HISTORY OF THE SUPREME COURT
OF THE UNITED STATES
THE SUPREME COURT UNDER CHIEF JUSTICE CHASE
Taneys successor was Salmon P. Chase, Secretary of the Treasury. It was maintained then, and the statement has been uniformly repeated in many memoirs and biographical works, that President Lincolns motive in appointing Chase Chief Justice of the Supreme Court was to rid himself of a too-ambitious competitive aspirant for the Presidential nomination. In both the years 1856 and 1860 Chase had aimed to get that nomination ; and as a member of Lincolns Cabinet he in nowise lessened his efforts and intrigues. Of these Lincoln was well aware, contemplating them with vexation and uneasiness. Some politicians of the period, like Senator Henderson, even hold, in their memoirs, that Chase gave no real help to Lincoln during the Civil War, but busied himself, whenever the opportunity presented, with seeking to undermine Lincolns chances for renomination, and with promoting his own.
Indeed, in a review of Chases career, published shortly after his death, in the October, 1873, issue of Bench and Bar (a periodical devoted to the legal profession) President Lincoln was quoted as saying to a distinguished and prominent statesman who assured him that if Chase were appointed Chief Justice he (Chase) would withdraw from politics and devote himself exclusively to judicial functions, I will nominate him, because it seems the public wish, but you are mistaken. He will be a candidate for President every four years as long as he lives, and never be elected.
For many years Chase had been an active and conspicuous figure in national politics. He had been a United States Senator from Ohio from 1849 to 1856, and Governor of Ohio from 1856 to 1860. He was a man of force and of impressive appearance : in stature six feet two inches, with a massive head, massive brows, blue-gray eyes, wide nostrils and heavy lips, altogether a commanding appearance. Did, however, the personal motive wholly account for Chases appointment ? by no means. Two other considerations had their weight.
Forces Behind Chases Appointment.
Chases views on the question of negro slavery had been so insistently disseminated, and were so nationally known, that there could be no atom of doubt as to where he stood on that issue. As an attorney, he had energetically defended fugitive slaves ; in the United States Senate he had been one of the most unyielding, aggressive Free Soil opponents of the extension of slavery, and as Governor of Ohio his course was a consistent agitation. The Civil War saw the anti-slavery forces in as thorough a control of the Federal Goverment as had been the slave-owning oligarchy under the former régime. Lincolns Emancipation Proclamation had been promulgated. Issues affecting this great revolutionary transformation were bound to come, and did come, in some phase or other, before the Supreme Court of the United States for final adjustment and Chase, as one of the founders of the Republican Party, could be depended upon in his capacity of Chief Justice to interpret law in accordance with the aims and demands of the triumphant anti-slavery forces.
The other reason underlying Chases appointment was of a very different nature, and one hitherto evaded in most works. The Civil War and its accompanying laws and administrative orders, placed the finances of the country in the power of the private bankers ; and while armies were fighting and hosts perishing on the battlefields, and at sea,1 the bankers extracted colossal profits. The System devised gave banking corporations absolute control over the volume of currency, enabling them in large measure to fix the price of labor and commodities of the whole nation. Enormous quantities of bonds were issued by the Government ; to pay interest to the bankers and other bondholders, the people of the United States were taxed from $18,000,000 to $20,000,000 a year. During the most crucial period of the Civil War the bankers had laws passed by which they could deposit their bonds in the United States Treasury, and upon them issue their privately-stamped currency up to ninety per cent. of the amount of the bonds. This currency they used in making loans, charging thereon varying rates of interest, often higher than twenty per cent. Hence the bankers received two concurrent sets of interestfrequently as much as six per cent. in gold in annual interest from the Government on their deposited bonds, and a much larger interest from borrowers for the use of the currency that they were thus allowed to issue on the strength of the bonds.2 The accruing profits obviously were very great, often averaging twenty, fifty, and at times one hundred per cent., in the course of a year.
This system caused great public agitation, resulting later in the Greenback political movement. One phase of the financial system, however, ranged the railroad interests in opposition to the bankers ; the developing conflict between these two powers, had as we shall see, a striking influence upon the Supreme Court.
The Banking Powers Sway.
In 1861 Congress passed an act providing for the issuance of $50,000,000 in Treasury notes. Thereupon the banks, which had been actively engaged in hoarding gold, suspended specie payments on December 30 of that year. This action they took in order to avoid paying gold for Treasury notes. In the next year 1862 Congress passed the Legal Tender Act, authorizing the issuance of $150,000,000 of greenbacks (so called from their color), and retiring the $50,000,000 provided by the act of the previous year.
But before this bill was finally passed the bankers industriously lobbied in Congress, with the result that the bill was altered and mutilated. In its amended form it provided that legal-tender notes should not be receivable for interest on bonds or notes, which shall be paid in coin. This meant gold ; and as the bankers monopolized the available supply of gold, Government had to borrow it from them at excessive premiums. No sooner did the Government borrow the gold than back it flowed to the bankers in interest on bonds an endless-chain process incessantly enriching the bankers, and this while hundreds of thousands of soldiers were pouring out their blood and wasting health and yielding life.
This mutilation of the original Legal Tender Act for the exclusive benefit of the bankers moved Representative Thaddeus Stevens, in the debate on February 20, 1862, to make a bitter denunciation. ... With my colleague, he said, referring to the first draft of the bill, I believe that no act of legislation of this Government was ever hailed with as much delight throughout the whole length and breadth of the Union by every class of people without exception, as the bill we passed and sent to the Senate. ... It is true there was a doleful sound come up from the caverns of bullion brokers and from the saloons of the associated banks. ... They fell upon the bill in hot haste and so disfigured and deformed it that its father would not know it. ... It is now positively mischievous ... it makes two classes of money ... one for the banks and brokers, and another for the people. ...3 We did not yield, he said later, until we found that the country must be lost or the banks be gratified, and we have sought to save the country in spite of the cupidity of the wealthy citizens. So rapacious was the hold-up of the nation by the bankers at a critical time when every particle of energy and every available resource were essential to carry on the war, that even John Sherman denounced the bill. Sherman, as his course as Secretary of the Treasury later proved, was a pliant instrument of the bankers, but he was an extensive railroad stockholder, and at this time the banking and the railroad interests were aligning in opposition.
Control Finances During the Civil War.
The act of 1862 merely said that the interest on the authorized bonds was to be paid in coin, but no explicit statement was made in the bonds as to what form of money the principal should be paid with. According to the law, greenbacks were a lawful money and a legal tender for all debts, public and private within the United States except duties on imports and interest on aforesaid. A rational construction of the law would have dictated the payment of the principal in greenbacks. The soldiers and sailors of the nation were being paid in that paper. But the bankers wanted no greenbacks ; they demanded gold. They had expressly lobbied in Congress to outlaw greenbacks so far as payment of customs dues was concerned, knowing that such a provision would depreciate their value. Having accomplished this depreciation, they then threatened that unless the principal were paid in gold no Government bonds would be marketed. Accordingly, on March 3, 1863, Congress compliantly passed an act providing that both interest and principal should be payable in coin, which, of course, signified gold.4
Two forms of United States notes, or currency, were issued, One kind bore interest ; of these $577,000,000 were issued by 1866. The other varieties called greenbacks, demand notes and national bank notes, bore no interest. In 1864, $449,000,000 of greenbacks were in circulation. Forming what was considered the better class of currency, the interest-bearing Treasury notes were closely hoarded by the banks which, in return, issued their own depreciated bank notes and forced them into general circulation. By the year 1865 more than $700,000,000 State and National bank notes were in circulation. ... Immense interests, said Hugh McCulloch, Comptroller of the Currency, in his second report, have been at work all over, and concentrated in New York to raise the price of coin, and splendid fortunes have been apparently made by their success. ... Gold has been a favorite article to gamble in. ... The effect of all of this has been, not to break down the credit of the Government, but to increase enormously the cost of the war and the expense of living ...
Mr. Chase, says a commentator describing his activities while Secretary of the Treasury, not a banker by profession, and without much experience in financing, had yet proved himself obstinated and unwilling to learn. Whatever were his intentions and it must be allowed that they were probably good and his difficulties great he had, yet without consenting to what the bankers desired on many points, actually played into their hands. Men said his ambition to be President had been his weakness. ...5
Chase as Bank Attorney and Director.
That Chase was subservient to the banking interests was a fact ; but the statement that he had had no experience in banking affairs reveals complete ignorance of his career. His appointment as Secretary of the Treasury had, in fact, been seconded by the powerful bankers, knowing that as a bank director and bank lawyer, he would well represent them, and conserve their particular interests at almost every point.
When a lawyer in private practice, Chases specialty had been, for many years, the advocacy of the interests of certain banks ; and during a part of that time he had been a bank director. Soon after removing to Cincinnati he had formed, in 1832, a partnership with D.A. Caswell. For the payment of a large bonus, Caswell agreed that Chase was to share equally in all business, including that of the agency of the Bank of the United States, for which institution Caswell was attorney.6 Thereafter, for many years, Chase appeared in the courts as the attorney for the Bank of the United States.7
Of the corrupt career of this institution, we have given a tolerably clear outline in previous chapters ; how $76,000,000 of its assets had vanished by the year 1841 ; how it had loaned $30,000,000 to various members of Congress, editors of newspapers, to politicians in general, to brokers and jobbers and to favorites. A large part of these $30,000,000 had been corruptly expended in the long effort to get a recharter from Congress and to subsidize the newspaper press. We have also related how the officials of the Bank of the United States plundered it of large sums : Nicholas Biddle, its president, had paid out $1,018,000 for which no vouchers could be found ; John Andrews, its cashier, embezzled $426,930.67 of its funds, and Joseph Cowperthwaite, its second assistant cashier, defaulted in the sum of $55,081.95.8
Corrupt Methods of the Bank of the United States.
As an illustration of the methods of the Bank of the United States in clandestinely securing legislation, the following incident, as related by Benton, and confirmed by the official records, showed how it bribed a charter through the Pennsylvania Legislature, after President Jackson had vetoed its recharter obtained by corrupt means from Congress.
On the 19th day of January, in the year 1836, Benton relates, a bill was reported in the House of Representatives of the General Assembly of Pennsylvania, entitled, An act to repeal the State tax, and to continue the improvement of the State by railroads and canals ; and for other purposes. It came from the standing committee on Inland navigation and internal improvement ; and was, in fact, a bill to repeal a tax and make roads and canals, but which, under the vague and usually unimportant generality of other purposes contained the entire draught of a charter for the Bank of the United States adopting it as a Pennsylvania State Bank.
The introduction of this bill, with this addendum, was a surprise upon the House. No petition had asked for such a bank ; no motion had been made in relation to it ; no inquiry had been sent to any committee ; no notice of any kind heralded its approach ; ... the unimportant clause of other purposes hung on at the end of the title, could excite no suspicion of the enormous measures which lurked under its unpretentious phraseology. ... Some members looked at each other in amazement. But it was soon evident that it was the minority only that was mystified that a majority of the elected members in the House, and a cluster of exotics in the lobbies, perfectly understood the instrusive moment ; in brief, it had been smuggled into the House, and a power was present to protect it there ...9
Charges of bribery forced the Pennsylvania Legislature to make a show of investigation. The Senate appointed an investigating committee which proceeded to swear witnesses by the usual oath, You do solemnly swear by the Holy Evangelists of Almighty God, etc., etc. Bribery was freely admitted. Colonel Jacob Krebs, a Senator, testified, for example, that on February 10, 1836, he had been offered $4,000 or $5,000 by James L. Dunn, for his favorable vote, and that he was at another time offered $20,000 by Henry W. Conrad, the money for his vote to be paid two weeks after the bill became a law.
The Senate Committee handed in a whitewashing report.10 But a Pennsylvania House investigating committee, appointed in 1840, with power to go back a number of years, reported that the sum of $130,000 had been expended in bribes by the Bank of the United States. It is hard to come to the conclusion, the committee commented, that men of refined education, and high and honorable character, would wink at such things, yet the conclusion is unavoidable. As to whom the $130,000 was paid, the committee professed to be utterly in the dark ; there was no evidence that money was paid to anybody.11
Chases Appearance for Banks.
This was the bank for which Chase was Cincinnati counsel during this identical period ; the methods of the United States Bank in Ohio did not differ from those it used at Washington and in Pennsylvania. Its corruption was established, yet Chase displayed no scruples at continuing to draw his fees, and in doing its law work.
At the same time he was one of the first directors of the Lafayette Bank of Cincinnati, established in 1834. For ten years he remained on the board of directors of the Lafayette Bank, also acting as secretary of the board, and serving as attorney for the bank. Among his many appearances as attorney for the Lafayette Bank was that in the action, in 1841, of the State of Ohio against the Lafayette Bank, the Commercial Bank, and the Franklin Bank of Cincinnati. This was an action by the State for the forfeiture of the charters of those banks for illegally issuing large sums of notes to circulate as money ; for receiving a greater rate of interest than six per cent. per annum ; for suspending payment of notes payable in coin ; for expanding their circulation to an amount greater than four times the amount of coin in their vaults, and then suddenly withdrawing a great part of those notes from circulation.12
Thus, considering his long service as a bank director and attorney, Chase was by no means as unsophisticated regarding financial matters and practices of the banking world as some of his ill-informed critics would have it. His lucrative practice was almost wholly one of a bank attorney, but when any case involved the defense of a fugitive slave he would gladly tender gratuitous service. His fortune, in 1861, was estimated at $65,000 ; his intimate friend and biographer, Schuckers, says that just before the Civil War, Joshua Hanna invested $5,000 for Chase in stock of the Cleveland and Pittsburg Railroad, and that Chase reaped $5,000 profit by selling the stock when its market value went up.13
Favors the Bankers When Secretary of the Treasury.
It was Chase who, as Secretary of the Treasury, proposed and urged the establishment of the national banking system. And it was under this system, so extraordinarily favorable to the bankers that, as we have explained, the bankers were allowed to fasten their iron hold on the National Treasury, and drain it for their own aggrandizement. Immense private fortunes were soon acquired by these means, which fortunes grew still greater by the further methods used by the bankers in forcing the Government to award them bond issues on their own terms. When Secretary Chase tried to place a large issue of five-per-cent. bonds authorized by Congress, the banks held off from taking them up. Their object was soon seen. Using their refusal as an argument, Chase induced Congress to authorize more legal-tender notes until that currency was depreciated to a low point. The bankers then hurried forward to get hold of this depreciated currency, and Chase allowed them to tender it, at its face value, for Government bonds. Was Chase the accomplice or dupe of the banking interests ? Whether he was the one or the other, the result was the same. Deliberately or supinely he played into the hands of the bankers, permitting them to buy up the bonds with a depreciated currency.
The Greenback Party, originating largely in this manipulation of the currency in favor of the bankers and bondholding class, took the view that this condition was the result of a definite conspiracy. It charged that the bankers, national and international, had conspired to make the issue of the war greenbacks a failure by inducing Congress to prevent their being legal tender for customs duties and for payment of the national debt, and thus depreciating their value. It declared that there had been a conspiracy to cause needless bonds to be issued and to buy up those greenbacks at their depreciated value, purchasing the bonds with them, and paying for the bonds with greenbacks accepted at their face value. It set forth that while these bonds had been bought with greenbacks at thirty cents on the dollar, yet Congress had been influenced, under the pretense of national faith and an honest dollar to declare those bonds redeemable in gold. The banker was allowed to get his gold while, so the Greenback Party complained, the soldiers and sailors of the war who had risked their lives, and got no interest had been paid in greenbacks.14
Corruption of Congress.
Much as Secretary Chase was denounced at the time, the full odium for these transactions could not justly be imputed to him. A large share of the responsibility fell upon the majority of Congress which had passed the successive laws construed so favorably to the banking interests by Chase. The particular arguments influencing that majority in the passage of various acts may be judged from the fact that at the very time when the murderous battles of the Wilderness were being fought, the promoters of the Union Pacific Railroad expended nearly $436,000 in bribes for the enactment of the act of July 2, 1864, giving that company Government subsidies amounting to from $16,000 to $48,000 a mile, according to the topography of the country, and making the Company a present of about 12,000,000 acres of public domain, and so altering the original act that the Government had little opportunity of getting back its outlays.15
Banks Seek a Monopoly of Issuing Currency.
After the banks had manipulated the greenback issues to suit their own purposes, and had glutted themselves with government bonds largely bought with depreciated greenbacks at their face value, they aimed to get rid of Government-issued currency. By October 9, 1869, the 1,617 national banks in the United States held about $339,000,000 of Government bonds on which they circulated their bank notes. Of legal tender notes they held about $129,000,000. But their holdings of specie amounted to some $23,000,000 ; as a matter of fact only $15,000,000 in gold was in that year in actual circulation in the United States. The bankers and speculators monopolized and controlled the gold supply.
This being so, they now planned to have the legal-tender issues outlawed so far as they applied to payments on contracts. The bankers were the creditor class ; and if the courts were to decide that promises to pay on contracts were not payable in legal-tender currency, then the payments would have to be made in gold. Inasmuch as the banks held a monopoly of the available gold supply, the debtor class would have to get the gold from the banks at the bankers own terms.
But another question was involved. The banks sought a complete monopoly of the traffic of issuing currency. They desired no competition in that line from the Government. The one form of currency represented private ownership and control of that essential medium of exchange ; the other public ownership and control. The banks planned to efface the Government from the money-issuing function. But how ? By having the courts declare the Legal Tender Act unconstitutional. True, various State courts, with the single exception of the Supreme Court of Pennsylvania, had decided in favor of the law, but the Supreme Court of the United States was still to speak, and it was upon that Court that the banking interests now confidently depended.
Banking and Railroad Interests Collide.
It was precisely at this juncture that the banking power came into the sharpest collision with the rapidly expanding railroad interests.
The preceding decades had been a period of phenomenal construction of railroads. In the year 1851, there were less than 9,000 miles of railroad in the entire United States. In the next six years 17,000 miles were built. By the beginning of the Civil War, a total of 30,000 miles of railroad had been constructed. During the next decade at least, before 1873 36,000 more miles of railroad were built, constituting a greater extension than the entire mileage of the preceding thirty-four years.16
Although, as we shall see, the promoters of those railroads had bribed act after act through Congress or State Legislatures or both, and had corrupted county officials and municipalities to give them stupendous gifts of public lands, public funds and extraordinary privileges, yet the construction necessities of actual cash were so great that necessarily the railroad corporations had to make out mortgages. As we have said, very little gold was in circulation. The receipts of the railroad companies were almost wholly in legal-tender notes. If they were required to pay their fixed charges or contracts in gold, they would be so completely at the mercy of the banks that it would only be a short time before the banks would own outright virtually every railroad system.
This was the prodigious contest now under way between these two powerful interests. Which side would win ? The Supreme Court of the United States would decide.
Supreme Courts Composition.
The composition of the Supreme Court of the United States at this time was mixed, in point of the economic interests represented by its members. President Lincoln had appointed four Associate Justices Noah H. Swayne, of Ohio, Samuel F. Miller, of Iowa, and David Davis, of Illinois, in 1862, and Stephen J. Field, of California, in 1863.
As an attorney, Swayne had represented various miscellaneous corporations the Columbus Insurance Company, the Bank of Wooster, the Columbus Machine Manufacturing Company, the Ohio Mutual Insurance Company, the Delaware County Bank, the Bank of Circleville and other companies and institutions.17 He had been an attorney for the Lafayette Bank, of Cincinnati,18 of which bank, as we have related, Chase had long been a director.
When an attorney for the Mad River and Lake Erie railroad, Swayne had contested an action attracting some adverse notice in the year 1856. Barber, a freight train conductor, had brought an action for severe injuries sustained while at work, in 1852. The cars were defective, not being supplied with brake rods, chains and other apparatus ; and while engaged in his duties, Barber was thrown under the cars which passed over him breaking one of his legs and crushing his right arm. Thereafter, he was disfigured and maimed for life, and unable to make a living. The jury in the lower court gave him a verdict for $9,500 damages.
Swayne and W.F. Stone, as attorneys for the railroad, carried the case on appeal to the Ohio State Supreme Court. In December, 1861, Chief Justice Bartley of that court reversed the judgment of the district court on the ground (among other grounds mentioned) that a railroad company was not liable in an action for damages in consequence of defective cars where (so the decision literally read) the defects of the cars were unknown to both parties, and where neither party was at fault. Barber the decision further read had voluntarily assumed the risk ; he had had a right to decline his job or refuse to run the train ; and when he voluntarily took the job, he assumed the risk.19 Thus, after nearly ten years futile attempts to get redress, the mutilated brakeman was condemned to live out his wretched life in penniless misery, while Swayne ascended to the Supreme Court of the United States.
Associate Justice Miller subsequently developed more than pronounced railroad leanings, as was shown in a noted cynical decision of his ; but what especially commended him at this time was that he had strongly favored the emancipation of negro slaves.
Davis was a personal friend of Lincoln ; after Lincolns assassination, he was one of the administrators of Lincolns estate. Davis had married Sarah Walker of Pittsfield, Massachusetts, who had a considerable fortune. For an adroit politician Davis was unusually conscientious and progressive ; he had been a judge in Illinois from 1848 to 1862, and there was highly spoken of and respected.20 Miller was forty-six years old, Davis, forty-seven, at the time of their appointment.
Justice Fields Career.
The career of Associate Justice Field was filled with scandals both before and after his elevation to the Supreme Court. Born at Haddam, Connecticut, in 1816, he was the son of a Congregationalist clergyman. He had studied law in the office of his brother, David Dudley Field, and was his partner from 1841 to 1848.
David Dudley Field had married a rich widow ; hence, says a contemporary account, a portion of his wealth, which amounted to $100,000.21 David Dudley Field became one of the attorneys for the notorious briber, Jacob Sharp, after Sharp had bribed the New York Board of Aldermen, in 1853, to grant him a street railway franchise for Broadway.22 Subsequently, David Dudley Field was attorney for those even more notorious bribers and railroad wreckers and looters, Jay Gould and James Fisk, Jr.23 And it may be mentioned here that (no doubt as a token of pure brotherly affection) David Dudley Field made, in 1880, a gift to Associate Justice Field of a deed to a fine house and grounds in Washington that Justice Field from thence to his death owned and occupied. The fact of this gift Justice Field himself stated in his will. Another brother of Associate Justice Field was Cyrus W. Field, the inventor of the submarine telegraph cable. Cyrus Field, after the Civil War, aligned himself with Jay Gould in the manipulation of the elevated railroads in New York City, in which roads he was a large stockholder. For a time, he was a director of the Manhattan Railway and also of the New York Central and Hudson River Railroad,24 but subsequently was stripped by Gould of his elevated railroad stock, and died a comparatively poor man.25
Going to California, Stephen J. Field settled at Yubaville, of which place he was elected mayor, in 1850. He was, indeed, mayor and judge in one, and carried a six-shooter both to enforce his authority and to protect himself. Heralded as a prominent capitalist and lawyer from the East, he bought Yubaville lots, put up zinc houses in Marysville, and rented those habitations at enormous rentals. From the sale of part of the lots he was said to have cleared a profit of $25,000 ; and it was related of him that he had not been in Marysville more than four months before he had accumulated $50,000.26
Getting into a dispute with Judge Turner of the California Circuit Court, primarily over the abolition question, Turner claimed that Field and two other attorneys had villified the court, and on June 10, 1850, Judge Turner expelled them from the bar. Seven days later Judge Turner committed Field to prison for forty-eight hours and to pay a fine of $500 for contempt of court. But the California Supreme Court issued a mandamus compelling Judge Turner to reinstate Field and the two other attorneys as members of the bar.27
Interests Represented by Field.
That Field was interested in some of the old Mexican land grants (genuine or otherwise) in California was well known ; and it was due largely to the influence of the promoters of these claims as well as to the influence of Leland Stanford and his associate railroad promoters that Field was elected to the California Supreme Court, becoming its Chief Justice in 1859. When a judge of this court Field as was openly charged gave especial protection to land titles, particularly those alleged to have been derived from Mexican authority. In short, he was the judge from whom the land jobbers and claimants could always expect favorable consideration. A letter was written at this time by United States Senator David C. Broderick saying that Judge David T. Terry who sat on the bench with Field was the only honest man on the California Supreme Court Bench. But when Broderick later took this statement back, so far as it excepted Terry, Broderick was challenged to a duel by Terry, in 1859, and was shot and killed. Thirty years later, Judge Terry was himself killed by a United States marshall accompanying Field after Terry had slapped Field in the face.28
The sponsor and pusher of Field for place and power was Leland Stanford, himself a lawyer. Projecting the Central Pacific Railroad Company in 1861, Stanford, Collis P. Huntington, Charles Crocker and Mark Hopkins successfully debauched legislatures and Congress, obtained $25,000,000 in Government bonds, millions more from the State of California and counties in that State, and a gift of a vast area of public lands all donated, actually or practically, for the purpose of enabling them to build their privately owned railroad. While Huntington was in Washington bribing Congress, Stanford caused himself to be elected Governor of California, so as to manipulate that State for the interests of the quartet. The enormous thefts that Stanford and his partners eventually consummated are set forth in the public documents, and are elaborately detailed elsewhere.29
Governor Leland Stanford personally urged President Lincoln to appoint Field to the Supreme Court of the United States.30 It was generally understood that with Field upon the Bench, the predatory land claimants had at least one Justice upon whose favor they could generally rely.
The Sutter Case.
The very next year after Associate Justice Field took his seat, a California land-claim case came up in which action he was disqualified from sitting for reasons best known to himself. This action was what was called the Sutter Case. It involved, according to the Supreme Court of the United States, immense interests in California, and questions greatly agitating a particular portion of that State.
In 1852 John A. Sutter had come forward with a claim purporting to have been given by the Mexican Governor, Alvarado, in 1841. The next year, 1853, Sutter submitted to the Board of Land Commissioners another claim for twenty-two leagues more, alleged to have been granted by Micheltorena, in 1845. Sutter had been a military commandant under Mexican authority, and had been charged with civil jurisdiction, also ; he was the very official who had recommended a grant of six square leagues to Pearson B. Reading whose claim we have described in a previous chapter. Sutters claims to thirty-three leagues in all were confirmed by the Board and by the District Court, but the Supreme Court of the United States allowed only the first claim of eleven square leagues as valid.31
Now, two surveys of the allowed eleven-league claim had been made ; the new question before the Supreme Court was, therefore, which of the surveys should be validated.
The first survey, made in 1859, was so manipulated as to break the claim into two parts which were not continuous. By this means the claim was made to include a part of the present county of Sacramento ; then the survey was run along the Feather River ; an intervening distance of several miles was marked out to separate one part of the claim from the other ; then the claim began again at a place called Canadian Ford and ran up to, and included, Marysville.
The second survey, made by the Surveyor-General in 1863, located the eleven leagues in a long continuous line of narrow tracts along the Feather and American rivers.
The majority of the Supreme Court of the United States ordered that the survey of 1859 be substituted for that of 1863. Thus the Sutter claimants were able to appropriate some of the finest parts of Sacramento County and Marysville. The note in the case reads : Mr. Justice Field did not sit in the case, nor take part in its decision.32
Justice Griers Resignation Demanded.
Of the men thus comprising the membership of the Supreme Court of the United States, the banking interests knew to a certainty upon whom they could depend. That the most vigorous, yet secret, influences were brought to bear upon two Justices at least, and possibly others, is fairly certain.
In the case of Justice Grier, the records of the Supreme Court itself strongly tend to indicate this. We have seen in the previous chapter how before the Dred Scott decision Justice Grier, as revealed by his own correspondence, was in collusion with President-elect Buchanan, and through Buchanan, with the representatives of the slaveholders who had put Buchanan into office, whose interests and plans Buchanan was elected to further. Of Buchanans selecting certain arch slavery representatives as members of his Cabinet, and how they stripped the North of munitions of war and transferred them to the South this is an elemental historical fact. In the Legal-Tender case, Justice Griers course was even more serpentine ; he played fast and loose with both sides, singularly shifting from one side to another. His vacillation was so suspicious and remarkable, that not a single one of his colleagues, either those favoring the Legal Tender Act or those against it, could find any excuse for his action ; they lost patience, and evinced their distrust by the significant and unprecedented action of demanding his resignation.
When, says Rhodes, the determination of the Court was arrived at on November 27, 1869, four Justices concurred with Chase : Nelson, Clifford, Grier and Field, but before the opinion was read Grier resigned. Swayne and Davis agreed with Miller. The decision could be stated as five or four to three according to ones individual preferences, but as a matter of history, the concurrence of Grier carries no weight whatever. When the first vote on the Hepburn vs. Griswold case was taken in conference, the Court stood 4-4, Grier pronouncing in favor of the constitutionality of the Legal Tender Act ; but before the conference closed, he, in another case, stated an opinion inconsistent with that vote. This inconsistency being called to his attention, he changed his vote and went over to the side of Chase, Nelson, Clifford and Field. Within a week from that day every judge on the bench authorized a committee of their number to say to Grier that it was their unanimous opinion that he ought to resign. 33 Grier did accordingly, in December, 1869, resign, his resignation to take effect on January 31, 1870.
Legal-Tender Decision Favors the Bankers.
By a majority of one, therefore, the Legal Tender Act was declared unconstitutional, Chief Justice Chase himself writing the opinion. The decision, handed down on February 7, 1870, declared that prior to the enactment of the Legal Tender law of 1862, gold formed the only legal tender, and that all promises to pay in contracts were tacitly understood to be payable in gold. So far as the Legal Tender Act applied to preëxisting contracts, it was, under Chases decision, inoperative ; the act could not be retroactive.34
Why did Chief Justice Chase decide against the constitutionality of a law that as Secretary of the Treasury he had been known to view as being thoroughly constitutional ? The explanation generally given was that in his incorrigible aspiration to become President, he desired to gain the further good will of the bankers, and to insure their support. Some critics held that in view of his inconsistencies he had a private understanding with the banking interests, but no evidence whatever has ever been produced to bear out that charge. That he was actuated by personal mercenary motives no one then believed, or now imputes. He was a politician, and was willing to do whatever could advance his political ambitions a form of corruption which, as we have seen, had influenced previous members of the Supreme Court. Assuming that he was personally honest, as honesty was understood, he was politically dishonest.
Chases open craving for the Presidency, Rhodes narrates, detracted from the weight of his opinion. In the spring of 1869, the Chief Justice and George F. Hoar walked home together from a meeting of a scientific club in Washington. For the whole distance, about a mile, Chase talked of the next nomination for the presidency, the prospects of the various candidates and the probable chances of a Democratic candidate who should appeal to Republicans disaffected with the present policies of their party. Somewhat later, during a half hours drive across Baltimore, he talked incessantly in the same strain to a stranger. He had the presidency on the brain, wrote Hoar. His conversations, his solicitations became a scandal and must have led his associates in the consultation room to look upon him with suspicion. ...35 Rhodes, nevertheless, thinks that Chase, in the legal-tender decision, acted from honest conviction. But there was another factor that Rhodes neither explains nor even mentions. Infallibly, a mans early economic interests, associations and training, long persisted in, have a determining influence upon his views, and conspire to sway or prejudice him in one direction or another. As a young lawyer, and in middle age, Chases self-interested associations were mainly with bankers, and as an older man he was constantly, as Secretary of the Treasury, in personal touch with the foremost bankers of the country. Nearly his whole adult life, it may be said, was so far as his personal interests and connections went an unbroken association with bankers, and a corresponding susceptibility and flexibility to their interests. In the light of this fact and a highly important one, reflecting the whole processes of present society upon ones mental attitude some clear explanation is afforded of at least one reason why Chase favored the banking power.
The same influence probably had its effect upon Justice Clifford, whose family, as we have noted, was connected by a double marriage with the largest banking family in Portland, Maine. As for Justice Nelson, he was a relic of the era of state banking, with its wild-cat currency issue, of which he had been an avowed advocate.
Nor was Justice Fields stand a mystery. In concurring with the majority he held that the legal-tender clause was unconstitutional as applied to prior contracts only. Such a dictum could in nowise affect the interests of his patrons, Leland Stanford and Collis P. Huntington. The mortgages that Stanford and his fellow promoters gave, were although subsequent to 1862, mortgages to the Government, not to private bankers. And the plan of cheating the Government out of much of its advances for the building of the Central Pacific Railroad was, thanks to the act of 1864, already formulated, to be finally consummated later by means of a decision of the Supreme Court of the United States, with Justice Field on the Bench.
Congress Estops the Supreme Court.
In striking contrast with the Supreme Courts edict of unconstitutionality in the legal-tender case was its action in another case at this time. Congress had passed various laws designed to facilitate reconstruction measures in the late rebellions states, and to enforce obedience to the military authorities in control. William H. McCardle was arrested in Southern Mississippi charged with attacks, in a newspaper of which he was editor, upon General Ord and other officers. Alleging unlawful restraint, McCardle sued from the Circuit Court to the Supreme Court of the United States for a writ of habeas corpus. The Supreme Court in 1867 was considering asserting its jurisdiction, when, to prevent that court from interfering, Congress, on March 27, 1868, passed a prohibitive act. Section 2 of that act repealed certain parts of the old judiciary act of 1789 which had allowed certain appeals to the Supreme Court of the United States. Further, Section 2 estopped the Supreme Court from exercising jurisdiction in the case of any such appeals.36
When the McCardle case came up again in December, 1868, the Supreme Court was compelled to admit that Congress had the power of regulating its jurisdiction. Delivering the Courts unanimous opinion, Chief Justice Chase, in December, 1868, acknowledged the paramount authority of Congress. It is quite true, he pronounced, as was argued by the counsel for the petitioner, that the appellate jurisdiction of this court is not derived from the acts of Congress. It is, strictly speaking, conferred by the Constitution. But it is conferred with such exceptions and under such regulations as Congress shall make....
We are not at liberty to inquire into the motives of the legislature. We can only examine into its power under the Constitution, but the power to make exceptions to the appellate jurisdiction is given in express words.
What, then, is the effect of the repealing act upon the case before us ? We cannot doubt as to this : Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare law, and when it ceases to exist the only function remaining to the court is that of announcing the fact and dismissing the cause. And this is not less clear upon authority than upon principle.
It is quite clear, therefore, that this court cannot proceed to pronounce judgment in this case, for it has no longer jurisdiction of the appeal ; and judicial duty is not less fitly performed by declining ungranted jurisdiction than in exercising firmly that which the Constitution and the laws confer.37
Here was a case involving so clear-cut a proposition that the Supreme Court could do nothing but admit the full authority of Congress in the premises. Had the case concerned a contract or the construction of the obligation of a contract the Supreme Court no doubt would have asserted its power, real or usurped, of deciding upon its constitutionality under that renowned Constitutional clause which had germinated in Wilsons brain eighty years before.
Railroads War Against the Legal-Tender Decision.
Gratifying as it was to the bankers, the Legal-Tender decision, on the other band, enraged the railroad magnates. The market value of railway mortgages immediately went up perhaps the most significant commentary on what the decision meant to the bankers. Every newspaper and politician subsidized by the railroad interests denounced the decision, and conversely, the banking journals praised it. The influence of the Pennsylvania Railroad and other large corporations which had outstanding bonds of issues prior to 1862, was directed against the decision. On the day on which Chase read his opinion gold was quoted at from 1211/8 to 120½.38 Railroad magnates saw the immediate necessity of opening a newspaper campaign demanding the reversal of the decision. Why, complained the railroad owners, should they be compelled to pay the interest and principal of their bonds in gold, when their passenger fares and freight money were received in paper currency ?39 From their point of view, a valid complaint, most assuredly.
With these two powerful capitalist groups in direct and intense opposition, the contest was clearly defined, and the final result impatiently awaited.
The bankers had won in the Supreme Court. But in Congress the railroad power had been steadily increasing. Within ten years great changes in representation had taken place. The immense donations of public lands and money that the railroad promoters had received from Government, States, counties and municipalities, now constituted the basis of a gigantic power. The railroad corporations had systematically corrupted politics ; they usually dictated who should go to Congress, and who should be defeated. They named State officials and judges of State courts. Suddenly they were confronted with the urgent necessity of securing control of the Supreme Court of the United States, and of insuring that control quickly. Some of the ablest men in Congress political leaders of both parties were railroad attorneys, retainers or stockholders. United States Senator Sherman, in fact, was one of the principal stockholders in the Pittsburg, Fort Wayne and Chicago Railroad now a constituent part of the Pennsylvania Railroad system.40
Growth of the Railroad Power.
For twenty years the bribery of members of Congress and of the Texas Legislature by railroad promoters had gone on incessantly. Of the 155,273,56o.73 acres of public lands granted directly by the United States Government, or by it through States, to railroad corporations, the greater part had already been obtained by corrupt legislation. From 1850 to 1870 not less than one hundred and thirty-three separate grants of public lands had been made by Congress to nearly as many different railroad corporations.41 In addition, the State of Texas (which retained control of its lands) granted a total of 32,400,000 acres, the bulk of which had already been appropriated by the year 1870.42 There were also donations of State lands in the East over which the United States Government had no jurisdiction, as for example the Legislature of Maine granting, in 1868, a donation of 700,000 acres of land to the European and North American Railroad.43
Altogether, counting the donations of Government, of the State of Texas, of other individual States and of counties and municipalities, the railroad corporations had received the major part of a total of about 212,000,000 acres. Nor does this estimate comprise the gifts of immensely valuable terminal facilities, municipal rights of way, harbor rights and other privileges of a value of hundreds of millions of dollars. Finally, from either Government, States, counties or cities, or from all, they had received loans or gifts of public funds approximating many hundreds of millions of dollars ; the total vast amount has never yet been computed.
Possessed of these immense resources, the railroad interests were formidably intrenched.
Corruption by Railroad Corporations.
For purposes of illustration, a few examples of this long-continuing corruption will be given.
In 1853 Alexander J. Marshall sued the Baltimore and Ohio Railroad for the sum of $50,000 due him on a contract for lobbying through the Virginia Legislature a bill granting that company a comprehensive right of way to the Ohio River. Without impropriety, he wrote on November 17, 1846, to Louis McLane, a politician of national note, and president of the railroad company, I may say for myself I have had considerable experience as a lobby member before the Legislature of Virginia. For several years past I have been before that body with difficult and important measures affecting the improvement of this region of the country ; and I think I understand the character and component in of that honorable body. ...44 The Supreme Court of the United States decided against Marshall, holding among other grounds, that the enforcement of such a corrupt contract was against public policy.45
In 1856 the LaCrosse and Milwaukee Railroad Company had bribed, with $800,000 of bonds, nearly the whole of the Wisconsin Legislature, the Governor and newspaper editors for the advocacy and passage of an act giving that company a land grant of about 1,000,000 acres valued at that time at nearly $18,000,000.46 A special committee of Congress was appointed in 1857 to investigate charges of corruption in connection with an act giving an enormous land grant in Iowa, Minnesota and other states to the Des Moines Navigation and Railroad Company. The Committee recommended the expulsion of four members of Congress, reporting that one of them, Orasmus B. Matteson, was a leader of a corrupt combination and had received for disbursement a corruption fund of $100,000 and other valuable considerations.47
These are merely a few of the many instances that could be cited, and many more of which are related in the History of the Great American Fortunes. The corruption continued during, and after, the Civil War. In the year 1868 alone, for example, Jay Gould and his associate directors of the Erie Railroad, had expended at least a million dollars in corrupting the New York Legislature, and Cornelius Vanderbilt had spent a large amount for the same purpose.48 Hand in hand with the Tweed régime then plundering New York, Gould and Fisk were able to purchase both laws and judges ; Barnard and Cardozo and other judges of the New York State Supreme Court were their supple tools ; after the Tweed ring was overthrown Barnard was, indeed, impeached ; and Cardozo resigned in time to save himself from impeachment.49 And of the many scandals developing in Congress and in the State Legislatures, we will here mention only one, and a very typical example the Credit Mobilier Company swindle. In this affair many of the foremost capitalists of the country were involved, and a galaxy of leading politicians in Congress. The testimony revealed that in the constructing of the Union Pacific Railroad at least $44,000,000 had been stolen by the falsifying of construction accounts and by other methods.50 James G. Blaine, Speaker of the House of Representatives, was one of those implicated in the Credit Mobilier transactions.
Packing of the Supreme Court.
How were the railroad interests to get control of the Supreme Court of the United States ? Partly by means of Congress and more definitely through President Grant. On March 3, 1863, Congress had passed an act (12 Statutes At Large, 794) that the Supreme Court should consist of ten members ;51 the purpose of that enactment was to provide a circuit for California. Three years later on July 23, 1866, another act was passed declaring that the number of judges should be thereafter reduced to seven, this change to take effect as soon as by death or retirement the number sitting should be reduced to seven. The intention of this act was to prevent President Johnson, to whose views on reconstruction the majority in Congress were antagonistic, from getting control of the Supreme Court. Justice Catron had died in May, 1863, but no actual appointment of any successor had taken effect. This was the state of affairs when on April 10, 1869, Congress passed another act restoring the number of justices to nine. Why was this statute passed ? Did the railroad power foresee the alignment of the Supreme Court on the Legal Tender Act, and was preparing accordingly to have railroad attorneys appointed and reverse Chases decision ? Whether or not that was the purpose, the result was exactly as though the arrangement had been premeditated and well planned. Two vacancies caused, in December, 1869, by the death of Justice Wayne and the resignation of Justice Grier, gave President Grant the opportunity of making appointments in their places.
Grant Surrounded by Venal Confidants.
That Grant would appoint railroad attorneys was an accepted conclusion. It was well known that he was not above receiving gifts, as it had been equally well known that President Lincolns wife had not refused them ; on one occasion, as Ben Perley Poore tells in his Reminiscences, Mrs. Lincoln accepted a valuable shawl, valued at $1,000, from A.T. Stewart, a New York capitalist, at the very time Stewart was a contractor for supplying the army with blankets. This giving of gifts was a favorite and safe form of winning favor. But so far as money bribes were concerned Grant was beyond reproach. He, however, was surrounded by as corrupt a corps of intimates, confidants and factotums as, perhaps, had ever been known in the White House. They had his ear and trust ; and when their integrity was impeached he resented the fact, and sought to shield them in every possible way. They seem to have manipulated Grant much as they willed. Vicious scandals kept developing in the war and navy departments and it was shown that Grants own private secretary and intimate friend, Orville E. Babcock, was a member of the Whiskey Ring and was sharing in the proceeds of its frauds.52 Grants brother-in-law, A.R. Corbin, had been a lobbyist in Congress for the Illinois Central Railroad, and was both an accomplice of Gould and a participant in the profits of Goulds gold conspiracy operations of 1869, leading to Black Friday.53
Grants open association with Gould and Fisk was, in truth, a national scandal ; he went on a junketing steamboat party with them ; he appeared with them at the theater ; and this public countenance was of the most incalculable value to them, in that it spread the public impression that Grant was in league with them, and gave them the support of his paramount authority. We cannot assume that he was so simple-minded as to have been an unconscious dupe, and not know (what every intelligent man knew) of their corrupt character and the enormous frauds and thefts that they were consunimating. On the other hand, it is not probable that Grant ever received any illicit money, or deliberately connived at fraud. Some writers hold that his early life of poverty reacted on him to such an extent that he was glad to be in the society of men of money. This is but a paltry explanation, for Grant well knew how fortunes were being acquired ; he had, as a general during the war, written indignant letters on the shameless frauds committed by army contractors in western Tennessee, and had bitterly denounced them.
Whatever his motives, the fact remained that as President, Grant well knew the methods by which his friends and adherents were getting rich and winked at them. What was of much greater importance, he was perfectly willing that capitalists of every description should have their way and control his actions, knowing as he did that without their support he could not get adequate campaign funds, nor perhaps even secure a renomination. To represent and advance their interests was his aim. One of the keenest political observers of the time Samuel Bowles, editor and proprietor of the Springfield Republican thus expressed the situation : Money-bags are always and everywhere conservative. When you have proved to the busy wealth seeker that the President has shown an indecent fondness for gifts, that he has appointed rascally or incapable kinsmen to office, that he has cracked, if not broken the laws, what have you accomplished by your denunciation ? They will reply to you, General Grant is a safe man. ... The railroad rings, the banking rings, the iron and coal rings, the money-grabbing combinations of every name and sort, are clear in the conviction that one good turn deserves another, and have come down handsomely for the general campaign fund.54
Two Railroad Attorneys Appointed.
On December 20, 1869, President Grant appointed Edwin M. Stanton, but Stanton died four days later.55 Then, on the same day that Chases opinion in the Legal-Tender case was announced, Grant sent the nominations of William Strong and Joseph P. Bradley, as Associate Justices, to the Senate. Their nominations were shortly afterward confirmed.56
Both Strong and Bradley were conspicuous railroad attorneys and directors. Born in 1808, Strong had studied at Yale, and had begun the practice of law at Reading, Pennsylvania. He was, for many years before, and after, the Civil War the regular counsel for the Philadelphia and Reading Railroad, and for the Lebanon Valley Railroad, which was merged into the Philadelphia and Reading Railroad.57 He was a member of the Reading Common Council,58 a director of the Farmers Bank and a director of the Lebanon Valley Railroad. In Congress from 1847 to 1852, he later, in 1857, was elected a member of the Pennsylvania Supreme Court for fifteen years, but he resigned from this bench in 1868, removed to Philadelphia, and resumed a railroad practice more lucrative than ever.
Bradley was both a noted railroad lawyer and a capitalist. Born in 1813, the son of a farmer and teacher, he was admitted to the bar in 1839, and commenced the practice of law at Newark, N.J., in partnership with John P. Jackson, superintendent of the New Jersey Railroad. Bradley, thereafter, represented that railroad in all important cases ; subsequently he was also the leading counsel of the Camden and Amboy Railroad, and for various companies associated under the name of the United Railways of New Jersey, which later became the New Jersey branches of the Pennsylvania Railroad Company. In 1844 he had married Mary, daughter of Chief Justice Hornblower, of New Jersey.
Bradleys Long Railroad Service.
Bradley was very closely associated both as counsel and fellow railroad director with Edwin A. Stevens, a conspicuous steamboat and railroad owner in New Jersey. If the numerous records state the case correctly, the fortune that Stevens acquired, and part of which he later used to blossom out as a philanthropist, was got by a sequence of fraud and bribery.
In one case, coming up in the Chancery Court, in 1847, Stevens, his brothers, and Robert F. and Richard Stockton (the latter of whom was subsequently associated with Bradley as counsel) were accused of collusion in the fraudulent manipulation of the stock and of the freight and profits of the New runswick Steamboat and Canal Company, the Union Transportation Line, the Camden and Amboy Transportation Company and the Delaware and Raritan Canal Company. The suit was brought by one, John D. Hagar, a stockholder who, after being granted an injunction restraining certain actions, sued for an accounting for some $400,000 and other sums which he alleged had been improperly appropriated and expended ; he further alleged that by a series of fraudulent manipulations the lesser stockholders had been cheated and frozen out. These charges the defendants denied. In denying Hagers petition for a receiver, Chancellor Halstead practically sustained the allegations of fraud. The Chancellor said that if a large accumulation of property should appear to be the result of a fraud on the rights of others not parties to the suit, the court would not become the instrument to distribute the moneys accumulated by such fraud, on the application of one who had been a stockholder of the company from the beginning, and who had been cognizant of the fraudulent proceedings which resulted in that fraudulent accumulation.59
Bradley was one of the attorneys for the Hoboken Land and Improvement Company, particularly in the suit of the Proprietors of the Bridges Over the Rivers Passaic and Hackensack. The Proprietors, etc., were an ancient corporation ; they had been incorporated in the year 1790 to build and conduct toll bridges, and they claimed a perpetual monopoly by vested right. The real owners of the Proprietors corporation was the New Jersey Railroad and Transportation Company which held more than nine hundred and fifty of the one thousand shares outstanding. As the owner of the Hoboken Land and Improvement Company, Edwin A. Stevens had compelled the New Jersey Railroad and Transportation Company to pay him an annual blackmail subsidy of $18,000 in order to buy him off from building a branch railroad on a franchise that he held running from Hoboken to Newark.60
Tiring of paying this blackmail money, the New Jersey Railroad and Transportation Company began an aggressive warfare. Amid open charges that bribery was being used both for and against the bill, Stevens, on March 8, 1860, obtained the enactment of a law by the New Jersey Legislature authorizing him to connect his line with the Morris and Essex Railroad in which he held a large proprietorship.61 Then the Proprietors, on the ground of their holding an exclusive franchise, applied for an injunction restraining the building of Stevens road. Chancellor Green refused to grant the injunction.62
In the foregoing case, Bradley successfully argued against the claims of monopoly of franchise. But two years later, in another case, we find him arguing as strongly for a similar monopoly. He and J.P. Stockton appeared in chancery to ask for a preliminary injunction in favor of the Delaware and Raritan Canal Company and the Camden and Amboy Railroad and Transportation Company restraining the Camden and Atlantic Railroad Company, etc., from constructing a continuous line between the cities of New York and Philadelphia, and prohibiting any competition with the complainants railroads.
Bradley Argues for Railroad Monopoly.
This injunction was asked for on the ground that legislative acts had been passed in 1832 and 1854 prohibiting, for a certain period, the building of competing railroads except by consent of the railroad now represented by Bradley. The plea set up by Bradley did not claim that the railroads he was proceeding against would by the construction they were planning violate those acts. He could not validly make such a claim, inasmuch as no through line was being constructed. But he contended that a through route, which would compete in business, would be virtually made up partly of railroad line and partly of steamboats. On the ground that the acts cited did not refer to steamboat lines, Chancellor Green refused his application for an injunction.63
Bradley appealed to the New Jersey Court of Errors and Appeals on which bench sat such former notorious railroad attorneys as Beasley and Zabriskie. Here Bradley obtained a modification of Chancellor Greens decision ; the two defendant corporations were enjoined from building such sections of railroad as would form a link between New York and Philadelphia .64 To Bradleys long continued legal efforts was due, in great part, the power of the railroad monopoly in New Jersey to extort exorbitant railroad rates. These great profits went to enrich Bradley, for he was a stockholder and director as well as counsel.
How large these profits were, and the basis of them, may be judged from statements in the suit of J.S. Black, former Chief Justice of the Supreme Court of Pennsylvania. As a dissatisfied stockholder, Black filed an action, June 23, 1871, for an injunction restraining the proposed lease, for 999 years, of the Delaware and Raritan Canal Company, the Camden and Amboy Railroad, and the New Jersey Railroad and Transportation Company (commonly called the United Railway Companies of New Jersey) to the Pennsylvania Railroad Company.
The answer of the United Railways admitted that the actual value of their properties was $50,000,000. But Judge Black estimated the value at $90,000,000. According to Black, the average annual dividends of the Delaware and Raritan Canal Company and of the Camden and Amboy Railroad, from 1833 to 1871, were about 12.20 per cent. This, Black set forth, was partly because of the small capital and the large bonded debt drawing only five per cent. interest, and partly because the companies had the monopoly of the transportation of passengers and merchandise between New York and Philadelphia across the State of New Jersey. Black contended that when the lease was made the United Railways stock was indirectly watered to the extent of $5,250,000. Anticipating legal trouble, equivocal laws had been lobbied through the legislatures of both Pennsylvania and New Jersey, in 1870 ; under these Chancellor Zabriskie denied Blacks application and held that the lease was valid.65
Bradleys corporation practice was extremely large and varied. He represented the New Jersey Zinc Company, the Morris County Bank, the Newark Lime and Cement Company, the Morris Canal and Banking Company, the Mays Landing Water Power Company and many other corporations.66 From 1857 to 1863 he was actuary of the Mutual Benefit Insurance Company of Newark ; he was president of the New Jersey Mutual Life Insurance Company and he was a director in various financial institutions. In the biography of Bradley, edited by his son, we are told that the Prudential Insurance Companys magnificent structure [in Newark] is erected on land owned by Judge Bradley for many years, and sold to it three years before his death.67
Certain of Strong and Bradley.
It was alleged and not denied, says Schuckers of the appointment of Strong and Bradley to the Supreme Court of the United States, that when Messrs. Strong and Bradley were made members of the court they were both interested as shareholders in the Camden and Amboy Railroad Company. It was alleged that one or both of these gentlemen had formerly been employed as law counsel by that company, and as such counsel had given opinions affirming the legal tender to be constitutional. It was known, too, that the Camden and Amboy Company had, in paying the interest upon their bonds subsequent to the decision in Hepburn vs. Griswold, made a reservation looking to a reversal of the judgment in that case.68
According to Poors Railroad Manual, Bradley, Edwin A. Stevens and others were directors of the Camden and Amboy Railroad, and Bradley, Stevens, etc., were directors of the Morris and Essex Railroad Company.69 In the eulogistic biography of Bradley to which we have already referred, we are informed that when Bradley went to Washington as an Associate Justice of the Supreme Court he bought a large residence at No. 201 I Street, built by Stephen A. Douglas, and that many old friends surrounded him in Washington.70 John P. Stockton and Frederick T. Frelinghuysen were there as United States Senators from New Jersey ; both were old friends and associates of Bradley ; Stockton was a railroad attorney, and Frelinghuysen was long a director of the Central Railroad of New Jersey.71 The biography in question goes on to tell that other of Bradleys old friends now in Washington were George F. Robeson, Secretary of the Navy, and John Kean, later Vice-President of the Jersey Central Railroad.72
The Supreme Court Reverses Itself.
Now that the Supreme Court of the United States was packed,73 or to put it more felicitously, reconstituted so as to reverse Chases Legal-Tender decision, Attorney-General Hoar moved for a rehearing of the case. This motion was granted ; and, in December, 1870, the Supreme Court, by a vote of five to four (Associate Justice Strong writing the majority opinion) reversed the previous decision, and declared the Legal Tender Act constitutional.74
From this time on, one decision after another, not always, but almost invariably, favorable to the railroad interests followed. The State of Pennsylvania had passed an act imposing a tax on all freight within the state. The railroads refused to pay this tax on the ground of its being unconstitutional. In December, 1872, Justice Strong, delivering the Supreme Courts majority opinion, declared the act unconstitutional.75 Another Pennsylvania law imposed a tax on gross receipts of railroad, canal, and transportation companies ; in this case, Justice Strong, as the mouthpiece of the majority, declared that the law was not invalid.76 Thereupon the Pennsylvania Railroad corrupted the Legislature to repeal the act.77 Another measure passed by the Pennsylvania Legislature for the Anti-Monopoly movement was then politically strong, and it was considered politic to give it deferential sops was an act taxing non-resident bondholders. By a vote of five to four (Justice Field writing the majority opinion) this act was declared unconstitutional by the Supreme Court in December, 1872.78
Meanwhile, during this period, the Supreme Court, although rejecting some California land claims, had confirmed many others. Not a few were of so questionable, if not visibly fraudulent, a nature, that members of the Supreme Court themselves vigorously denounced the majority opinions confirming them, as in the case of Hornsby vs. the United States. Upon the pretense that acting Governor Pio Pico, on May, 1846, had granted 40,000 acres of land to Jose Roland, from whom he (Hornsby) claimed to have bought it, Hornsby, in 1869, obtained a confirmation of his title from the Supreme Court of the United States. In a severe dissenting opinion, Justices Davis, Clifford and Swayne pointed out that the very records of the case showed that the grant, if made, was illegally conferred. No possession of any kind, they went on, is proved in this case, and the authenticity of this grant, covering an area of over forty thousand acres of land, depends upon the testimony of a single witness, unsupported by any proof, except the imperfect or mutilated expedients, found among a mass of loose papers on the floor of one of the rooms of the custom house at Monterey after the Mexican officials had fled on the approach of our forces.79
Death of Chief Justice Chase.
Chief Justice Chase died on May 7, 1873. In his laudatory biography, Schuckers asserts that Chases fortune was not more than $100,000. But Chases will dated November 19, 1870, and filed with the Register of Wills at Washington, on May 21, 1873, showed a total of real and personal property appraised at $250,000, of which $150,000 was estimated to be in real property. If we are to accept the statement of Schuckers, his confidant and biographer, that his forttme, in 1861, amounted to $65,000, then Chase must have gathered the difference $185,000 during the twelve years he was Secretary of the Treasury, and Chief Justice of the Supreme Court of the United States. No doubt, part of this added wealth could be attributed to the accumulating increment on his real estate.80
When Chief Justices or Associate Justices of the Supreme Court of the United States died, the newspapers and periodicals and the publications of the legal profession almost invariably contained effusive laudations. It was remarkable, therefore, that only a few months after Chases death, the periodical Bench and Bar, representing the opinion of the legal profession, should make severe comments upon Chief Justice Chases political activities. After stating that there was no intention of disparaging Chases memory or derogating from his deeds, the article in question, published in the October, 1873, issue of Bench and Bar, spoke of him as exhibiting the spectacle of a standing candidate for the Presidency. The magnitude and dignity of the office of Chief Justice sank before a restless ambition for political power and place. It was not possible that this should not meet the disapproving opinion of the public, and especially of the Bar of the United States. ...
1 Of the Union soldiers, 67,000 were slain in battle, 43,000 died of wounds, and 230,000 perished of diseases and other causes. Of the number of indirect deaths produced in families by the absence of adequate support arising from breadwinners enlisting in the war, no ascertainment, of course, is possible.
2 From 1863 to 1878, the Government paid out to National banks the enormous sum of $252,837,556.77 as interest on bonds.House Executive Document No. 34, 1879.
3 The Congressional Globe, Part I, Second Session, Thirty-seventh Congress, 1861-62 : 900.
4 See, Bolles Financial History of the United States, pp. 79, 80, 139, etc.; Summers History of American Currency; Dunbars Laws of the United States Relating To Currency and Finance From 1789 to 1890, etc.
5 See, Article on Currency, Encyclopedia of Social Reform, Edition of 1897 : 443.
6 Van Santvoord, pp. 663-664.
7 See, Case of Bank of U.S. vs. Dunseth, X Ohio Reports, 21, and Ibid., 61, etc., etc.
8 After Biddles retirement from the presidency of the Bank of the United States, that institution brought a civil action against him and Andrews for the restitution of more than $400,000 that they were charged with stealing from the bank in 1836. The theft, so it was charged, was concealed by fraudulent entries, burning of vouchers and by other methods. By the time the suit came up, in 1844, Biddle had died, but the action was pressed against Andrews. His answer was a general denial, but Judge Parsons decided that he was convinced that the claim for recovery was one which could be enforced, and he overruled Andrews demurrer.See, Parsons Select Equity Cases of the First Judicial District of Pennsylvania, 1844, II : 31-63. Also, Pa. House Journal, 1812, Vol. II : Appendix, 182.
9 Thirty Years in the Senate, Vol. II : 23-24.
10 Pa. Senate Journal, 1835-1836, Vol. I : 305-306.
11 Pa. House Journal, 1812. Vol. II : Appendix, 172-531.
12 X Ohio Reports, 543. Judge Lane decided in favor of the banks upon the ground that specific legislation neccessary to bring about the forfeiture of their charter had not been enacted.
13 Life of S.P. Chase (1874) : p. 617.
14 The demand that bonds which did not distinctly call for payment in coin should be paid in greenbacks was called the Ohio idea, and was agitated as early as 1868. In the election of 1874, Peter Cooper, as the Presidential nominee of the Greenback Party, polled 81,737 popular votes. Subsequently the Greenback-Labor Party polled more than a million votes. It was the predecessor of the Populist Party.
15 Reports of Committees, Credit Mobilier Reports, Forty-second Congress, Third Session, 1872-73, Doc. No. 78 : xviii. The Wilson investigating committee of the Senate reported that the evidence proved that nearly $436,000 had been disbursed in connection with the passage of the amendatory act of July 2, 1864.
16 See, Poors Railroad Manual, for the years in question.
17 XVII Ohio Reports, 224, etc.; I Ohio State Reports, 234 ; XI Ibid., 163 ; XII Ibid., 178, etc., etc.
18 VIII Ohio State Reports, 28.
19 See, Case of Mad River and Lake Erie R.R. vs. Barber, V Ohio State Reports, 541-568.
20 Nor did he ever forfeit this respect. So esteemed was he for his progressive views that, in February, 1872, the National Convention of the Labor Reform Party nominated him as its candidate on a platform which declared, among other things, in favor of a national currency, based on the faith and resources of the nation; which demanded the establishment of an eight-hour law throughout the country, and the payment of the national debt without mortgaging the property of the people to enrich capitalists. Davis accepted. At the Liberal Republican Party Convention, in 1872, he received 92½ votes for the nomination for President, but determined to retire from the final contest. The convention nominated Horace Greeley.
21 The Wealth and Biography Of The Wealthy Citizens of New York, 1846.
22 See, Case of Milhau vs. Sharp, XV Barbours Supreme Court Reports [N.Y.] : 193-232. For details of the bribery see Testimony before the Grand Jury, Documents of the N.Y. Board of Aldermen, XXI, Part II, No. 55 : 1333-1335. The courts, at the time, refused to allow the franchise to be carried into effect. But twenty-one years later in 1884 Sharp was more successful. With $500,000 in cash, he bribed the Board of Aldermen to give him a franchise for Broadway. (See, Myers History of Public Franchises In New York City, 139-143.) But although the bribery was exposed, and a number of aldermen were convicted and sent to prison, the courts declared the franchise indefeasible.
23 See, V Lansings Reports, 26, concerning the scandalous effort of Gould and Fisk to get control of the Albany and Susquehanna Railroad. The circumstances are narrated in the History of the Great American Fortunes, Vol. III: 180-183. Field also appeared for Fisk in a case involving the Chicago and Rock Island Railroad.
24 See, Poors Railroad Manual for 1880 : p. 182.
25 The process is described in the History of the Great American Fortunes, Vol. III: 84-85.
26 On September 26, 1850, he mortgaged various of his Marysville lots as security for $6,500 of notes, and three months later conveyed all of his estate in trust for the benefit of creditors.Case of Benthamm vs. Field, Rowe et al., I California Reports, 387.
27 See, People ex rel. Stephen J. Field vs. Turner, etc., I California Reports, 144 and 152, and Ibid., 188-189.
28 See later.
29 See, Chapter on The Pacific Quartet, History of the Great American Fortunes, Vol. III. In cash alone they stole more than $50,000,000, and still further enriched themselves by vast issues of stocks and bonds. See later.
30 The author has been personally assured of this by a man (still living) who was Stanfords private secretary at this time.
31 U.S. vs. Sutter, XXI Howard, 170.
32 II. Wallaces Reports, 587.
33 History of the United States, 1830-1877, Vol. VI: 262-263, citing statement on April 30, 187o, by Swayne, Miller, Davis, Strong and Bradley. Also, Bradleys Miscellaneous Writings, p. 73.
34 Case of Hepburn vs. Griswold, VIII Wallaces Reports, 626.
35 History of the United States, 1850 to 1877, Vol. VI : 266, citing Hoars Autobiography, Vol. I : 282.
36 XV Statutes At Large, 44.
37 See, Ex Parte McCardle, VI Wallaces Reports, 318, and VII Ibid., 506-515. The Supreme Court, accordingly, dismissed the case for want of jurisdiction.
38 Rhodes, Vol. VI : 265.
39 Rhodes, Vol VII: 27.
40 See, Case of State of Ohio vs. Sherman et al., XXII Ohio State Reports, 411. When, in 1869, the Pittsburg, Fort Wayne and Chicago Railroad Company leased its entire road to the Pennsylvania Railroad for a term of 999 years, the State of Ohio brought an abortive suit for an ouster for usurpation and unlawful exercise of franchise, etc. As a young attorney, Sherman had started out as a railroad counsel ; in 1848, he was attorney for the Vermilion and Ashland Railroad. XVIII Ohio Reports, 189.
41 Report of The Public Land Commission, 1905 : pp. 144-155.
42 Biennial Report of the Commissioners of the General Land Office of Texas, 1908-10 : p. 29.
43 See, Seventh Report of the Forest Commissioner of Maine, 1908 : p. 90.
44 Marshall vs. Baltimore and Ohio Railroad Company, XVI Howards Reports, 315.
45 Ibid., 314, etc. Similar bribery cases of the times are set forth in XVIII Pickerings Massachusetts Reports, 470 ; VII Watts Reports, 152, etc., etc.
46 Report of the Joint Select Committee Appointed to Investigate Into Alleged Frauds and Corruption, etc. Appendices to (Wisconsin) Senate and Assembly journals, 1858.
47 Reports of Committees, House of Representatives, Thirty-fourth Congress, Third Session, 1856-57, Report No. 243, Vol. III. By a construction of the law made by the land grabber Robert J. Walker, when Secretary of the Treasury, the grant of this company was vastly enlarged. In 1892 the Government tried to recover much of the lands, but the Supreme Court of the U.S. decided adversely to the Government. See later.
48 See, History of the Great American Fortunes, particularly Vol. II : 310-317,
49 See, History of Tammany Hall, 296-297.
50 Reports of Committees, Credit Mobilier Reports, Forty-Second Congress, Third Session, 1872-73, Doc. No. 78 : xiv-xx.
51 It was under this act that Justice Field was appointed.
52 The Whisky Ring defrauded the Government out of many millions of dollars in revenue on the manufacture of whisky by falsifying the returns with the collusion of Government officials.
53 Gold Panic Investigation, House Report No. 31, Forty-first Congress, Second Session, 1870 : 157.
54 Merriams Life and Time of Samuel Bowles, Vol. II : 195-196.
55 As an attorney, Stanton had been a noted railroad lawyer. He was also a stockholder in the Pittsburg and Steubenville Railroad.See Pittsburg and Connellsville Railroad Co., vs. Clarke and Thaw 29 Pa. State Reports, 147.
56 The Washington dispatch of the New York Times, February 11, 1870, read : There is authority for saying that in the matter of the recent decision in the legal tender cases, both Mr. Strong and Mr. Bradley have on occasions long prior to their present appointment given expression to views in consonance with those expressed in the dissenting opinion of Mr. Justice Miller.
57 For Strongs early appearances as a railroad lawyer, see VI Pennsylvania State Reports, 74; XXI Ibid., 188; XXIV Ibid., 467, etc., etc.
58 The Reading Common Council was induced to adopt an ordinance calling for a popular vote to decide upon a municipal subscription of $2,000,000 to aid in the construction of the Lebanon Valley Railroad, of which, as stated above, Strong was both a director and counsel. The vote was in favor of the measure. When an injunction was sought on the ground that the ordinance was unconstitutional, Strong appeared as counsel for the Lebanon Valley Railroad. Judge Black, in the Pennsylvania Supreme Court, in 1853, refused to grant the injunction.XXI Pa. State Reports, 188-2o3.
59 See, Case of John D. Hager vs. Edwin A. Stevens et al., VI New Jersey Chancery Reports, 374-447.
60 Said the financial column of the New York Times, February 27, 1860, of Stevens : ... The germ of the quarrel between that gentleman and the New Jersey Transportation people seems to have been the stoppage by the latter of a subsidy of $18,000 a year to Mr. Stevens (or the Hoboken Improvement Company) to quiet or in satisfaction for the time being of his right to demand a branch line to the Hoboken Ferry, etc., etc.
61 Assemblyman Slaight, of Hudson County, charged, on May 1, 1860, that an offer of bribery had been made to him to vote for Stevens bill, and Assemblyman Peckham, of the same county, declared that he had been offered $3,000 to oppose the bill.
62 See, Case of Proprietors, etc., vs. The Hoboken Land and Improvement Company, XIII New Jersey Equity Reports, 81, and Ibid., 503-561. In both cases Bradley was one of Stevens attorneys, as well as being associated with him as a director.
63 XV New Jersey Equity repors, 19. (May, 1862.)
64 XVII New Jersey Equity reports, 546-575. (November, 1867.)
65 XXII New Jersey Equity Reports, 130-430.
66 See, Vols. XIII, XIV, XV, XVII, XIX, etc., New Jersey Equity Reports, pp. (respectively) 322, 419, 190, 65, 385, etc., etc.
67 Miscellaneous Writings of the Late Hon. Joseph P. Bradley, etc., Edited and Compiled by his son, Charles Bradley, Newark, 1901 : p. 5.
68 Life of S.P. Chase (1874) : p. 261.
69 Poors Railroad Manual for 1868-1869: pp. 383 and 386.
70 Miscellaneous Writings of the Late Hon. Joseph P. Bradley, etc., p. 3.
71 Poors Railroad Manual for 1880; p. 234.
73 This packing of the Supreme Court caused such a long-continuing scandal, that, as late as 1881, Justice Strong felt called upon to write an article for the North American Review (May, 1881, Vol. CXXXII p. 437) defending the increase of members as made necessary by the great pressure of cases for consideration.
74 XII Wallaces Reports, 457-681. Chief Justice Chase and Justices Clifford, Field and Nelson dissented.
75 Case of State Freight Tax, XV Wallace, 237. Justices Swayne and Davis dissented.
76 State Tax on Railway Gross Receipts, XV Wallace, 284. Justices Miller, Field and Hunt dissented. Associate Justice Ward Hunt had been appointed that year (1872) to succeed Justice Nelson. Justice Hunt had practiced at Utica, New York, had been Mayor of that city, and in 1865 he had been elected to the New York Court of Appeals. He was identified with the railroad interests. (See, Poors Railroad Manual, for 1869-7o.) At the time of his appointment to the Supreme Court he was sixty-two years old.
77 So it was charged by Judge Black in his argument on railroad monopoly before the Pa. Senate Judiciary Committee, and before the Pa. Constitutional Convention of 1873. Judge Black dealt at length with the corruption carried on by the Pennsylvania and the Reading railroad companies.See, Essays and Speeches of J.S. Black (pp. 99. 176, etc.) published at the time.
78 XV Wallace, 300. Justices Davis, Clifford, Miller and Hunt dissented.
79 X Wallaces Reports, 224-245.
80 This interpolation of a description of the Supreme Court at the time will be of interest :
At eleven oclock in the morning, the door back of the judges platform is thrown open, the Marshall of the Court enters, walking backward, with his gaze fastened upon the door. Upon reaching the center of the chamber, he pauses, and cries in a loud voice :
The Honorable, the Judges of the Supreme Court of the United States.
All present in the chamber immediately rise to their feet, and remain standing respectfully. Then, through the open door, headed by the Chief Justice, enter the members of the Court, one by one, in their large, flowing robes of black silk. There is something very attractive about these men, nearly all of whom have passed into the closing years of life. They ascend the platform, range themselves in front of their seats, and the Chief Justice makes a sign to the Crier, who immediately makes the following proclamation :
O yea ! O yea ! O yea ! All persons having business before the Honorable, the Judges of the Supreme Court of the United States, are admonished to draw near, and give their attendance, for the Court is now in session. God save the United States, and this Honorable Court !
The Judges and other persons take their seats, and the business of the day begins." Dr. John B. Ellis The Sights and Secrets of the National Capital, 1869, p. 258.