CHAPTER XIII.

THE FATAL POLICY OF MORTGAGING CITIES AND COUNTIES FOR THE

CONSTRUCTION OF RAILROADS.

TH

HE justification for the munificent grants and lavish taxation of the people in aid of railroads has been, that these roads afford the necessary facilities for transportation of freight, promote speedy communication throughout the country, provide ready markets for the products of husbandry, increase the value of property in their vicinity, and assist in improving and developing the new portions of our country. While some, or all, of these objects may have been in a degree promoted, the little good thus accomplished has been more than counterbalanced by the evils uniformly attending this species of aid to railroads. What are the evils incident to the general incorporation acts, and local taxation in favor of railroads?

First. They take from the individual the natural and constitutional right of owning and controlling his own property, and license the agents of a county, city, or town, to incumber his property with a debt, without his consent and against his protest.

Second. The policy engenders a rivalry between different localities, cansing reckless extravagance and the creation of an immense indebtedness by public corporations. This indebtedness not unfrequently retards the settlement of the locality expected to be benefitted, and depreciates instead of enhancing the value of property, for the constant and compulsory drain of the resources of the place in payment of the debt thus created can leave nothing but barrenness behind, the rule being, with but few exceptions, that non-residents hold the evidences of the indebtedness, and as a consequence, payment must be made to distant creditors. If one thinks that this is overdrawing the picture, let him examine the condition of those

counties and cities that years ago loaned their credit to railroad companies, or subscribed to their capital stock. Localities less favorably situated, with fewer natural advantages, fewer miles of railroad, and with less productive countries tributary to their growth, have far outstripped their bonded neighbors in wealth, improvements, and the increased value of their property. Persons who are seeking locations dread and shun these bond-cursed localities, and seek homes elsewhere. New counties far outstrip these old ones in improvement and wealth; new towns and cities spring up and destroy the business of these old bond-ridden ones, and the latter, instead of receiving the anticipated and promised increase of wealth, show a paralyzed industry and depreciated property. Localities that fifteen or twenty years ago gave promise of prosperous future, are less wealthy, less prosperous, and in some instances less populous than when they subscribed stock, and issued bonds to railroads. For years to come, the wealth and industry of these places must suffer from the incubus of enormous taxes levied for the payment of bonds issued under the mistaken idea that great benefit was to result from the indebtedness.

Third. It places the pecuniary interests of all the people of the counties and cities creating this kind of indebtedness in the hands of unscrupulous and relentless non-resident creditors, mainly Wall street stock-jobbers, who obtained it at large discounts, often at one-fourth its par value, and who own not only the county and city bonds, but control the railroads in aid of which they were issued, and so by constantly collecting from the people the oppressive taxes required to pay the interest and principal of these bonds, withdrawing the amounts so collected from circulation and sending it to the east without leaving, or ever having paid any equivalent, they are constantly impoverishing the people with the very means which were to have been sources of prosperity.

Fourth. The aid granted to railroad companies has enabled them to get control of the commerce of the country. As a general rule, all of the railroads receiving subsidies in land, government, state, county, and city bonds, and large gifts in

local taxes, have been owned or controlled by the same class of men, and not a few of the roads by the same ring or combination. Then speculators have visited all parts of the country, claiming to be men of "large hearts" who desire to benefit mankind. They talk of their large experience in railroad matters; of the great benefit the particular locality will derive from the construction of a certain line of road; of the great profit to be returned in the shape of dividends if local aid is voted, and after having by fraud, falsehood, and willful deception induced the people to move in the matter, they then turn their attentions to state legislatures and to congress for more aid, and so perfect is their combination, that in almost all their attempts they are successful. Among these rings and combinations are found men to fill every department in the scheme for plundering the people. Some of them become directors in the corporation to which the aid is voted and granted, and they thus get control of the donations, grants, and bonds. Some members of the ring become agents to sell the bonds of the corporation, as well as any others received from the general or local government, and to mortgage the lands granted to the companies. Still another division of the ring become the purchasers of the bonds at their market value. They all unite in this way and mortgage their roads, rights, and franchises, and construct the road, taking care that when the road is completed, the liabilities resting upon it shall be sufficient to represent its entire value. By this means they become the creditors of the counties and towns through which the road runs; they own and control the road; and the combination being the same substantially throughout the country, owning and controlling all the roads, holding and using the subsidy bonds, fixing the rates of freight and passenger transportation, they control the whole country and hold the best interests of the people subject to their will. In the prosecution of their ends they bribe local officers, state legislatures, and members of congress. To secure the election of their friends to congress, large gifts are made. In one instance one of these raiders upon the rights of the people bestowed upon a prospective United States senator ten thousand dollars for

the purpose, as he stated, of securing friendly legislation for a certain railroad company. The pirates and robbers who prey upon mankind are not more dishonest or unscrupulous than are these rings who make the people their prey. They differ only in the degree of punishment received; the former being ' executed or sent to prison, while, of the latter, many are clected to congress or to other high and responsible offices, or they are appointed to high places of trust and profit in the government. If the reader will look through the Railroad Manual, he will find a long list of names of men, prominent now from the recent raids upon the people and public treasury, who have been engaged in the same business for at least twenty years; men whose names are now as familiar to the western people as "household words," who, like birds of prey, have flitted from one part of the country to another until their blighting influence is felt in the whole land. We are referring of course to the men who have followed the business of "organizing" railroad companies for the purpose of procuring aid in lands, bonds, and taxes, and who have devoted their energies to this class of railroads, and not to those capitalists who, with their own money and credit, have constructed their roads and pursued a legitimate busines. Prominent among the men who have devoted their time and talents to railroad enterprises, will be found the names of Thomas C. Durant, John A. Dix, Henry Farnham and others, whose memory will remain fresh with western men, because of their diligence in procuring local aid to roailroad companies from counties and cities fifteen or twenty years ago, and who, after obtaining such aid, by some means become the owners of city and county bonds, to a large amount, and then to prompt the people to greater diligence in the payment of taxes, levied to liquidate these bonds, applied to the president of the United States for troops to aid in their collection. Slightly varied, the same organization of men which inaugurated the system of constructing railroads through land grants, donations, and subsidies, is still in the same business. With their headquarters in New York and Boston; with Wall street as the principal depot for all railroad stocks and bonds, as well as the bonds of the

United States, and of such states, counties, and cities as have been duped by them, these raiders upon the treasury and resources of a people have taken the absolute control of the railroad interests of the country, and "run it" for their own exclusive benefit, to the injury of the country and the absolute destruction of the agricultural interests of the great west. By having placed in their hands the large grants of land and subsidies voted to railroad corporations, they acquired the means of controlling the principal roads throughout the country. Roads in Texas, Louisiana, Alabama, Arkansas, Kansas, Nebraska, Iowa, and in other states and territories, are owned and managed in the exclusive interest of capitalists in eastern cities who have no interest in the communities where these roads are located, save to realize large dividends by extortions and oppressions. All of the roads receiving large grants and subsidies, whether from the general or state government, or as local aid, are in the hands of this class of men, with their fiscal and transfer agencies in the cities above named.

This statement has its illustration in the Kansas City, St. Joseph & Council Bluffs company, which has five directors in Boston, two in New York, one in Michigan, and one in Missouri-Fiscal agency and transfer office, Boston. Peoria & Bureau Valley company has its principal office in New York; Chicago & Northwestern-Financial and transfer office, Wall street, New York; Dubuque & Southwestern- all of the directors, save one, and its financial agency, in New York; Atchinson, Topeka & Sante Fe company-Fiscal agency and transfer office, Boston; Galveston, Harrisburg & San Antonio company-Fiscal and transfer agency, Boston; Leavenworth, Lawrence & Galveston company-Fiscal agency and transfer office, Boston; Kansas City & Sante Fe company-Fiscal and transfer agency, Boston; Cedar Falls & Minnesota company-All of the directors reside in New York; Iowa Falls & Sioux City company-Of the directors, John B. Alley, Oliver Ames, P. S. Crowell, and W. T. Gilden, reside in Massachusetts, J. I. Blair in New Jersey, and W. B. Allison and Horace Williams in Iowa - Fiscal and transter agency, Boston, Colorado Central company-Of the directors, Oliver Ames, Frederick