Great Fortunes From Railroads - free ebook by Gustavus Myers

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Great Fortunes From Railroads

Gustavus Myers

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PART III

PART III

Before setting out to relate in detail the narrative of the amassing of the great individual fortunes from railroads, it is advisable to present a preliminary survey of the concatenating circumstances leading up to the time when these vast fortunes were rolled together. Without this explanation, this work would be deficient in clarity, and would leave unelucidated many important points, the absence of which might puzzle or vex the reader. Although industrial establishments, as exemplified by mil

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THE LAGGING FACTORY FORTUNES.

THE LAGGING FACTORY FORTUNES.

Under the first stages of the old chaotic competitive system, in which factory warred against factory, and an intense struggle for survival and ascendency enveloped the whole tense sphere of manufacturing, no striking industrial fortunes were made. Fortunate was that factory owner regarded who could claim $250,000 clear. All of those modern and complex factors offering such unbounded opportunities for gathering in spoils mounting into the hundreds of millions of dollars, were either unknown or i

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MIGHT OF THE RAILROAD OWNERS.

MIGHT OF THE RAILROAD OWNERS.

In contrast to the slow, almost creeping pace of the factory owners in the race for wealth, the railroad owners sprang at once into the lists of mighty wealth-possessers, armed with the most comprehensive and puissant powers and privileges, and vested with a sweep of properties beside which those of the petty industrial bosses were puny. Railroad owners, we say; the distinction is necessary between the builders of the railroads and the owners. The one might construct, but it often happened that

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THE LEGALIZING OF CUNNING

THE LEGALIZING OF CUNNING

Thus this situation, so singularly conflicting with the theoretical majesty of the law, was frequently presented: A band of men styling themselves a corporation received a perpetual charter with the most sweeping rights and properties. In turn, the law interposed no effective hindrance to the seizing of their possessions by any other group proving its power to grasp them. All of this was done under nominal forms of law, but differed little in reality from the methods during medieval times when a

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THE LAND LAWS AGAINST THE POOR

THE LAND LAWS AGAINST THE POOR

From the very beginning of the government, the land laws were arranged to discriminate against the poor settler. Instead of laws providing simple and inexpensive ways for the poor to get land, the laws were distorted into a highly effective mechanism by which companies of capitalists, and individual capitalists, secured vast tracts for trivial sums. These capitalists then either held the land, or forced settlers to pay exorbitant prices for comparatively small plots. No laws were in existence co

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VAST TRACTS SECURED BY BRIBERY.

VAST TRACTS SECURED BY BRIBERY.

One of the most scandalous land-company transactions was that involving a group of Southern and Boston capitalists. In January, 1795, the Georgia Legislature, by special act, sold millions of acres in different parts of the State of Georgia to four land companies. The people of the State were convinced that this purchase had been obtained by bribery. It was made an election issue, and a Legislature, comprising almost wholly new members, was elected. In February, 1796, this Legislature passed a r

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GREAT EXTENT OF THE LAND FRAUDS.

GREAT EXTENT OF THE LAND FRAUDS.

The land frauds were great and incessant. In a long report, the United States Senate Committee on Public Lands, reporting on June 20, 1834, declared that the evidence it had taken established the fact that in Ohio and elsewhere, combinations of capitalist speculators, at the public sales of lands, had united for the purpose of driving other purchasers out of the market and in deterring poor men from bidding. The committee detailed how these companies and individuals had fraudulently bought large

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THE SWAYING OF GOVERNMENT.

THE SWAYING OF GOVERNMENT.

The trading, banking and landed class had learned well the old, all- important policy of having a Government fully susceptible to their interests, whether the governing officials were put in office by them, and were saturated with their interests, views and ideals, or whether corruption had to be resorted to in order to attain their objects. At all events, the propertied classes, in the main, secured what they wanted. And, as fast as their interests changed, so did the acts and dicta of Governme

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GRANTS TO CANAL CORPORATIONS.

GRANTS TO CANAL CORPORATIONS.

The first great canal, built in response to the demands of the commercial class, was the Erie Canal, completed in 1825. This waterway was constructed at public expense, and was owned by New York State. The commercial men could succeed in having it managed for their purposes and profit, and the politicians could often extract plunder from the successive contracts, but there was no opportunity or possibility for the exercise of the usual capitalist methods of fraudulent diversion of land, or of ov

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THE GRANTS FRAUDULENTLY MANIPULATED

THE GRANTS FRAUDULENTLY MANIPULATED

Many of the canal companies, so richly endowed by the Government with great land grants, made little attempt to build canals. What some of them did was to turn about and defraud the Government out of incalculably valuable mineral deposits which were never included in the original grants. In his annual report for 1885, Commisioner Sparks, of the United States General Land Office told (House Executive Documents, 1885-86, Vol. II) how, by 1885, the Portage Lake "canal" was only a worthless ditch an

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CASH THE GREAT PERSUADER

CASH THE GREAT PERSUADER

Through the public press, and in speeches and pamphlets, the people were assured in the most seductive and extravagant language that railroads were imperative in developing the resources of the country; that they would be a mighty boon and an immeasurable stimulant to progress. These arguments had much weight, especially with a population stretched over such a vast territory as that of the United States. But alone they would not have accomplished the ends sought, had it not been for the quantiti

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A WELTER OF CORRUPTION.

A WELTER OF CORRUPTION.

So the onslaught of corruption began and continued. Corruption in Ohio was so notorious that it formed a bitter part of the discussion in the Ohio Constitutional Convention of 1850-51. The delegates were droning along over insertions devised to increase corporation power. Suddenly rose Delegate Charles Reemelin and exclaimed: "Corporations always have their lobby members in and around the halls of legislation to watch and secure their interests. Not so with the people—they cannot act with that d

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IMPOTENCE OF THE PEOPLE.

IMPOTENCE OF THE PEOPLE.

These are but a very few of the many instances of the debauching of every legislature in the United States. No matter how furiously the people protested at this giving away of their resources and rights, the capitalists were able to thwart their will on every occasion. In one case a State legislature had been so prodigal that the people of the State demanded a Constitutional provision forbidding the bonding of the State for railroad purposes. The Constitutional Convention adopted this provision.

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VAST THEFTS OF LAND.

VAST THEFTS OF LAND.

But plaudits were too hasty. To the utter surprise of the people the law began to work in a perverse direction. Its provisions had read well enough on a casual scrutiny. Where lay the trouble? It lay in just a few words deftly thrown in, which the crowd did not notice. This law, acclaimed as one of great benefit to every man aspiring for a home and land, was arranged so that the capitalist cattle syndicates could get immense areas. The lever was the omission of any provision requiring actual set

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SPOLIATION ON A GREAT SCALE.

SPOLIATION ON A GREAT SCALE.

The "poor settler" catspaw was again made use of. At the behest of the lumber corporations, or of adventurers or politicians who saw a facile way of becoming multimillionaires by the simple passage of an act, the "Stone and Timber Act" was passed in 1878 by Congress. An amendment passed in 1892 made frauds still easier. This measure was another of those benevolent-looking laws which, on its face, extended opportunities for the homesteader. No longer, it was plausibly set forth, could any man say

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THE "CASH SALES" ACT.

THE "CASH SALES" ACT.

By 1876, however, the public agitation had died away. The time was propitious. Congress rushed through a bill carefully worded for the purpose. The lands were ordered sold in unlimited areas for cash. No pretense was made of restricting the sale to a certain acreage so that all any individual could buy was enough for his own use. Anyone, if he chose, could buy a million or ten million acres, provided he had the cash to pay $1.25 an acre. The way was easy for capitalists to get millions of acres

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COAL LANDS EXPROPRIATED

COAL LANDS EXPROPRIATED

Not merely were the capitalist interests allowed to plunder the public domain from the people under these various acts, but another act was passed by Congress, the "Coal Land Act," purposely drawn to permit the railroads to appropriate great stretches of coal deposits. "Already," wrote President Roosevelt in a message to Congress urging the repeal of the Stone and Timber Act, the Desert Land Law, the Coal Land Act and similar enactments, "probably one-half of the total area of high-grade coals i

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AN ARRAY OF COMMANDING FACTS.

AN ARRAY OF COMMANDING FACTS.

But this is not the only commanding fact. A much more important one lies in the astonishing ease with which the masses of the people have been discriminated against, exploited and oppressed. Theoretically the power of government resides in the people, down to the humblest voter. This power, however, has been made the instrument for enslaving the very people supposed to be the wielders of political action. While Congress, the legislatures and the executive and administrative officials have been i

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GOVERNMENT BY PROPERTY INTERESTS.

GOVERNMENT BY PROPERTY INTERESTS.

Hence it is that most histories are mere registers of names and dates, dull or highly-colored hackneyed splurges of print giving no insight into actual conditions. In this respect most of the prevailing histories of the United States are the most egregious offenders. They fix the idea that this or that alleged statesman, this or that President or politician or set of politicians, have been the dominating factors in the decision and sway of public affairs. No greater error could be formulated. Be

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CONDITIONS OF THE NON-PROPERTIED.

CONDITIONS OF THE NON-PROPERTIED.

Since Government was actually, although not avowedly or apparently, a property regime, what was the condition of the millions of non- propertied? In order to get a correct understanding of both the philosophy and the significance of what manner of property rule was in force, it is necessary to give an accompanying sketch of the life of the millions of producers, and what kind of laws related to them. Merely to narrate the acts of the capitalists of the period is of no enduring value unless it be

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THE SUPREMACY OF EMPLOYERS.

THE SUPREMACY OF EMPLOYERS.

At the same time, while enriching themselves in every direction by transferring, through the powers of Government, public resources to themselves, the capitalists declared it to be a settled principle that Government should not be paternalistic; they asserted that it was not only not a proper governmental function to look out for the interests of the masses of workers, but they went even further. With the precedents of the English laws as an example, they held that it devolved upon Government to

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AN INCESSANT WARFARE.

AN INCESSANT WARFARE.

History in the main, thus far, has been an institution for the propagation of lies. The truth is that for thousands of years back, since the private property system came into existence, an incessant, uncompromising warfare has been going on between oppressors and oppressed. Apart from the class distinctions and the bitterness manifested in settlement and colonial times in this country— reference to which has been given in earlier chapters—the whole of the nineteenth century, and thus far of this

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THE WORKERS' STRUGGLE FOR BETTER CONDITIONS.

THE WORKERS' STRUGGLE FOR BETTER CONDITIONS.

Again and again the workers attempted to throw off some of their shackles, and every time the whole dominant force of society was arrayed against them. By 1825 an agitation developed for a ten-hour workday. The politicians denounced the movement; the cultured classes frowned upon it; the newspapers alternately ridiculed and abused it; the officials prepared to take summary action to put it down. As for the capitalists—the shipping merchants, the boot and shoe manufacturers, the iron masters and

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EMPLOYMENT OF MILITIA AGAINST THE WORKERS.

EMPLOYMENT OF MILITIA AGAINST THE WORKERS.

But it was not only the National Government which used the entire governing power against the workers. State and municipal authorities did likewise. In 1836 the longshoremen in New York City struck for an increase of wages. Their employers hurriedly substituted non-union men in their places. When the union men went from dock to dock, trying to induce the newcomers to side with them, the shipping merchants pretended that a riot was under way and made frantic calls upon the authorities for a subdu

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CAJOLING THE LABOR VOTE.

CAJOLING THE LABOR VOTE.

Now it was that the politicians began the familiar policy of "catering to the labor vote." Some rainbow promises of what they would do, together with a few scraps of legislation now and then— this constituted the bait held out by the politicians. That adroit master of political chicanery, President Van Buren, hastened to issue an executive order on April 10, 1840, directing the establishment of a ten-hour day, between April and September, in the navy yards. From the last day of October, however,

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THE BASIS OF POLITICAL PARTIES.

THE BASIS OF POLITICAL PARTIES.

However these parties might differ on various issues, they both stood for the perpetuation of the existing social and industrial system based upon capitalist ownership. The tendency of the Republican party, founded in 1856, toward the abolition of negro chattel slavery was in precise harmony with the aims and fundamental interests of the manufacturing capitalists of the North. The only peril that the capitalist class feared was the creation of a distinct, disciplined and determined workingmen's

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WEALTH AND THE SWAY OF DIRECT POWER

WEALTH AND THE SWAY OF DIRECT POWER

It was about this time that the Senate of the United States was undergoing a transformation clearly showing how impatient the great capitalists were of operating Government through middlemen legislators. Previously, the manufacturing, railroad and banking interests had, on the whole, deemed it wise not to exercise this power directly but indirectly. The representatives sent to Congress were largely lawyers elected by their influence and money. The people at large did not know the secret processe

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THE PASSING OF THE MIDDLE CLASS.

THE PASSING OF THE MIDDLE CLASS.

Yet let us not go so fast. It is necessary to remember that the last few decades have constituted a period of startling transitions. The middle class, comprising the small business and factory men, stubbornly insisted on adhering to worn-out methods of doing business. Its only conception of industry was that of the methods of the year 1825. It refused to see that the centralization of industry was inevitable, and that it meant progress. It lamented the decay of its own power, and tried by every

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THE TRUSTS AND THE UNEMPLOYED.

THE TRUSTS AND THE UNEMPLOYED.

With this newer organization and centralization of industry the number of unemployed tremendously increased. In the panic of 1893 it reached about 3,000,000; in that of 1908 perhaps 6,000,000, certainly 5,000,000. To the appalling suffering on every hand the Government remained indifferent. The reasons were two-fold: Government was administered by the capitalist class whose interest it was not to allow any measure to be passed which might strengthen the workers, or decrease the volume of surplus

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THE STATE OF THE FARMING POPULATION.

THE STATE OF THE FARMING POPULATION.

The conditions of the farming population, along with that of the working class, steadily grew worse. In the hope of improving their condition large numbers migrated from the Eastern States, and a constant influx of agriculturists poured in from Europe. A comparatively few of the whole were able to get land direct from the Government. Naturally the course of this extensive migration followed the path of transportation, that is to say, of the railroads. This was exactly what the railroad corporati

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METHODS OF THE GREAT LANDOWNERS.

METHODS OF THE GREAT LANDOWNERS.

While thus the produce of the farmer's labor was virtually confiscated by the different capitalist combinations, the farmers of many States, particularly of the rich agricultural States of the West, were unable to stand up against the encroachments, power, and the fraudulent methods of the great capitalist landowners. The land frauds in the State of California will serve as an example. Acting under the authority of various measures passed by Congress— measures which have been described—land grab

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SEIZURE OF IMMENSE AREAS BY FRAUD.

SEIZURE OF IMMENSE AREAS BY FRAUD.

Official reports of the period, contemporaneous with the original seizure of these immense tracts of land, give far more specific details of the methods by which that land was obtained. Of the numerous reports of committees of the California Legislature, we will here simply quote one—that of the Swamp Land Investigating Committee of the California Assembly of 1873. Dealing with the fraudulent methods by which huge areas of the finest lands in California were obtained for practically nothing as "

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ACTUAL SETTLERS EXCLUDED FROM PUBLIC DOMAIN.

ACTUAL SETTLERS EXCLUDED FROM PUBLIC DOMAIN.

"Wealthy speculators and powerful syndicates," reported Commissioner Sparks, covet the public domain, and a survey is the first step in the accomplishment of this desire. The bulk of deposit surveys have been made in timber districts and grazing regions, and the surveyed lands have immediately been entered under the timber land, preŽmption, commuted homestead, timber-culture and desert-land acts. So thoroughly organized has been the entire system of procuring the survey and making illegal entry

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THE GIGANTIC PRIVATE LAND CLAIM FRAUDS.

THE GIGANTIC PRIVATE LAND CLAIM FRAUDS.

The frauds in the settlement of private land claims on alleged grants by Spain and Mexico were colossal. Vast estates in California, New Mexico, Arizona, Colorado and other States were obtained by collusion with the Government administrative officials and Congress. These were secured upon the strength of either forged documents purporting to be grants from the Spanish or Mexican authorities, or by means of fraudulent surveys. One of the most notorious of these was the Beaubin and Miranda grant,

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FORGERY, PERJURY AND FRAUDULENT SURVEY.

FORGERY, PERJURY AND FRAUDULENT SURVEY.

Reporting, in 1881, to the Commissioner of the General Land Office, Henry M. Atkinson, U. S. Surveyor-General of New Mexico, wrote that "the investigation of this office for the past five years has demonstrated that some of the alleged grants are forgeries." He set forth that unless the court before which these claims were adjudicated could have full access to the archives, "it is much more liable to be imposed upon by fraudulent title papers." [Footnote: "The Public Domain," etc. 1124. Also see

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INCREASE OF FARM TENANTRY.

INCREASE OF FARM TENANTRY.

Without dwelling upon all the causative factors—involving an extended work in themselves—some significant general results will be pointed out. The original area of public domain amounted to 1,815,504,147 acres, of which considerably more than half, embracing some of the very best agricultural, grazing, mineral and timber lands, was already alienated by the year 1880. By 1896 the alienation reached 806,532,362 acres. Of the original area, about 50,000,000 acres of forests have been withdrawn from

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A LARGELY DISPOSSESSED NATION.

A LARGELY DISPOSSESSED NATION.

These are the statistics of a Government which, it is known, seeks to make its showing as favorable as possible to the existing regime. They make it clear that a rapid process of the dispossession of the industrial working, the middle and the small farming classes has been going on unceasingly. If the process was so marked in 1900 what must it be now? All of the factors operating to impoverish the farming population of the United States and turn them into homeless tenants have been a thousandfol

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NINETY MILLIONS IN FIFTEEN YEARS.

NINETY MILLIONS IN FIFTEEN YEARS.

Yet to the people of thirty years ago, a round hundred million was something vast and unprecedented. In 1847 millionaires were so infrequent that the very word, as we have seen, was significantly italicised. But here was a man who, figuratively speaking, was a hundred millionaires rolled in one. Compared with his wealth the great fortunes of ten or fifteen years before dwindled into bagatelles. During the Civil War a fortune of $15,000,000 had been looked upon as monumental. Even the huge Astor

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A FORTUNE OF $700,000,000

A FORTUNE OF $700,000,000

From $105,000,000 bequeathed at his death, the Vanderbilt fortune has grown until it now reaches fully $700,000,000. This is an approximate estimate; the actual amount may be more or less. In 1889 Shearman placed the wealth of Cornelius and William K. Vanderbilt, grandsons of the first Cornelius, at $100,000,000 each, and that of Frederick W. Vanderbilt, a brother of those two men, at $20,000,000. [Footnote: "Who Owns the United States?"—The Forum Magazine, November, 1889.] Adding the fortunes o

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BONDS THAT HOLD PRESENT AND POSTERITY.

BONDS THAT HOLD PRESENT AND POSTERITY.

Behold, in imagination at least, this mass of stocks and bonds. Heaps of paper they seem; dead, inorganic things. A second's blaze will consume any one of them, a few strokes of the fingers tear it into shapeless ribbons Yet under the institution of law, as it exists, these pieces of paper are endowed with a terrible power of life and death that even enthroned kings do not possess. Those dainty prints with their scrolls and numerals and inscriptions are binding titles to the absolute ownership o

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THEY DECREE TAXES AT WILL.

THEY DECREE TAXES AT WILL.

These batches of stocks and bonds betoken as much more again. A pretty fiction subsists that Government, the creator of the modern private corporation, is necessarily more powerful than its creature. This theoretical doctrine, so widely taught by university professors and at the same time so greatly at variance with the palpable facts, will survive to bring dismay in the near future to the very classes who would have the people believe it so. Instead of now being the superior of the corporation

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AND EXERCISE UNRESTRAINED POWER.

AND EXERCISE UNRESTRAINED POWER.

Visualizing this power one begins to get a vivid perception of the comprehensive sway of the Vanderbilts and of other railroad magnates. They levy tribute without restraint—a tribute so vast that the exactions of classic conquerors become dwarfed beside it. If this levying entailed only the seizing of money, that cold, unbreathing, lifeless substance, then human emotion might not start in horror at the consequences. But beneath it all are the tugging and tearing of human muscles and minds, the t

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HIGH AND MIGHTY POTENTATES.

HIGH AND MIGHTY POTENTATES.

The Vanderbilts are potentates. Their power is bounded by no law; they are among the handful of fellow potentates who say what law shall be and how it shall be enforced. No stern, masterful men and women are they as some future moonstruck novelist or historian bent upon creating legendary lore may portray them. Voluptuaries are most of them, sunk in a surfeit of gorgeous living and riotous pleasure. Weak, without distinction of mind or heart, they have the money to hire brains to plan, plot, sch

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THE FOUNDER'S START.

THE FOUNDER'S START.

Vanderbilt was a rugged, headstrong, untamable, illiterate youth. At twelve years of age he could scarcely write his own name. But he knew the ways of the water; when still a youth he commenced ferrying passengers and freight between Staten Island and New York City. For books he cared nothing; the refinements of life he scorned. His one passion was money. He was grasping and enterprising, coarse and domineering. Of the real details of his early life little is known except what has been written b

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DRIVING OUT COMPETITORS.

DRIVING OUT COMPETITORS.

Judging from the records of the times, one of his most effective means for harassing and driving out competitors was in bribing the New York Common Council to give him, and refuse them, dock privileges. As the city owned the docks, the Common Council had the exclusive right of determining to whom they should be leased. Not a year passed but what the ship, ferry and steamboat owners, the great landlords and other capitalists bribed the aldermen to lease or give them valuable city property. Many s

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REGARDED AS A COMMERCIAL BUCCANEER.

REGARDED AS A COMMERCIAL BUCCANEER.

The exploitation of labor, however, does not account for his success as a money maker. Many other men did the same, and yet in the vicissitudes of business went bankrupt; the realm of business was full of wrecks. Vanderbilt's success arose from his destructive tactics toward his competitors. He was regarded universally as the buccaneer of the shipping world. He leisurely allowed other men to build up profitable lines of steamboats, and he then proceeded to carry out methods which inevitably had

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EXTORTION AND THEFT COMMON.

EXTORTION AND THEFT COMMON.

The truth is that the bulk of Vanderbilt's original millions were the proceeds of extortion, blackmail and theft. In the established code of business the words extortion and theft had an unmistakable significance. Business men did not consider it at all dishonorable to oppress their workers; to manufacture and sell goods under false pretenses; to adulterate prepared foods and drugs; to demand the very highest prices for products upon which the very life of the people depended, and at a time when

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THE CORRUPTION OF OFFICIALS.

THE CORRUPTION OF OFFICIALS.

To get these subsidies, in conjunction with the "postages," the steamship owners by one means or another corrupted postal officials and members of Congress. "I have noticed," said Senator Toombs, in a speech in the United States Senate on June 9, 1858, that there has never been a head of a Department strong enough to resist steamship contracts. I have noticed them here with your Whig party and your Democratic party for the last thirteen years, and I have never seen any head of a Department stron

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VANDERBILT'S HUGE LOOT.

VANDERBILT'S HUGE LOOT.

In the course of this debate some remarkable facts came out as to how the Government was being steadily plundered, and why it was that the postal system was already burdened with a deficit of $5,000,000. While the appropriation bill was being solemnly discussed with patriotic exclamations, lobbyists of the various steamship companies busied themselves with influencing or purchasing votes within the very halls of Congress. Almost the entire Senate was occupied for days with advocating this or tha

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BLACKMAIL CHARGES TRUE.

BLACKMAIL CHARGES TRUE.

The mail steamer appropriation bill, as finally passed by Congress, allowed large subsidies to all of the steamship interests. The pretended warfare among them had served its purpose; all got what they sought in subsidy funds. While the bill allowed the Postmaster- General to change Collins' European terminus to Southampton, that official, so it was proved subsequently, was Vanderbilt's plastic tool. But what became of the charges against Vanderbilt? Were they true or calumniatory? For two years

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HE QUITS STEAMSHIPS.

HE QUITS STEAMSHIPS.

The Civil War with its commerce-preying privateers was an unpropitious time for American mercantile vessels. Vanderbilt now began his career as a railroad owner. He was at this time sixty-nine years old, a tall, robust, vigorous man with a stern face of remarkable vulgar strength. The illiteracy of his youth survived; he could not write the simplest words correctly, and his speech was a brusque medley of slang, jargon, dialect and profanity. It was said of him that he could swear more forcibly,

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THE ANSWER FOUND.

THE ANSWER FOUND.

The steamboat and steamship owners were not long lost in perplexity. Since they could no longer use their ships or make profit on ocean routes why not palm off their vessels upon the Government? A highly favorable time it was; the Government, under the imperative necessity of at once raising and transporting a huge army, needed vessels badly. As for the other question momentarily agitating the capitalists as to what new line of activity they could substitute for their own extinguished business,

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INDISCRIMINATE PLUNDERING DURING THE CIVIL WAR.

INDISCRIMINATE PLUNDERING DURING THE CIVIL WAR.

The capitalists abundantly proved their devout patriotism by making tremendous fortunes from the necessities of that great crisis. They unloaded upon the Government at ten times the cost of manufacture quantities of munitions of war—munitions so frequently worthless that they often had to be thrown away after their purchase. [Footnote: In a speech on February 28, 1863, on the urgency of establishing additional government armories and founderies, Representative J. W. Wallace pointed out in the Ho

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PATRIOTISM AT A SAFE DISTANCE.

PATRIOTISM AT A SAFE DISTANCE.

But, while lustily indulging in patriotic palaver, the propertied classes took excellent care that their own bodies should not be imperilled. Inspired by enthusiasm or principle, a great array of the working class, including the farming and the professional elements, volunteered for military service. It was not long before they experienced the disappointment and demoralization of camp life. The letters written by many of these soldiers show that they did not falter at active campaigning. The pro

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VANDERBILT'S METHODS IN WAR.

VANDERBILT'S METHODS IN WAR.

The outfitting of the Banks expedition was of such a rank character that it provoked a grave public scandal. If the matter had been simply one of swindling the United States Treasury out of millions of dollars, it might have been passed over by Congress. On all sides gigantic frauds were being committed by the capitalists. But in this particular case the protests of the thousands of soldiers on board the transports were too numerous and effective to be silenced or ignored. These soldiers were no

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HORRORS DONE FOR PROFIT.

HORRORS DONE FOR PROFIT.

On some of the vessels chartered by Vanderbilt, vessels that under the immigration act would not have been allowed to carry more than three hundred passengers, not less than nine hundred and fifty soldiers were packed. Most of the vessels were antiquated and inadequate; not a few were badly decayed. With a little superficial patching up they were imposed upon the Government. Despite his knowing that only vessels adapted for ocean service were needed, Vanderbilt chartered craft that had hitherto

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FRAUDS REMAIN UNPUNISHED.

FRAUDS REMAIN UNPUNISHED.

Did the Government make any move to arrest, indict and imprison Vanderbilt and his tools? None. The farcical ending of these revelations was the introduction in the United States Senate of a mere resolution censuring them as "guilty of negligence." Vanderbilt immediately got busy pulling wires; and when the resolution came up for vote, a number of Senators, led by Senator Hale, sprang up to withdraw Vanderbilt's name. Senator Grimes thereupon caustically denounced Vanderbilt. "The whole transact

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THE STORY OF A FRANCHISE.

THE STORY OF A FRANCHISE.

This railroad, the first to enter New York City, had received from the New York Common Council in 1832 a franchise for the exclusive use of Fourth avenue, north of Twenty-third street—a franchise which, it was openly charged, was obtained by distributing bribes in the form of stock among the aldermen. [Footnote: "The History of Tammany Hall": 117.] The franchise was not construed by the city to be perpetual; certain reservations were embodied giving the city powers of revocation. But as we shall

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VANDERBILT GETS A RAILROAD.

VANDERBILT GETS A RAILROAD.

After Vanderbilt, by divers machinations of too intricate character to be described here, had succeeded in knocking down the price of New York and Harlem Railroad shares and had bought a controlling part, the price began bounding up. In the middle of April, 1863, it stood at $50 a share. A very decided increase it was, from $9 to $50; evidently enough, to occasion this rise, he had put through some transaction which had added immensely to the profits of the road. What was it? Sinister rumors pre

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THE ALDERMEN OUTWITTED BY VANDERBILT.

THE ALDERMEN OUTWITTED BY VANDERBILT.

But the aldermen were by no means unschooled in the current sharp practices of commercialism. A strong cabal of them hatched up a scheme by which they would take Vanderbilt's bribe money, and then ambush him for still greater spoils. They knew that even if they gave him the franchise, its validity would not stand the test of the courts. The Legislature claimed the exclusive power of granting franchises; astute lawyers assured them that this claim would be upheld. Their plan was to grant a franch

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HE ANNEXES A SECOND RAILROAD.

HE ANNEXES A SECOND RAILROAD.

Having found it so easy to get one railroad, he promptly went ahead to annex other railroads. By 1864 he loomed up as the owner of a controlling mass of stock in the New York and Hudson River Railroad. This line paralleled the Hudson River, and had a terminal in the downtown section of New York City. In a way it was a competitor of the New York and Harlem Railroad. The old magnate now conceived a brilliant idea. Why not consolidate the two roads? True, to bring about this consolidation an author

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CUNNING AGAINST CUNNING.

CUNNING AGAINST CUNNING.

A majority of the New York Legislature was bought. It looked as if the consolidation act would go through without difficulty. Surreptitiously, however, certain leading men in the Legislature plotted with the Wall Street opponents of Vanderbilt to repeat the trick attempted by the New York aldermen in 1863. The bill would be introduced and reported favorably; every open indication would be manifested of keeping faith with Vanderbilt. Upon the certainty of its passage the market value of the stock

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ACQUISITION BY WRECKING.

ACQUISITION BY WRECKING.

Vanderbilt considered it unnecessary to buy New York Central stock to get control. He had a much better and subtler plan. The Hudson River Railroad was at that time the only through road running from New York to Albany. To get its passengers and freight to New York City the New York Central had to make a transfer at Albany. Vanderbilt now deliberately began to wreck the New York Central. He sent out an order in 1865 to all Hudson River Railroad employees to refuse to connect with the New York Ce

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GOULD OVERREACHES VANDERBILT

GOULD OVERREACHES VANDERBILT

Vanderbilt resolved to wrest the Erie Railroad out of Drew's hands. By secretly buying its stock he was in a position in 1866 to carry out his designs. He threw Drew and his directors out, but subsequently realizing Drew's usefulness, reinstated him upon condition that he be fully pliable to the Vanderbilt interests. Thereupon Drew brought in as fellow directors two young men, then obscure but of whom the world was to hear much—James Fisk, Jr., and Jay Gould. The narrative of how these three men

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A NEW CONSOLIDATION PLANNED

A NEW CONSOLIDATION PLANNED

However, Vanderbilt quickly and multitudinously recouped himself for the losses encountered in his Erie assault. Why not, he argued, combine the New York Central and the Hudson River companies into one corporation, and on the strength of it issue a vast amount of additional stock? The time was ripe for a new mortgage on the labor of that generation and of the generations to follow. Population was wondrously increasing, and with it trade. For years the New York Central had been paying a dividend

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ALARM OF THE TRADING CLASS

ALARM OF THE TRADING CLASS

It was the opposition of the various groups of this class that Vanderbilt expected and provided against. He was fully aware that the moment he revealed his plan of consolidation boards of trade everywhere would rise in their wrath, denounce him, call together mass meetings, insist upon railroad competition and send pretentious, firebreathing delegates to the State Capitol. Let them thunder, said Vanderbilt placidly. While they were exploding in eruptions of talk he would concentrate at Albany a

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A LEGALIZED THEFT OF $44,000,000

A LEGALIZED THEFT OF $44,000,000

One act after another was slipped through the Legislature by Vanderbilt in 1868 and 1869. On May 20, 1869, Vanderbilt secured, by one bill alone, the right to consolidate railroads, a free grant of franchises, and other rights worth hundreds of millions of dollars, and the right to water stock and bonds to an enormous extent. The printing presses were worked overtime in issuing more than $44,000,000 of watered stock. The capital stock of the two roads was thus doubled. Pretending that the railro

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VANDERBILT AND HIS CRITICS.

VANDERBILT AND HIS CRITICS.

They denounced Vanderbilt as a bandit whose methods were a menace to the community. To the onlooker this campaign of virulent assault was extremely suggestive. If there was any one line of business in which fraud was not rampant, the many official reports and court proceedings of the time do not show it. This widespread fraud was not occasional; it was persistent. In one of the earlier chapters, the prevalence, more than a century ago, of the practise of fraudulent substitution of drugs and food

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THE WISDOM OF GRAND LARCENY.

THE WISDOM OF GRAND LARCENY.

Now it was that one could see with greater clearness than ever before, how the mercenary ideal of the ruling class was working out to its inevitable conclusion. Society had made money its god and property its yardstick; even in its administration of justice, theoretically supposed to be equal, it had made "justice" an expensive luxury available, in actual practice, to the rich only. The defrauder of large sums could, if prosecuted, use a part of that plunder, easily engage a corps of shrewd, exp

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HE CONTINUES THE BUYING OF LAWS

HE CONTINUES THE BUYING OF LAWS

Protest as it did against Vanderbilt's merging of railroads, the middle class found itself quite helpless. In rapid succession he put through one combination after another, and caused theft after theft to be legalized, utterly disdainful of criticism or opposition. In State after State he bought the repeal of old laws, or the passage of new laws, until he was vested with authority to connect various railroads that he had secured between Buffalo and Chicago, into one line with nearly 1,300 miles

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PUBLIC FUNDS FOR PRIVATE USE

PUBLIC FUNDS FOR PRIVATE USE

Instead of paying for these improvements with even a few millions of the proceeds of the watered stock, Vanderbilt (and all other railroad magnates in like cases did the same) forced the public treasury to defray a large part of the cost. A good illustration of his methods was his improvement of his passenger terminus in New York City. The entrance of the New York Central and the Harlem Railroads is by way of Park (formerly Fourth) avenue. This franchise, as we have seen, was obtained by bribery

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"REFORM" AS IT WORKS OUT.

"REFORM" AS IT WORKS OUT.

But these were not his only gifts from the "reform" Legislature. The Harlem Railroad owned, as we have seen, the Fourth avenue surface line of horse cars. Although until this time it extended to Seventy- ninth street only, this line was then the second most profitable in New York City. In 1864, for instance, it carried nearly six million passengers, and its gross earnings were $735,000. It did not pay, nor was required to pay, a single cent in taxation. By 1872 the city's population had grown to

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VANDERBILT'S CHIEF OF STAFF

VANDERBILT'S CHIEF OF STAFF

His chief instrument during all those years was a general utility lawyer, Chauncey M. Depew, whose specialty was to hoodwink the public by grandiloquent exhibitions of mellifluent spread-eagle oratory, while bringing the "proper arguments" to bear upon legislators and other public officials. [Footnote: Roscoe Conkling, a noted Republican politician, said of him: "Chauncey Depew? Oh, you mean the man that Vanderbilt sends to Albany every winter to say 'haw' and 'gee' to his cattle up there."] Eve

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REPRESSION BY STARVATION.

REPRESSION BY STARVATION.

These repressive tactics took on a variety of forms, some of which are not ordinarily included in the definitions of repression. The usual method was that of subsidizing press and pulpit in certain subtle ways. By these means facts were concealed or distorted, a prejudicial state of public opinion created, and plausible grounds given for hostile interference by the State. But a far more powerful engine of repression was the coercion exercised by employers in forcing their workers to remain submi

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THE SERMONIZING OF THE "BEST CLASSES."

THE SERMONIZING OF THE "BEST CLASSES."

One section of the social organization declined to accept the views of the class above it. This was the working class. Superimposed upon the working class, draining the life blood of the workers to provide them with wealth, luxuries and power, were those upper strata of society known as the "best classes." These "best classes," with a monstrous presumption, airily proclaimed their superiority and incessantly harped upon the need of elevating and regenerating the masses. And who, it may be curiou

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"HONESTY AND INDUSTRY" ANALYZED.

"HONESTY AND INDUSTRY" ANALYZED.

If there is any one fortune commonly praised as having been acquired "by honesty and industry," it is the Borden millions, made from cotton factories. At the time Vanderbilt was blackmailing, the founder of this fortune, Colonel Borden, was running cotton mills in Fall River. His factory operatives worked from five o'clock in the morning to seven in the evening, with but two half hours of intermission, one for breakfast, the other for dinner. The workday of these men, women and children was thus

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LABOR'S PRINCIPLES IGNORED.

LABOR'S PRINCIPLES IGNORED.

Such principles as these evoked so little attention that it is impossible to find them recorded in most of the newspapers of the time; and if mentioned it was merely as the object of venomous attacks. In varying degrees, now in outright abuse and again in sneering and ridicule, the working class was held up as an ignorant, discontented, violent aggregation, led by dangerous agitators, and arrogantly seeking to upset all business by seeking to dictate to employers what wages and hours of labor sh

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VANDERBILT'S CHARACTERISTICS.

VANDERBILT'S CHARACTERISTICS.

To such an extent did it corrode him that even when he could boast his $100,000,000 he still persisted in haggling and huckstering over every dollar, and in tricking his friends in the smallest and most underhand ways. Friends in the true sense of the word he had none; those who regarded themselves as such were of that thrifty, congealed disposition swayed largely by calculation. But if they expected to gain overmuch by their intimacy, they were generally vastly mistaken; nearly always, on the c

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THE OLD MAGNATE'S DEATH.

THE OLD MAGNATE'S DEATH.

An end, however, was soon coming to his prolonged life. A few more years of money heaping, and then, on May 10, 1876, he was taken mortally ill. For eight months he lay in bed, his powerful vitality making a vigorous battle for life; two physicians died while in the course of attendance on him; it was not until the morning of January 4, 1877, that the final symptoms of approaching death came over him. When this was seen the group about his bed emotionally sang: "Come, Ye Sinners, Poor and Needy,

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THE RISE OF THE FIRST TRUST.

THE RISE OF THE FIRST TRUST.

It was these conflicts that developed the auspicious time and opportunity for a change of the most world—wide importance, and one which had a stupendous ultimate purport not then realized. The wars between the railroad magnates assumed many forms, not the least of which was the cutting of freight rates. Each railroad desperately sought to wrench away traffic from the others by offering better inducements. In this cutthroat competition, a coterie of hawk-eyed young men in the oil business, led by

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CORPORATE WEALTH AND LABOR UNIONS.

CORPORATE WEALTH AND LABOR UNIONS.

The effects of this great industrial transition were clearly visible by 1877, so much so that two years later, Vanderbilt, more prophetically than he realized, told the Hepburn Committee that "if this thing keeps up the oil people will own the roads." But other noted industrial changes were concurrently going on. With the up- springing and growth of gigantic combinations or concentrations of capital, and the gradual disappearance of the small factors in railroad and other lines of business, work

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THE GREAT STRIKE OF 1877.

THE GREAT STRIKE OF 1877.

Making a loud and plaintive outcry about their declining revenues, some of the railroad systems prepared to assess their fictitious losses upon the workers by cutting down wages. They had already reduced wages to the point of the merest subsistence; and now they decreed that wages must again be curtailed ten cents on every dollar. The Baltimore and Ohio Railroad, then in the hands of the Garrett family, with a career behind it of consecutive political corruption and fraud, in some ways surpassin

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FRAUD BECOMES RESPECTABLE WEALTH

FRAUD BECOMES RESPECTABLE WEALTH

So the great investigation of 1879 passed by without the least deterrent effect upon the constantly-spreading power and wealth of such men as Vanderbilt and Gould. Every new development revealed that the hard-dying middle class was being gradually, yet surely, ground out. But the investigation of 1879 had one significant unanticipated result. What William H. Vanderbilt now did is well worth noting. As the owner of four hundred thousand shares of New York Central stock he had been rabidly denounc

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MORE RAILROADS ACQUIRED.

MORE RAILROADS ACQUIRED.

The impact of his vast fortune was well-nigh resistless. Commanding both financial and political power, his money and resources were used with destructive effect against almost every competitor standing in his way. If he could not coerce the owners of a railroad, the possession of which he sought, to sell to him at his own price, he at once brought into action the wrecking tactics his father had so successfully used. The West Shore Railroad, a competing line running along the west bank of the Hu

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THE SEQUEL TO A "GENTLEMEN'S AGREEMENT."

THE SEQUEL TO A "GENTLEMEN'S AGREEMENT."

Vanderbilt's methods and his duplicity in the disposition of this project were strikingly revealed in the court proceedings instituted by the State of Pennsylvania. It appeared from the testimony that he had made a "gentlemen's agreement" with the Reading Railroad, the bitterest competitor of the Pennsylvania Railroad, for a close alliance of interests. Vanderbilt owned eighty-two thousand shares of Reading stock, much of which he had obtained on this agreement. Strangely confiding in his word,

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HE EXPANDS IN SPLENDOR.

HE EXPANDS IN SPLENDOR.

It was at this time that he, in accord with the chrysalid tendency manifested by most other millionaires, discarded his long-followed sombre method of life, and invested himself with a gaudy magnificence. On Fifth avenue, at Fifty-first and Fifty-second streets, he built a spacious brown-stone mansion. In reality it was a union of two mansions; the southern part he planned for himself, the northern part for his two daughters. For a year and a half more than six hundred artisans were employed on

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A SUDDEN TRANSFORMATION.

A SUDDEN TRANSFORMATION.

The President of the United States lived in the subdued simplicity of the White House. But William H. Vanderbilt ate in a great, lofty dining room, twenty-six by thirty-seven feet, wrought in Italian Renaissance, with a wainscot of golden-hued, delicately-carved English oak around all four sides, and a ceiling with richly-painted hunting-scene panels. When he entertained it was in a vast drawing- room, palatially equipped, its walls hung with flowing masses of pale red velvet, embroidered with f

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"THE PUBLIC BE DAMNED."

"THE PUBLIC BE DAMNED."

If he had discreetly comported himself in other respects he might have passed tolerably well as an extremely public-spirited and philanthropic man. After every great fraud that he put through he would usually throw out to the public some ostentatious gift or donation. This would furnish a new ground to the sycophantic chorus for extolling his fine qualities. But he happened to inherit his father's irascibility and extreme contempt for the public whom he exploited. Unfortunately for him, he let o

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ADDS $100,000,000 IN SEVEN YEARS.

ADDS $100,000,000 IN SEVEN YEARS.

But William H. Vanderbilt was little affected by this outburst of public rage. He could well afford to smile cynically at it, so long as no definite move was taken to interfere with his privileges, power and possessions. Since his father's death he had added fully $100,000,000 to his wealth, all within a short period. It had taken Commodore Vanderbilt more than thirty years to establish the fortune of $105,000,000 he left. With a greater population and greater resources to prey upon, William H.

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HIS DEATH A NOTABLE EVENT.

HIS DEATH A NOTABLE EVENT.

Vanderbilt's death, as that of one of the real monarchs of the day, was an event of transcendent importance, and was treated so. The vocabulary was ransacked to find adjectives glowing enough to describe his enterprise, foresight, sagacity and integrity. Much elaborated upon was the fiction that he had increased his fortune by honest, legitimate means—a fiction still disseminated by those shallow or mercenary writers whose trade is to spread orthodox belief in existing conditions. The underlying

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HIS FRAUDS IN EVADING TAXES.

HIS FRAUDS IN EVADING TAXES.

As in the larger sense all criticism of conditions was systematically smothered, so were details of the methods of the rich carefully obscured or altogether passed by in silence. At Vanderbilt's death the newspapers laved in gorgeous descriptions of his mansion. Yet apart from the proceeds of his great frauds, the amounts out of which he had cheated the city and State in taxation were alone much more than enough to have paid for his splendor of living. Like the Astors, the Goelets, Marshall Fiel

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HIS WILL TRANSMITS $200,000,000.

HIS WILL TRANSMITS $200,000,000.

Unlike his father, William H. Vanderbilt did not bequeath the major portion of his fortune to one son. He left $50,000,000 equally to each of his two sons, Cornelius and William K. Vanderbilt. Supplementing the fortunes they already had, these legacies swelled their individual fortunes to approximately $100,000,000 each—about the same amount as their father had himself inherited. The remaining $100,000,000 was thus disposed of in William H. Vanderbilt's will: $40,000,000, in railroad and other s

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THE GREAT LABOR MOVEMENT OF 1886

THE GREAT LABOR MOVEMENT OF 1886

Now, to the intense alarm of all sections of the capitalist class, a very different quality of movement reared itself upward from the deeps of the social formation. [Footnote: It may be asked why an extended description of this movement is interposed here. Because, inasmuch as it is a part of the plan of this work to present a constant succession of contrasts, this is, perhaps, as appropriate a place as any to give an account of the highly important labor movement of 1886. Of course, it will be

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THE HAYMARKET TRAGEDY.

THE HAYMARKET TRAGEDY.

Fired with indignation at the slaughter at the McCormick meeting, Spies and others of his group issued a call for a meeting on the night of May 4, at the Haymarket, to protest against the police assaults. Spies opened the meeting, and was followed by Fielden. Observers agreed that the meeting was proceeding in perfect quiet, so quietly that the Mayor of Chicago, who was present to suppress it if necessary, went home—when suddenly one hundred and eighty policemen, with arms in readiness, appeared

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JUDICIAL MURDER OF LABOR'S LEADERS.

JUDICIAL MURDER OF LABOR'S LEADERS.

The details of the trial will not be gone into here. The trial itself is now everywhere recognized as having been a tragic farce. The jury, it is clear, was purposely drawn from the employing class, or their dependents; of a thousand talesmen summoned, only five or six belonged to the working class. The malignant class nature of the trial was revealed by the questions asked of the talesmen; nearly all declared that they had a prejudice against Socialists, Anarchists and Communists. Soon the blin

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THE LABOR UPRISING IN NEW YORK.

THE LABOR UPRISING IN NEW YORK.

In the meanwhile, between the time of the Haymarket episode and the hanging and imprisonment of the Chicago group, the labor movement in New York City had assumed so strong a political form that the ruling class was seized with consternation. The Knights of Labor, then at the summit of organization and solidarity, were ripe for independent political action; the effects of the years of active propaganda carried on in their ranks by the Socialists and Single-Tax advocates now began to show fruit.

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CAPITALIST TRIUMPH BY FRAUD.

CAPITALIST TRIUMPH BY FRAUD.

This was the familiar one of corruption and fraud. It was a method in the exercise of which the capitalists as a class had proved themselves adepts; they now summoned to their aid all of the ignoble and subterranean devices of criminal politics. In the New York City election of 1886 three parties contested, the Labor party, Tammany Hall and the Republican party. Steeped in decades of the most loathsome corruption, Tammany Hall was chosen as the medium by which the Labor party was to be defrauded

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THE LABOR PARTY EVAPORATES.

THE LABOR PARTY EVAPORATES.

By the end of the year 1887 the political phase of the labor movement had shrunk to insignificant proportions, and soon thereafter collapsed. The capitalist interests had followed up their onslaught in hanging and imprisoning some of the foremost leaders, and in corruption and fraud at the polls, by the repetition of other tactics that they had long so successfully used. Acting through the old political parties they further insured the disintegration of the Labor party by bribing a sufficient nu

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THE SMALL CAPITALISTS' LOSING FIGHT.

THE SMALL CAPITALISTS' LOSING FIGHT.

The great capitalists both dared and did. If specific statutes were against them, the impelling forces of economic development and the power of might were wholly on their side. The competitive system was already doomed; the middle class was too blind to realize that what seemed to be victory was the rattle of the slow death struggle. At first, the great capitalists made no attempt to have these laws altered or repealed. They adopted a slyer and more circuitous mode of warfare. They simply evaded

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SEIZING RAILROADS AND COAL MINES.

SEIZING RAILROADS AND COAL MINES.

This system of abject slavery was in full force when the railroads ousted many of the small operators, and largely by pressure of power took possession of the mines. In vain did the miners' unions implore the railroad magnates for redress of some kind. The magnates abruptly refused, and went on extending and intrenching their authority. The Vanderbilts manipulated themselves into being important factors in the Delaware and Hudson Railroad, and in the Delaware, Lackawana and Western Railroad, whi

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AND THE WAY IN WHICH IT WAS DONE.

AND THE WAY IN WHICH IT WAS DONE.

The two powers controlling the large railroads traversing most of the New England States were the Vanderbilts and J. Pierpont Morgan. The one owned the New York Central, the other dominated the New York, New Haven and Hartford Railroad. The Pennsylvania Railroad likewise had no intention of allowing such a powerful competitor in its own province. These magnates viewed with intense amazement the effrontery of what they regarded as an upstart interloper. Although they had been constantly fighting

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THE DICTATION OF THE COAL FIELDS.

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 hea

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THE BITUMINOUS COAL MINES ALSO.

THE BITUMINOUS COAL MINES ALSO.

The sway of the Vanderbilts, however, extends not only over the anthracite, but over a great extent of the bituminous coal fields in Pennsylvania, Maryland, West Virginia, Ohio and other States. By their control of the New York Central Railroad, they own various ostensibly independent bituminous coal mining companies. The Clearfield Corporation, the Pennsylvania Coal and Coke Co., and the West Branch Coal Company are some of these. By their great holdings in other railroads traversing the soft c

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THE HUGE PROFITS FROM THE COAL MINES.

THE HUGE PROFITS FROM THE COAL MINES.

No one knows or can ascertain the exact profits of the Vanderbilts and of other railroad owners from their control of both the anthracite, and largely the bituminous, coal mines. As has been noted, the railroad magnates cloud their trail by operating through subsidiary companies. That their extortions reach hundreds of millions of dollars every year is a patent enough fact. Some of the accompaniments of this process of extortion have been referred to;— the confiscation, on the one hand, of the l

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AN $8,000,000 AREA CONFISCATED.

AN $8,000,000 AREA CONFISCATED.

Such a slight fraud was, for instance, the Vanderbilts' confiscation of an entire section of New York City. In 1887 they decided that they had urgent and particular need for railroad yard purposes of a sweep of streets from Sixtieth street to Seventy-second street along the Hudson River Railroad division. What if this property had been bought, laid out and graded by the city at considerable expense? The Vanderbilts resolved to have it and get it for nothing. Under special forms of law dictated b

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PUBLIC TAXATION TO SUPPLY PRIVATE CAPITAL.

PUBLIC TAXATION TO SUPPLY PRIVATE CAPITAL.

The Legislature of 1892 was thoroughly responsive. This was a Legislature which was not merely corrupt, but brazenly and frankly so, as was proved by the scandalous openness with which various spoliative measures were rushed through. An act was passed compelling New York City to pay one-half of the cost of the projected elevated approaches up to the sum of $1,600,000. New York City was thus forced to pay $800,000 for constructing that portion south of the Harlem River. If, so the law read on, th

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A MULTITUDE OF ACQUISITIONS

A MULTITUDE OF ACQUISITIONS

Why tempt exhaustion by lingering upon a multitude of other frauds which went to increase the wealth and possessions of the Vanderbilt family? One after another—often several simultaneously—they were put through, sometimes surreptitiously, again with overt effrontery. Legislative measures in New York and many other States were drafted with such skill that sly provisions allowing the greatest frauds were concealed in the enactments; and the first knowledge that the plundered public frequently had

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THE BOSTON AND ALBANY RAILROAD BECOMES THEIRS.

THE BOSTON AND ALBANY RAILROAD BECOMES THEIRS.

To a great extent, this railroad had been built with public funds raised by enforced taxation, the city of Albany contributing $1,000,000, and the State of Massachusetts $4,300,000 of public funds. Originally it looked as if the public interests were fully conserved. But gradually, little by little, predatory corporate interests got in their delicate work, and induced successive legislatures and State officials to betray the public interests. The public holdings of stock were entirely subordinat

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THE GOVERNMENT AN ENGINE OF TYRANNY.

THE GOVERNMENT AN ENGINE OF TYRANNY.

The grievances and protests of the workers aroused no response save the ever-active one of contumely, coercion and violent reprisals. The treasury of Nation, States and cities, raised by a compulsory taxation falling heavily upon the workers, was at all times at the complete disposal of the propertied interests, who emptied it as fast as it was filled. The propertiless and jobless were left to starve; to them no helping arm was outstretched, and if they complained, no quarter given. The State as

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MACHINE GUNS FOR THE OVERWORKED.

MACHINE GUNS FOR THE OVERWORKED.

These deadly conditions prevailed on the Vanderbilt railroads even more than on any others; it was notorious that the Vanderbilt system was not only managed in semi-antiquated ways so far as the operation was concerned, but also that its trainmen were terribly underpaid and overworked. [Footnote: "Semi-antiquated ways." Only recently the "Railway Age Gazette," issue of January, 1909, styled the New York Central's directors as mostly "concentrated absurdities, physically incompetent, mentally unf

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TEN MILLIONS FOR A DUKEDOM.

TEN MILLIONS FOR A DUKEDOM.

The announcement was made in 1895 that "a marriage had been arranged" between Consuelo, a young daughter of William K. Vanderbilt, and the Duke of Marlborough. The wedding ceremony was one of showy splendor; millions of dollars in gifts were lavished upon the couple. Other millions in cash, wrenched also from the labor of the American working population, went to rehabilitate and maintain Blenheim House, with its prodigal cost of reconstruction, its retinue of two hundred servants, and its annual

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DIVERSITY OF THE VANDERBILT POSSESSIONS.

DIVERSITY OF THE VANDERBILT POSSESSIONS.

The fortune of the Vanderbilt family, at the present writing, is represented by the most extensive and different forms of property. Railroads, street railways, electric lighting systems, mines, industrial plants, express companies, land, and Government, State and municipal bonds—these are some of the forms. From one industrial plant alone—the Pullman Company—the Vanderbilts draw millions in revenue yearly. Formerly they owned their own palace car company, the Wagner, but it was merged with the P

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THE SORT OF ABILITY DISPLAYED.

THE SORT OF ABILITY DISPLAYED.

The particular kind of ability by which one man, followed by his descendants, obtained the controlling ownership of this great railroad system, and of other properties, has been herein adequately set forth. Long has it been the custom to attribute to Commodore Vanderbilt and successive generations of Vanderbilts an almost supernatural "constructive genius," and to explain by that glib phrase their success in getting hold of their colossal wealth. This explanation is clumsy fiction that at once f

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JAY GOULD'S BOYHOOD

JAY GOULD'S BOYHOOD

The founder of this fortune was Jay Gould, father of the present holding generation. He was the son of a farmer in Delaware County, New York, and was born in 1836. As a child his lot was to do various chores on his father's farm. In driving the cows he had to go barefoot, perforce, by reason of poverty, and often thistles bruised his feet—a trial which seems to have left such a poignant and indelible impression upon his mind that when testifying before a United States Senate investigating commit

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HE GOES INTO THE TANNING BUSINESS.

HE GOES INTO THE TANNING BUSINESS.

Subsequently Gould went into the tanning business in Pennsylvania with Zadoc Pratt, a New York merchant, politician and Congressman of a certain degree of note at the time. [Footnote: Pratt was regarded as one of the leading agricultural experts of his day. His farm of three hundred and sixty-five acres, at Prattsville, New York, was reputed to be a model. A paper of his, descriptive of his farm, and containing woodcut engravings, may be found in U. S. Senate Documents, Second Session, Thirty-se

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HE BUYS RAILROAD BONDS WITH HIS STEALINGS.

HE BUYS RAILROAD BONDS WITH HIS STEALINGS.

Three years later, in 1860, Gould set up as a leather merchant in New York City; the New York directory for that year contains this entry: "Jay Gould, leather merchant, 39 Spruce street; house Newark." For several years after this his name did not appear in the directory. He had been, however, edging his way into the railroad business with the sums that he had stolen from Pratt and Leupp. At the very time that Leupp committed suicide, Gould was buying the first mortgage bonds of the Rutland and

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WHY THIS BIASED VIEW OF GOULD'S CAREER?

WHY THIS BIASED VIEW OF GOULD'S CAREER?

Yet, it may well be asked now, even if for the first time, why has Jay Gould been plucked out as a special object of opprobrium? What curious, erratic, unstable judgment is this that selects this one man as the scapegoat of commercial society, while deferentially allowing his business contemporaries the fullest measure of integrity and respectability? Monotonous echoes of one another, devoid of understanding, writer has followed writer in harping undiscriminatingly upon Jay Gould's crimes. His c

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THE TEACHINGS OF HIS ENVIRONMENT.

THE TEACHINGS OF HIS ENVIRONMENT.

To understand the incentives and methods of Gould's career, it is necessary to know the endemic environment in which he grew up and flourished, and its standards and spirit. He, like others of his stamp, were, in a great measure, but products of the times; and it is not the man so much as the times that are of paramount interest, for it is they which supply the explanatory key. In preceding chapters repeated insights have been given into the methods not merely of one phase, but of all phases, of

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A SPECIMEN OF GOULD'S TUITION.

A SPECIMEN OF GOULD'S TUITION.

At the very dawn of his career in 1857, as a railroad owner, Gould had the opportunity of securing valuable and gratuitous instruction in the ways by which railroad projects and land grants were being bribed through Congress. He was then only twenty-one years old, ready to learn, but, of course, without experience in dealing with legislative bodies. But the older capitalists, veterans at bribing, who for years had been corrupting Congress and the Legislatures, supplied him with the necessary inf

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PATRIOTISM AT FIFTY PER CENT.

PATRIOTISM AT FIFTY PER CENT.

Some of these acts, demanded by the banking interests, made the people of the United States pay an almost unbelievable usurious interest for loans. These banking statutes were so worded that nominally the interest did not appear high; in reality, however, by various devices, the bankers, both national and international, were often able to extort from twenty to fifty, and often one hundred per cent., in interest, and this on money which had at some time or somehow been squeezed out of exploited p

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PRIVATE CONFISCATION OF THE ERIE RAILROAD.

PRIVATE CONFISCATION OF THE ERIE RAILROAD.

The Erie Railroad, running from New York City to Buffalo and thence westward to Chicago, was started in 1832. In New York State alone, irrespective of gifts in other States, it received what was virtually a gift of $3,000,000 of State funds, and $3,217,000 interest, making $6,217,000 in all. Counties, municipalities and towns through which it passed were prevailed upon to contribute freely donations of money, lands and rights. From private proprietors in New York State it obtained presents of la

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THE SPECULATOR, DREW, GETS CONTROL.

THE SPECULATOR, DREW, GETS CONTROL.

Not satisfied with the thefts of public funds, the successive cliques in control of the Erie Railroad continually plundered its treasury, and defrauded its stockholders. So little attention was given to efficient management that shocking catastrophies resulted at frequent intervals. A time came, however, when the old locomotives, cars and rails were in such a state of decay, that the replacing of them could no longer be postponed. To do this money was needed, and the treasury of the company had

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GOULD AND HIS PARTNERS FLEE WITH MILLIONS.

GOULD AND HIS PARTNERS FLEE WITH MILLIONS.

It was not until the day's activity was over that Vanderbilt, amazed and furious, realized that he had been gouged out of $7,000,000. Other buyers were also cheated out of millions. The old man had been caught napping; it was this fact which stung him most. However, after the first paroxysm of frenzied swearing, he hit upon a plan of action. The very next morning warrants were sworn out for the arrest of Drew, Fisk and Gould. A hint quickly reached them; they thereupon fled to Jersey City out of

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GOULD BRIBES THE LEGISLATURE WITH $500,000.

GOULD BRIBES THE LEGISLATURE WITH $500,000.

Stuffing $500,000 in his satchel, Gould surreptitiously hurried to Albany. Detected there and arrested, he was released under heavy bail which a confederate supplied. He appeared in court in New York City a few days later, but obtained a postponement of the action. No time was lost by him. "He assiduously cultivated," says Adams, "a thorough understanding between himself and the Legislature." In the face of sinister charges of corruption, the bill legalizing the fraudulent stock issues was passe

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GOULD AND FISK THROW OVER DREW.

GOULD AND FISK THROW OVER DREW.

The next development was characteristic. Having no longer any need for their old accomplice, Gould and Fisk, by tactics of duplicity, gradually sheared Drew and turned him out of the management to degenerate into a financial derelict. It was Drew's odd habit, whenever his plans were crossed, or he was depressed, to rush off to his bed, hide himself under the coverlets and seek solace in sighs and self-compassion, or in prayer—for with all his unscrupulousness he had an orthodox religious streak.

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ALLIANCE WITH CORRUPT POLITICS AND JUDICIARY.

ALLIANCE WITH CORRUPT POLITICS AND JUDICIARY.

From 1868 to 1872 Gould, abetted by subservient directors, issued two hundred and thirty-five thousand more shares of stock. [Footnote: Fisk was murdered by a rival in 1872 in a feud over Fisk's mistress. His death did not interrupt Gould's plans.] The frauds were made uncommonly easy by having Tweed machine as an auxiliary; in turn, Tweed, up to 1871, controlled the New York City and State dominant political machine, including the Legislature and many of the judges. To insure Tweed's connivance

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GOULD'S TRADING CLASS SUPPORT

GOULD'S TRADING CLASS SUPPORT

Those writers who are content with surface facts, or who lack understanding of popular currents, either state, or leave the inference, that it was solely by bribing and trickery that Gould was able to consummate his frauds. Such assertions are altogether incorrect. To do what he did required the support, or at least tolerance, of a considerable section of public opinion. This he obtained. And how? By posing as a zealous anti-monopolist. The cry of anti-monopoly was the great fetich of the entire

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GOULD'S DIRECTORS BRIBED TO RESIGN.

GOULD'S DIRECTORS BRIBED TO RESIGN.

They made no further attempt to resort to the law. A fund of $300,000 was sent over by them to their American agents with which to bribe a number of Gould's directors to resign. As Gould had used these directors as catspaws, they were aggrieved because he had kept all of the loot himself. If he had even partly divided, their sentiments would have been quite different. The $300,000 bribery fund was distributed among them, and they carried out their part of the bargain by resigning. [Footnote: Ass

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THE LEGISLATURE BRIBED AGAIN.

THE LEGISLATURE BRIBED AGAIN.

It seems that the entire amount, including the large fees paid to agents and lawyers, corruptly expended by the English capitalists in ousting Gould, was $750,000. Did they foot this bill out of their own pockets? By no means. They arranged the reimbursements by voting this sum to themselves out of the Erie Railroad treasury; [Footnote: Assembly Document No. 98, 1873: xii and xvi.] that is to say, they compelled the public to shoulder it by adding to the bonded burdens on which the people were t

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GOULD'S DIRECT ERIE THEFTS WERE $12,000,000.

GOULD'S DIRECT ERIE THEFTS WERE $12,000,000.

What did Gould's plunder amount to? His direct thefts, by reason of his Erie frauds, seem to have reached more than twelve million dollars, all, or nearly all, of which he personally kept. That sum, considering the falling prices of commodities after the panic of 1873, and comparable with current standards of cost and living, was equivalent to perhaps double the amount at present. Various approximations of his thefts were made. After a minute examination of the Erie railroad's books, Augustus St

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AN EXTRAORDINARY "RESTITUTION."

AN EXTRAORDINARY "RESTITUTION."

Apparently Gould was trapped. But a wonderful and unexpected development happened which filled the Wall Street legion with admiration for his craft and audacity. He planned to make his very restitution the basis for taking in many more millions by speculation; he knew that when it was announced that he had concluded to disgorge, the market value of the stock would instantly go up and numerous buyers would appear. Secretly he bought up as much Erie stock as he could. Then he ostentatiously and wi

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THE SECOND STAGE OF THE GOULD FORTUNE

THE SECOND STAGE OF THE GOULD FORTUNE

Gould's thefts from the Erie railroad were, however, only one of his looting transactions during those busy years. At the same time, he was using these stolen millions to corner the gold supply. In this "Black Friday" conspiracy (for so it was styled) he fradulently reaped another eleven million dollars to the accompaniment of a financial panic, with a long train of failures, suicides and much disturbance and distress. The "gold conspiracy" as plotted and consummated by Gould was in its day deno

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THE ABUSE OF GOULD OVERDONE

THE ABUSE OF GOULD OVERDONE

It was not nearly as discreditable as the gigantic and repulsive swindles that traders and bankers had carried on during the dark years of the Civil War. The very traders and financiers who beslimed Gould for his "gold conspiracy" were those who had built their fortunes on blood-soaked army contracts. Nor could the worst aspects of Gould's conspiracy, bad as they were, begin to vie in disastrous results with the open and insidious abominations of the factory and landlord system. To repeat, it wa

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GOULD EMBARKS ON HIS CONSPIRACY

GOULD EMBARKS ON HIS CONSPIRACY

After the opening of the Civil War, gold was exceedingly scarce, and commanded a high premium. The supply of this metal, this yellow dross, which to a considerable degree regulated the world's relative values of wages and commodities, was monopolized by the powerful banking interests. In 1869 but fifteen million dollars of gold was in actual circulation in the United States. Notwithstanding the increase of industrial productive power, the continuous displacement of obsolete methods by the introd

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HE BRIBES GOVERNMENT OFFICIALS.

HE BRIBES GOVERNMENT OFFICIALS.

To get this inside information he succeeded in corruptly winning over to his interests A. R. Corbin, a brother-in-law of President Grant. The consideration was Gould's buying of two million dollars' worth of gold bonds, without requiring margin or security for Corbin's account [Footnote: Gold Panic Investigation, House Report: No 32, Forty-first Congress, Second Session, 1870:157. Corbin's venality in lobbying for corrupt bills was notorious; he admitted his complicity before a Congressional Inv

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GOULD BETRAYS HIS PARTNERS.

GOULD BETRAYS HIS PARTNERS.

Entrapped, Gould realized that something had to be done, and done quickly, if he were to escape complete ruin, holding as he did the large amount of gold that he had bought at steep prices. By plausible fabrications he convinced Fisk that Grant was really an ally. Gould had bought a controlling interested in the Tenth National Bank. This institution Gould and Fisk now used as a fraudulent manufactory of certified checks. These they turned out to the amount of tens of millions of dollars. With th

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THE MEMORABLE "BLACK FRIDAY"

THE MEMORABLE "BLACK FRIDAY"

The next day, "Black Friday," September 24, 1869, was one of tremendous excitement and gloomy apprehension among the money changers. Even the exchanges of foreign countries reflected the perturbation. Gould gave orders to buy all gold in Fisk's name; Fisk's brokers ran the premium up to 151 and then to 161. The market prices of railroad stocks shrank rapidly; failure after failure of Wall Street firms was announced, and fortunes were swept away. Fearing that the price of gold might mount to 200,

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ELEVEN MILLIONS POCKETED BY JUDICIAL COLLUSION.

ELEVEN MILLIONS POCKETED BY JUDICIAL COLLUSION.

Ever agile and resourceful, Gould quickly extricated himself from this difficulty. He fell back upon the corrupt judiciary. Upon various flimsy pretexts, he and Fisk, in a single day, procured twelve sweeping injunctions and court orders. [Footnote: Gold Panic Investigation, etc. 18.] These prohibited the Stock Exchange and the Gold Board from enforcing any rules of settlement against them, and enjoined Gould and Fisk's brokers from settling any contracts. The result, in brief, was that judicial

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THEIR PRESENT WEALTH TRACED TO FRAUD.

THEIR PRESENT WEALTH TRACED TO FRAUD.

From these persistent frauds came, to a large extent, the great collective and individual wealth of the members of this firm, and of their successors. It was also by reason of these frauds that Phelps, Dodge and Company were easily able to outdo competitors. Only recently, let it be added, they formed themselves into a corporation with a capital of $50,000,000. With the palpably great revenues from their continuous frauds, they were in an advantageous position to buy up many forms of property. B

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THE CLUBBING OF THE UNEMPLOYED.

THE CLUBBING OF THE UNEMPLOYED.

"The winter of 1873-74," says McNeill, was one of extreme suffering. Midwinter found tens of thousands of people on the verge of starvation, suffering for food, for the need of proper clothing, and for medical attendance. Meetings of the unemployed were held in many places, and public attention called to the needs of the poor. The men asked for work and found it not, and children cried for bread…. The unemployed and suffering poor of New York City determined to hold a meeting and appeal to the p

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THE MISLEADING ACCOUNTS HANDED DOWN.

THE MISLEADING ACCOUNTS HANDED DOWN.

This railroad had been chartered by Congress in 1862 to run from a line on the one hundredth meridian in Nebraska to the western boundary of Nevada. The actual story of its inception and construction is very different from the stereotyped accounts shed by most writers. These romancers, distinguished for their sycophancy and lack of knowledge, would have us believe that these enterprises originated as splendid and memorable exhibitions of patriotism, daring and ability. According to their version

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SECTIONAL INTERESTS IN CONFLICT.

SECTIONAL INTERESTS IN CONFLICT.

Far greater forces than individual capitalists, or isolated groups of capitalists, were at work to promote or prevent the construction of this or that Pacific road. In the struggle before the Civil War between the capitalist system of the North and the slave oligarchy of the South, the chattel slavery forces exerted every effort to use the powers of Government to build railroads in sections where their power would be extended and further intrenched. Their representatives in Congress feverishly s

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A MYTH OF MODERN FABRICATION

A MYTH OF MODERN FABRICATION

The myth had not then been built up of putative great construction pioneers, risking their every cent, and racking their health and brains, in the construction of railways. It was in the very heyday of the bribing and swindling, as numerous investigating committees showed; there could be no glamour or illusion then. The money lavishly poured out for the building of railroads was almost wholly public money drawn from compulsory taxation of the whole people. At this identical time practically ever

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CONGRESS BRIBED FOR THE UNION PACIFIC CHARTER.

CONGRESS BRIBED FOR THE UNION PACIFIC CHARTER.

It was highly probable that this act was obtained by bribery. There is not the slightest doubt that the supplementary act of 1864 was. The directors and stockholders of the company were not satisfied with the comprehensive privileges that they had already obtained. It was very easy, they saw, to get still more. Among these stockholders were many of the most effulgent merchants and bankers in the country; we find William E. Dodge, for instance, on the list of stockholders in 1863. The pretext tha

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THE CREDIT MOBILIER JOBBERY.

THE CREDIT MOBILIER JOBBERY.

All the funds that the Union Pacific Railroad Company could privately raise by 1865 was the insufficient sum of $500,000. Some greater incentive was plainly needed to induce capitalists to rush in. Oakes Ames, head of the company, and a member of Congress, finally hit upon the auspicious scheme. It was the same scheme that the Vanderbilts, Gould, Sage, Blair, Huntington, Stanford, Crocker and other railroad magnates employed to defraud stupendous sums of money. Ames produced the alluring plan of

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GREAT CORRUPTION AND VAST THEFTS.

GREAT CORRUPTION AND VAST THEFTS.

Charges of enormous thefts committed by Credit Mobilier Company, and of corruption of Congress, were specifically made by various individuals and in the public press. A sensational hullabaloo resulted; Congress was stormed with denunciations; it discreetly concluded that some action had to be taken. The time-honored, mildewed dodge of appointing an investigating committee was decided upon. Virtuously indignant was Congress; zealously inquisitive the committee appointed by the United States Senat

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THRIFTY, SAGACIOUS PATRIOTISM.

THRIFTY, SAGACIOUS PATRIOTISM.

Who could deny that the phalanx of capitalists scrambling forward to share in this carnival of plunder were not gifted with unerring judgment? From afar they sighted their quarry. Nearly all of them were the fifty per cent. "patriot" capitalists of the Civil War; and, just as in all extant biographies, they are represented as heroic, self-sacrificing figures during that crisis, when in historical fact, they were defrauding and plundering indomitably, so are they also glorified as courageous, ent

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THE BRIBERY PERSISTENTLY CONTINUES.

THE BRIBERY PERSISTENTLY CONTINUES.

When the act of 1864 was passed, Congress plausibly pointed out the wise, precautionary measures it was taking to insure the honest disbursements of the Government's appropriations. "Behold," said in effect this Congress, "the safeguards with which we are surrounding the bill. We are providing for the appointment of Government directors to supervise the work, and see to it that the Government's interests do not suffer." Very appropriate legislation, indeed, from a Congress in which $436,000 of b

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JAY GOULD COMES FORWARD

JAY GOULD COMES FORWARD

It was now that Jay Gould eagerly stepped in. Where others saw cessation of plunder, he spied the richest possibilities for a new onslaught. For years he had been a covetous spectator of the operations of the Credit Mobilier; and, of course, had not been able to contain himself from attempting to get a hand in its stealings. He and Fisk had repeatedly tried to storm their way in, and had carried trumped-up cases into the courts, only to be eventually thwarted. Now his chance came. What if $50,00

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