of the people, perpetrated by these eight men, with the aid of congress, as above shown.

But how the five non-stockholding directors, appointed by the president, who are presumed to act for the government and its interest, could have been ignorant of the whole matter, is not so easily understood. The act of congress of July 2, 1864, section 13, provides:

"That at least one of said government directors shall be placed on each of the standing committees of said company, and at least one on every special committee that may be appointed. The government directors SHALL, from time to time, report to the secretary of the interior, in answer to inquiries he may make of them touching the condition, management, and progress of the work, and shall communicate to the secretary of the interior, at the same time, such information as should be in the possession of the department. They shall, as often as may be necessary for a full knowledge of the condition and management of the line, visit all portions of the line of road, whether built or surveyed, and while absent from home, attending to their duties as directors, shall be paid their actual traveling expenses, and be allowed and paid such reasonable compensation for their time actually employed as the board of directors may decide."

If these government directors and the company observed the law, then one of them was on the executive committee of the Union Pacific company and must have known of this fraudulent contract and its assignment. If no one of them was placed on the executive committee, then, in the discharge of their duty, they should have reported the facts to the secretary of the interior. One of two inferences is irresistible: 1st, That they were ignorant of what it was their duty to know, or 2d, That they were unfaithful to the public trust confided in them.

Follow us a little further into this Credit Mobilier organization. It was first organized in Pennsylvania, as the Pennsylvania Fiscal Agency for the buying and selling of railroad bonds, advancing loans to railroads and contractors, and to do

almost any kind of business except banking. The charter was granted in 1860 to Duff Green and some fifteen others, but included none of the Credit Mobilier company. In 1864, (the corporation having done nothing up to this time,) the secretary of the company supposing Duff Green, (the president,) to be dead, sold out the charter to George Francis Train, Thomas C. Durant, Oakes Ames, Oliver Ames, and others, and Train baptized it with the new name of, "The Credit Mobilier of America;" and then George Francis seems to have disappeared. It does not appear that any considerable amount of the capital stock was ever paid in, (the whole capital stock being $5,000,000;) perhaps just sufficient to legalize their operations. to-wit, $25,000. The first business done, of which there is any record, was a contract made by the directors of the Union Pacific company with one Hoxie, of Iowa, for building 247 miles of the road, at what price per mile we cannot learn. It was not intended that Hoxie should build this road, but, as the directors of the company could not contract with themselves, it was arranged to contract with Hoxie, and then to set the Credit Mobilier to "running," and divide the spoils. With the consent of the executive committee of the company, Hoxie assigned his contract to the Credit Mobilier. The first mortgage bonds of the company were sold, and sufficient realized to build forty miles of road in 1865, and in 1866 to complete the Hoxie contract. From the subsidy bonds received from government, or from some other and unknown source, the Credit Mobilier, in the year 1867, reported a paid up capital stock of $3,750,000, and were ready for extensive operations. In pursuance of the plan formed by the executive committee of the railroad company and the owners and directors of the Credit Mobilier, the contract with Oakes Ames, herein copied, was made, and then assigned. The Credit Mobilier was so used as to do good. It was "placed where it would do the most good." It does not appear that this corporation had any considerable financial transactions, or did any particular business save in connection with the Pacific road; yet it proved to the holders the most prolific stock of any on record. The Ames contract was assigned to Sidney Dillon, and others,

trustees, on the 15th of October, 1867. It declared dividends

as follows:

Dec. 12, 1867, Union Pacific R. R. bonds, valued at..

$2,700,000

637,500

525,000

2,250,000

1,125,000

-$7,237,500

In addition to the above, another dividend was declared July 3d, 1868, of $2,390,625 in bonds, which were pronounced bogus or worthless. It is thus seen that the directors of the Pacific railroad company, who were also the Credit Mobiliertrustees for themselves, and some of them members of congress -by the aid of congressional legislation, and the fiction of the Credit Mobilier, contracted with themselves, agreeing to pay themselves extravagant prices for building their own road, and getting their pay as a donation from the public treasury, and were able in seven months to declare dividends to themselves of nearly two hundred per cent upon the reported paid up capital, which capital was also obtained from the government. If the reader has followed us in the statements we have made relative to the land bond subsidies granted to the Pacific railroad companies, he will not wonder that the indebtedness of these companies, after the completion of the road, and after the receipt from the government of more than their entire cost, nearly doubles the amount necessary to build them, had honesty and economy been used in their construction.

We might pursue this subject further, but we think enough has been shown to convince the impartial reader, that whatever the pretence for making these grants, the real object has been to enrich unscrupulous and dishonest men at the expense of the public; and that this corrupting power has become so great that those who occupy high and responsible places in the government have become partners in these wholesale robberies of the people. This conclusion becomes irresistible when we find members of congress voting government aid to railroad companies in which they are stockholders and directors at the time the aid is voted.

CHAPTER VIII.

HAS CONGRESS THE POWER, UNDER THE CONSTITUTION, TO CREATE OR ENDOW PRIVATE CORPORATIONS?

T

answer this question intelligently, we must examine the the powers granted to the United States, as well as the rights, powers and relative duties of the state governments. The state governments are supreme in all matters affecting the public and the people, save in those which, by the expressed provisions of the constitution, are delegated to, or conferred upon the general government. The powers thus delegated to the general government are all of a public character, such as the states individually could not control or execute, and such as were deemed essential to our national existence. All the privilges, rights, and powers, not deemed essential to the successful administration of the national government, were reserved to the states and to the people. It follows that the general government is one of limited powers; that while it is supreme in all matters delegated to it by the constitution, and while in its several departments it can exercise all such implied powers as are necessary for the complete execution of those expressly delegated, neither the executive, legislative, nor judicial departments can assume the exercise of powers not conferred upon them by the express provisions of the constitution; and that while the state governments can exercise all powers not expressly prohibited in their constitutions, because of their general Sovereign character, the general government is limited to such as are expressly granted. If these propositions are correct, then the general government has no authority for creating private corporations.

We are aware that congress has assumed the negative of these propositions, and has granted charters to some of the most gigantic corporations of the country, under which char

ters they have organized and are doing business in states which, according to our interpretation of the constitution, as above stated, should have the absolute control of such companies. We shall attempt to demonstrate that the acts of congress granting charters to railroads and other private corporations are usurpations of power, in conflict with the provisions of the constitution, destructive of the rights of the people and of republican government.

What are the powers delegated to the general government by the constitution in questions of this character? Article I. Section 8, contains, among others, the following, as some of the powers conferred upon congress: "To regulate commerce with foreign nations, and among the several states, and with the Indian tribes; " "To establish post-offices and post-roads;' "To make all laws which shall be necessary and proper for carrying into execution the foregoing powers and all other powers vested by this constitution in the government of the United States, or in any department or office thereof." The same section gives congress power to provide for organizing the army, etc.; and, in time of war, extraordinary powers, controlled only by the necessities of the case, are vested in congress. If congress has power under the constitution to charter private corporations, it must be derived from, or contained in, the provisions above quoted. Article IX. of the constitution reads as follows: "The enumeration in the constitution of certain rights shall not be construed to deny or disparage others retained by the people." And Section 10 reads as follows: "The powers not delegated to the United States by the constitution, nor prohibited by it to the states, are reserved to the states respectively or to the people." And the framers of the constitution it would seem, for the purpose of making the line of demarcation between the powers of the states and the general government still more plain and definite, provided as follows: Article IV., Section 2: "The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states.”

We think that the above quotations from the constitution (and we have quoted all having any relation to the question