Great Fortunes from Railroads | Page 9

The principal of these decisions was that of the Supreme Court of the United States in the case of Schluenberg vs. Harriman (Wallace's Supreme Court Reports, xxi:44). In many of the railroad grants it was provided that in case the railroad lines were not completed within certain specified times, the lands unsold or unpatented should revert to the United States. The decision of the Supreme Court of the United States practically made these provisions nugatory, and indirectly legalized the crassest frauds.
The original grants excluded mineral lands, but by a subsequent fraudulent official construction, coal and iron were declared not to be covered by the term mineral.
Commissioner Sparks of the U. S. General Land Office estimated in 1885 that, in addition to the tens of millions of acres the railroad corporations had secured by fraud under form of law, they had overdrawn ten million acres, "which vast amount has been treated by the corporations as their absolute property, but is really public land of the United States recoverable to the public domain." (House Executive Docs., First Session, Forty-ninth Congress, 1885-86, ii:184.) It has never been recovered.]
That Congress, not less than the legislatures, was honeycombed with corruption is all too evident from the disclosures of many investigations--disclosures to which we shall have pertinent occasion to refer later on. Not only did the railroad corporations loot in a gigantic way under forms of law, but they so craftily drafted the laws of both Nation and the States that fraud at all times was easy.
DEFRAUDING THE NATION OF TAXES.
Not merely were these huge areas of land obtained by fraud, but after they were secured, fraud was further used to evade taxation. And by donations of land is not meant only that for intended railroad use or which could be sold by the railroads. In some cases, notably that of the Union Pacific Railroad, authority was given to the railroad by acts passed in 1862 and 1864 to take all of the material, such as stone, timber, etc., needed for construction, from the public lands. So, in addition to the money and lands, much of the essential material for building the railroads was supplied from the public resources. No sooner had they obtained their grants, than the railroad corporations had law after law passed removing this restriction or that reservation until they became absolute masters of hundreds of millions of acres of land which a brief time before had been national property.
"These enormous tracts," wrote (in 1886) William A. Phillips, a member of the Committee on Public Lands of the Forty-third Congress, referring to the railroad grants, "are in their disposition subject to the will of the railroad companies. They can dispose of them in enormous tracts if they please, and there is not a single safeguard to secure this portion of the national domain to cultivating yeomanry." The whole machinery of legislation was not only used to exclude the farmer from getting the land, and to centralize its ownership in corporations, but was additionally employed in relieving these corporations from taxation on the land thus obtained by fraud. "To avoid taxation," Phillips goes on, "the railroad land grant companies had an amendment enacted into law to the effect that they should not obtain their patents until they had paid a small fee to defray the expense of surveying. This they took care not to pay, or only to pay as fast as they could sell tracts to some purchasers, on which occasions they paid the surveying fee and obtained deeds for the portion they sold. In this way they have held millions of acres for speculative purposes, waiting for a rise in prices, without taxation, while the farmers in adjacent lands paid taxes." [Footnote: "Labor, Land and Law": 338-339.]
Phillips passes this fact by with a casual mention, as though it were one of no great significance.
It is a fact well worthy of elaboration. Precisely as the aristocracies in the Old World had gotten their estates by force and fraud, and then had the laws so arranged as to exempt those estates from taxation, so has the money aristocracy of the United States proceeded on the same plan. As we shall see, however, the railroad and other interests have not only put through laws relieving from direct taxation the land acquired by fraud, but also other forms of property based upon fraud.
This survey, however, would be prejudicial and one-sided were not the fact strongly pointed out that the railroad capitalists were by no means the only land-graspers. Not a single part of the capitalist class was there which could in any way profit from the theft of public domain that did not wallow in corruption and fraud.
The very laws seemingly passed to secure to the poor settler a homestead at a reasonable price were, as