Great Fortunes from Railroads | Page 6

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 over-capitalization and exorbitant rates with
which to pay dividends on fictitious stock.
Very significantly, from about the very time when the Erie Canal was
finished, the era of the private canal company, financed by the
Government, began. One after another, canal companies came forward
to solicit public funds and land grants. These companies neither had
any capital of their own, nor was capital necessary. The machinery of
Government, both National and State, was used to supply them with
capital.
The Chesapeake and Ohio Canal Company received, up to 1839, the
sum of $2,500,000 in funds appropriated by the United States
Government, and $7,197,000 from the State of Maryland.
In 1824 the United States Government began giving land grants for
canal projects. The customary method was the granting by Congress of

certain areas of land to various States, to be expressly given to
designated canal companies. The States in donating them, sometimes
sold them to the canal companies at the nominal rate of $1.25 an acre.
The commuting of these payments was often obtained later by corrupt
legislation.
From 1924 to 1834, the Wabash and Erie Canal Company obtained
land grants from the Government amounting to 826,300 acres. The
Miami and Dayton Canal Company secured from the Government, in
1828 and 1833, a total grant of 333,826 acres. The St. Mary's Falls Ship
Canal Company received 750,000 acres in 1852; the Portage Lake and
Lake Superior Ship Canal Company, 400,000 acres in 1865-66; and the
Lac La Belle Ship Canal Company, 100,000 acres in 1866. Including a
grant by Congress in 1828 of 500,000 acres of public land for general
canal purposes, the land grants given by the National Government to
aid canal companies, totalled 4,224,073.06 acres, mostly in Indiana,
Ohio, Illinois, Wisconsin and Michigan.
Whatever political corruption accompanied the building of such State-
owned canals as the Erie Canal, the primary and fundamental object
was to construct. In the case of the private canal companies, the
primary and fundamental object was to plunder. The capitalists
controlling these companies were bent upon getting rich quickly; it was
to their interest to delay the work as long as possible, for by this
process they could periodically go to Legislatures with this argument:
That the projects were more expensive and involved more difficulties
than had been anticipated; that the original appropriations were
exhausted, and that if the projects were to be completed, fresh
appropriations were imperative. A large part of these successive
appropriations, whether in money, or land which could be sold for
money, were stolen in sundry indirect ways by the various sets of
capitalist directors. The many documents of the Maryland Legislature,
and the messages of the successive Governors of Maryland, do not tell
the full story of how the Chesapeake and Ohio Canal project was looted,
but they give abundantly enough information.
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 and a complete fraud. What had the company done with its large
land grant? Instead of accepting the grant as intended by Congress, it
had, by means of fraudulent surveys, and doubtless by official
corruption, caused at least one hundred thousand acres of its grant to be
surveyed in the very richest copper lands of Wisconsin.
The grants originally made by Congress were meant to cover swamp
lands--that is, lands not particularly valuable for agricultural uses, but
which had a certain value for other purposes. Mineral lands were
strictly excluded. Such was the law: the practice was very different.
The facility with which capitalists caused the most valuable mineral,
grazing, agricultural and timber lands to be fraudulently surveyed as
"swamp" lands, is described at length a little later on in this work.
Commissioner Sparks wrote that the one hundred thousand acres
appropriated in violation of explicit law "were taken outside of legal
limits, and that the lands selected both without and within such limits
were interdicted lands on the copper range" (p. 189). Those stolen
copper deposits were never recovered by the Government