HISTORY OF THE GREAT AMERICAN FORTUNESCHAPTER XIV
THE HILL FORTUNE
Unsparingly criticised, and frequently assailed with extreme bitterness in his early career, few magnates have been the subject of more lavish eulogy in his latter years than James J. Hill. As his wealth and power rapidly grew, and he became a multimillionaire, and dictator of the political and industrial affairs of large sections of the United States and Canada, the usual transformation resulted. He ceased being the familiar Jim Hill derisively slurred as the Jay Gould of the Northwest, and was metamorphosed into the great Mr. Hill, the imposing genius of stupendous achievement. A crowd of writers, well schooled in the extravagant language of sycophancy, came forth to proclaim his heroic proportions as a master mind in the constructive development of the countrys resources.
For full thirty years these eulogies, all suspiciously alike as though inspired from a central source, have continuously appeared. In all of them one special dithyrambic note has been pressed. With infinite rhetorical variations, such transcendent terms as genius of transportation and intellectual giant have been freely applied to Hill. Ingeniously put forward under many dictional disguises and artful tricks of style, the burden of these lays had been the same as that so much remarked in the endless panegyrics of the Astors, the Vanderbilts, J. Pierpont Morgan, Blair, Sage, and nearly all other magnates. Always there is the emphasis, strongly denoting an argument for a client, upon Hills extraordinary capacity and integrity ; how he obtained every dollar of his vast fortune honestly, and how (it is specified) corruption and graft have been conspicuously absent in the methods by which he amassed his wealth. One steady monotonous song it had been, varied, in long-separated intervals, by a tirade from the pen of some unyoked brother a tirade with substance of truth, but lacking estimate and understanding.
HILLS ENORMOUS FORTUNE.
The extent of Hills fortune is enormous, but at this writing neither the exact nor approximate number of his hundreds of millions of dollars can be stated with any degree of accuracy. In one notable respect his puffers do not misstate : Hill started with no money whatever. Now that he has a colossal fortune, that fact of itself should be provocative enough to cause deep investigation ; for money does not fall like rain ; it must be garnered somehow ; and while millions of hard workers have a difficult enough time getting a sufficiency for their simplest wants, the ease with which one man has possessed himself of vast storehouses of wealth is a grave and grim fact, well calculated at the outset to cause disbelief, on general principles, in the airy, sweeping statements of Hills eulogists. But the very fact which should at once arouse questionings and originate investigation is converted by his panegyrists into a sublime tribute into a conclusive proof of his remarkable power of demonstrating himself to be a self-made man. We know too well what this commercial jargon of the day means ; not a man with intelligence, ideals or culture, but merely one of wealth ; the customary bourgeois mind can, generally speaking, conceive of no other kind of successful man.
If, however, wealth can be used interchangeably with greatness, then Hill is a truly great nabob. He owns or controls extensive railroad systems in the Northwest and West ; he is the owner of vast areas of land, and of mineral deposits the fabulous value of which defies calculation. He is the possessor of steamship lines and of many other kinds of property ; he lives in a virtual palace, and politicians, editors, clergy and judges are his puppets. Seeing that he began as his eulogists express it without money, how did he contrive to get all this wealth ? His homagers do not explain this vital question ; they unctuously reel out dates and figures, and glibly relate when he obtained this or that property, but how he really accomplished the process they tell not.
THE CHARACTER OF THE NORTHWESTS SETTLEMENT.
Hill was born at Guelph, Canada, in 1838, and migrated to St. Paul, Minnesota, in 1856. The environment into which he came, as a youth of eighteen, can easily be comprehended after a reading of the previous chapters. The Northwest was in its first real period of settlement ; and not as conventional histories have it, was this settlement wholly made by stalwart pioneers. As a matter of fact, it was made also by land-grabbers, timber thieves, gamblers, trading sharps, cutthroats and rogues in general. The rush to get land grants, mineral deposits, railroad franchises and every other available resource, was at its height. Booms of all kinds were projected ; a horde of venal individuals swarmed in to preŽmpt whatever they could, and fleece anybody that they could. There was a raging mania for the rapid acquisition of wealth, regardless of the means used.
True, a stream of agriculturists, whose sole aim was to obtain cheap land and honestly till it, poured in. But this element did not give the tone to the general character of the activities. The real aggressive tone was imparted by adventurers, capitalistic and otherwise. Practically all of these capitalists were Easterners, and many of them, as the records show, had been engaged in swindles in the East. Different sets of them were busily bribing Congress, Government officials and the Legislatures for land grants, railroad charters, franchises, mineral deposits and special laws. Sharp merchants, trading schemers and real estate hawks overran the newly-settled towns and cities. The stamp of money was upon every thought and plan ; the pervading ideal was wealth, no matter how acquired ; all classes were infected by it. Greed was in the very air, and if the many law-suit records in the Minnesota Courts can be taken as an indication, jobbery, swindling and cheating were a very routine performance in all business transactions.
Hill came into this atmosphere of venality, avarice and corruption ; a state of society judging every man by the significant question, How much is he worth ? Long before his entry, this corruption had gained full headway. Throughout the whole West, Northwest and Southwest, the fraudulent seizure of agricultural, timber and mining lands, and the corruption of Congress and of the Legislatures for gratuitous awards of public money, had (as we have abundantly seen in previous chapters) long been notorious. The Common Councils of the cities and public offices of all kinds were generally filled with men who converted their positions into a means of securing illicit revenue. Bribed or otherwise influenced to give special franchises and privileges or connive at frauds many of these men left offices, paying modest salaries, with a fortune.
THE DEBAUCHING AND SWINDLING OF INDIANS.
The character of trade in the West and Northwest had been determined early in the nineteenth century by the operations of John Jacob Astors American Fur Company and his other fur companies. Of the nature of the methods by which Astor laid the foundations of the fortune of $20,000,000 which he left at his death in 1848, and which fortune has since grown to be one of the largest in the world, many details have been set forth in Volumes I and II. We have seen, from the official records, how he systematically debauched numerous Indian tribes with whiskey, charged them incredibly extortionate prices for cheap merchandise which he exchanged for furs, and pauperized, and spread demoralization and death among, the Indians. We have also seen how many of the Indian uprisings, resulting in the murder and massacres of white settlers, and in the murder and punitive shooting by the traders and by the vengeful Indians in return, were originally caused by these continued practices of debauching and swindling. In Volume I it was explained that many additional facts had been intentionally left out ; some of those there omitted will be described here in order to contribute to a clearer understanding of the long-prevailing trading methods in the West and Northwest.
It is clear from the reports of the United States army officers and those of the Government Indian Agents that the American Fur Company dominated the whole of the West and Northwest fur regions. The Government had established its own trading posts, called factories or agencies, the purpose of which was to supply the Indians with merchandise in exchange either for furs or land or to relieve their destitute condition when necessary. These Government trading posts were strictly prohibited from dealing in or supplying liquor. The American Fur Company succeeded in undermining the trade of these agencies, and finally in causing their abolition. The illegal use of liquor by the American Fur Company was one of its powerful means in seducing the Indians from the Government trading posts ; another successful method was by prejudicing the Indians against them by the claim that the Government merchandise was inferior. In representing to the Government at Washington that the Government trading posts did little business, Matthew Irwin, U.S. Indian Agent, at Green Bay, Wisconsin, wrote that two of the reasons for this state of affairs were because of the secret practice on the part of private traders in vending whiskey, and because of the prejudice excited among the Indians against the Government agencies. (Doc. No. 60, First Session, Seventeenth Congress, p. 60.) In a communication, dated February 22, 1822, to Senator Johnson, chairman of the U.S. Senate Committee on Indian Affairs, Thomas L. McKenney, U.S. Superintendent of Indian Trade, wrote that the agents of the American Fur Company had a great deal at stake in overturning these establishments (the Government trading posts) and has much more at stake in the overthrow of the entire system. Superintendent McKenney wrote pointedly of the haste of the American Fur Company to grasp the trade with our Indians. (Doc. No. 60, p. 42.)
Writing from Camp Missouri, Missouri River, to Colonel H. Atkinson, on October 29, 1819, Major Thomas Biddle gave this description of the private traders :
These traders are continually endeavoring to lessen each other in the eyes of the Indians, not only by abusive words, but by all sorts of low tricks and maneuvers. If a trader trusts an Indian, his opponent uses all his endeavors to purchase the furs he may take, or prevent in any way his being paid ; each trader supports his favorite chief, which produces not only intestine commotions and dissensions in the tribe, but destroys the influence of the principal chief, who should always be under the control of the Government. The introduction of ardent spirits [whiskey, etc.] is one of the unhappy consequences of this opposition among traders ; so violent is the attachment of the Indians for it, that he who gives most is sure to obtain furs ; while, should any attempt to trade without it, he is sure of losing ground with his antagonist. No bargain is ever concluded without it, and the law on the subject is evaded, by their saying they give, not sell it.
Parenthetically, a reply made by Major John Biddle to one of the interrogations addressed to him by Senator Johnson may be properly interposed here :
Question 13. Are the Indians judges of the quality of goods in which they trade, of the reasonableness of prices, and of the value of their own furs and peltries ?
Answer. The Indians are very observant, and reputed to be very good judges of the articles which they are accustomed to buy. Their capacity for the petty traffic which they carry on is believed to be much greater than is generally apprehended. The principal fraud practiced upon them is believed to be in the article of spurious liquors ; to which the seller attaches a price in proportion to the penalty he would incur from detection. (Doc. No. 60, p. 5.)
To resume Major Thomas Biddles communication to Colonel Atkinson : He wrote further that when the traders bought furs after Indian hunt a keg of whiskey was considered an indispensable equipment of such an undertaking. He closed his communication with the following remarks :
I had found on my arrival [at the Maha nation of Indians] most of the principal men drunk. The Big Elk, who is so much our friend, and who formerly possessed unlimited power in his nation, was so drunk for two days, that I could not deliver your letter to him ; when I gave it, I requested an interpreter to inform him that I had been two days waiting to deliver a letter from you, but that very much to my surprise, I had found him too drunk to transact business. He appeared affected at what I said, acknowledged how unworthy it was in him to be in that situation, and admitted he had lost much power by it. He blamed the whites for bringing liquor into the country, said when he knew it was not to be had he felt no inclination for it, but that when it was near and attainable his attachment for it is irresistible. ...
Thus is the influence of this valuable and sensible Indian lost to his tribe and the Government, and thus is a man who possesses some traits that do honor to human nature, debased and made a beast of. (Doc. No. 60, pp. 46, 47.)
Document No. 60, First Session, Seventeenth Congress, includes this extract from a letter from the U.S. Indian Agent at Green Bay, Wisconsin, to Mr. McKenney, U.S. Superintendent of Indian Trade :
The fact can be established that in almost every case the persons engaged [as traders] by Mr. Astors principal agent, Mr. Crooks (who is a British subject), were known British subjects ; many of them having held commissions under the British Government and headed Indians during the late war [that of 1812-15]. For example, at this place Mr. Astor sent goods to the following persons, last fall, to be traded alongside the factory [Government agency]:
and Peter Powell,
British subjects and holding commissions
from the British Government in
the Indian Department during the late war.
And the following persons were sent by Mr. Astor in the neighborhood of Mr. Rouse, whom I sent to do business with the Indians at the Ouisconsin [Wisconsin].
British subjects belonging to this place,
and holding commissions, during the
and late war, from the British Government,
in the Indian Department.
And Mr. Lusienaux (a British subject) was sent by Mr. Astor to trade with the Indians at Winnebago lake. At Menominee river, where I sent Mr. Thomas P. James to trade, he was opposed by a Canadian sent by Mr. Astor ; and in an underhand manner by Peter Powell, a British subject who held a commission in the Indian Department during the late war.
A description followed of the secret traffic in whiskey carried on by Astors agents, with the explanatory statement that it was deemed illegal to accept Indian testimony. In other words, Indians could be indiscriminately debauched, swindled, plundered and murdered, as we have seen in Vol. I, and yet their testimony in civil or criminal suits was not considered legal. The communication further described how Astor caused honest officials who exposed his methods and sought to prevent them to be dismissed from office (see note on page 84, Vol. II, of this work) and continued :
It appears that the commanding officer at Prairie du Chien undertook at the instigation of the Indian agent, to stop and send to St. Louis some of Mr. Astors British trading subjects. For this act it is said the agent will be dismissed from the public service ; and we now have the novel spectacle before us of a British subject (Mr. Crooks) traveling to the Prairie, with a passport from Governor Cass, said to be given by authority of the War Department, to inquire into the conduct of the Indian agent and commanding officer.
The Cass referred to was the same Lewis Cass, who, as has been noted in Vol. I, received $35,000 from Astor, for services not stated.
On January 14, 1822, Senator Johnson laid before the United States Senate a long communication (Doc. No. 10) regarding Astors American Fur Company from Superintendent of Indian Trade McKenney, who wrote of the keen and adventurous trader, skilled in the arts of deception and speculation, who is bent on making gains, and how the consequences to the Indians are notorious ; and these involve bereavement, and suffering and death ! McKenney referred feelingly to the sight of that intellectual and moral degradation to which such a traffic necessarily dooms this unfortunate race of men, and described the trade as essentially degrading in its character, and disastrous in its consequences, for it is the principal business of such traders to oppose everything like improvement. Such is the likeness which is stamped deep upon our Indians, and which may be traced out in all of the poverty and misery which invests so large a portion of their population. History details the causes ; and these are to be found in the superior intelligence and keen avarice of the one party, and their disregard to political and moral order ; and the unenlightened and dependent condition of the other. McKenney went on :
... It cannot be admitted as a just view of the Indian character and manners to pronounce upon his treachery and cruelty as the characteristics of his moral constitution. These wily acts are rather the results of his best conceptions of defence, and of preserving himself from the treachery which is practiced upon him ; and the displays of his vengeance are but the ebullitions of a provoking temper. We see the Indian goaded into desperation by injustice and fraud. . . .
G.C. Sibley, U.S. Indian Agent at Fort Osage, wrote, on April 16, 1819, to Superintendent McKenney, denouncing the attempts, chiefly on the part of the American Fur Company, to bring about the abolition of the Government trading posts. With bitterness he wrote that The clamorous cupidity of the traders will no longer be restrained ; the Indian trade must be given up to ` individual enterprise; to merciless men . . . to unprincipled pioneers of commerce of every shade and hue. If that should be done, he pointed out, an address along these lines might as well be made to the settlers : Your property will be sacrificed ; your families murdered, and your farms desolated ; but these men insist upon their rights, and the fur trade must be left open to them. ... What is the bleeding scalp of an infant, compared with the rich fur of a beaver skin ? (Doc. No. 6o, pp. 57-59.)
All of these protests were of no avail ; by a campaign of persistent misrepresentation, wire-pulling and presumably bribery, Astor finally succeeded in having the Government trading posts abolished, and thereafter could debauch and swindle the Indian tribes without any competition in trade from the Government. But while denouncing Astor, and justly so, for his extraordinarily revolting practices, the United States Indian Agents might well have denounced themselves for virtually defrauding the Indians in the purchase for the Government of vast areas of lands owned by the Indians. Superintendent McKenney stated that these lands had cost the Government an average of only two cents an, acre ! Two cents an acre, so it is written ; the Indians were often paid this sum in merchandise. Much of the poverty, and nearly all of the debauchery, swindling, murders and massacres could be rightfully charged to Astor, but the Government itself was responsible for some of the destitution in thus taking advantage of the unsophisticated Indians and wheedling away their valuable agricultural, timber and mineral lands for virtually nothing. And, as we have seen, capitalists then promptly stepped in and fraudulently secured great stretches of these timber and mineral lands, while sections of the working class were vainly petitioning Congress to give the workers cheap access to the soil, or to hold the land as national property, for the benefit of the whole people.
The bribery of Government agents, in all departments, by capitalists determined upon defrauding the Government, the Indians, inventors and the producers in general, was persistent. In Chapter I, Vol. II, facts have been given of the corrupt collusion of land office registers and receivers by which capitalists obtained immense tracts of land. Many of the Government agents among the Indian tribes were likewise corrupted, either by money or other means. Numerous Congressional investigations conclusively established this fact. An investigation, in 1842, of the frauds practiced during the previous decade or more upon the Cherokees, for instance, revealed such an elaborate system of fraud on the part of private contractors in the contracts for supplies, that a powerful attempt was made to suppress the report. The House Committee on Indian Affairs declined to yield to the influences demanding suppression, and published the report in full. (Report No. 271, February 25, 1843, Twenty-seventh Congress, Third Session.) The report of the investigation consisted of two sections, the first of which gave a description of the Cherokees. In its own report, the House Committee on Indian Affairs thus reported in part :
The second report relates to frauds alleged to have been committed upon the Government and the Indians, by certain subordinate agents in the public employment, and persons who had contracted with the Government to furnish subsistence to a number of tribes. This report presents a great amount of facts on the subject, showing that the most exorbitant prices were paid to the contractors who furnished the rations. The manner in which the contracts were made is pointed out, as well as the manner in which they were performed ; and, unless the statements are false, it is evident that the Government was defrauded in the first instance, and the Indians in the second ; and that in both the agents of the Government participated.
The facts contained in the report are very valuable. They expose the whole machinery of fraud, by which the Government and Indians have been so often and so greatly wronged. The inquiry by Lieutenant Colonel Hitchcock appears to have been conducted with great intelligence and fairness. ...
North and south, east and west, this defrauding of Government and Indians continuously went on.
THE SEIZURE OF MINERAL LANDS.
The thefts of mineral lands in Wisconsin, Illinois, Iowa, Michigan and other States were so scandalous a condition by the year 1840, that successive Congressional Committees were moved to report extensively upon them. The House Committee of Public Lands reported, on December 18, 1840, that large tracts of land, well known to be rich in mineral deposits, in the Northwest and elsewhere, had been fraudulently seized under nominal forms of law, and that deception, perjury and fraud were common.1
Two years later, on April 1, 1842, the House Committee on Public lands submitted a similar elaborate report, containing a petition from citizens of various Western and Northwestern States complaining that the oldest and most valuable mines had been fraudulently seized and that, too at the very time when the regular miners were occupying the same, and were deriving their livelihood from them. The committee described many cases of perjury or fraud in the seizure of lead and copper mines, and many facts were brought out showing that the bribery of Land Office officials and army officers was a regular part of the fraudulent operations. Redress through the courts of ordinary jurisdiction, the report read is slow and expensive. The persons aggrieved are generally men poor in purse, living by their labor, and they have not the means to contend in court with the wrongdoers.2
A report, dated January 27, 1846, of the Senate Committee on Public Lands, in answer to a resolution of inquiry of the United States Senate as to the character and disposition of the Lake Superior mineral regions, pointed out that that region has within the two or three past years risen into great importance in the public estimation. The committee declared itself fully persuaded that its copper mines were very valuable, and that under proper management the mines might become a prolific source of income to the Treasury of the United States. The committee described the great frauds by which large areas of these mineral deposits, located on public domain, were passing into private hands.3
Frequent Congressional reports told of the fraudulent methods by which immensely valuable mineral deposits in the Northwest were robbed from the Indians, and the Government swindled. The House Committee on Indian Affairs reported, for example, on April 11, 1874, that a treaty, signed in 1854, between the United States and a branch of the Chippewa Indians gave that tribe a reservation in Michigan. In 1869, the report continued, some speculators in public lands discovered valuable minerals in the township, fifty-one [part of the Chippewa reservation]. They immediately went to work, while the secret remained theirs, to have it restored to market. They finally succeeded so far as to induce the Government to restore to market so much of the township, by far the larger and more valuable portion, as lies east of Huron Bay.4 The report declared that the Indians had been unjustly dealt by and wronged, and the mineral lands fraudulently acquired. This was but one of many such reports dealing with the theft of mineral lands from that tribe and other Indian tribes.
THE COLOSSAL THEFTS OF TIMBER.
The huge fraudulent operations in the theft of timber from the public domain in Minnesota and other States and Territories, and the bribery of public officials to connive at those thefts, were another example of the widespread and permeating fraud.
Congress had passed an explicit act prohibiting depredations on the public timber lands, and providing a penalty for each violation of the law of a fine of not less than triple the value of the timber cut, destroyed or removed, and a term of imprisonment not to exceed twelve months. This law was effectively ignored or evaded by individual lumber capitalists or lumber corporations. In a long report, under orders, to United States Secretary of the Interior Robert McClelland, on February 12, 1854, James B. Estes, U.S. Timber Agent for Iowa, Minnesota and the Western district of Wisconsin, stated that in one Minnesota section alone the Black River district more than two hundred million feet of pine had been cut and carried away. On the Black River, wrote Estes,
are sixteen lumbering mills, all of which, until the last year have been supported by logs taken from the public lands.5 Upon the Chippewa and Red Cedar or Menominee rivers, the same state of waste exists and has been carried on for a number of years. There are also upon these streams, and their branches, eight saw mills which doubtless cut, as an average, more than two millions of feet a year. The amount of lumber cut at all of these mills is small compared with the actual waste upon the public lands, as there is now, and has been for years, a most extensive business of logging carried on to supply the lower markets of the Mississippi.6
Along certain rivers besides those named, Estes added, there were nineteen saw mills, of steam and water power, which are engaged in cutting, and doubtless consume, forty or fifty millions feet of lumber yearly. In addition to this, there has been a large traffic in rafting logs down the Mississippi to the St. Louis and other markets below.7
BRIBERY OF OFFICIALS.
This immense amount of lumber was almost all stolen. Usually the Government timber agents were bribed to wink at this colossal system of fraud, and at other times they were likewise bribed to sell (what they had no legal authority to sell) permission or licenses, for insignificant payments to the Government, to cut timber from the public lands. Estes reported that he had instituted twenty-one indictments against some of these timber trespassers, and that among the number he had caused to be indicted, was Stunton, a former United States Timber Agent, for being accessory to those trespassers, in having sold to individuals permissions to cut and waste.8
So intrenched was this system of enormous theft that when one honest Government official attempted to enforce the law, the whole lumbering interests sought to discredit him and his aim and bring about his removal.
Such a practice had long been the usual capitalist method of reprisal ; we have seen how Astor, earlier in the century, caused officials who tried to stop his debauching and swindling of the Indians to be dismissed from office, and we have noted the same occurrence so repeatedly, that it might be said to be a fixed accompaniment of capitalist plans. Eternally boasting of their concern for law and order when labor unions declared a strike, and demanding the strict enforcement of the laws whenever that enforcement had to do with the working class, the capitalists, on all occasions, insisted upon their right to interpret laws as they willed, and evade or violate them if their self interest so pleased them.
Even further : not only did the lumber capitalists systematically seek to thwart the enforcement of the law by honest officials ; all of the allied capitalists in the same region, and subsidized newspaper owners and hirelings joined in threatening, and often using, force to prevent the laws from being executed. This is clearly shown by the report made on February 18, 1854, by I.W. Willard, U.S. Timber Agent for Western Michigan, to United States Secretary of the Interior McClelland. Willard estimated that there have been manufactured and shipped from, there [the region north of Grand River and Lake Michigan] more than five hundred million feet of lumber within the last ten years, and more than seven-eighths of which was plundered from the public lands. ... Besides this, the extensive tanneries of Chicago and Milwaukee have been largely supplied with bark from the forests of hemlock on the eastern shore of Lake Michigan.9
HONEST OFFICIALS MALIGNED AND PERSECUTED.
Willard caused thirty-seven of the trespassers to be indicted. Then, he wrote, the entire timber interests commenced a systematic war upon me. The newspapers at Chicago, it is believed, at the instance of the trespasses, their attorneys and agents, contained attacks daily upon the agent, characterizing his conduct as oppressive in the extreme, and the `Chicago Tribune went so far as to counsel resistence by force. Meetings were held in the lumber regions, attended by lumber merchants from Chicago in some instances, at which violent harangues were made, and resolutions adopted, the temper of which was well calculated to excite a feeling leading to the most dangerous consequences.10 In fact, the timber capitalists employed armed gangs to prevent the seizure of the stolen lumber, and fleets of lake ships were requisitioned to carry off the lumber by stealth before the Government agents could arrive to confiscate it.
What eventually happened to those thieves ? Invariably they gradually succeeded in forcing the honest Government timber and land officials out of office. They fought the Government by force and strategy, and contested it in the courts. The plea was set up by them that timber was not a part of the land, and for years the courts solemnly considered the question whether a tree went with the real estate. Finally, the Supreme Court of the United States gravely decided that it did ; that the timber while standing is a part of the realty, and it can only be sold as the land could be, and unless lawfully cut, will remain the property of the United States.11 A few of the underlings of the lumber capitalists were detained in jail ; as for the capitalists themselves, they were allowed by the Government to compromise the cases against them, by payment of trivial sums. No poor man violating the law had ever been permitted to compromise with the Government ; he had to face a court mandate and go to jail and stay there until his sentence expired. But the timber capitalists, like all other sections of the capitalist class, were allowed to keep the fruit of their thefts, and buy immunity from the penalties of the law by paying back a very small part of the proceeds. With these proceeds the timber thieves often then bribed legislatures for privileges and franchises, bought stocks and bonds, and real estate in the cities, built fine mansions and became the founders of some of the considerable fortunes in the United States. And continuously, decade after decade, the gigantic thefts of timber from the public lands went on unceasingly.12
These are a very few instances of the methods in the seizure of mineral deposits and timber throughout the Northwest long before, or at about the time, Hill appeared on the scene. In fact, it might be said that when he arrived in St. Paul, fraud as the foremost means to success, bad already become traditional. The remarkable frauds by which many millions of dollars were stolen by Russell Sage and others in the projection and manipulation of the St. Paul and Pacific railroad were carried on under Hills eyes. Very probably he learned his first great lesson from observing Sages methods, and it was this very railroad that he and his partners obtained, after Sage had plundered, and practically abandoned, it.
THE HISTORY OF A RAILROAD HILL SECURED.
The history of this railroad was one of continuous corruption from its inception. The facts have been given in one of the chapters on the Sage fortune, but a recapitulation will be here summarized.
The attempted corrupt seizure of public lands in Minnesota began in 1854, when an act was corruptly lobbied through Congress indirectly giving nine hundred thousand acres of public domain to the Minnesota and Northwestern Railroad Company. The ensuing public scandal compelled the repeal of that act. But other acts were passed by Congress in 1857, by the same proved methods of bribery, indirectly, yet absolutely, giving a present of six million acres of public land in Minnesota to various railroad corporations.
One of these measures of Congress, approved on March 3, 1857, made a large land grant to the Territory of Minnesota for the benefit of the Minnesota and Pacific Railroad Company. The further history of this railroad has heretofore been specifically described ; how its projectors were composed of notorious lobbyists and swindlers ; how they corrupted the Minnesota Legislature to award them as aid several millions of dollars of State bonds ; how they fraudulently sold and hypothecated large amounts of those bonds and stole the proceeds ; and how, although they had received millions of acres of public lands, and millions of dollars of public money, yet, by 1859, they had not built more than a few miles of worthless track. More millions of dollars had been stolen by palming off stock on farmers, merchants and other investing dupes.
The robbery of these huge sums threw the railroad company into insolvency. Then in order to prevent defrauded creditors from recovering, Sage and his associates corrupted the Minnesota Legislature to pass an act reorganizing the company into two divisions, one division called the St. Paul and Pacific, and the other, the First Division of the St. Paul and Pacific Railroad Company. This legislative act, the courts held, entirely relieved the two new corporations from the debts of the old corporation, although it in nowise affected their land grant and franchise rights.
Having thus made it impossible for creditors to recover, Sage and company, on the plea that further public encouragement was necessary to complete the railroad, lobbied an act through Congress in 1865 ; by which the land grant was increased to ten sections a mile for each mile of the railroad and its branches. They then mortgaged the railroad and its land grants to a syndicate of Dutch capitalists for $13,380,000, of which $8,000,000 was immediately diverted by various fraudulent devices, and the railroad was again plunged into bankrupcy.13 In 1875, Judge Dillon, of the United States Circuit Court, appointed a receiver for the railroad in the person of Jesse P. Farley.
HILL STEPS IN WHERE SAGE LEAVES OFF.
Hill and his associates stepped in where Sage left off. We have seen how Farley expended only about $100,000 in constructing and repairing the railroad. So little was done, and the road was in such a disgraceful condition, that on March 9, 1878, the Legislature of Minnesota passed an act declaring that unless a specified number of miles should be built by certain dates, the uncompleted portions of the railroad, together with the land grants, rights, franchises and exemptions from taxation, should be at once forfeited to the State of Minnesota without any act or ceremony whatsoever. From another direction, also, trouble was threatening. The Dutch bondholders were angrily clamoring to know what had become of their millions, and had appointed John S. Kennedy a New York banker, as their representative to bring suit.
Hill saw the opportunity of getting for almost nothing a railroad of five hundred miles, and a land grant of more than two and a half million acres. How did he manage it ? According to Farleys repeated statements in subsequent court proceedings, Hill and Norman W. Kittson entered into a conspiracy with him (Farley) to betray the United States Courts, and at the same time Kennedy conspired with him to betray the Dutch bondholders. These allegations Hill denied, but Farley asserted and reasserted them in many court proceedings.14
THE METHODS BY WHICH CONTROL WAS OBTAINED.
Farley was an ignorant, almost illiterate, man who had seen some railroad experience in Iowa, and his cupidity was well known. That he was selected as a receiver, or rather recommended to the court, by Kennedy is definitely asserted in the court decisions.15 Undoubtedly he was chosen by Kennedy in accordance with a surreptitious agreement, because it was known that he would prove a pliable tool. If Farleys own sworn statements may be accepted, he was to mismanage the affairs of the railroad so that the price of the bonds would be reduced, and he was to inform Hill and Kittson of every move that he made. At the propitious time, Hill and Kittson were to come forward and get control of the railroad. Neither Hill nor Kittson had the necessary money to do this, but according to Farley they were to give a two-fifths or forty-per-cent. interest to anyone supplying the funds. Farley contended that this agreement further provided that a three-fifths or sixty-per-cent. interest should be reserved for himself and for Hill and Kittsonone-fifth for each of the trio.16
The all important consideration was to build at once the extensions, in view of the act of the Minnesota Legislature threatening the franchise rights and land grant with forfeiture. But who would supply the funds for this construction ? Kittson brought in two fellow-Canadian friends George Stephen, manager of the Bank of Montreal, and Alexander Donald Smith, long associated with the Hudson Bay Trading Company. Where Stephen and Smith obtained the millions of dollars which they now advanced, has never been clearly shown. It was long persistently charged, by at least one responsible member of the Canadian Parliament, among others, that Stephen, Smith and one Angus withdrew $6,000,000 from the Bank of Montreal with which to finance the enterprise, without the knowledge of their co-directors. So far as documentary proof of this allegation is concerned, none has been found ; it may exist, but we have been unable to discover it.
HILL AND HIS CLIQUE GET THE RAILROAD.
The campaign to get control of the railroad was now fairly complete. The various properties embraced in the railroad companys title were mortgaged in several mortgages amounting, in the aggregate, to $28,000,000 of bonds. Hill and his associates bought in these $28,000,000 of bonds at an absurdly low price, in some cases of large issues, at only three per cent. of their value. The range of prices was from thirteen and a quarter, to seventy-five per cent., of their par value.17 But Hill and his partners were not required to pay in immediate cash. The bonds were chiefly bought on the understanding that they were not to be paid for until the railroad was reorganized.
Such actual money as was expended was spent in a busy effort to construct the extensions, and thus forestall the forfeiture law. Under these circumstances, the court record states, the receiver, at the instance of Mr. George Stephen and other large bondholders (James J. Hill, Donald A. Smith and Norman W. Kittson) hurried to court, and got an order on April 18, 1878, to get authority to issue debentures to complete the extensions.18 Under the authority of the court, Farley, out of the funds advanced by the Hill-Stephen combination, built one hundred and twenty-five miles of railroad at an aggregate cost of $1,016,300. This extension gave an unbroken railway connection between St. Paul and the Canadian system of railway in Manitoba.
Only one thing more was necessary to get the whole railroad line out of the jurisdiction of the Court into absolutely private possession. This was a decree of foreclosure. On April 11, 1879, a final order of foreclosure was decreed, and on June 14, 1879, the road was sold to the St. Paul, Minneapolis and Manitoba Railroad Company. This company Hill and his associates had organized a month before the sale, for the express purpose of buying the railroad under foreclosure. The entire cost of the main lines and extensions of the St. Paul and Pacific, both divisions, was $6,780,000. But the Hill coterie were not called upon to pay this sum in money. They were allowed to turn in receivers debentures and bonds as payment for the purchase price.
THEY BUY IN AT A BARGAIN SALE.
Farley testified subsequently that the railroad thus sold for $6,780,000 was worth, at the very least, $15,000,000, thereby confessing his criminal complicity in being a party (as he swore) to a clandestine agreement by which such a sale had been fraudulently arranged for in advance. In the suit, in 1880, of Wetmore vs. the St. Paul and Pacific Railroad Company, to set aside the sale, Judge Miller estimated the five hundred and sixty-five miles of railroad and the 2,586,606 acres of land to be worth $20,000,000 or more.19 In fact, from a part of the land grant alone, aside from the railroad property itself, Hill and company obtained more than twice the sum that they had paid for the entire property. Immediately after the foreclosure sale, they sold the greater part of the land grant for $13,068,887.
A few years previously Hill was a poor man ; perhaps he had a few thousand dollars. The operation described at once made him a millionaire. He and his associates not only held the railroads bonds, but they apportioned the stock among themselves. Hill and Kittson each received 57,646 shares of stock, and the other members of the combination their share. In addition, they otherwise made large profits.20 As soon as the railroad was secure in their possession, they began the accustomed process of hugely watering its stock.
THE RECEIVER SWEARS THAT HE WAS IN COLLUSION.
Farley was bitterly disappointed at receiving none of the spoils. So determined was he to get what he claimed was his allotment, that he did not mind the publicity of his betrayal of his trust as receiver. He brought a suit against Kittson, Hill, etc., in the Minnesota Supreme Court, alleging that by agreement he was to receive one-fifth of the capital stock of the railroad, and one-fifth of all other securities and property acquired by Kittson, Hill and the others of the combination, as a result of his collusion. It was a very audacious ground upon which to base a complaint. Farley could produce no written agreement, and Judge Gilfillan, in October, 1880, decided that he had not proved his case.21
At the same time, Farley sued the St. Paul, Minneapolis and Manitoba Railroad Company in the United States Circuit Court. The attorneys for the defense, it is interesting to note, based their main plea for non-suiting the case on the ground that a court official who had betrayed his trust had no standing in court. In this particular plea Judges Treat and Nelson concurred. Their decision, rendered in 1882, said in part :
Courts will not and ought not be made the agencies whereby frauds are in any respect recognized or aided. They will not unravel a tangled web of fraud for the benefit of anyone enmeshed therein through whose agency the web was woven. Especially must that be a rule where a trusted officer of a court, whose position is both advisory and fiduciary, seeks its assistance to compel alleged confederates to share with him the spoils acquired through his concealments and deceits, which he admits were deemed by his confederates and himself necessary to their success through his betrayal of his trust.22
THE COURT VIRTUALLY CONFIRMS HIS CHARGES.
Then followed parts of the courts decision practically confirming Farleys statements that he had entered into a conspiracy of collusion with Hill, Kittson, Stephen, Smith, etc., on the one hand, and Kennedy on the other. The plaintiff, continued the decision, conceived a scheme to wreck the vast railroad interests which it was his duty to protect. Through a betrayal of his trust under such circumstances, according to his version of the facts, these vast railroad properties have been secured, and a profit realized of $15,000,000 or more.23
The court went on to say that for his betrayals, Farley was to get a portion of the spoils, and the ground of his suit was that his associates had repudiated the fraudulent contract. As they refused to divide the spoils, Farley had sought the aid of the courts to compel them a very strange demand, the decision said, to bring into any court. As for Kennedys part in the transaction, the decision set forth, It is charged, however, and for the purposes of the case may be admitted, that Mr. Kennedy, agent of the Amsterdam Committee, was advised by the plaintiff [Farley] during the progress of the scheme that he, the plaintiff, was secretly betraying his trust.24 The decision concluded by saying that Farleys cause of action was based on inherent turpitude, and that the courts would not recognize any such action as valid.25
FARLEY INSISTS UPON GETTING HIS SHARE OF THE SPOILS.
Farley carried the case to the Supreme Court of the United States. That court, in October, 1886, held that the plea put forth in the lower court was unsatisfactory, in that it had not established any question of fact. The case was remanded with instructions for a new trial.26
The suit, therefore, came up again in the United States Circuit Court at St. Paul, this time in September, 1889. This courts statement of the case reads :
In 1876, complainant, Farley, was, by appointment of this court, receiver of the property of the St. Paul and Pacific Railway, and also general manager of the lines of the First Division of the St. Paul and Pacific Railway Company. . . . Several series of mortgage bonds were outstanding, largely owned and held in Holland. Complainant alleges that he and the defendants, Kittson and Hill, entered into an agreement for the purchase of these bonds, or a majority thereof, and the use of the same in the purchase of the road in foreclosure of the mortgages. The defendants were to furnish the funds necessary therefor, and the complainant to furnish facts, information and assistance. Certain it is that the bonds were purchased by the defendants, Hill and Kittson, with two associates, foreclosures consummated, and the railway properties acquired.27
The question was, the court declared, whether such a contract had been made, and if so, whether it was against public policy.
Farley testified that an oral contract had been made, and he was corroborated by his clerk, Fisher. Hill denied it, and as for Kittson, he had died before his testimony could be taken. Various letters of Farleys correspondence, with the banking firm of John S. Kennedy and Company were produced in court and were incorporated in the court record. One of these, written on May 23, 1879, by Farley to John S. Barnes, a member of the Kennedy firm, read :
Since the election of Bigelow and Galush, as Directors in the New Company, Men of no Money, railroad experience or Influences, And myself left out in the cold, I am forced to the conclusion that My time and claims on the St. Paul and Pacific is Short, I did expect better things of Hill and Kittson. I had a talk with Jim Hill last Knight. He disclaims any intention on his part to ignore my claims, but he is such a Lyer cant believe him. It is a matter of astonishment to every person in St. Paul to see the way Jim Hill handles Mr. Stephens. He is notoriously known to be the biggest liar in the state. Mr. Kittson told me time and time again that Jim Hill is the worst man he ever saw. Upham, P.H. Kelly, Thompson and in fact every citizen in St. Paul if they would Speak their Sentiments would all tell the same story. You Must Not blame Me if I should try to get even with Jim Hill before I leave here.28
In deciding the case, Justice Brewer said that he did not believe such a contract had been made, and he based his belief on this singular and highly amusing ground of reasoning : Is it probable, he wrote of Farley, that a man so situated, with his years of experience in railroad foreclosures, and owing such a duty to the bondholders, would enter into a secret arrangement with third parties for the purchase of the bonds an arrangement which made it to his interest to reduce the market price of bonds ? Is it probable that such a man would deliberately cloud the record of his life ? etc., etc.29 Of course not.
Again Farley carried the case to the Supreme Court of the United States. This court, in October, 1893, upheld the decision of the Circuit Court, declaring that Farley had not proved his claini.30 After thirteen years of legal contest, Farley was unable to collect a single dollar.
HILL AND HIS PARTNERS BECOME GREAT DIGNITARIES.
Of the men whom Farley alleged conspired with him, or who were alleged to have profited by his betrayal of his duty, Hill became the great multimillionaire autocrat of the Northwest, and Stephen and Smith obtained peerages from the British CrownStephen as Lord Mount Stephen, Knight of the Grand Cross of the Royal Victorian Order, etc., and Smith as Lord Strathcona, Knight of the Order of St. Michael and St. George, etc.31 Kennedy rose to be a multimillionaire ; when he died on October 31, 1909, he left a fortune estimated at from $30,000,000 to $60,000,000 which included $7,000,000 worth of stock in the Great Northern Railway, mostly obtained at the very time he betrayed his clients, the Dutch capitalists. He also held $10,000,000 of Northern Pacific Railway stock, secured at about the time when the Northern Pacific Railroad Company, as we shall see, was bribing land grants through Congress and stealing vast mineral deposits from the public domain. In the latter years of his life, Kennedy gave a few millions for philanthropic purposes, and was exalted as a great philanthropist. His will revealed that he bequeathed tens of millions to philanthropic and educational institutions.
This by way of passing explanation. To continue the story of the Hill fortune, however : Hill and his associates secured more franchises and special laws, built extensions, and formed the Great Northern Railroad out of the railroads that they had obtained and the extensions which they constructed. The Legislatures of the Northwest were deluged with bribe money, although it was never specifically proved that Hill was the distributor. The whole newspaper press was subsidized, and towns, cities and counties were prevailed upon to grant endowments and exemptions of all kinds. So rife was this corruption, that, in 1883, some protesting members of the Minnesota Senate introduced this resolution which was adopted :
WHEREAS, The acquisition and holding of large interests in land-grant railroads, public contracts and other schemes receiving aid from the General Government, by high Federal officials, places such officials in positions where they cannot be true to the public interests, without a sacrifice of self interest ; and
WHEREAS, Money thus acquired by public men is ordinarily used to corrupt the springs of political influence, and prevent the expression of the real sentiments of the people, and,
WHEREAS, It is alleged that in the preceding Senatorial election, certain members of this Legislature have been improperly and corruptly influenced by promises of money, public office or other valuable considerations, for a certain candidate for United States Senator, therefore,
The resolution called for a Special Investigating Committee of Seven.32 The report of this committee, while of a whitewashing and partisan nature, indicated an appalling state of corruption.
The significance of this self-admitted corruption of the successive Minnesota legislatures, will be better understood by a consideration of one among a large number of characteristic episodes.
On March 1, 1877, when the popular indignation against the robberies and usurpations committed by Russell Sage and his band was at its height, the Minnesota Legislature had enacted that the St. Paul and Pacific Railroad Company should have no right directly or indirectly to any land upon which settlers had settled in good faith. Inasmuch as a certain part of the railroad was not completed until November, 1878, the terms of the act of Congress of June 22, 1874, were violated. This act had extended the time of completion to March 3, 1876 ; otherwise the land grant was to be forfeited.33 But the Supreme Court of the United States conveniently decided that a mere breach of the conditions of the act of Congress did not of itself work a forfeiture of the grant ; either Congress or the Minnesota Legislature had to take some specific action declaring the forfeiture.34 The essential object, therefore, on the part of Hill and his associates was to prevent Congress and the Minnesota Legislature from passing such a forfeiture act ; and they were successful.
THE EVICTION OF DAKOTA SETTLERS.
After Hill had secured control of the St. Paul and Pacific Railroad, under the name of the St. Paul, Minneapolis and Manitoba Railroad, and had changed the title to that of the Great Northern Railroad, he claimed in 1884, sixty-five thousand acres of land in Dakota. Before 1884 no claim had ever been set up by the company to that land. The claim was based upon the old land-grant act of 1857, passed when Dakota was a part of Minnesota. For years the country along the Red River in Dakota had remained a wilderness until farmers settled there, and converted it into one of the richest agricultural regions in the West. The General Land Office took it for granted that this land did not belong to the railroad company, and had given full titles to the settlers.
In November and December, 1891, intense excitement prevailed among the farmers in the Red River Valley. An order had been issued by the Great Northern Railroad Company compelling farmers, by December 15, to vacate lands belonging to the company. This order was based upon a decision of the Supreme Court of the United States declaring that the companys land grant extended to the Territory of Dakota now the States of North Dakota and South Dakota.35 This decision gave the company some of the most fertile and valuable areas in Dakota. Unquestionably, under the acts of Congress, these lands, even if the original grant had extended west of the Red River, had long since been forfeited. The Supreme Court of the United States, however, by its successive decisions, negatived the explicit acts of Congress. The Great Northern Railroad thereupon began the eviction of farmers in the odd numbered sections within the twenty-mile indemnity limit of its land grant. This order of the company was like a thunderclap to the settlers. Many had resided on the land for twenty years.
The settlers appealed to Congress. That body passed an act to allow the railroad company to select an equal area of lands in lieu of those settled upon. This act, although apparently passed for the benefit of the settlers, was precisely what the Great Northern Railroad Company was waiting for. The lands relinquished by the company were non-mineral ; the act of Congress therefore, provided that the lands in exchange that it should select elsewhere should be non-mineral. But when the exchange was made it was discovered that the company had selected the most valuable timber lands in Idaho, Montana and Washington lands worth far more than the Dakota lands and that on some of these lands rich mineral deposits underlay the timber. The Commissioner of the General Land Office at that time was, as we have noted in a previous chapter, T.H. Carter. His record was so very satisfactory to Hill, the ruler of the politics of the Northwest, that, a few years ago, the Montana Legislature was allowed to send Carter to the United States Senate, of which he is now a distinguished member.
HILLS IRON ORE DEPOSITS.
Hill personally owns immense iron-ore deposits in Minnesota. These deposits are currently estimated to be worth at least a billion dollars. In 1906 he leased what was really a small part of these deposits to the Steel Trust for a period of twenty-five years on a royalty basis, the payments amounting, in the aggregate, to tens of millions of dollars. How he obtained these deposits is not told clearly in official documents. We have seen in previous chapters, that the original land grants made by Congress, corrupt as were the circumstances of the passage of the various acts, were never intended to cover coal, iron or other mineral deposits. But, by fraudulent constructions of the laws, made by Land Commissioners and the Courts, coal and iron lands were determined not to be included within the meaning of the word mineral.
According to Senator Pettigrews version, Hill secured large iron deposits in Minnesota by private purchase. For this he had ample capital, reaching hundreds of millions of dollars. This money was derived from the St. Paul and Pacific Railroad transactions, successive illegal stock waterings, and the extortionate profits from his railroad system profits terrifically oppressive to the people of the Northwest. Senator Pettigrew writes of the purchase by Hill of these iron deposits : The iron underlay forests of pine, and the lumber company had built a lumber road to get out the pine, and having cut the pine off, sold the road and the land to Mr. Hill at what they considered a very exorbitant price, but it turned out that underlying the land were vast deposits of iron ore. I think Mr. Hill estimates the mines at five hundred million tons.36 If this account is correct, it may safely be assumed that Hill knew the character of the land before he bought it ; judged by business standards it was a very astute transaction.
This assumption is borne out by the facts revealed in a suit brought at St. Paul, in January 29, 1901, by H.W. Pearson, a geologist of Duluth, against Hill and the Great Northern Railroad Company. The sum involved in the proceeding was stated to be not less than $14,000,000 which was alleged to be the value of property, held by Hill and his railroad, and taken by them after its discovery by Pearson. In his complaint Pearson averred that these mineral deposits were located by him under a contract with Hill by which he, Pearson, was to have a share in the profits. Pearson further alleged that he had been employed by Hill, in 1896, to locate coal and iron deposits in the States of Washington and Montana ; that he found the deposits ; that under his direction the Hill interests secured thousands of acres of valuable land, and that when he presented his claim for a share, he was cast aside. Of the final disposition of this suit no record appears in the available court documents.
If, however, the methods used by the Great Northern Railroad in appropriating mineral lands have been the same as those employed by the Northern Pacific Railroad, then their nature is clear. This latter railroad was not originally owned by Hill, but he and those allied with him, now hold its ownership. The net outcome, says Moody, of the Northern Pacific corner, and of the Northern Securities incident 37 has been that the Hill interests remain in undisputed control of the three vast railroad systems which now go under the name of the Hill properties, viz : The Northern Pacific, the Great Northern, and the Chicago, Burlington and Quincy, constituting in the aggregate, over 18,000 miles of railroad lines.38
THE NORTHERN PACIFIC RAILROAD.
The Northern Pacific Railroad was chartered in 1864. By act of Congress of July 2 of that year, it was given the right of way through the public domain, the right to take from the public lands material for construction, and an immense area of public lands in Montana, Idaho and other sections of the Northwest. These enormous privileges and grants were given to it at the identical time when the Union Pacific Railroad and other landgrant and subsidized railroad companies were bribing Congress. As we have seen, the Union Pacific Railroad disbursed nearly $436,000 in securing the passage of the act of July 2, 1864, increasing the Government money subsidy granted to it and doubling its land grant.39 Doubtless the passage of the Northern Pacific Railroad act was effected by the same means. In all, the Northern Pacific Railroad obtained about 57,000,000 acres of public domain.
By the definite terms of this act however, all mineral lands were expressly excluded from this grant, although the term mineral (to repeat an explanation already given) was later fraudulently construed, in the case of all land grants, not to include iron or coal. The Northern Pacific Railroad was, therefore, endowed with a land grant forty miles wide running across the continent, west of the Missouri River. This land grant included vast stretches of the very richest timber lands.
The ensuing history of the Northern Pacific Railroad was the same as that of all other railroads. It was plundered by successive groups of capitalists. One of the capitalists powerfully controlling the Northern Pacific Railroad for some years was Henry Villard, a man of remarkable character and enterprise. Different factions of capitalists fiercely fought him, and sought to oust him from the control of the Northern Pacific Railroad and other railroads in the Northwest. In his Memoirs, Villard tells of a formidable combination arrayed against him in 1889, composed of Hill and large financial corporations. Four years later Villard was accused by his opponents of having profited enormously from buying, in his individual capacity, semi-worthless railroads in Manitoba and elsewhere, and then unloading them, at exorbitant prices, upon the Northern Pacific Railroad, which, corporatively, he controlled. So far as the court records indicate the facts, these allegations seem to have been part of a plan to discredit Villard, and cause his overthrow ; when the charges were passed upon by the courts, Villard was personally vindicated. But that the railroads treasury had been looted by previous groups of capitalists is absolutely clear ; contesting factions were continually charging the other with the responsibility for promotions, extensions and enterprises largely devised for the special purpose of appropriating large amounts in loot.40 So contradictory and involved were these charges and recriminations that it is not easy to determine the relative, much less the absolute, truth. Certain of Villards capitalist opponents were especially notorious for their evil records ; so much so that charges coming from them were received with distrust and cynical skepticism, in general, and with dismissal, on the merits, from the courts in particular.
For years the contest to dislodge Villard from control was fiercely carried on.
GREAT THEFTS OF MINERAL LANDS
During the time that various capitalists controlled the Northern Pacific Railroad the thefts of mineral lands were so extensive that both Congress and the State of Montana were constrained to investigate. The people of Montana were greatly agitated over the railroads claim to lands containing the very richest gold, silver, lead and copper mines, particularly the great copper deposits for which Montana was famous. In fact, the people of the entire West were deeply aroused, for if the courts should finally sustain the action of the Northern Pacific Railroad, then all of the other Pacific railroads could likewise claim all of the mines and mineral deposits within their land grants, consisting of odd numbered sections. Already, in 1890, the Supreme Court of the United States had provisionally handed down a decision sustaining the Northern Pacific Railroads claim that only such mineral lands as were known to be mineral at the date of the land grant were to be excepted from the land grant.
The trans-Mississippi Congress, meeting at Denver, in May and October, 1891, adopted resolutions declaring :
WHEREAS, This dictum of the Supreme Court, if it should become law, would invest the Pacific railway companies holding grants of land from the Government with a vast number of the best mines discovered within the limits of said grants by prospectors and miners, who have located thereon in good faith and developed and sold therein in the honest belief that said grants were limited to agricultural lands only, as declared in the acts of Congress making them ; and
WHEREAS, The citizens of the United States have invested millions of dollars in the development of mines on said lands which have been discovered subsequent to the date of said grants ; and
WHEREAS, The consequences of this newly made construction of said grants must be the confiscation of private property and, the spoilation of individuals in behalf of said railway companies on a scale so vast that history affords few parallels thereto, and to the bringing of actions to recover the value of ores heretofore mined from said lands, which, if successful, must reduce a large number of our citizens to want and beggary ; and
WHEREAS, If said construction of it becomes the law of the land, it will take vast regions of mineral land out of the market, either for future explorations or purchase, to the manifest injury of the people. Wherefore, be it
Resolved, That the Congress protests against any construction of the statutes of the United States which will result in such a system of wholesale confiscation, and the consequent enrichment of great combinations already enjoying the bounty of the government, and calls upon the representatives of the people in Congress assembled to take such prompt and immediate action as may be within their immediate constitutional prerogative to destroy this threatened danger.
At the same time Martin Maginnis, Mineral Land Commissioner of Montana, reported to Governor Toole that the
vast land grant of the Northern Pacific Railway Company stretches from the eastern to the western boundary of the State of Montana in one broad belt which, including indemnity lands, is nearly one hundred and twenty miles wide and over seven hundred miles long. The Congress which created this corporation gave to it one-half of the lands within these limits, carefully excluding all mineral lands, and emphasizing their reservation from the grant by giving to the company indemnity for such lands as might turn out to be mineral. Little prospecting had then been done ; very little was known of the character of these lands. All the discoveries of mineral land had yet to be made, the mines upon them to be developed and these to be finally segregated from the land grant of the company, and the company recompensed therefor with other lands not mineral in their character.
Nothing would seem to be plainer than the fact that the reservation went with and was part of the grant ; and that future exploration, survey and classification would be necessary to define the non-mineral lands which would become the property of the company and the mineral lands which were reserved to be forever open to the prospector and the miner, under the mining laws of the United States.
If the road could have been definitely located and built as rapidly across the continent as the charter was pushed through the Congress, it would have been left to the future to prove the character of the lands, and if the company at that time by virtue of a finished road claimed all the lands, surveyed and unsurveyed, unexplored and not prospected, that company would simply have taken them all ; for the mineral discoveries have all been made since then. It was not until later that the audacious claim was set up that lands not then known to be mineral, or not known to be mineral at a certain date, were therefore not mineral, and by consequence passed to the corporation.41
Mineral Land Commissioner Maginnis then dealt extensively with the long delay of the projectors of the Northern Pacific Railroad in building the railroad a delay, he wrote,
by which it failed in one of the primal purposes of its creation, and in fairly earning that part of its endowment which was intended to secure its completion at least fifteen years before it came to us, who, while wearily waiting its advent, had occupied, subdued and partially developed the country without its assistance. It was never dreamed that the railroad company would set up at any time in its existence a claim to the mineral lands, which were excluded from the grant, in the granting act itself, by specific reservations intended to run with and be as perpetual as the grant itself.
Congress had created no tribunal to decide which were mineral or which non-mineral bearing lands. It left that to the executive department, which has the control of the sale and survey and classification of all the public lands. A large portion of the land inside lines of the grant has never been surveyed or in any way examined, prospected or classified by the government. The labor and toil of the voluntary prospector and the miner has alone made known which are mineral districts and which are not.
Suddenly the astounding claim was set up that all the portions of the country which had not been voluntarily examined by the individual prospector, acting under no agency of the Government but at his own expense, and therefore proven to be mineral at a certain date, were to be considered non-mineral and to become the property of the Northern Pacific Railway Company in spite of the fact that the charter itself said that such lands never should be, and that the company should take other lands in lieu thereof in order to make up the quota that it claimed.
It would seem that neither in law nor equity could there be any warrant for such a claim, that the company could not obtain by indirection those lands that were directly reserved from the grant and held open to the prospector and the miner under the well-defined policies of the United States as laid down in its laws governing the disposition of mineral lands. But under certain constructions of certain cases in some of the courts, the company did set up its claims not only to the mineral lands but to the minerals which had been mined. It contested the applications for patents to mines upon odd sections and sued for the recovery of ores taken from the same.
The people of the State became universally alarmed at a course which threatened such calamity to its interests and recognizing the fact that poor prospectors and miners, or rich ones either for that matter, could not successfully contest with such a powerful corporation, the State determined to make the cause of its people its own cause, and with that object in view, the Legislature passed the following law : 42
Here followed the provisions of that law, the object of which was to safeguard the interests of the individual miners. Notwithstanding the passage of this act, the lower courts, many of the judges of which had been railroad attorneys, or who had been elevated to the bench by railroad influence, gave decision after decision in favor of the Northern Pacific Railroad. The chief opponents of this railroad were large copper corporations, such as the corporation controlling the great Anaconda copper mine, then valued at $25,000,000. These corporations had themselves obtained their mines largely by fraud. But individual miners and prospectors, in nowise connected with any fraudulent operation, were deeply stirred, and in turn the mass of resident people.
The House Committee on Public Lands of Congress took up the matter. Villard, as president of the finance committee of the Northern Pacific Railroad was busily in evidence with his attorneys. Mr. Henry Villard, stated the report of Mineral Commissioner Maginnis,
next engaged the attention of the committee. He also claimed that the company was now completely vested with the title of the disputed mineral lands. He considered that question as no longer open. The Supreme Court could only affirm the numerous decisions already rendered in favor of the railway company. The property rights of the corporation were beyond the reach of legislation ; but he was anxious to have this controversy settled. It was injuring the road and the mining industry and he was ready to offer a compromise on the part of his company. He was authorized to submit a proposition to the committee : That the company would agree to this bill, to the survey and classification, and would deed back to the United States all lands so excepted as mineral : Provided, That the company should be recompensed therefor with other lands, either by the extension of present indemnity limits or by selection from the even as well as the odd sections within the grant.43
The House Committee on Public Lands reported that the Northern Pacific Railroad had included in its land grant the richest and most extensively developed mines in Montana and Idaho. Within this grant are also included millions of acres of land not yet entirely or at all explored for minerals but which . . . probably contain mineral deposits as valuable as any yet discovered. The railroad company, the committee set forth, claimed that the legal construction of the act of 1864 gave the company all lands within the grant, not known to be mineral at the date of that act, or at least at the date when the company filed the map of its route.
This, the report went on, seems to the committee a most extraordinary claim. . . . Many of the most valuable mines in Montana, and most all of those in Idaho, have been discovered since 1882. The company, not satisfied with its immense land grant and other special privileges given by the Government, now seeks, upon what is at best but a technicality, to take from those who have discovered and developed them, the very mineral lands expressly excepted from the grant.44
Meanwhile, however, the Northern Pacific Railroad had gained its point. While time was being consumed in talk and appeals from court decisions, this is what was done, according to Senator Pettigrew : The whole force at Washington in the Land Department at Washington was engaged exclusively in rushing through these patents for the Northern Pacific, and I think, if you will look up the court records, you will find that the judge objected to an item of about $3,000 brought in by the receivers, which was paid to a very special friend of the Land Commissioner as an attorney fee to hasten the issue of these patents, and thus, the Northern Pacific acquired title to vast areas of exceedingly valuable mineral lands in the States of Montana, Idaho and Washington. The Land Commissioner was no doubt corrupt in this connection, and there is no doubt that the Northern Pacific officials really purchased his activity in getting those patents.
Afterwards, ex-Senator Pettigrew continues, Congress passed a law, some time, I think, in 1898, providing for inspectors to inspect the lands along land-grant roads, and determine which were mineral, and which were not, so that mineral lands should not be patented after that date ; but the mischief had nearly all been done.45
Pettigrews statements, however, are disputed by friends of Villard claiming to have a knowledge of the matter. They deny that the Northern Pacific thus obtained patents. No patents, they assert, were obtained by the railroad or were granted to it during the prevailing agitation. They add that the Commission provided for by Congress was authorized to issue patents for non-mineral lands only. If corruption was used to get mineral lands under the pretext of being non-mineral, it is unlikely that Villard personally sanctioned it.
At approximately during this time the Northern Pacific Railroad, on August 15, 1893, went into bankruptcy.
On the plea that the railroad was in poor financial condition, the receivers cut the wages of the railroads employees. These workers knew that they were being thus assessed to recoup the treasury of the railroad for a part of the immense sums robbed by financiers ; however, they made no official complaint. But when a second curtailment of wages from fifteen to thirty per cent. was announced, the workers decided that they would not tolerate having to suffer for the depleted condition of the railroads treasury.
On numerous occasions, in the history of various railroads, the practice had been common of compelling the workers to make good whatever portion of the sums stolen by the magnates they could be mulcted for by a reduction of wages. Yet there was not a single law to protect them, nor was there a judge, who, knowing and considering the circumstances, issued a writ preventing the reduction of wages. The law and all officialdom allowed the magnates to keep their booty. Whether the railroad went into bankruptcy or not, the law in no case restrained the magnates from reducing wages in order to make up the deficiency caused by their own thefts.
But the judiciary were quick enough to stretch the law illegally to forbid the workers going on strike. When the Northern Pacifics workers asked for a conference with the receivers, the latter assented. Clandestinely, however, attorneys for the receivers were drawing up a sweeping judicial injunction, which was presented to Judge Jenkins, of the United States Circuit Court, and signed by him, on the very eve of the arranged conference. The chief attorney in the authorship of this injunction and in applying for its enforcement was Senator Spooner. The injunction prohibited the men from combining or conspiring to quit, with or without notice. It was followed by a supplementary injunction forbidding the workers from ordering, recommending, approving or advising others to quit the service of the receivers.
The whole proceeding was so glaringly illegal, that the Judiciary Committee of the House of Representatives was forced to investigate it. This committee reported that the injunction was in violation of a constitutional provision, an abuse of judicial power and without authority of law ; that Jenkins conduct was an oppressive exercise of the powers of his court, and an invasion of the rights of American citizens.46 Aside from this denunciation, no punitive action was taken against Jenkins, Spooner, the receivers or any other of the inculpated. Meanwhile the injunction had done its expected service in terrorizing the workers and crippling the effectiveness of their strike.
Villards control of the Northern Pacific was overthrown by a combination of opposing capitalists,47 and Hill gradually began to figure as the dominant owner. It is pertinent to note here that it was alleged that Maginnis was secretly in the employ of Hills Great Northern Railroad at the very time he was warring upon the Northern Pacific.
The great contest between Hill and Harriman in 1901, for the control of the Northern Pacific Railroad has already been described in one of the chapters on J. Pierpont Morgan ; the result thus far has been (as hitherto related) that the Hill interests remain in control of the Northern Pacific Railroad, as well as the Great Northern Railroad and the Chicago, Burlington and Quincy.
According to Charles Edward Russell, who made a very careful study of the successive stock waterings of the Great Northern Railroad, Hill, Kennedy, Lord Mount Stephen, Lord Strathcona and other magnates have drawn a total of $407,000,000 profit from the manipulation of stock of the Great Northern. Russell says that this sum is entirely exclusive of all dividends interest and other emoluments. These, of themselves, have reached enormous sums.48 A committee appointed by the Minnesota State Senate, in 1907, to investigate the capitalization of railroads in Minnesota, reported that these railroads were capitalized at about $400,000,000, or about $50,000 a mile, whereas the actual capitalization, on an average cost of $27,000 a mile, should be $215,000,000. The Great Northern Railroad, owning 2,040 miles of road in Minnesota, was heavily overcapitalized, the committee reported. The committee declared that the Great Northern had been making an annual profit of sixteen and a half per cent. estimated on a valuation of cost of construction and maintainance of $33,000 per mile.49 The Northern Pacific likewise largely overcapitalized, had been deriving, it reported, an annual profit of twelve and a half per cent. on an estimated valuation of $35,000 per mile.50
One of Hills recent stockjobbing transactions resulted in a suit in which he was accused of gross fraud. On July 22, 1907, complaint was filed in the county court at St. Paul by Clarence A. Venner, a stockholder, alleging that on November 1, 1900, Hill, as president of the Great Northern Railroad and others of the officers and directors, had entered into a scheme to obtain, in conjunction with the Northern Pacific Railroad, a controlling interest in the Chicago, Burlington and Quincy Railroad. The complaint averred that on April 23, 1901, Hill was authorized by the Board of Directors to make the purchase of the Burlington at $200 a share, which he did before January 1, 1902, in conjunction with the Northern Pacific, for the purpose of which joint collateral trust funds were issued by the two railroads.
The complaint further alleged that Hill, knowing of the plan to purchase the Burlington by the stockholders of the two roads, in violation of his duty as an officer and director of the Great Northern, honestly, diligently and faithfully and carefully to administer the affairs of the said Great Northern, for its best interests, conceived and entered into certain illegal, wrongful and fraudulent plans and designs to make a large profit for himself personally, and at the expense and to the loss and damage of the Great Northern, by personally purchasing and causing to be purchased and held for him subject to his control, a large amount of the capital stock of the Chicago, Burlington and Quincy Railway Company, which was acquired at prices far in advance of those paid by him for the stock by the Great Northern and Northern Pacific Railway companies.
Venner also alleged in his complaint that Hill acquired a personal profit out of the transaction of an amount exceeding $10,000,000 for which he asked an accounting. We are unable to ascertain Hills answer or the result of this suit.51
Let it not be supposed, however, that the record of Hills cumulative acts, as revealed in successive law and other records, has interfered in the slightest with his exalted reputation. Far and wide his sycophants of the press do still loudly spread their fanciful, rapturous descriptions of him, always carefully leaving unsaid the true means by which he obtained his great wealth. Much has been made of his piety ; his giving, for instance, $500,000 for the endowment of a Roman Catholic Cathedral, at St. Paul ; much is incessantly written of his exceeding probity, his financial acumen and business virtues. When he speaks he is hailed as a veritable oracle, and truly so, for the gods of present society are the Money Gods ; Society, which at huge expense has built jails and prisons for the petty criminal, erects palaces for the great criminals, and insists upon pouring wealth increasingly into their coffers and hails them dictators. And who can blame the magnates for thus mocking and scourging the peoples who thus reverence them and the system which produces and perpetuates them ? For, not they, but the system, should be held responsible.
Comprehensive Conclusions would be premature here ; there still remains to be told the narrative of how Edward H. Harriman, and above all, the Standard Oil Company, for whom it is believed he so largely acted, possessed themselves of vast railroad systems. The Standard Oil oligarchy is, indeed, the mightiest railroad owner of all ; many of those railroads the inception and development of which have been here told, are owned or controlled by it ; to it has accrued the final benefits of much of that series of original frauds and thefts some picture of which has been given in this work. But the scope of this volume does not here permit of the extended narrative of Harrimans career, with its accompaniments of enormous frauds and salutary constructive work ; nor, more so, does it allow the prolonged description of how the Standard Oil Company, starting with a few oil refineries, contrived to secure possession of so large a share of the resources of the United States, railroads and otherwise. This narrative will have to be deferred to later volumes, as also the story of the great fortunes based upon public franchises, mines and industries.
Meanwhile, some few observations may be properly pertinent and instructive.
The inevitable burden of this work, as is too painfully obvious, has been the frauds and thefts by what is known as property has been acquired, and great fortunes built up. This is not so because the author, in the perverseness of his heart has formulated it so, but because these are the inescapable facts. But why, query certain querelous critics, schooled in sychophantic standards, enlarge upon the dark side of the picture ? Had not all of these men their good points, their kindly streaks, their capacity for some doing of service for their fellow men ?
Such misguided critics, with your obtrusive narrow conceptions and warped mentality, it is ye who so blindly refuse to perceive, and do justice. What, may it be inquired, would your comment been had this work, instead of laying bare the frauds, shams and robberies by which immense fortunes have been amassed, been an artful or (for the matter of that) an unartful eulogy of those men, and an apotheosis of the system creating them ? What, indeed, would you have said ? Indubitably this work would have been highly rational and unbiassed ; no accusations of prejudicial treatment would have occurred. Conventional publishers would have eagerly grasped for it ;52 and to the author encouragement and money returns would have been assured. As it is (what is really of no interest to anyone but himself) he has had to undertake it in the face of the greatest obstacles a fact perhaps tending to demonstrate that he who proclaims stern truth in stern garb must do it for its own sake, and with an utter defiance of all supine or mercenary powers that would seek to change his plan or hold him back.
Then there are those piping critics, overwhelmed by the proofs, who, as a last resort exclaim : Is it possible that your facts are correct ? Do you not exaggerate ? To all such not remonstration nor censure but pity should be extended : deep pity for their hemmed-in mental horizon. And, after all, they are only reflections, or rather products, of a certain prevalent standard of the day which prima facie condemns the man with the poor appearance as guilty of all the offenses charged, but resolutely declines to impute serious crime to him of wealth and corresponding superior station, regardless of how much the proofs multiply. Much could be written upon the efficacy of a high silk hat as a protection of person and reputation.
When the authors History of Tammany Hall appeared, its accuracy was not questioned, because, perforce, the facts were accurate, and the story there told was that of a vulgar political organization. How singular it is, remarks one perceptive commentator, that some of those who so highly acclaimed that work for its comprehensiveness and accuracy, should be the very critics who now insinuate their doubts as to the accuracy of facts when applied to the founders of great fortunes and their very respectable descendants. No, sage reviewer, it is by no means singular ; that attitude is transparent ; the truer in this case the facts are and the more voluminous and indisputable the citations from official records, the more the apologists and retainers of wealth are driven back to their only possible defence. They can do nothing but suggest meaningless doubts doubts so abundantly refuted by the formidable mass of citations throughout this work. And be it known that the frauds and robberies herein described, great and continuous as they have been, are far from being the complete story ; further volumes remain to be written ; and for every one fraudulent transaction accidentally coming to public notice, scores of such transactions have unquestionably gone down into the sewers of time, unvisited by a ray of daylight.
This, it is unnecessary to say, is palpably no history of personal traits, dispositions or temperaments ; it is a narrative of the means whereby properties have been acquired, and great fortunes possessed. But the academician, strong in the audacity of his soporific mediocrity, may say, This is no history ; it lacks dispassionate style. If dispassionate style consists of a dull string of dates, names and phrases, with no glimpses of the roots of matters, nor a clear interpretation of causes and events, then this work does certainly want dispassionate style, and well it is that this defect is there. Who, indeed, does not know that there is no more effective medium for inventing, telling and perpetuating falsehoods than this same so-called dispassionate style ? A heightening and an emphasis of certain tissues of fact, a slighting concealment of other facts, and behold ! the trick is done.
While on this point, it will be pardonable on the part of the author (considering his many earnest years of original research) to express his unbounded amazement that so many pretentious volumes, theoretical and otherwise, have been turned out by college professors on this subject, without their having taken the slightest trouble to ascertain the facts. Fine-spun dogmatic theory, most of it is, or distorted high-sounding assumptions ; words, words, no end of turgid words : no really original work or thought, no insight, no interpretation except a pseudo, illegitimate one arrived at without a knowledge of the facts, and so curiously in accord with the dictates of the ruling wealth of the time. This particular history, be it said, is written from a distinct point of view, narrating facts never hitherto brought out, and the accuracy of which cannot be challenged ; the point of view, as the author believes, is the correct one, verified by every accumulating proof.
Finally, there are those who rush forward to press this question : Have not the founders and perpetuators of the great fortunes had their good qualities ? The question is arrant superfluity ; so they have had and have. But do the good people who are so solicitous on this score ever think of making the same interrogatory as to the hundreds of thousands of slum dwellers, or of the 50,000 (or so) convicts in the United States ? Is any consideration or extenuation demanded for them ? For the poor, the wretched, the degraded everywhere ? And yet the crimes for which petty malefactors are punished are not a thousandfold as criminal as those committed by the founders and holders of wealth ; even solitary murder lapses far into insignificance compared to the never-ending catalogue of the mass of indirect murders brought about by the greed for profit and wealth.
All, all, capitalist and slum dweller, convict and multimillionaire are creatures of the system thus causing greed and vice, poverty and crime horrid factors produced by no intrinsic fault in human nature, but by the impetus, provocations and results of that system. All, all have infinite capacity for good, were it but given favorable environment to develop ; the wonder can be expressed that under such a blighting system so much good does exist. And those magnates who, in their pomp and vainglory, think that they rule forces, are (blind creatures!) only the instruments of forces. Behind all of this tumult, this rushing and trampling lies a slowworking Purpose, moving forward with a definite symmetry which those who will can clearly see. Despite their avarice, their corruption and fraud, these magnates unconsciously have been doing their great necessary work in these times the very vital work of crushing out hindrances so that all industries shall become centralized, in order that at the proper day the whole people shall collectively step into their ownership and operation, and artificial classes, with all of their attendant hideous evils, injustices and oppressions, be forever abolished.
END OF VOL. III
NOTE.-It is the authors plan, at a future date, to describe the acquiring of railroads by Harriman and the Standard Oil Company, and to deal with great fortunes based upon public franchises, mines and industries.
1 Reports of Committees, Second Session, Twenty-sixth Congress, 1840-41, Report No. 1.
2 Report of Committees, Second Session, Twenty-seventh Congress, 1841-42, Vol. ii, Report No. 484.
3 Senate Documents, First Session, Twenty-ninth Congress, 1845-46, Vol. iv, Doc, No. 160.
4 Reports of Committees, First Session, Forty-third Congress, 1873-74, Report No. 396.
5 Executive Documents, First Session, Thirty-third Congress, 1853-54, Vol. xiv, Doc. No. 115:8.
8 Ibid., 9.
9 Doc. No. 115, 1853-54, etc., 16.
11 U.S. vs. Cook, Wallaces Reports, Supreme Court of the United States, xix : 591.
12 The voluminous reports on the subject issued by the General Land Office in 1877, show that the most extensive timber depredations were still going on in Minnesota, Michigan, Wisconsin, Louisiana, Alabama, Florida and other States, and that Government timber agents were being bribed, or otherwise influenced to connive. See Senate Documents, Forty-fifth Congress, Second Session, 1877-78, Ex. Doc. No. 9.
13 The specific facts, from the court records, have been related in the second chapter on the Sage fortune.
14 Farley vs. St. Paul, Minneapolis and Manitoba Railroad Company, Federal Reporter, xiv: 114-118 ; United States Reports, Vol cxx:303-318 ; Farley vs. Hill, Federal Reporter. xxxix: 513-522 ; Farley vs. Norman W. Kittson et al., Minnesota Reports, xxvii : 102-107.
15 Federal Reporter, xxxix:516.
16 Farley vs. Norman W. Kittson et al., Minnesota Reports, xxvii : 103.
17 Federal Reporter, xxxix: 516.
18 John S. Kennedy et al. vs. The St. Paul and Pacific Railroad Company et al., Dillons Circuit Court Reports, 1879-50, v : 527.
19 Dillons Circuit Court Reports, 1879-80, v: 531.
20 United States Reports, Vol. cxx : 308.
21 Minnesota Reports, xxvii : 102-107.
22 Federal Reporter, xiv : 114-118.
23 Federal Reporter, xiv : 117.
25 Ibid., 117.
26 United States Reports, Vol. cxx : 303-318.
27 Federal Reporter, xxxix :514
28 Federal Reporter, xxxix: 521. One of Hills eulogists, in a biography, very effusive on the whole, published in the New York Tribune, issue of April 7, 1907, thus wrote of Hill :
Mr. Hill has a reputation in the Northwest as a very hard man in business. . . . He has never had patience with any one who could not practice unflagging industry and self-denial. Out of this same trait has grown the conviction among railroad men that `Jim Hill is the hardest man in the business to work for. For himself there has never been a quitting time. Even now he is busy nights and Sundays when there is work to do. It has always been a short shrift for those in his employ who could not forget that there were such things as office hours and holidays. ...
29 Federal Reporter, xxxix :516.
30 United States Reports, Vol. cl : 572-577.
31 See Burkes Peerage.
32 Minnesota Senate Journal, 1883: 29.
33 Senate Executive Documents, First Session, Fifty-second Congress, 1891-92, Vol. v, Doc. No. 67.
34 Case of St. Paul, Minneapolis and Manitoba Railroad Co. vs. Charles and James Greenlaugh, March 2, 1891.
35 United States Reports, Vol. cxxxvii : 528.
36 Related in a personal letter to the author. In Chapter ii, Vol. ii, of this work ( The Seizure of the Public Domain ), we have seen how large areas of land, granted to canal corporations as nominally swamp lands, were so fraudulently surveyed as to include some of the very richest copper deposits in the Northwest. The same was true of iron ore deposits in some of the grants to railroad corporations. It cannot be said that the beneficiaries of these frauds were unaware of the fact that copper and iron ore deposits were on the lands thus fraudulently acquired by them. A number of reports by Government geological experts had described the extent and location of these mineral deposits. One voluminous report, in particular, was that by J.W. Foster and J.D. Whitney, United States Government geologists. It was issued in 1851, and gave full descriptions of the character of the mineral lands. It especially described the iron ore deposits of the Lake Superior region as being of an almost unprecedented state of purity. U.S. Senate Documents, Special Session, Thirty-second Congress, 1851, Vol. iii, Doc. No. 4.
37 Described in one of the chapters on J. Pierpont Morgan.
38 The Romance of the Railways, Moodys Magazine, issue of July, 1908: 17.
39 Reports of Committees, Credit Mobilier Reports. Forty-second Congress, Third Session. 1872-73. Doc. No. 78: xviii. See the second chapter on the Gould fortune, Vol. ii of this work.
40 Such charges were characteristic, as we have so frequently stated, of capitalist methods of warfare upon one another. Magnates in power were violently assailed so as to discredit and dislodge them. The spectacle was frequently presented of the leading and most respectable financiers ferociously denouncing one another as liars and thieves. These virtuous outbursts, it is needless to say, arose from no moral indignation ; the ulterior purpose was to crush the other, if possible, and seize property and power.
41 Annual Report of the Mineral Land Commissioner for the State of Montana, for the Year Ending November 30, 1891. Helena, Montana, 1892:3-4.
42 Annual Report of the Mineral Land Commissioner, etc., 5-6.
43 Annual Rep., Mineral Land Com., etc., 28.
44 House Reports, Fifty-second Congress, Second Session, 1891-92, Vol. v, Report No. 1145: 1-4.
45 Related in a personal letter to the author. The fact that powerful members of Congress were, at the same time, paid attorneys for land-grant railroads, and acted in that capacity in Congress, caused the introduction of a bill in the United States Senate, on June 1, 1886, by Senator Beck of Kentucky, making it unlawful for any member of Congress to act as the attorney or agent for any railroad which had received a land grant from Congress. In the debate on his measure on June 22, 1886, Senator Beck urged : Will any gentleman insist that any man who is the attorney of any railroad, any man who is retained in any way by any of these roads, when these great questions involving perhaps fifty or a hundred millions to the tax-burdened peoples of this country come up for consideration, shall advocate the interests of the road whose money in the shape of retainers or fees he has in his pocket, keeping the fact concealed, professing all of the time that he is acting and arguing in the interests of the United States ? The bill failed, of course, to become a law.
46 House Report No. 1049, June 8, 1894, Second Session, Fifty-third Congress. During all of this time John S. Kennedy, the great philanthropist, was one of the largest stockholders in this railroad.
47 Villard bought the New York Evening Post ; and his methods, upon the acquirement of that newspaper, constituted both an exception and a strong contrast to the methods invariably applied by other capitalists when they purchased newspaper properties. He divested himself of all authority over that newspapers editorial policy by transferring to three trustees the absolute control in that respect. At no time did he use the Evening Post to influence Wall Street operations ; in fact, he did not dictate a single line of its editorials. On the other hand, the editors at times frankly criticised his policy in railroad affairs.
It may be added that (to the authors personal knowledge) the New York Evening Post has consistently refused to be influenced in its editorial expressions by either the offer or withdrawal of department-store, financial and other advertising. It has maintained this course, despite very heavy losses resulting from the withdrawal of such advertising.
48 The Heart of the Railroad Problem, Hamptons Magazine, May, 1909.
49 Report of the Committee of the State Senate of Minnesota Appointed for the Purpose of Investigating the Value and Cost of Operation of the Railroads of the State of Minnesota: 14.
51 With great frequency, charges have been made that railroad attorneys throughout the United States often write the decisions of judges in cases affecting railroads. Many such specific scandals have lately come to light. Only recently the Grand Jury, of Spokane, Washington, brought indictments for embezzlement against judge M.J. Gordon, former western counsel of the Great Northern Railroad. The Grand jury, at the same time, denounced Hill and other Great Northern Railroad officials in attempting to hamper its work, and prevent the indictment of Gordon, and it further censured Judge Milo A. Root for permitting Gordon, while attorney for the Great Northern Railroad, to write an opinion in a case in which the railroad was concerned. This opinion Judge Root submitted as his own.
52 On this point the author speaks advisedly. The letters that he holds from some of the foremost publishers in the United States would, if published, make exceedingly and typically significant reading.