country; as also the further fact that the time is not distant when the question whether the people or railroad corporations shall govern, must be determined. To prepare for this issue they use their great influence to have the important positions in the government occupied by their friends. To a considerable extent they have succeeded.

Mr. Ackerman, of North Carolina, was attorney general. He was what might be termed a strict constructionist. His views were conservative. As the legal adviser of the executive department, his opinions were adverse to the interests of the railroad companies on certain questions submitted to him. At the request of the president he resigned, and Judge Williams, of Oregon, was appointed in his stead. No one will question the integrity of the present attorney general; yet is was a well-known fact that at the date of his appointment he was one of the attorneys of the Northern Pacific railroad company; that he was fully committed to the railroad interests, and that his appointment was urged by railroad men in all parts of the country. By his appointment a friend of these corporations became a member of the cabinet, and an important ally is present whenever questions affecting their interests are discussed in executive council.

A question of the greatest importance to these corporations was the construction to be given to the statutes of the United States, and especially the "Legal Tender Act." The first of the legal tender acts was passed July, 1862. This was followed by other acts increasing the amounts of legal tender issues. Prior to the passage of these acts railroad corporations had issued and sold many millions of bonds, and stipulated that both principal and interest should be paid in gold. Soon after the issue of legal tender bills their value depreciated, and from that time to the present there has been, and still is, a wide margin between their value and coin. If these railroad companies could pay their bond indebtedness with legal tender at par, a saving of from ten to fifteen dollars could be effected on every hundred so paid. In the year 1869 the question whether this act was retroactive in its operation or effect was presented to the supreme court. The court was then composed

of eight justices. When the case involving this question was presented to and decided by the court, but seven of the justices were on the bench. Of these, four, including the chief justice, were of the opinion that the statute did not affect contracts made before its passage, and decided that these railroad companies must pay their bonds in coin, according to the contract. This decision was not acceptable to this vast corporate power. It was condemned by railroad men throughout the country. The president was approached on the subject, and his great influence was besought in the matter. Four of the justices (one-half of the court) having held adversely to the corporations, a full bench could not reverse their decision. To effect a reversal one of the four must change his opinion, or the number of justices must be increased. The latter alternative was decided to be the more feasible, and the president asked congress to increase their number to nine. The reason urged was, that upon important questions, before a full bench, the court might be equally divided, and important questions would remain undetermined. The railroad interest was fully represented in the lobby at Washington, and congress provided for an additional justice. About this time one of the justices. retired from the bench, making a vacancy, and rendering it necessary for the president to appoint two new justices. This was a grand opportunity for the railroad interest. If men who were identified with them could be appointed, the decision on the "Legal Tender Act" could be reversed, and they could save from ten to fifteen millions of dollars on every hundred million of dollars due from them. Not only could they save this amount, but in future, as the members of the court are appointed during life or good behavior, they would have no apprehensions of a decision against their interest. At once the president was importuned to appoint William Strong, of Pennsylvania—a man who was fully identified with them by education and employment, he being attorney for the Pennsyl vania railroad company-and Joseph P. Bradley, of New Jersey, who was also identified with this interest, he being the attorney of the greatest railroad corporation in that state. Neither of these men had any national reputation; but all at

once the city of Washington, as well as the whole country, was enlightened as to their great judicial worth, and railroad men throughout the country were urging their appointment. It was publicly announced, and not contradicted, that they were in favor of reversing the decision of the court on the legal tender act, and their appointment was urged for this reason. This influence controlled the president. These gentlemen were nominated by him, and their appointment was confirmed by the senate in 1870. The decision on the legal tender act was reversed, and railroad men were happy. As we shall attempt to show, when we treat of the controlling influence of these corporations upon the finances of the country, this reversal was most baneful to the country, and detrimental to the best interests of the people. We do not wish to be understood as accusing the president of being governed by improper motives in the appointments of Messrs. Strong and Bradley to the supreme bench; but we do mean that the railroad interests, by concert of action, procured these appointments; it being known, or at least well understood that these appointments would insure a reversal of the decision, as we have recounted, and that by such reversal their interests would be greatly subserved. Nor do we wish to be understood as accusing the persons so appointed of lacking the requisite ability for the honorable stations for which they were selected, or that their decisions were governed by personal considerations, or that they reversed said former decision to specially subserve the interests of railroad corporations. We have long since come to the conclusion that judges of courts, like other men, are influenced by surrounding circumstances; that they are not infallible, and that it is no unusual thing for the most eminent judges to differ upon questions submitted for their decision. While these decisions are honestly made, they are often controlled or dictated by extrajudicial considerations. As we shall have occasion hereafter to examine this subject when treating of t. intimate and controlling relations between these corporations and the courts of the country, we are content to leave the case of their influence with the executive department to the proof submitted in these three appointments of Williams, Bradley, and Strong.

CHAPTER XX.

THE UNITED STATES TREASURY THE VASSAL OF WALL STREET OPERATIONS" EXPLAINED.

WE

66 STOCK

E now beg to call the reader's attention to the financial operations of the monopolists, and the course resorted to by them to control the finances of the country.

There are now (January, 1873,) seventy thousand one hundred and seventy-eight miles of railroad completed in the United States and territories. At an expense of $35,000 per mile, the total cost of these roads is $2,456,230,000. The cost, as given by the companies, is $3,436,638,749, or $48,970 per mile. In contemplation of law, and as reported, this cost is represented by stock certificates, and is supposed to be paid up. If the roads cost but $35,000 per mile, then $980,408,749 of the stock certificates (that amount being the excess over actual cost) have only an imaginary value. In addition to the stock certificates representing the above sum of $3,456,230,749, the railroad companies have issued and put upon the market their bonds to the amount of $2,800,000,000, thus making their roads represent the enormous sum of six billions two hundred and thirty-six millions six hundred and thirty-eight thousand seven hundred and forty-nine dollars, or eighty-eight thousand eight hundred and seventy-two dollars per mile. The only real value all these bonds and certificates of stock represent is the railroads. These we have put at $35,000 per mile. Of course some lines of road exceed this valuation; but an examination of the actual cost, as reported by the engineers of the respective roads, will show that much the larger portion of the roads has cost less. Now let us look at the amount of the capital represented by a few of these roads, as reported in the Railroad Manual and The Stockholder. The Chicago, Burlington & Quincy is reputed to be one of the best and most prudently managed roads in the

country. This road represents in stock and bonds the sum of $32,845,880, or $43,292 per mile. On the other extreme we will take the Central Pacific, which represents the sum of $182,208,000, or $130,000 per mile. The Atlantic & Great Western (an organization of the New York, Pennsylvania & Ohio) represents the sum of $109,000,000, or about $256,000 per mile. The Cedar Rapids & Missouri River railroad represents the sum of $11,334,000, or $41,000 per mile. The Chicago, Rock Island & Pacific represents the sum of $25,717,000, or $56,667 per mile. The Erie represents the sum of $112,935,710, or $125,750 per mile. The New York Central & Hudson River railroad represents $104,660,049, or $142,656 per mile. The Union Pacific represents $112,911,512, or $109,507 per mile. We give the above as samples of the amounts represented by the different roads. In some other instances the stocks are "watered" more, and in others less than in the roads above named. Taking all the roads in the country, and adding together the stock and bonds issued, they represent $3,800,408,749 more than their actual cost. It will not be out of place here to state that the only resource these railroad companies have for the payment of interest and dividends on their stock and bonds, representing the sum of $6,236,638,749, is the earnings of their roads. While a low rate of charges would pay fair dividends on the actual cost of the roads, yet in order to pay dividends on their "watered" stock, and interest on their bonds, oppressive and extortionate rates must be charged and collected. The men who control these great monopolies, viz.: Col. Scott, who controls roads representing about $700,000,000; Vanderbilt, who controls about as great an interest; Drew, Gould, and some few others of the principal railroad men, care but little about the prosperity of the country, or the profits made by their roads, save as a basis for their Wall street speculations. The roads serve as a basis for financial operations. Like the old "wild cat" banks that issued bills without regard to stock or capital, so the roads controlled by these railroad monarchs are loaded with "watered" stock and bonds, until their value as roads are destroyed, and passengers and shippers are oppres