Cosby the gift of what was then called the "Fresh Water Pond and Swamp"—a stretch of seventy acres of little value at the time, but which is now covered with busy streets and large commercial and office buildings. What the circumstances were that attended this grant are not now known. The grant consisted of what are now many blocks along Broadway north of Lispenard street. It is not merely business sections which the Rhinelander family owns, however; they derive stupendous rentals from a vast number of tenement houses.
The Rhinelanders, also, employ their great surplus revenues in constantly buying more land. With true aristocratic aspirations, they have not been satisfied with mere plebeian American mansions, gorgeous palaces though they be; they set out to find a European palace with warranted royal associations, and found one in the famous castle of Schonberg, on the Rhine, near Oberwesel, which they bought and where they have ensconced themselves. How great the wealth of this family is may be judged from the fact that one of the Rhinelanders—William—left an estate valued at $50,000,000 at his death in December, 1907.