HISTORY OF THE GREAT AMERICAN FORTUNESCHAPTER VI
THE PACIFIC QUARTET
During the range of years when the Vanderbilts, Gould, Sage, Blair and various other railroad magnates were hurling themselves upward into the realms of masterful wealth, four other noted capitalists whose careers were interjoined, were doing likewise in the Far West.
This group was composed of Collis P. Huntington, Leland Stanford, Charles Crocker and Mark Hopkins. It was an unusual brotherhood in that, for a long time, they hung together with a tenacious fidelity not often found among railroad capitalists. In fact, it was so rare a phenomenon that the mention of it deserves a place of supreme precedence. Such magnates as Commodore Vanderbilt and William H. Vanderbilt, Gould and Sage, preferred to go it alone, not merely satisfied with the lions share, but determined to bag it all, if they could ; they were distrustful and intolerant of partners except as expediency demanded, and then they acted with them only to fleece them eventually. The Pacific quartet were also starkly individualistic, each for himself, but they moderated their propensities enough to fuse their interests in a common harmony of aim. Even more they sagaciously weighed the special fitness of each, assigned the duties according to this individual appraisement, and divided the spoils with a certain flavor of fairness.
So far as railroad magnates were concerned, this was a remarkable feature of their time.
FOUR MEN WHO COULD ACT TOGETHER.
In fine, this group was distinguished by a method of intelligent co÷peration. To this fact was due, in a measure, their rapid success in obtaining great wealth without the necessity of dragging through intermediate stages. They were among the first of the magnates to prove the superiority of the principle of systematic organization a lesson which the Standard Oil group took up a little later, amplified, improved, and developed into a superfine system. Here was not a case of where one man dominatingly insisted that he alone was endowed with all of the functions required in successful business. The Pacific quartet recognized the value of specialization. In a general way, Huntington was entrusted with the supervision of the financial affairs ; Stanford of the plans for the manipulation of law and politics ; Crocker was placed in charge of the construction work, and Hopkins was the commandant of office details. The particular useful qualifications of each of the four were mutually appreciated and availed of. In addition to this division of overseership, all joined together as a unit in the promotion and consummation of their plans.
Circumstances did not compel these four men to be of quite the same revolutionary type of capitalists as the Vanderbilts and Goulds. They did not have to do much pummeling of smaller capitalists, nor expend much effort in beating down the sacred doctrine of free and unrestricted competition. Their territory was largely one which had not been taken up by companies of small capitalists, building in piecemeal fashion. They had the oportunity of bringing forth great railroad systems out what had been a void. At a bound they sprang from obscure position to that of great capitalists ; the transformation from petty dealers in merchandise or law to multimillionaires was a quick, sudden one. Within a few years they took their place among the industrial dictators of the United States ; owners of great railroad and steamship lines and of many other forms of property, and of an immense domain of land not less than 30,000,000 acres in all. All of these men have passed away, but the wealth that they became possessed of remains ; and even if their personal careers are of no lingering interest, their fortunes are still active, and the history of their properties is of very pertinent present importance.
THEY BEGIN WITH SCANT CAPITAL.
All four had migrated from the East to California after the discovery of gold on the Pacific Coast. There Huntington carried on a hardware and miners supply store at Sacramento, and Hopkins became his partner ; Crocker was likewise a small merchant, and Stanford was a lawyer. The four were not able to scrape together a pool of more than an insignificant sum with which to execute what was then considered one of the greatest and most difficult railroad projects of modern times.
The phrase monger is addicted to rhapsodizing upon the marvelous self-confidence which could initiate a huge railroad line with only a trivial sum as a starter. This may be a romantic way of describing their prowess and ingenuity. But neither was the project itself of their conception, nor did they have to supply the funds. Years before they took hold of the work as a definite undertaking, the building of Pacific lines had been agitated and urged, and the Government had surveyed feasible routes.1 Not one of the quartet knew anything of railroad construction, nor had the least fundamental knowledge of how to equip and operate a railroad.
In what direction, then, lay their ability ? Purely and wholly in the line of promoting. The capitalist system was of such a fantastically inverted nature that to grasp the ownership of anything did not imply or require the ability of supervision. Railroads, factories, mines and public utility systems were generally owned by men often by absentees who knew nothing of any aspect of them except the one all-important phase the budget of profit or loss.
The ability of the promoter was the most necessary consideration, although not the foremost in insuring the title of ownership. Very frequently, in the case of factories and mines, promoters had to get funds from banking houses, which usually, by skillful law work, succeeded in getting those promoters into a legal snare, forcing them out, and expropriating their property. Railroad promoters, however, did not have to depend so much upon private bankers. They could draw upon Government, State and cities for advances of money. If a man, or a set of men, could succeed in bribing Congress and the legislatures to donate land grants and advance the funds, it was a very simple matter to hire highly competent civil engineers to survey and build the routes, and employ good executives to run them after they were built.
The first and prime necessity was the purchase of legislation with its corollaries franchises, gifts and free access to the public treasuries. This done, the remainder of the program was easy. In this regard it was that Huntington and his partners showed their finesse not an unusual finesse, by any means ; its caliber was neither more nor less than that of many another capitalist, who also had been adroit in bribing legislation through.
Upon organizing the Central Pacific Railroad Company in 1861, the Huntington group could not privately raise more than about $195,000, of which amount they, themselves, put in about $50,000. This sum, ridiculously inadequate to build a railroad estimated to cost $25,000,000, was, however, enough and more than enough, for certain well-understood primary operations.
With it expenses could be defrayed at the centers of legislation ; petitions and memorials concocted ; advocates paid, and newspapers subsidized. If the trick were well turned, a whole succession of franchises, special laws, land grants and money subsidies would follow. Thus we see that the original capital needed in many capitalist enterprises was not for the actual prosecution of the work, but for the purpose of bribery. In fact, money, as an absolute requirement, could be dispensed with. For their votes, legislators (being wily, tactful and practical men) much preferred cash, but when cash could not be fingered, they conveniently took whatever inducements were offered. We have come across instance after instance in which embryo capitalists organized corporations, rolled off stocks and bonds (which cost the expense of engraving only) and used them, in lieu of cash, as payment for legislative votes.
If the average railroad corporation, argued the Pacific quartet, could so easily, by the simple media of bought laws, annex itself to public treasuries, what could not they do ? A far more telling and impressive public argument the Huntington group had than most of their fellow railroad promoters. Already in the fifties there was an insistent, genuinely enthusiastic popular demand, reaching almost the proportions of a clamor, for railroad connections between coast and coast. Upon the strength of this eagerness, much bounty and booty could be extracted. At the outbreak of the Civil War the demand became irresistibly intensified by the lack of speedy intercoastal communications, both railroad and telegraph. Moreover, the popular imagination was captivated and dazzled by the immensity of the undertaking. With prevailing opinion in so favorably an assenting state, matters could be pliably molded.
THEY GET THEIR LAWS.
Yet while the people, as a whole, were desirous of Pacific railroads, considerable sections of them were by no means reconciled to the corrupt legislative methods of presenting large areas of land and large advances of money for private enrichment.
The farmer, burdened by the price that he had to pay for his small farm, and often blanketed by a mortgage, did not quite approve of the squandering of the public domain for the benefit of a law-created handful of grandees. The small traders, resenting the very idea of any class above them, bitterly objected, as a class, to great capitalists being created by virtual edict of law. The alert and organized sections of the working class, saw in this constant manipulation of legislative bodies another perversion of governmental power for the aggrandizement of a small and hostile class, and the rapid impetus to an overshadowing plutocracy. Aware of this general feeling, legislative assemblies had to be induced; they might themselves use fine-sounding and seemingly solid arguments in explaining to constituencies ; but a very different incentive appealed to them ; settlements had to be made in cash or its equivalent.2
A more temptingly opportune time for spoliative measures than the period of the Civil War could hardly have been found. Engrossed in the tumultuous upheavals of those convulsive years, the people had neither the patience nor disposition to keep close track of routine enactments in Congress or in the legislatures. At the very beginning of that war the Huntington group organized the Central Pacific Railroad Company, with a capital stock of $8,500,000, nearly the whole of which capital was fictitious so far as actual investment of money was concerned. At once they directed their energies right to the core of things. Huntington betook himself to Washington to lobby in Congress, while Stanford, elected Governor of California, busied himself with similar ends at home. No visionaries were they, but practical men who knew how to proceed straightway.
Stanfords work quickly bore fruit in California ; the city of Sacramento was authorized to donate $400,000 ; Placer County to loan $550,000, and the State of California to hand over $2,100,000. At the same time, Huntington was doing surpassing missionary duty in Congress. An act was passed in 1862 by which about $25,000,000 in Government six-per-cent. bonds and about 4,500,000 acres of public lands were placed at the disposal of the quartet. The few protests against these great gifts were immediately silenced. Is not the Government fully protected ? the promoters innocently inquired. Are not its loans covered by a first mortgage ? If the company defaults, cannot the Government step in and recover ? This sounded plausible. Two years later, however, at the very time when (as we have seen) the Union Pacific coterie were corrupting Congress to get greater land grants and altered laws, Huntington again debauched Congress. An act was passed doubling the Central Pacifics land grant and relegating the Governments claim on the Central Pacific to the under position of a second mortgage. And, as it turned out later, the contract with the Government was so deftly drawn that, according to a decision of the Supreme Court of the United States subsequently, the Governments lien covered the main lines only, and not the branch lines. Whether this contract, as drawn, was a result of collusion with Government officials was never determined.
Whence came the means, asks Bancroft, by which four men with only moderate fortunes were enabled to build, buy, own and operate all the roads belonging to the Central and Southern Pacific systems ? In 1869, before the last spike had been driven at Promontory, the railroad quartet, besides owning the road, had received as a loan $24,000,000 of Government bonds forming a second mortgage on the road, together with $400,000 of San Francisco bonds as an unconditional gift, $550,000 of county bonds, and $2,100,000 paid, or to be paid, by the State of California in return for services to be rendered by the company.3
The operations of the quartet were simple enough. Once they had obtained the requisite loans and gifts, they threw aside all pretenses, and openly and vigorously set out to defraud all within reach, not only the Federal Government, but also States, counties, cities and investors. First, they organized a construction company, called the Credit and Finance Company. Then they made a contract with themselves to build the Central Pacific. With the aid of the loans given by Sacramento and Placer County, they built enough road to draw $848,000 from the Government as the subsidy of the first section. By repeating the process they had the entire road constructed, with scarcely the expenditure of a single dollar of their own. The next step was to load it down with a capitalization of $139,000,0004 which was the beginning of still more stock inflation.
A THEFT OF $50,000,000.
What was the total of their frauds ? The report of the Pacific Railroad Commission gives no adequate idea of the immensely valuable rights and possessions of all kinds that they secured by bribery and fraud. But it does give a comprehensive account of their money and stock plunderings. In the accounts of the Central Pacific Railroad Company, the report of the Pacific Railroad Commission of 1887 states, the division of earnings for improper purposes amounted to many millions, through contracts made by Messrs. Stanford, Huntington, Hopkins and Crocker with themselves. According to this report, the cost of building 1,171 miles of road was $27,217,000, but they fraudulently charged three times that sum. Here was a theft of more than fifty millions in one grand haul. In addition to stolen cash, they issued to themselves $33,722,000 in bonds and $49,005,000 of stock. But these sums were only part of the total thefts. The Pacific Railroad Commissions report goes on to say :
GROSS CORRUPTION OF CONGRESS.
The process of corruption and theft was continued in the building of the Southern Pacific Railroad.
In 1871 Congress chartered the Texas and Pacific Railroad to run from Marshall, Texas, to San Diego, Cal., and presented the company with approximately 18,000,000 acres of public lands on condition that the road was to be completed in ten years ; otherwise the land grant was to be declared forfeited. At the same time, Congress chartered the Southern Pacific Railroad Company to build a line from El Paso, Texas, to San Francisco, and gave it a gift of about 5,000,000 acres of public lands. The Texas and Pacific project was owned by a group of capitalists headed by Scott, of the Pennsylvania Railroad ; the Huntington men were at the head of the Southern Pacific Railroad Company.
These two groups of capitalists soon came into collision ; each fiercely sought to oust the other, and gain an undisputed monopoly of transportation in the territory in question. The fight was carried into Congress ; each side caused the introduction of bills aimed at crippling the other. The contest then narrowed to a question of which group could corrupt Congress the more effectually.
Scott, wrote Huntington on January 29, 1876, is making a terrible effort to pass his bill, and he has many advantages with his railroad running out from Washington in almost every direction, on which he gives Free Passes to everyone who can help him ever so little. . . . It has cost money to fix things, so I know his bill would not pass. I believe with $200,000 we can pass our bill.5
On March 6, 1876, Huntington wrote that the Railroad Committee of the House was set up for Scott, and it has been a very difficult matter to switch a majority of the Committee from him, but I think it has been done. On November 11, 1876, Huntington wrote further to one of his associates, I am glad to learn that you will send to this office $2,000,000 by the first of January. On May 3, 1878, he notified his partners : The T. and P. folks are working hard on their bill and say they are sure to pass it, but I do not believe it. They offered one member of Congress $1,000 cash down, $5,000 when the bill was passed and $10,000 of the bonds when they got them if he would vote for the bill.6
Huntington came out victorious. There is no room for doubt, reported the Pacific Railroads Commission of 1857, that a large portion of $4,818,535 was used for the purpose of influencing legislation, and preventing the passage of measures deemed hostile to the interests of the company, and for the purpose of influencing elections.7
The next thing the Huntington group did was to force the Eastern capitalists out of the Texas and Pacific Railroad, absorb that line into their own system, and illegally grab the eighteen million-acre land grant of the Texas and Pacific. Even under the law, as it stood, the Texas and Pacific was not entitled to the land grant. The House Committee on Judiciary on August 3, 1882, after an investigation, declared that the Texas and Pacific Railroad Company had never completed any part of the route for which the land grant in New Mexico, Arizona and California was given ; that it had never earned the grant ; that it did not purpose to build the road for which it was chartered and endowed, and that it was transferring to the Southern Pacific Railroad Company all of the rights and titles to the land in question.8 The Committee on Judiciary prepared a resolution declaring the forfeiture of the land grant, and urged its passage by Congress as a joint resolution. It did not pass.
A SUMMARY OF THEIR PLUNDERINGS.
Presenting the general results as nearly as official investigations could ascertain them, this is what Huntington and his associates did : They had received hundreds of millions of dollars in the form of money, bonds and lands from Government, States, counties and municipalities. As controllers of the Contract and Finance Company and other construction companies, they had turned over to themselves $142,000,000 in all for ostensible construction work. They had expended at least five millions for corrupt political purposes. They had stupendously watered the stock of their railroads, and with the cumulative proceeds of their thefts had secured control of nineteen distinct railway systems and of steamship lines, also. They had, by fraud, robbed the Government of many millions of acres of land ; they had defrauded the Government of the bulk of the funds that it had advanced ; they refused to pay more than the merest nominal taxation, and they extorted onerous rates for transportation.
This is the general summary of their acts as set forth in the report of the Pacific Railroads Commission. From the evils of subsidy-giving, says Bancroft,
the country suffered for many years. The population was shifting, the available resources of the State [California] few ; but notwithstanding, there was hardly a county in it that by 1870 had not burdened itself with a debt of from $100,000 to $300,000 at a high rate of interest, to run in some instances sixty years. Companies incorporated under a general law besieged the Legislature annually to pass acts authorizing the people to vote on incurring this indebtedness ; newspapers paraded the benefits to be received from every railroad scheme, often without knowing whether it had any merit. Thus, urged by the Legislature and the press, the people passed under the rod with the greatest equanimity.9
Bancroft relates further : It is a fact in California commercial history that hardly could the reader of a city daily or a country weekly open his newspaper without finding therein some complaint against railroad management, especially applying to freight charges. The railroads were apt to fix the rates on a given article all it would bear. 10 This description applied not only to California but to every State and Territory reached directly or indirectly by railroads. The very people whose representatives had given public property so lavishly to a few, were robbed in every manner that ingenuity could formulate. Not only was the public plundered ; Huntington and his associates ground out their own lesser stockholders by the same fraudulent methods that Gould and Sage used, and also, like Gould and Sage, they cheated out a horde of confiding investors.
The disillusioning of the people of the Pacific States was reflected in the messages of the various Governors. Only a few years previously, the Governors of California and other States had urged the Legislatures to be extremely generous in donating large bounties to railroad projectors and other capitalists. They wrote rapturously of the great public benefits certain to come from the construction of railroads, and praised the railroad promoters as men of the loftiest public spirit. Soon a decided change came over the spirit of these messages. Bitter complaints of extortion and robbery succeeded glowing encomiums. In his message to the California Legislature, in 1869, Governor H.H. Haight had this to say :
Our land system seems to be mainly formed to facilitate the acquisition of large bodies of land by capitalists or corporations, either as donations, or at nominal prices. ... Numbers who purchased from the State lands sold as swamp or overflowed, find their farms claimed under the railroad grants, and themselves involved in expensive contests before Registers of Land Offices.11
In his inaugural address, delivered on December 8, 1871, Governor Newton Booth of California expressed himself :
The undue political influence and financial control that many corporations have assumed, is not the only evil presented by them. In their internal administration, between majorities and minorities, directors and stockholders, cases of the grossest injustice are constantly arising. It is not uncommon to find one class of stockholders enriching themselves from a company which impoverishes another. . . . The organization of corporations within corporations is a refinement of subtlety and fraud which should be positively prevented by law.12
After describing the Central Pacific Railroads system of discrimination in fares and freights, a grievous burden, so long and patiently endured by our people, Governor John H. Kinkhead of Nevada wrote to the Legislature of that State in 1879 :
Grave, and I believe well-grounded, complaint is made concerning the valuation of railroad property for taxation. The owners of this species of property are granted exceptional privileges, and should be made to bear their equal part of all of the expenses of Government.
Not one of these messages had any vital result. In some instances they were sincere, but, as a rule, they were intended to be nothing more than wordy sops to appease middle-class public opinion.13 Some of the very Governors who wrote them with such a display of earnestness were put in power and controlled by the very corporations of which they complained. The legislatures were wholly under the domination of the great private corporations, and the judiciary almost wholly so. Year after year, the different Governors denounced corporate practices, and demanded corrective legislation, which never came. Two and three decades after Governor Newton Booths denunciation, Governors were still writing similar futile messages.
Acclaimed at first as public benefactors, Huntington and his associates were subjected to the fiercest denunciation when the people realized the enormous frauds that they had committed. For the frauds, of which an epitome has been here given, were only a portion of the total. It is hardly necessary to plunge into the tortuous mass and maze of detail ; how they resorted to nimble subterfuges to escape their obligations, and defrauded the Government ; how they corrupted and ruled States and Territories, and seized hold of one possession after another ; and how, through their control of political machinery, they sent Representatives and Senators to Washington as though they were so many errand boys. The Pacific quartet were among the first of the magnates to come out into the open and exercise political power directly, instead of intrusting it to retainers. To have one of their own members in the United States Senate, there to keep alert for their interests, they caused the California Legislature, in 1887, to elect Stanford to that body.
Hopkins died in 1876, Crocker in 1888. Very characteristic of the peculiarities of prevailing society was one of the ways in which Hopkins millions were used. His widow inherited his wealth and remarried, and part of her inheritance went toward the purchase of an old-established New York newspaper. Thus was witnessed, as in the case of Gould, a newspaper being financed by the proceeds of theft, and the inheritors of those proceeds giving directions as to what should constitute the moral and political pabulum fed out to the public. A splendid country mansion, costing $2,000,000, at Great Barrington, Mass., is a standing explanation of how some more of Hopkins millions were applied. Crocker left a fortune nominally estimated at $40,000,000.
Stanfords wealth was so great that he, like the Astors, the Vanderbilts, Goulds and other magnates, was forced to the necessity of investing the surplus. Part of the many millions stolen from the Government and expropriated from the people, was put into San Francisco street railways,14 of which system he owned a one-fourth share, and from which he derived ten per cent. a year. Other millions were invested in other forms of property. He became a great landed proprietor. He owned the immense Vina vineyard, comprising 100,000 acres of land ; the Palo Alto ranch, with its extensive breeding establishment and its great vineyards, and he owned much other real estate in San Francisco and elsewhere. From his stocks and lands he received, it was estimated, an income of $1,000,000 a year.
Up to 1885 he had been merely a financier, so-called, praised by some as a great railroad builder, by others as a colossal thief. Now he became a full-fledged philanthropist by giving property worth many millions for the establishment of the Leland Stanford, Jr., University.
Thus was another seat of learning established to be subjected to the censorship of money.
STANFORD IN THE UNITED STATES SENATE.
As a United States Senator, Stanfords salary was $5,000 a year ; he spent $75,000 every session ; it was a pastime of this man to throw twenty-dollar gold pieces to the newsboys. His chief business in Washington was to prevent the Government from taking genuine action compelling him and his band to disgorge ; to stifle all hostile proceedings, and to get through laws giving more franchises, land, waterway rights and special privileges, and to secure license for extortions. On the whole, he succeeded. This ponderous magnate, weighing two hundred and thirty-four pounds, was the political wirepuller of the quartet, while Huntington was the crafty financier, full of sharp tricks and devious contrivances. When Stanford died, in 1893, his estate was appraised as nominally worth about $18,000,000, but its size was considerably greater. He had given large sums for the Leland Stanford, Jr., University, and in his will he provided more millions. The remainder of his estate went to his widow, who likewise gave donations to this university ; in all, Mr. and Mrs. Stanford presented fully $30,000,000 for the establishment, expansion and perpetuation of the institution named after their son.
The fortune plucked by Huntington was greater than that of any of the others of the quartet. At his death, in 1900, it was estimated at from $50,000,000 to $80,000,000. It embraced interests in a vast number of railroad, steamship and other corporations interests which he had bought with his share of the Pacific railroads loot, or engineered into his control by fraud. A favorite boast of his at one time was that he could travel from the Atlantic to the Pacific in his own cars and over his own rails, and that he could also, if he chose, sail in his own steamships from Brazil to New York, from thence to Colon, from Panama to San Francisco, and from there to Yokohama and Hongkong. His power was gigantic ; he controlled the economic life of millions of workers, and dictated the government of a half dozen States. His plunder was intact. In 1894 he was quoted as saying in answer to a report : I never made any exhibition of $44,000,000 of bonds, although I could have displayed twice as much in amount.
THEY BECOME ARISTOCRATS.
No intelligent person was unaware of the long and great series of frauds and thefts that Huntington, Stanford, Crocker and Hopkins had plowed through to squeeze their wealth. Yet, while severely denounced, they did not have to meet the same taunts and revilings constantly cast at Jay Gould. Essentially they were of the same stripe as Gould, but Gould was held up to popular maledictions as a railroad wrecker, while criticism of the Huntington group was always tempered with the remark, Well, if they stole colossal sums, they at least constructed great railways and were big factors in the development of the country. And they had no difficulty in getting instant entree into what was represented as the best society. No question was raised as to their eligibility. By power of money they at once became a part of the financial aristocracy. Also, by this same power of money, Huntingtons adopted daughter entered with ease the fine circle of European titled aristocracy ; she married Prince Haztfeld, in 1889, and received a paternal present of several million dollars.
Huntington lived like a grandee at least residentially. He had a mansion in San Francisco ; a superb place in the Adirondacks, for which he paid $250,000 ; a palatial country home at Throggs Neck, N.Y.; and he built, at an expense of millions, an impressive pile at Fifth avenue and Fifty-seventh street, New York City.15 that aristocratic avenue whither so many magnates, after a career of fraud and theft, came to ensconce themselves in befitting grandeur. Eight years were spent in building, at a cost of $250,000, a mausoleum in Woodlawn Cemetery a classic, capacious tomb of marble.
THEIR LINES TAKEN OVER BY HARRIMAN.
And there his remains now lie. After his death the inventory of his estate showed that his wealth was apparently about $60,000,000 ; unquestionably it totalled a much larger sum. His widow, who still lives, inherited the greater part of it. But what became of the control of the railroad and steamship lines which he dominated ? His death occurred at about the very time the Standard Oil oligarchy, acting through Harriman and its banking houses, was prepared, in its gradual reaching out for railroad ownership, to buy in the ownership of the Pacific railroad and steamship lines. The great surplus of the Standard Oil treasury easily furnished the many millions needed to buy over the shares held by Mrs. Huntington ; and the control of the Southern Pacific and other extensive lines, both railroad and steamship, built and sustained by fraud and theft, was taken over by the all-powerful Standard Oil magnates, thus marking one more aggressive step in the assumption of a centralized ownership of the productive and distributing resources of the United States.
1 By an act of March 3, 1853, Congress appropriated funds for the surveying, by the Army Corps of Engineers, of railroad routes from the Mississippi River to the Pacific. The results were published in 1855.
2 The California Legislature was frequently charged with corruption, but its farcical investigations of itself always resulted in whitewashing reports.
One of these scandals was that of April, 1861, when John F. McCauley charged that legislators had sought bribes from him to pass a claim that he held against the State of California. The Legislature appointed an investigating committee on April 18, 1861. (See Appendix to journal of California Assembly, Twelfth Session, 1861, Doe. No. 15). McCauley testified that one Wittgenstein, a go-between for Chairman Walden of the Assembly Committee on Claims, approached him and told him that for a favorable report Walden wanted $400 or $500 (pp. 2-4). In his testimony Wittgenstein admitted telling McCauley that Walden had made $7,000 or $8,000 in that way ; he also admitted saying that Walden had made a large amount of money during the session. Wittgenstein substantially admitted the truth of McCauleys charges (pp. 5-11). The report, however, was a whitewashing one.
Another scandal was when the editor of the newspaper, the American Flag, specifically charged, in 1866, that a fund of $108,000 had been expended in the Legislature by local bankers, commission merchants and importers to prevent the repeal of a law called the Specific Contract Act. He accused seven Senators of having sold their votes for $12,000 each. An investigating committee of the California Senate was appointed. One of the witnesses examined was Darius O. Mills, then a San Francisco banker, and later a prominent New York multimillionaire. He and other witnesses denied knowing anything of a corruption fund. The committees report exonerated the accused. Report of Senate Committee of Investigation on Certain Charges Made by the Editor of the American Flag, Appendix to Journal of Senate and Assembly of the Legislature of California, 1866, Vol. ii.
3 History of the Pacific States, xix : 62.
4 Hudsons Railways and the Republic : 265.
5 We have seen, in the narration of the Gould fortune, how Scott had been placed in charge of the Government supervision of railroad transportation during the Civil War, and how a Congressional committee had exposed the immense extortions in conveying soldiers, equipment and supplies that some of the Northern railroads successfully carried on immediately following his appointment.
6 There were many of these letters ; we have already given a glimpse of one of them in Chapter iii, Vol, iii. They came to light (as noted in that chapter) in a lawsuit between two factions. They were published in full in Driven from Sea to Sea, by C.C. Post.
It is impossible, reported the Pacific Railroad Commission in 1887, to read the evidence of C.P. Huntington and Leland Stanford and the Colton letters without reaching the conclusion that very large sums of money have been improperly used in connection with legislation. Vol. i : 121. Huntington was accustomed to boasting of his method of bribery, Whenever Possible I always try to pay in checks, for the men who take them are ever afterward my slaves.
7 Report of U.S. Pacific Railway Commission, i:84.
8 House Report No. 1803, Forty-seventh Congress, Second Session.
9 Bancrofts History of the Pacific States, xix:564.
10 History of the Pacific States, xix :628.
11 First Biennial Message, etc., 6.
12 Inaugural Address of Gov. Newton Booth, etc., 10-11.
13 The merchants, manufacturers and importers who had applauded and banqueted Huntington and his associates only a few years previously, were now caustically denouncing them, not for their direct thefts, but for their extortions. For example, see A Petition of the Citizens of San Francisco Relative to the Arbitrary Exactions And Injustices of Railroad Companies. Nearly all of the signers were business firms. They complained, in this petition, of the arbitrary exactions and injustice of railroad companies, and demanded State regulations.Appendix to California Senate and Assembly Journal, Twentieth Session, 1874, Vol. iv, Doc. No. 8.
14 Recent developments in San Francisco showing how bribery was used in getting street railway franchises are but an indication of the corrupt methods long prevailing.
15 But after it was completed he could never be persuaded to live in it. His reason was a belief in the superstition that men build houses only to die in them.