Great Fortunes from Railroads Part 6

"The widespread belief of the people of this country," wrote Commissioner Sparks in 1885, "that the land department has been largely conducted to the advantage of speculation and monopoly, private and corporate, rather than in the public interest, I have found supported by developments in every branch of the service.... I am satisfied that thousands of claims without foundation in law or equity, involving millions of acres of public land, have been annually pa.s.sed to patent upon the single proposition that n.o.body but the Government had any _adverse_ interest. The vast machinery of the land department has been devoted to the chief result of conveying the t.i.tle of the United States to public lands upon fraudulent entries under loose construction of law." [Footnote: House Ex. Docs., 1885-86, ii: 156.] Whenever a capitalist's interest was involved, the law was always "loosely construed," but the strictest interpretation was invariably given to laws pa.s.sed against the working population.

It was estimated, in 1892, that 57,000,000 acres of land in New Mexico and Colorado had, for more than thirty years, been unlawfully treated by public officers as having been ceded to the United States by Mexico. The Maxwell, Sangre de Cristo, Nolan and other grants were within this area. The House Committee on Private Land Claims reported on April 29, 1892: "A long list of alleged Mexican and Spanish grants within the limits of the Texas cession have been confirmed, or quit claimed by Congress, under the false representation that said alleged grants were located in the territory of New Mexico ceded by the treaty; an enormous area of land has long been and is now held as confirmed Mexican and Spanish grants, located in the territory of Mexico ceded by the treaty when such is not the fact." [Footnote: House Report, 1892, No. 1253:8.]

In Texas the fraudulent, and often, violent methods of the seizure of land by the capitalists were fully as marked as those used elsewhere.

Upon its admittance to the Union, Texas retained the disposition of its public lands. Up to about the year 1864, almost the entire area of Texas, comprising 274,356 square miles, or 175,587,840 acres, was one vast unfenced feeding ground for cattle, horses and sheep. In about the year 1874, the agricultural movement began; large numbers of intending farmers migrated to Texas, particularly with the expectation of raising cattle, then a highly profitable business.

They found huge stretches of the land already preempted by individual capitalists or corporations. In a number of instances, some of these individuals, according to the report of a Congressional Committee, in 1884, dealing with Texas lands, had each acquired the ownership of more than two hundred and fifty thousand acres.

"It is a notorious fact," this committee reported, "that the public land laws, although framed with the special object of encouraging the public domain, of developing its resources and protecting actual settlers, have been extensively evaded and violated. Individuals and corporations have, by purchasing the proved-up claims, or purchases of ostensible settlers, employed by them to make entry, extensively secured the ownership of large bodies of land." [Footnote: House Reports, Second Session, Forty-eighth Congress, 1884-85, Vol. xxix, Ex. Doc. No. 267:43.] The committee went on to describe how, to a very considerable extent, "foreigners of large means" had obtained these great areas, and had gone into the cattle business, and how the t.i.tles to these lands were se-cured not only by individuals but by foreign corporations. "Certain of these foreigners are t.i.tled n.o.blemen. Some of them have brought over from Europe, in considerable numbers, herdsmen and other employees who sustain to them a dependent relationship characteristic of the peasantry on the large landed estates of Europe." Two British syndicates, for instance, held 7,500,000 acres in Texas. [Footnote: House Reports, etc., 1884-85, Doc. No. 267:46.]

This spoliation of the public domain was one of the chief grievances of the National Greenback-Labor party in 1880. This party, to a great extent, was composed of the Western farming element. In his letter accepting the nomination of that party for President of the United States, Gen. Weaver, himself a member of long standing in Congress from Iowa, wrote:

An area of our public domain larger than the territory occupied by the great German Empire has been wantonly donated to wealthy corporations; while a bill introduced by Hon. Hendrick B. Wright, of Pennsylvania, to enable our poor people to reach and occupy the few acres remaining, has been scouted, ridiculed, and defeated in Congress. In consequence of this stupendous system of land-grabbing, millions of the young men of America, and millions more of industrious people from abroad, seeking homes in the New World, are left homeless and dest.i.tute. The public domain must be sacredly reserved to actual settlers, and where corporations have not complied strictly with the terms of their grants, the lands should be at once reclaimed.

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 the public domain by the Government, and converted into forest reservations. Large portions of such of the agricultural, grazing, mineral and timber lands as were not seized by various corporations and favored individuals before 1880, have been expropriated west of the Mississippi since then, and the process is still going, notably in Alaska. The nominal records of the General Land Office as to the number of homesteaders are of little value and are very misleading. Immense numbers of alleged homesteaders were, as we have copiously seen, nothing but paid dummies by whose entries vast tracts of land were seized under color of law. It is indisputably clear that hundreds of millions of acres of the public domain have been obtained by outright fraud.

Notwithstanding the fact that only a few years before, the Government had held far more than enough land to have provided every agriculturist with a farm, yet by 1880, a large farm tenant cla.s.s had already developed. Not less than 1,024,061 of the 4,008,907 farms in the United States were held by renters. One-fourth of all the farms in the United States were cultivated by men who did not own them.

Furthermore, and even more impressive, there were 3,323,876 farm laborers composed of men who did not even rent land. Equally significant was the increasing tendency to the operating of large farms by capitalists with the hired labor. Of farms under cultivation, extending from one hundred to five hundred acres, there were nearly a million and a half--1,416,618, to give the exact number--owned largely by capitalists and cultivated by laborers.

[Footnote: Tenth Census, Statistics of Agriculture: 28.]

Phillips, who had superior opportunities for getting at the real facts, and whose volume upon the subject issued at the time is well worthy of consideration, thus commented upon the census returns:

It will thus be seen that of the 7,670,493 persons in our country engaged in agriculture, there are 1,024,601 who pay rent to persons not cultivating the soil; 1,508,828 capitalist or speculating owners, who own the soil and employ laborers; 804,522 of well-to-do farmers who hire part of their work or employ laborers, and 670,944 who may be said to actually cultivate the soil they own: the rest are hired workers.

Phillips goes on to remark:

Another fact must be borne in mind, that a large number of the 2,984,306 farmers who own land are in debt for it to the money lenders. From the writer's observation it is probable that forty per cent, of them are so deeply in debt as to pay a rent in interest.

This squeezing process is going on at the rate of eight and ten per cent., and in most cases can terminate in but one way. [Footnote: "Labor, Land and Law": 353. It is difficult to get reliable statistics on the number of mortgages on farms, and on the number of farm tenants. The U.S. Industrial Commission estimated, in 1902, that fifty per cent, of the homesteads in Eastern Minnesota were mortgaged. Although admitting that such a condition had been general, it represented in its Final Report that a large number of mortgages in certain States had been paid off. According to the "Political Science Quarterly" (Vol. xi, No. 4, 1896) the United States Census of 1890 showed a marked increase, not only absolutely, but relatively in the number of farm tenants. It can hardly be doubted that farm tenantry is rapidly increasing and will under the influence of various causes increase still more.]

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 cla.s.ses 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 thousandfold intensified and augmented in the last ten years, beginning with the remarkable formation of hundreds of trusts in 1898. Even though the farmer may get higher prices for his products, as he did in 1908 and 1909, the benefits are deceptively transient, while the expropriating process is persistent.

There was a time when farm land in Ohio, Illinois, Minnesota, Indiana, Wisconsin, and many other States was considered of high value. But in the last few years an extraordinary sight has been witnessed. Hundreds of thousands of American farmers migrated to the virgin fields of Northwest Canada and settled there--a portentous movement significant of the straits to which the American farmer has been driven.

Abandoned farms in the East are numerous; in New York State alone 22,000 are registered. Hitherto the farmer has considered himself a sort of capitalist: if not hostile to the industrial working cla.s.ses, he has been generally apathetic. But now he is being forced to the point of being an absolute dependant himself, and will inevitably align his interests with those of his brothers in the factories and in the shops.

With this contrast of the forces at work which gave empires of public domain to the few, while dispossessing the tens of millions, we will now proceed to a consideration of some of the fortunes based upon railroads.

CHAPTER III

THE BEGINNINGS OF THE VANDERBILT FORTUNE

The first of the overshadowing fortunes to develop from the ownership and manipulation of railroads was that of Cornelius Vanderbilt. The Havemeyers and other factory owners, whose descendants are now enrolled among the conspicuous multimillionaires, were still in the embryonic stages when Vanderbilt towered aloft in a cla.s.s by himself with a fortune of $105,000,000. In these times of enormous individual acc.u.mulations and centralization of wealth, the personal possession of $105,000,000 does not excite a fraction of the astonished comment that it did at Cornelius Vanderbilt's death in 1877. Accustomed as the present generation is to the sight of billionaires or semi- billionaires, it cannot be expected to show any wonderment at fortunes of lesser proportions.

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 fortune, so long far outranking all compet.i.tors, lost its exceptional distinction and ceased being the sole, unrivalled standard of immense wealth. Nearly a century of fraud was behind the Astor fortune. The greater part of Cornelius Vanderbilt's wealth was ma.s.sed together in his last fifteen years.

This was the amazing, unparalleled feature to his generation. Within fifteen brief years he had possessed himself of more than $90,000,000. His wealth came rushing in at the rate of $6,000,000 a year. Such an accomplishment may not impress the people of these years, familiar as they are with the ease with which John D.

Rockefeller and other multimillionaires have long swept in almost fabulous annual revenues. With his yearly income of fully $80,000,000 or $85,000,000 [Footnote: The "New York Commercial," an ultra- conservative financial and commercial publication, estimated in January, 1905, his annual income to be $72,000,000. Obviously it has greatly increased every year.] Rockefeller can look back and smile with superior disdain at the commotion raised by the contemplation of Cornelius Vanderbilt's $6,000,000.

Each period to itself, however. Cornelius Vanderbilt was the golden luminary of his time, a magnate of such combined, far-reaching wealth and power as the United States had never known. Indeed, one overruns the line of tautology in distinguishing between wealth and power. The two were then identical not less than now. Wealth was the real power.

None knew or boasted of this more than old Vanderbilt when, with advancing age, he became more arrogant and choleric and less and less inclined to smooth down the storms he provoked by his contemptuous flings at the great pliable public. When threatened by compet.i.tors, or occasionally by public officials, with the invocation of the law, he habitually sneered at them and vaunted his defiance. In terse sentences, interspersed with profanity, he proclaimed the fact that money was law; that it could buy either laws or immunity from the law.

Since wealth meant power, both economic and political, it is not difficult to estimate Vanderbilt's supreme place in his day.

Far below him, in point of possessions, stretched the 50,000,000 individuals who made up the nation's population. Nearly 10,000,000 were wage laborers, and of the 10,000,000 fully 500,000 were child laborers. The very best paid of skilled workers received in the highest market not more than $1,040 a year. The usual weekly pay ran from $12 to $20 a week; the average pay of unskilled laborers was $350 a year. More than 7,500,000 persons ploughed and hoed and harvested the farms of the country; comparatively few of them could claim a decent living, and a large proportion were in debt. The incomes of the middle cla.s.s, including individual employers, business and professional men, tradesmen and small middlemen, ranged from $1,000 to $10,000 a year.

How immeasurably puny they all seemed beside Vanderbilt! He beheld a mult.i.tude of many millions struggling fiercely for the dollar that meant livelihood or fortune; those bits of metal or paper which commanded the necessities, comforts and luxuries of life; the antidote of grim poverty and the guarantees of good living; which dictated the services, honorable or often dishonorable, of men, women and children; which bought brains not less than souls, and which put their sordid seal on even the most sacred qualities. Now by these tokens, he had securely 105,000,000 of these bits of metal or wealth in some form equivalent to them. Millions of people had none of these dollars; the hundreds of thousands had a few; the thousands had hundreds of thousands; the few had millions. He had more than any.

Even with all his wealth, great as it was in his day, he would scarcely be worth remembrance were it not that he was the founder of a dynasty of wealth. Therein lies the present importance of his career.

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 of the various other members of the Vanderbilt family, the Vanderbilts then possessed about $300,000,000. Since that time the population and resources of the United States have vastly increased; wealth in the hold of a few has become more intensely centralized; great fortunes have gone far beyond their already extraordinary boundaries of twenty years ago; the possessions of the Vanderbilts have expanded and swollen in value everywhere, although recently the Standard Oil oligarchy has been encroaching upon their possessions. Very probable it is that the combined Vanderbilt fortune reaches fully $700,000,000, actually and potentially.

But the incidental mention of such a ma.s.s of money conveys no adequate conception of the power of this family. Nominally it is composed of private citizens with theoretically the same rights and limitations of citizenship held by any other citizen and no more. But this is a fanciful picture. In reality, the Vanderbilt family is one of the dynasties of inordinately rich families ruling the United States industrially and politically. Singly it has mastery over many of the railroad and public utility systems and industrial corporations of the United States. In combination with other powerful men or families of wealth, it shares the dictatorship of many more corporations. Under the Vanderbilts' direct domination are 21,000 miles of railroad lines, the ownership of which is embodied in $600,000,000 in stocks and $700,000,000 in bonds. One member alone, William K. Vanderbilt, is a director of seventy-three transportation and industrial combinations or corporations.

BONDS THAT HOLD PRESENT AND POSTERITY.

Behold, in imagination at least, this ma.s.s 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 inst.i.tution 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 t.i.tles to the absolute ownership of a large part of the resources created by the labors of entire peoples.

Kingly power at best is shadowy, indefinite, depending mostly upon traditional custom and audacious a.s.sumption backed by armed force. If it fall back upon a certain alleged divine right it cannot produce doc.u.ments to prove its authority. The industrial monarchs of the United States are fortified with both power and proofs of possession.

Those bonds and stocks are the tangible t.i.tles to tangible property; whoso holds them is vested with the ownership of the necessities of tens of millions of subjected people. Great stretches of railroad traverse the country; here are coal mines to whose products some ninety million people look for warmth; yonder are factories; there in the cities are street car lines and electric light and power supply and gas plants; on every hand are lands and forests and waterways-- all owned, you find, by this or that dominant man or family.

The mind wanders back in amazement to the times when, if a king conquered territory, he had to erect a fortress or castle and station a garrison to hold it. They that then disputed the king's t.i.tle could challenge, if they chose, at peril of death, the provisions of that t.i.tle, which same provisions were swords and spears, arrows and muskets.

But nowhere throughout the large extent of the Vanderbilt's possessions or those of other ruling families are found warlike garrisons as evidence of ownership. Those uncouth barbarian methods are grossly antiquated; the part once played by armed battalions is now performed by bits of paper. A wondrously convenient change has it been; the owners of the resources of nations can disport themselves thousands of miles away from the scene of their ownership; they need never bestir themselves to provide measures for the retention of their property. Government, with its array of officials, prisons, armies and navies, undertakes all of this protection for them. So long as they hold these bits of paper in their name, Government recognizes them as the incontestable owners and safeguards their property accordingly. The very Government established on the taxation of the workers is used to enforce the means by which the workers are held in subjection.