HISTORY OF THE SUPREME COURT
OF THE UNITED STATES
THE SUPREME COURT UNDER CHIEF JUSTICE FULLER
Following Waites death, considerable speculation was rife as to who would be appointed his successor. President Cleveland finally chose Melville W. Fuller, a Chicago lawyer, obscure so far as public reputation went and without judicial experience but well and favorably known in corporation circles. Like Cleveland, Fuller was a Democrat, but he was urged for the Chief Justiceship by both Republican and Democratic Senators and capitalists.
Fullers Sponsors and Backers.
Among those particularly active at Washington assiduously working for his appointment was Colonel W.C. Goudy, an attorney for a large number of varied corporations. Goudy was counsel for the South Chicago Railway Company, the Washburn and Moen Manufacturing Company, the Chicago, Burlington and Quincy Railroad, the Illinois Central Railroad, the Indiana Banking Company, the Chicago Dock Company, and he was general counsel for the Chicago and Northwestern Railway Company, for the Fremont and Elkhorn Railroad, and for the Sioux City and Pacific Railroad.1
Senator John C. Spooner, of Wisconsin, a Republican, was energetic in Fullers behalf ; of Spooners activities as a railroad lawyer we have given an adequate glimpse in the description of the case of Schulenberg vs. Harriman in the preceding chapter. The selection of Fuller was also approved by Robert T. Lincoln, former Secretary of War, and for many years president of the Pullman Company, of Chicago. Another of the many functionaries strongly pushing Fullers appointment was the millionaire United States Senator Charles B. Farwell, of Illinois, a partner in the large Chicago dry goods establishment with his brother, John V. Farwell. This house had made great profits on contracts during the Civil War ; by the abundant infusion of money into politics Charles B. Farwell had wrested an election to Congress, and then an election as United States Senator.
A Transaction of the Farwells.
Aside from their other political and corporate transactions, the Farwells had but recently come conspicuously into public attention by reason of the successive steps by which they had obtained the title to 3,000,000 acres of public land in Texas.
During the session of the Texas Constitutional Convention, at Austin, on November 1, 1875, a clever attempt was made to pass a resolution for the setting apart of 5,000,000 acres of public lands in exchange for the building of a new State Capitol. This resolution was defeated, but on November 20 a constitutional provision was finally adopted after much skillful lobbying, setting apart 3,000,000 acres for the purpose.2
On February 20, 1879, the Texas Legislature passed an act appropriating 3,050,000 acres in the counties of Deaf Smith, Parmer, Castro, Lamb, Bailey, Hockley, Dallain, Hartley, Cochran and Oldham to be turned over to the contractors for the new building. This contract was made on January 18, 1882, with Matthew Schnell, of Rock Island, Illinois. In the same month, Schnell assigned his entire interest to Charles B. Farwell, John V. Farwell, Amos C. Babcock and others comprising the firm of Taylor, Babcock and Company of Chicago.3 When only a small part of the building had been constructed, the State officials leased to the Farwells all of the 3,000,000 acres not yet earned at six cents an acre per annum.4 The Farwells immediately used it for grazing purposes, at large profit to themselves.
Instead of using granite the contractors began to construct the building with limestone, whereat public indignation began to manifest itself.5 Pleading that they could not afford granite the Farwells demurred at being put to more expense, although they were then receiving the 3,000,000 acres in installments as fast as certain parts of the building were constructed. It had been definitely understood and expected that in return for that enormous area of land they would erect a substantial building ; that they were not doing so caused ugly scandal.
Three Million Acres by the Convict Labor Route.
At this point, Lacy, Westfall and Norton, owners of a granite quarry in Travis County, Texas, came forward, and in a burst of public spirit offered the Farwells the free use of their granite deposits, provided they would quarry them and build a railroad to the quarry. The Farwells, however, objecting that they did not care to pay the schedule rates of union labor, induced the State officials to give them a supply of convict labor. On July 25, 1885, the State officials contracted with the firm of Taylor, Babcock and Company to furnish that corporation with five hundred able-bodied convicts. In return, all that the contractors had to do was to board, clothe and guard the convicts, and to pay the State sixty-five cents a day for each convicts labor. These convicts were to be used in constructing a railroad to the granite quarries and were also to do the granite and stone work at the quarries necessary for the building. The convicts thus used were to be white, Mexican or colored, and were to work ten hours a day.6
Complaints were frequently made that the convicts were wretchedly treated and brutally overworked. But so far as the general public went the charge that made a deeper impression was that the Capitol was flimsily constructed. At a meeting of the State Capitol Board, on September 10, 1888, Attorney-General Hogg introduced a resolution stating that whereas, for more than a year past many complaints of a serious nature have been made against the workmanship of the new State Capitol, mostly by private parties, but more recently by General W.P. Hardeman, Superintendent of Public Buildings and Grounds, and they yet continue to be made, etc., etc. Hogg accused the Capitol Commissioners of paying no attention to the charges, and his resolution, therefore, invited them to re sign.7 The commissioners denied the charges and, of course, declined the invitation.
The cost of constructing the Capitol was stated to be $3,095,000, and the last installment of the 3,000,000 acres was turned over to the Farwells on August 25, 1888.8 A large part of the 3,000,000 acres the Farwells disposed of at an enormous profit ; the Farwell family still holds 800,000 acres and have a large ranch house at Charming, which Walter Farwell occupies during the summer, spending the winters in England.
Apparently a digression, these details are introduced for the purpose of exhibiting a few of the economic interests of some of the men vigorously pushing Fuller for the Chief Justiceship. At the precise time when Senator Farwell was urging the appointment he was putting the finishing touches upon the consummation of the acquisition of the 3,000,000 acres, obtained by the connivance of officials and the exploitation of convict labor.
Like that of Waite, Fullers appointment was a complete surprise to the large public ; his name and career were utterly unfamiliar. But to corporations of all kinds his skill and service had long been intimately known and highly valued. The list of corporations that he had represented as an attorney was an elaborate one.
Career of the New Chief Justice.
He was born in Augusta, Maine, in 1833. As a child he was brought up in a legal atmosphere ; his father was a lawyer ; and so were his fathers two brothers ; and his mother was a daughter of Nathan Weston, for many years the Chief Justice of the Supreme Court of Maine. Fuller went to Chicago, in 1856, and from the first sought the clientage of rich individuals and powerful corporations, dipping somewhat into politics. He was a member, in 1861, of the Illinois State Constitutional Convention ; in 1862 he served in the Illinois Legislature, and he was a delegate to the Democratic National Conventions of 1864, 1872, 1876 and 1880.
His corporation practice was so large that only some typical cases of the entire number in which he appeared will be given here.
He and J.H. Roberts, in 1870, represented Dows, a stockholder of the Union National Bank of Chicago, in a longdrawn but unsuccessful action to restrain the City of Chicago from levying a tax upon bank stock.9 Three years later we find him arguing for the Merchants National Bank, but without success, that the power of a State to tax stockholders in a national bank did not extend to non-resident stockholders.10
At the same time Fuller was counsel for the First National Bank of Springfield ;11 for the Commercial Bank of Bristol, R.I.,12 and for other banks. He represented Jesse Hoyt, a large Chicago railroad capitalist, Philip D. Armour, the multimillionaire Chicago packer, and associates in an action for an injunction to restrain the Chicago, Burlington and Quincy Railroad from taking up a certain sidetrack. Hoyt owned a three-quarter interest in the Union Elevator, a large grain warehouse ; hence his participation in the action. This contest of millionaire wheat gamblers and monopolists assumed various phases in which Hoyt, Armour and others, although associates, were at times on different sides.13 Representing the First National Bank of Chicago, Fuller and two other attorneys sought to prevent that bank from being held responsible for the defalcation of $114,032.62 of A.W. Waldron, treasurer of the village of Hyde Park. The circumstances of the defalcation were such that the bank, so the lower court decided, could be held liable for nearly $60,000 and interest. But Fuller won the case in the Supreme Court of Illinois.14 At different times during this period, and often for many successive years he was counsel for the Metropolitan National Bank, the Traders Bank, the Fourth National Bank, the Manufacturers National Bank, the Merchants National Bank and for extensive estates such as the Walker, the Stephen A. Douglas and others.
Fullers Course as Railroad Attorney.
He was the regular counsel for the Chicago, Burlington and Quincy Railroad. One of the cases pertaining to this railroad in which he appeared, in 1883, is worth citing.
For six years Samuel Warner had worked for the railroad, first as a brakeman and during the last two years as a freight-train conductor. While uncoupling and detaching a freight car in motion on August 20, 1875, Warner threw himself around the corner of the car, expecting to get a foothold on similar steps on the other side, whence he could have reached the rear of the car where the uncoupling had to be done. But the car was not equipped with any such steps a fact that Warner did not know. The consequence was that Warner lost his balance, was thrown to the track, and his left arm was so crushed and mangled that it had to be amputated.15
On the ground that the company was willfully negligent in not providing end steps or ladders for coupling or uncoupling purposes, Warner sued for damages. He was awarded $5,000 damages in the lower court ; this judgment was sustained by the Appellate Court. The company appealed to the Illinois Supreme Court ; meanwhile six years had gone by without Warner receiving a cent.
Fuller appeared for the railroad company in the Illinois Supreme Court, arguing for a reversal of the verdict. Astonishingly contradictory and pettifogging as they may seem, these were actually the points that he advanced : First, there was no evidence that the loss of Warners arm did, or would, impair his ability to pursue his business. Second, there was no evidence of the extent of the pain that Warner had suffered, other than the loss of his arm ; pain, as an element of damage, could not be inferred from this fact. Third, there was no evidence of damages none of nurses bills incurred, or of any other expense.16
So far as the railroad workers were concerned, Fuller argued that the master is not bound to throw away his machinery because there may be others better calculated to insure safety. In other words, railroad corporations could ignore the safety of the lives of their workers, which is precisely what they were doing. An enormous number of railroad employes were being killed or maimed annually. Although the railroad corporations were making vast profits, they were contesting every attempt to pass an employers liability law, and especially a law compelling them to equip their cars with safety appliances. In respect to the liability of railroad companies to passengers, Fuller argued, the rule was different. Warner, he contended, knew that the company used cars without steps or handle, and before attempting to uncouple he should have ascertained whether the car had them or not.
But it must be said that Fuller did not state the real facts, nor apply common-sense logic. If Warner had refused to work on such dangerous cars he would have been without a job and support, and if all other workers had similarly refused, the railroad could not have been operated. At the peril of their lives, the workers were really doing a favor to the company working on its cars.
Justice Mulkey agreed with Fuller that the risk was one of voluntary assumption. Of Fullers other pleadings he strongly disapproved.
Ironical as it may seem, the fact remains that Mulkey proceeded to argue gravely whether the mangling of an arm, and its consequent amputation, constituted evidence of pain. He decided solemnly that it did. Justice Mulkey then went on to controvert Fullers fiction that the loss of an arm did not impair Warners ability to earn his living. The fact that he was forced to abandon his job, Mulkey said, was in evidence before the jury. That both arms, he commented, are useful in all, and indispensable in most, of the avocations of life is but a part of the common information of mankind in general, and hence it required no other proof to establish it. . . . But, so the court decided, Warner had voluntarily assumed the risk ; therefore, he was negligent ; therefore, the judgment in his favor should be reversed, and he must get no damages.17 Warner was consigned to a life of destitution ; Fuller at this time was enjoying an annual income of at least $20,000. In fact, Fuller, it was said, was a stockholder in the Chicago, Burlington and Quincy Railroad.
A Multimillionaires Attorney.
Two Chicago multimillionaires Marshall Field and Levi Z. Leiter quarreled over a party wall, which difference grew into an extended litigation. As one of Fields attorneys Fuller eventually won the case.18 Field was a conspicuous railroad stockholder ; he was a powerful factor in the Chicago, Rock Island and Pacific Railroad and other railroads ;19 his will revealed that he also owned $1,500,000 of Baltimore and Ohio Railroad stock, $600,000 of Atchison, Topeka and Santa Fe Railroad stock ; $1,860,000 in stock in the Chicago and Northwestern Railroad, and tens of millions of dollars of stock in fourteen other railroads.
Field was, likewise, one of the largest stockholders in the Union Traction Company and its associated street railway companies of Chicago.20 The methods by which these companies obtained their franchises and controlled Common Council and Legislature were consistently corrupt ; the sums spent in purchasing ordinances and legislation were immense.21 And it may be remarked here that although for more than twenty years from 1865 committees of Chicago citizens were formed time after time to fight this corrupt legislation, Fuller was never one of their number. Other lawyers enlisted, but Fuller was preoccupied advancing the interests of the very capitalists against whom these movements were conducted.
Field was also in almost absolute control of the Pullman Company works by reason of his being the largest owner of stock in that concern. Manufacturing Pullman cars, and employing nearly 20,000 men, the Pullman was a vast corporation, reaping great profits. The trickeries, snares, fraudulent sales and cheatings by which it was alleged the land on which the works were located was originally gotten, were set forth in detail in the suit brought by Speck and others.22 We have seen how Robert T. Lincoln, president of the Pullman Company, was one of Fullers most active backers for the Chief Justiceship of the Supreme Court a fact intimately related, as we shall show later, to a certain notable decision of the Supreme Court of the United States when Fuller was Chief Justice.
Marshall Field, at his death, left a fortune estimated at $140,000,000. It was then discovered that for many years he had owned at least $17,500,000 of taxable personal property on which he had long defrauded the city of taxes. Suit was brought for $1,700,000 back taxes, but on March 2, 1908, the Field estate compromised by paying the city $1,000,000.23 It was calculated that the total amount of Fields tax frauds reached fully $3,000,000.
Fullers Further Corporation Practice.
Fuller was one of the leading counsel for the Chicago Gaslight and Coke Company in its legal contest with the Peoples Gaslight and Coke Company. Both of these companies had debauched the Common Council and Legislature to get their franchises. The Chicago Gaslight and Coke Company had secured, in 1849, an exclusive franchise for ten years. In 1855 the Peoples Gaslight and Coke Company obtained a franchise from the Legislature on the plea that it sought to break the monopoly held by that company. But in 1862 both companies formed a combination, and the Chicago Gaslight and Coke Company agreed, for the period of one hundred years, not to lay pipes or sell gas in the territory of the other company. This pool, of course, created a monopoly.
The compact continued until 1886, when the Chicago Gaslight and Coke Company secured a franchise to build a tunnel under the South branch of the Chicago River. Pleading that the Chicago Gaslight and Coke Company threatened to compete and violate its contract, the Peoples Company applied for an injunction, and obtained it in the Appellate Court. In the Illinois Supreme Court, Fuller, on appeal, argued that a contract to control rates was void. Judge Magruder, in 1887, decided that the court would not aid either party in the enforcement of such an illegal contract. The injunction was dissolved.24
These, perhaps, are sufficient examples of Fullers practice. He was one of the busiest and best-paid corporation attorneys in Chicago ; it was estimated that in thirty-two years he had probably tried not less than twenty-five hundred cases, not including cases settled out of court.
One of the exceptions to his long list of pleadings for individual capitalists or large corporations was his being retained by the City of Chicago in the suit of the State against the Illinois Central Railroad. This company had assumed to own, since the year 1869, not less than a thousand acres of formerly submerged lands along the city front of Lake Michigan, on portions of which it had built wharves, docks, piers and warehouses. The act under which this claim was set up had been originally obtained by corruption. In 1873 the Legislature passed a repealing act. When the State brought suit charging unlawful possession and usurpation, the railroad claimed that the repealing act was unconstitutional, as impairing the obligation of a contract. The Circuit Court of the United States, however, decided that the title remained vested in the city.25 This decision was upheld by the Supreme Court of the United States.26
Before considering some of the important decisions of the Supreme Court of the United States under Chief Justice Fuller, it will be advisable to describe certain circumstances, and to give a review of the careers of new Justices successively appointed after he assumed his seat.
Justice Fields Enemy, Terry, Shot and Killed.
Justice Field, who seems to have been oppressed by the unfortunate faculty of personally stirring adverse public criticism, again came sharply into public notice at this juncture. Judge Terry, of whom we have spoken in a previous chapter, had acted as counsel to Sarah Althea Hill, who claimed that she had been secretly married to Senator William Sharon, a Nevada and California millionaire mine owner. When he died she married Judge Terry and claimed Sharons estate. The Supreme Court of California decided that there had been a secret marriage contract. But in the United States Circuit Court Justice Field ordered the cancellation of the marriage contract on the ground of forgery. In a burst of rage Mrs. Terry arose in court and asked Field how much he had been paid for his decision. Field held her for contempt.
The old enmity, or rather feud, between Terry and Field now gathered fresh fuel. It was reported (although whether falsely or not, we do not know) that when Field committed Mrs. Terry to jail for a month, Terry drew a bowie knife. At any rate, Field ordered Terry arrested and committed to jail for six months.
On the way north from Los Angeles, on his circuit duties, Justice Field, on the morning of August 14, 1889, stopped at Lathrop, California, for his breakfast. Mr. and Mrs. Terry were there at the time. Terry stepped up to the luncheon stool on which Field sat and slapped his face with the back of his hand. United States Marshall David Nagle then shot Terry dead. Terry was unarmed, but reports had it that Mrs. Terry had a bowie knife and revolver in her hand bag.
Opinion over the affair was divided. Some defenders of Field held that it was a justifiable case of self-protection. Friends of Field asserted that Terry had sworn that he would take Fields life. A considerable section of public opinion condemned the killing as unmitigated murder. Justice Field was arrested, but released. As for Nagle, he was exonerated by the courts on the ground that he had done his duty in preserving the life of a judge.
Fields Nephew, Brewer, Appointed.
Four months after this killing, Fields nephew, David J. Brewer, was appointed an Associate Justice of the Supreme Court of the United States.
Brewer was the son of a missionary to Turkey ; he had been graduated from Yale, in 1856 ; had been a United States Commissioner in Kansas ; a judge of the probate and criminal court in that State from 1861 to 1865 ; a member of the Kansas Supreme Court from 1870 to 1884, and, in the latter year, had been appointed a judge of the United States Circuit Court. According to the bare newspaper reports, Brewer, when nominated for the Supreme Court of the United States, was subjected to serious criticism of his conduct in the appointment of receivers for the Wabash railroad system, and for some decisions he had rendered concerning the receivership. It was a fact that Judge Gresham, who was an incorruptible judge and who had exposed Goulds fraudulent manipulation of the Wabash railroad, removed receivers whom Gould and Sage had caused to be appointed, and caustically denounced the transaction.27 Brewers friends explained that the responsibility was to be charged not to him, but to Judge Treat.
Justice Browns Corporate Connections.
The next appointee to the Supreme Court was Henry B. Brown of Detroit, Michigan. He was born in Lee, Massachusetts ; his father was a manufacturer. After leaving Yale he went, in 1859, to Detroit. From 1861, when he was appointed a deputy United States marshall, he held various Public offices was Assistant United States District Attorney, and judge of the Wayne County (Mich.) Court. In 1864 he married Caroline Pitts, the daughter of a rich lumberman, and later returned to the practice of law, forming a partnership with J.S. Newberry and Ashley Pond.
The firm of Newberry and Pond had represented the Amboy, Lansing and Traverse Bay Railroad, the Detroit and Milwaukee Railroad and other railroads and copper-mining and insurance companies.28 During the time that Brown was a member of the firm of Newberry, Pond and Brown, the firm was counsel for the Atlas Mining Company, and Pond appeared for the Marquette and Ontonagan Railroad and other corporations.29
The firm then became Pond and Brown. From 1873 to 1875 it represented such corporations as the Michigan State Insurance Company, the Port Huron Dock Company, the Connecticut Mutual Life Insurance Company and the Lake Superior Ship Canal, Railroad and Iron Company.30 This last-named company had obtained from Congress, in 1865-1866, a grant of 400,000 acres of swamp lands as assistance in encouraging the building of its canals. But the company caused fraudulent surveys to be made by which it secured vast beds of iron ore. In his annual report for 1885, Commissioner Sparks of the General Land Office, described how its canal was only a worthless ditch, and how instead of surveying swamp lands, it had fraudulently appropriated at least 100,000 acres of the richest mineral lands.31 The suit in question was brought by the Attorney-General of Michigan on the score of usurpation and alleged illegal collection of tolls. The company won.
In 1875 President Grant appointed Brown a United States District Court judge in Michigan. Ashley Pond continued his practice as a railroad lawyer ; he became general counsel for the Michigan Central Railroad a Vanderbilt property.32 Brown went on the Bench of the Supreme Court of the United States, on December 29, 1890, succeeding Justice Miller.
Justice Browns Interest in a Copper Case.
In addition to being a corporation attorney, Brown was a stockholder. In the case of the appeal of the Detroit Citizens Street Railway Company vs. Detroit which came up before the Supreme Court of the United States, in 1895, Mr. Justice Brown took no part in the consideration and determination of this petition.33 Justice Brown was more specific in a case against the Calumet and Hecla Mining Company ; he frankly caused it to be inserted in the record that, Mr. Justice Brown being interested in the result, did not sit in this case and took no part in its decision.34
The copper mines of the Calumet and Hecla Mining Company, in Houghton County, Michigan, have been rated as among the richest copper properties in the world. They were obtained in this way : In 1852 the St. Marys Falls Ship Canal Company secured from Congress a grant of 750,000 acres of public lands for aid in the construction of a canal. A year previously in 1851 a voluminous report had been issued by J.W. Foster and J.D. Whitney, Government geologists, giving full reports of the character of the mineral deposits in the Lake Superior region.35 Long before that time it was well known that Lake Superior Indians used copper utensils made by them from native ore.
Now the grants made by Congress to canal companies meant to cover swamp lands. But by fraudulent surveys they were so manipulated as to comprise the most valuable ore beds.36 This fact is not only stated in official reports, but it was made the basis of the suit brought by Chandler against the Calumet and Hecla Mining Company. In his bill of complaint, Chandler detailed the granting of the alleged swamp lands by Congress, and claimed an interest. The decision of the Supreme Court of the United States went against him.
That he tried so hard to establish his claim is not surprising considering the enormous profits that the company was making. For example, Moody thus describes its operations for a certain number of years : Capital stock, $2,500,000. Par $25, on which only $12 per share has been paid. Dividends for the year ended April 30, 1895, 60 per cent., 1896, 100 per cent.; 1897, 120 per cent.; 1898, 160 per cent.; 1899, 280 per cent.; 1900, 320 per cent.; 1901, 260 per cent.; 1902, 100 per cent.; 1903, 140 per cent.37 When Quincy A. Shaw, president of the Calumet and Hecla Mining Company, died in 1910, his will filed for probate at Boston on December 9, 1910, disclosed an estate of $23,000,000.
Justice Shiras, Railroad Lawyer.
George Shiras, Jr., was next appointed to the Supreme Court of the United States, July 19, 1892, by President Harrison to succeed Justice Bradley.38 His father was a Pittsburg brewer who had retired from business in 1840. Practising law in that city from 1856 to the time of his appointment, George Shiras, Jr.s connections were with large corporations. For twenty years he was associated with the Baltimore and Ohio Railroad in important cases, and he represented the Peoples Gas Company and other corporations. From 1881 to 1883 his partner was Henry H. Hoyt, who later became director of various powerful banks. During a deadlock of the Pennsylvania Legislature over the election of a United States Senator, in 1881, Shiras was nominated at a secret caucus of Republicans by a majority of two, but two days later the vote was reconsidered, and John J. Mitchell was elected.
Shiras frequently appeared in the courts as the regular counsel for the Pittsburg and Connellsville Railroad Company a part of the Baltimore and Ohio Railroad system.39 In the case of the Commonwealth of Pennsylvania vs. the Pittsburg and Connellsville Railroad Company, he, Latrobe and other attorneys for the railroad argued, in 1868, against an action for the forfeiture of the companys franchise.40
McClurg, a passenger, having obtained a judgment for injuries, Shiras had the verdict reversed on appeal.41 Elijah Patterson, a freight-train conductor, had notified the superintendent of the bad construction of a sidetrack connection ; the superintendent promised it would be repaired, but it was never attended to. A train on which Patterson was conductor was later derailed and Patterson was severely injured. The successful defense of the railroad in the lower court was that Patterson knew of the danger and had voluntarily exposed himself. Patterson appealed to the Supreme Court of Pennsylvania. There Shiras advanced the proposition that where persons are employed in the same general service, and one of them is injured through the carelessness of another, the employer is not responsible. The Supreme Court of Pennsylvania, in 1875, decided in favor of Patterson.42
Shiras also represented James M. Bailey, a director of the Pittsburg and Connellsville Gas, Coal and Coke Company ; Shiras was also one of the counsel for the Pittsburg, Virginia and Charlestown Railway Company, for the Monongahela National Bank and sundry other corporations.43 When appointed to the Supreme Court of the United States Shiras had an annual income from his practice of (it was estimated) not less than $59,000 a year, and possibly $75,000. The city of Pittsburg was in the grip of the notoriously corrupt Magee political-capitalist ring, but Shiras took no part in movements antagonistic to Magee ; he assiduously adhered to his corporation practice ; and some of the very corporations represented by him were foremost in bribing Common Council and Legislature and debauching politicians generally.44
Jackson Succeeds Lamar.
At Justice Lamars death, in 1893, President Harrison appointed Howell E. Jackson, of Tennessee, to succeed him. Jackson had been associated with railroads before the Civil War. In the winter of 1857-1858 he had been sent to New York by the Mississippi Central Railroad (later the Chicago, St. Louis and New Orleans Railroad) to negotiate its bonds. This he did satisfactorily. After the Civil War he settled at Memphis, Tennessee, becoming a member of the firm of Estes, Jackson and Elliott.
The clients of this firm were mostly large banks and other corporations.45 In 1874, a year after the death of his first wife, Jackson married Mary Elizabeth Harding, a daughter of General W.G. Harding, owner of the renowned Belle Meade Farm. It was currently reported in the newspapers that Jacksons election as United States Senator, in 1881, was accomplished by the use of money, but of this charge there is no definite proof in the records. Howell E. Jackson, next to his brother, was reputed to be the richest man in Tennessee. President Cleveland appointed him, in 1887, to the United States Circuit Court. An examination of his decisions shows that they were uniformly favorable to corporations.
A fact commented upon was that the chief proposer and pusher of Jackson for the Supreme Court was Thomas C. Platt, the Republican boss of New York State, and that the plant of the Tennessee Coal and Iron Company,46 of which Platt was president, was located in the circuit in which Jackson sat, and in which he had handed down decisions favorable to that corporation. Doubtless the additional fact that Jackson was a personal friend of President Harrison had its weight in determining his appointment to the Supreme Court of the United States.
Here for urgent and appropriate reasons that will explain themselves, it will be necessary to defer describing further appointments, and to begin the narrative of some of the decisions of the Supreme Court under Chief Justice Fuller.
The Timber Monopoly.
Decisions favoring railroads were so common that a description of them would entail an interminable mass of detail. A typical case, deserving adequate treatment, was a particularly remarkable decision by which the Supreme Court deliberately turned over to a group of railroad-lumber syndicate capitalists vast holdings of standing timber, thus directly making possible the concentration of the timber supply in a monopoly closely controlled by a few men.
Recently a report issued by Herbert Knox Smith, United States Commissioner of Corporations, comprehensively described this monopoly and its workings. . . . Only forty years ago, the report stated, at least three-fourths of the timber now standing was (it was estimated) publicly owned. Now about four-fifths of it is privately owned. The great bulk of it passed from Government to private hands through (a) enormous railroad, canal and wagon-road grants by the Federal Government ; (b) direct government sales in unlimited quantities at $1.25 an acre ; (c) certain public land laws, great tracts being assembled in spite of the legal requirements for small holdings. . . . Elsewhere the report says : In the last forty years concentration has so proceeded that 195 holders, many interrelated, have now practically one-half the privately owned timber in the investigation area (which contains eighty per cent. of the whole). This formidable process of concentration, in timber and in land, certainly involves grave future possibilities of impregnable monopolistic conditions, whose far-reaching consequences to society it is now difficult to anticipate fully, or to overestimate. . . .47
This report, while thorough and authentic within its prescribed limits, omits the important fact that it was decisions of the Supreme Court of the United States which were largely responsible for these conditions. One of these decisions and its antecedent and later circumstances were as follows :
The Military Wagon-Road Grants.
Congress, on February 25, 1867, had passed an act granting about 600,000 acres to the Dallas Military Road Company as aid in the construction of a military wagon road from Dallas City on the Columbia River, to Fort Boise, on the Snake River, Idaho. Congress had granted other tracts to other wagon-road companies ; the total grants to all of the companies were about 1,781,000 acres. These areas comprised the finest timber lands in the Northwest. The Willamette Valley and Cascade Mountain Wagon Road Company obtained patents for some 440,000 acres. One of these acts granting an area fraudulently extended to about 720,000 acres to the Oregon Central Military Road Company, was passed on July 2, 1864, at the identical time when, as we have seen, the Union Pacific Railway Company was distributing $436,000 in bribes to get its land grant increased and its charter altered.
The act of Congress of July 8, 1866, provided, however, that if certain military wagon roads were not completed in five years, the grants were to be forfeited, and revert to the Government.
Manipulation of the Grants.
None of these companies made the slightest attempts to build the roads. In order to fortify themselves against any possibility of forfeiture of land grants, they immediately began to sell or mortgage the grants to innocent parties. That they had not earned the grants and that they were selling domains which they held conditionally only did not trouble them in the least. Familiar with many successive precedents set by the Supreme Court of the United States from the time of Chief Justice Marshall, they knew that if action for forfeiture were brought against them on the ground of non-performance and fraud, the innocent purchasers could step in, and plead that they knew nothing of any frauds and had bought in good faith.
By collusion with officials, the companies obtained title, and then proceeded to sell or mortgage the lands. For the sum of $125,000 (at least, it was so claimed) the Dallas Military Road Company sold its land grant to Edward Martin, who later disposed of it to the Eastern Oregon Land Company. The Oregon Central Military Road Company conveyed its land grant in bulk to the California and Oregon Land Company. The Willamette and Cascade Mountain Wagon Road Company transferred its interest to the Oregon Pacific Railroad Company and others, and gave a mortgage to the Farmers Loan and Trust Company of New York.
The Fraudulent Methods Disclosed.
The people of Oregon were aroused over this bold appropriation of more than a million acres of the most valuable timber lands. They denounced it as a barefaced theft, which it was, in truth ; the roads had never been constructed. Many years of forcible agitation were required to get the Oregon Legislature to take some action. Successive legislatures were controlled by the land-grabbing syndicate. At last, in 1885, the Oregon Legislature did move. It recited the frauds committed, and memorialized Congress to pass an act for the institution of proceedings for the forfeiture of the grants. This Congress did on March 2, 1889.
The Government then brought suits against the Dallas Military Road Company, the Oregon Central Road Company, the Willamette and Cascade Mountain Company and others.
The Government alleged as to the Dallas Company : That the road was never constructed in whole, or in part ; that through the fraudulent representations of the officers, stockholders and agents of the company, the Governor of Oregon [George L. Woods] was deceived and induced to issue a certificate . . . and that relying upon this certificate, the patents to portions of the lands had been issued to the company. . . .48
In the case of the Oregon Central Military Road Company, the Government set forth that by the same fraud and deceit, it had obtained a certificate from Governor Addison C. Gibbs, in 1866, that portions of the road had been built. The Governments bill of complaint went on to say that it was not true that the [first] fifty miles of road had been constructed ; that in order to procure the certificate . . . the company fraudulently pointed out to the governor a county road to which the company never had a legal right, and led the governor to believe that the road had been constructed by the company. . . .49
Concerning the manner in which the Willamette Company had secured its lands the Government charged that the company fraudulently represented to the acting governor of Oregon that the road had been constructed as required by law for a distance of 180 miles, they knowing that such representations were false, and that the road had never been constructed at all ; that such representations were made for the purpose of fraudulently procuring from the acting governor a certificate . . .; that the acting governor did not examine, or cause to be examined, any part of the 180 miles, etc., etc.50
These cases originally came up before Judge Lorenzo Sawyer, in 1890, in the United States Circuit Court, in Oregon. As we have noted, Judge Sawyer was regarded with great friendliness by the Pacific railroad interests. Judge Sawyer ignored the charges of fraud. He took the formal ground that the Governor of Oregon was the agent of the United States, and that when he certified that the roads had been built he was the sole deciding authority and his certificate was to be accepted as final evidence. Anyway, Judge Sawyer said, the claims put forward by the Government were stale.51
The Supreme Court Validates the Frauds.
The action now went up to the Supreme Court of the United States. The old subterfuge of the innocent purchaser was now again pleaded, and successfully. Justice Brewer wrote the decisions covering these associated cases. On March 6, 1893, Brewer decided against the United States. The purchasers from the original companies, he said, knew nothing wrong in respect to the title, or the proceedings of the road company, or any officials connected with the title. And harking back to Marshalls celebrated precedents in the Arrendondo and other cases, he held that where the Government delegated power to an official to certify, the evidence of that official was final and conclusive.
Yet Brewer was forced to admit that the allegations that the certificates had been obtained by fraud were uncontested. Therefore, said he on this point, as the inquiry is now presented, it must be in the light of the uncontested allegation that the certificates were obtained through the fraudulent acts the road company.52 But, he quickly went on, the purchasers were innocent ; they knew that the governor had certified, and thought the title valid. There were other points in the decision, but these were the main grounds.53
Justice Brewers Doctrine.
In later decision, Justice Brewer, it may be parenthetically remarked, openly avowed that fraud mattered nothing, so long as legal title was held.
This nephew of Justice Field was even franker than Field himself in justifying the products of fraud and theft. Justice Brewer, on November 12, 1894, laid down the naked doctrine that it was immaterial how an owner got his property. He may have made his fortune by dealing in slaves, as a lobbyist, or in any other way obnoxious to public condemnation ; but, if he has acquired the legal title to his property, he is protected in its possession, and cannot be disturbed until the receipt of the actual cash value. The same rule controls if railroad property is to be appropriated. No inquiry is open as to whether the owner has received gifts from State or individuals, or whether he has, as owner, managed the property well or ill, or so as to acquire a large fortune therefrom. It is enough that he owns the property has the legal title ; and, if so owning, he must be paid the actual cash value of the property. . . .54
Could there be a more undisguised justification of every species of fraud and theft ? In more cautious phraseology the doctrine had been often handed down from the Supreme Court bench, but here was Justice Brewer serving blunt declaration that irrespective of what flagrant fraud and general scoundrelism were used, the Supreme Court of the United States would justify it and sanction the results, provided the form of getting legal title, which is to say, paper title, was accomplished.
Results of the Wagon-Roads Decision.
One of the effects of the wagon-road land grant cases may be seen by reverting to Commissioner Herbert Knox Smiths report on the timber monopoly. Of the ownership of timber lands in the Pacific States and Northwest, he details that the Southern Pacific Railroad Company, the Weyerhaeuser Timber Company, and the Northern Pacific Railway Company (including their subsidiary companies) own 238,000,000,000 feet of standing timber.
The timber holdings of the Southern Pacific Railroad Company extend from Portland, Oregon, to Sacramento a distance of 682 miles. This holding, he further explains, consists of the unsold part of the Government land grants in Oregon and Northern California held by the Oregon and California Railroad Company and the Central Pacific Railroad Company, subsidiaries of the Southern Pacific Railroad Company. The timber holding of the Southern Pacific Railroad Company is the largest in the United States, amounting to more than 106,000,000,000 feet, of which about 71,000,000,000 feet is in Oregon.55 The Weyerhaeuser Timber Company owns 96,000,000,000 feet of timber, and the Northern Pacific Railway Company about 36,000,000,000 feet. Considerable of this area was appropriated by means of the military wagon-roads decisions. The present commercial value of the privately owned standing timber in the country, not including the value of the land, the report further says, is estimated (though such an estimate must be very rough) as at least $6,000,000,000. Ultimately the consuming public will have to pay such prices for lumber as will give this timber a far greater value.56
Here, at the risk of repetition, we will again observe that Justice Field, Brewers uncle, had been placed on the Supreme Court Bench at the solicitation of Leland Stanford, one of the four magnates then controlling the Central and the Southern Pacific railroads with all their auxiliary and adjunct corporations. And Stanford was a powerful member of the United States Senate at the time of Brewers appointment to the Supreme Court of the United States.
Another Great Railroad Grant Validated.
The decisions that we have narrated are but a few typical cases of the many determined by the Supreme Court of the United States favorable to railroad corporations. Another characteristic decision written by Brewer was that finally validating an enormous land grant to the Des Moines Navigation and Railway Company.
This company, as we have related, had obtained by proved briberies,57 the passage of an act by Congress, in 1846, granting it an area five miles (in alternate sections) on each side of the Des Moines River, Iowa. Subsequently, the company claimed that the grant included lands along the entire course of the river to its source. If this claim held, the company would get many hundreds of thousands additional acres.
The contention was submitted in 1849 to Robert J. Walker, Secretary of the Treasury, which department then exercised jurisdiction over the public lands. Walker, as we have seen, had himself profited notoriously from land grabbing. In his opinion on the issue, Walker decided that a stretch of 900,000 acres above Raccoon Fork lay within the grant.58 His successor, Thomas Ewing, held the contrary. So the question remained unsettled until, in 1858, 1860 and 1861, the company lobbied acts through Congress and the Iowa Legislature acts so ingeniously worded that they seemed to be for the interests of actual settlers, but were in reality disguised measures for the companys benefit.
Litigation, however, continued for forty years. In 1889 the Government brought a suit to reclaim the lands from the company. The grant, it charged, had been merely given by legislative enactment upon a trust for a distinct purpose. That purpose was to improve the navigation of the river. But, so the Government alleged, the company did but a very small fraction of the work it pretended to do ; it abandoned the undertaking covered by its contract. Notwithstanding this abandonment it grabbed a vast land grant. On the other hand thousands of hard-working pioneers have settled and made their homes upon the lands. Then, also, other railroad companies claimed the lands under their grants.
This litigation, declared the Government, is in the interests of bona-fide settlers against speculators who have appropriated these lands in violation of law and of the principles of common honesty. . . .59 The Supreme Court of the United States, in January, 1892, decided in favor of the Des Moines Navigation and Railway Company ; Justice Brewer delivered its opinion.
A Legislatures Good Faith.
Instead of admitting (what the fact was) that the Government was acting directly for the settlers, Brewer diverted the point in this fashion : The United States, he said, was only a nominal party whose aid is sought to destroy the title of the company; therefore, the defense of laches that it was a stale claim should be sustained. Justice Brewer well knew that no statute of limitations ran against the Government ; hence his object in relegating the Government as a nominal party. He also was not aware of the fact that bitter contests between corporation and settlers had gone on continuously, and that the claims of the settlers had never become dormant.
But what of the original acts lobbied through by fraud and bribery ? Out again came Marshalls time-worn fiction. Knowledge and good faith of a legislature, echoed Brewer, are not open to question, but the presumption is conclusive that it acted in full knowledge and good faith. . . .60 The records were full of evidences of bribery, but the Supreme Court pretended to be innocent of knowing them, or even of giving them credit.
Without examining this decision further it is only necessary to draw a parallel between it and that in the Illinois Central Railroad water-front case to show the glaring inconsistency that the Supreme Court continuously betrayed.
In the Illinois Central case the Supreme Court (by a vote of four to three) decided, as we have seen, that the Legislature held the submerged water-front lands in Chicago in trust for the people.
But in the Des Moines Navigation and Railway Company case, it repudiated the Governments contention that the Iowa lands were held in similar trust.
It may be pertinently inquired, if one kind of property was held in trust for the people, why not all other kinds ?
By such decisions the Supreme Court revealed itself as an arbitrary, dictatorial body, often contradicting its own dogmas, and fashioning constructions as it pleased, only to upset those constructions when the dominant capitalist interests so required it.
Justice Field Serves Notice.
Indeed, on one noted occasion, Justice Field in his apparent anxiety to be of service to the Central Pacific Railroad so far transgressed the ordinary rules of judicial procedure and prudent caution, that his action caused scandal even among the legal fraternity. In a suit brought by California against the Central Pacific, he announced that if that State attempted to force its stand, an injunction could be applied for and would undoubtedly be granted.61 Now as he was the very Supreme Court Justice who presided over the California circuit, his announcement was equivalent to notifying the Central Pacific that it should apply to him for an injunction and would get it. This kind advice Field gave at a stage in the suit when no steps whatever had yet been taken for any such writ.
In another noted case, Fields nephew, Brewer, wrote a Supreme Court decision which, in order to validate a succession of land claims, absolutely contradicted and contravened a dictum that, for the same purposes, had been followed since Marshalls day.
A Memorable Decision.
The case was that of Camou vs. the United States, for confirmation of a private land claim of 20,034.62 acres, near Santa Cruz, Arizona. This land was claimed under an alleged grant and sale made by the Mexican authorities, in 1827-1828. In 1853, President Santa Anna of Mexico issued a decree declaring that the public lands, as the exclusive property of the nation, never could have been alienated by virtue of decrees, orders and enactments of the legislatures, governments or local authorities. Article II of the decree ordered that all sales or grants made without the approval of the Federal Government, according to law, were null and void. Section III provided for the recovery of these lands, and Section IV prohibited their confirmation. A month later, Santa Anna signed a treaty with the United States by which that part of Arizona comprised in the Gadsden purchase, was transferred to the United States. The Camou claim was in this territory.
Another decree issued by Santa Anna, on July 5, 1854, was even more specific and drastic. It practically annulled an immense number of grants which had been obtained unlawfully or by fraud and collusion.62 Naturally enough, the holders of these and other claims struck back by manufacturing a revolution, and Santa Anna was deposed. His successor, Juan Alvarez, a creature of the land appropriators, issued a decree repealing Santa Annas decrees, and declaring the titles valid.
Thirty-seven years later in 1891 Camou filed claim for the confirmation of the tract claimed by him. Meanwhile, rich mining deposits had been discovered in that locality. The Court of Private Land Claims decided in favor of the Government. Santa Annas decrees, it held, were valid. He was President of Mexico, and the United States Government had recognized him as such when it negotiated the Gadsden Purchase with him. Accordingly, the Court of Private Land Claims held, his decrees had to be accepted as authoritative.
Camou appealed to the Supreme Court of the United States. Seldom if ever, had this Court been put in a more ticklish or embarrassing position. In the cases in which it had validated titles to tens of millions of acres in Florida, Louisiana, Missouri, California and other sections it had consistently held that the certificate of the officials in office was final and conclusive, even if the tenure of those officials were brief, and changes and revolutions constantly upheaved new men into authority.63
So far as Mexican law was concerned the Supreme Court of the United States could not apply its celebrated dictum that no legislation could be passed impairing the sacred obligation of a contract. On the other hand, if the decision of the Court of Private Land Claims were sustained it would mean that titles to vast areas of land covered by alleged Mexican grants, including gold, silver, copper and other mines of fabulous riches, would be declared defective.
The Supreme Court Finds a Way Out.
The Supreme Court of the United States was in a quandary. How was it to get around the admitted facts ?
By an extraordinary decision it achieved the feat of squaring the circle to its own satisfaction. First it admitted (what it could not deny) that Santa Anna had been the actual and recognized President, and that the United States had rightfully dealt with him in a political way in the negotiation and purchase of territory. But Brewer went on with a species of reasoning that no other court in the world would or could have used. When, he said, the courts are called upon to inquire as to personal rights existing in the ceded territory, a mere declaration by the temporary executive cannot be deemed absolutely and finally controlling. . . . It is going too far to hold that the mere declaration of law made by a temporary dictator,64 never enforced as against an individual grantee in possession of lands, is to be regarded as operative and determinative of the latters rights. Brewer concluded, We think this arbitrary declaration made by a temporary dictator was not potent to destroy the title.65
The decision of the Court of Private Land Claims was reversed ; and that railroad, mining and other corporations, instead of the Government, now hold incalculably rich areas of copper, gold and silver mines, oil and timber lands and other natural resources, is due to that decision and accompanying decisions of the Supreme Court of the United States. To say that the Southern Pacific Railroad was one of the corporations interested is but stating a fact.
An Administration of Railroad Lawyers.
During Clevelands administration, new Justices came on the Supreme Court Bench. One of these appointments was that of United States Senator Edward D. White, whose career we shall describe in a later chapter. The other was that of Rufus W. Peckham. Before reviewing Peckhams career, it is important to summarize an especially notable decision which was argued just before Peckham went on the Bench.
President Cleveland himself had been a railroad attorney ; he had represented the Canada Southern Railway and other corporations. Likewise many of the members of his cabinet, or his close associates, were railroad attorneys or railroad stockholders. Attorney-General Olney had been a director of the Philadelphia, Wilmington and Baltimore Railroad,66 now an integral part of the Pennsylvania Railroad system. Olney had also been counsel for the Eastern Railroad Company, the Framingham and Lowell Railroad and other railroads.67 William C. Whitney, who had been Secretary of the Navy under Clevelands first administration, was the chief promoter and campaign fund accumulator for Clevelands renomination and reŽlection in 1892. Whitney was allied by marriage with Senator Henry B. Payne, railroad magnate and treasurer of the Standard Oil Company. Whitney, at this time, was associated with other capitalists in control of the Metropolitan Street Railway Company of New York. According to the specific charges uttered and published by Col W.N. Amory, these financiers stole at least $30,000,000 by the manipulation of that company, and an estimated $60,000,000 in addition.68
Whitney had been associated in 1884-1885 with William H. Vanderbilt, the Rockefellers, Stephen B. Elkins, D.O. Mills and other capitalists in the Southern Pennsylvania Railroad transaction a very remarkable piece of profitable manipulation and duplicity described elsewhere.69 Whitney was in the closest touch with the great capitalist interests. So, also, was Daniel S. Lamont, Clevelands former private secretary, and Secretary of War under Clevelands second administration. Subsequent developments revealed him associated with J. Pierpont Morgan, George F. Baker and other powerful capitalists in the Northern Securities Company, illegally formed to combine the interests of the Northern Pacific Railroad and the Great Northern Railroad.70
The United States Senate was filled with railroad attorneys or magnates : Allison, Spooner, Gorman, Aldrich (whose daughter married John D. Rockefeller, Jr.), Hoar and many other representatives of railroad or associated interests were conspicuous in that body. One of the most eminent Senators, Cushman K. Davis, had represented Russell Sage and had also been attorney for Hills Great Northern Railway.71 The Senators belonging to the capitalist interests were in the majority, and held control over the confirmation of appointments.
But at this juncture there was a group of men in both branches of Congress who, while comparatively small in number, were able by their persistence and agitation to exert an influence on legislation and to expose predatory bills. These were the representatives of the Populist Party, which in the election of 1892 polled more than a million votes, and put five Senators and ten Representatives in Congress. The old political parties viewed this formidable vote with dread and apprehension. It was essentially a middle-class movement. This was the reason at that particular time why its progress and strength evoked dismay among the great capitalists, who were as yet very far from the final process of crushing the middle class and consummating their movement for concentration of control of all transportation systems and industry. Few as the Populist representatives in Congress were, they had behind them this large voting strength. Moreover, even a few forceful men in Congress then proved themselves able to compel the majority to make a certain concession.
The Income-Tax Bill.
This concession was the passage of the bill for the taxation of incomes. Bitterly opposed, the income-tax bill became a law in 1894 without President Clevelands signature. On five different occasions the Supreme Court of the United States had declared the income tax constitutional.
The large capitalist interests were determined to do away with this law by one means or another. To collect a specific new tax it was necessary at least it was held to be so that Congress should pass an appropriation for that purpose. Although the Government had already begun preparations to collect the tax, the Secretary of the Treasury, Carlisle, pretended that he had no funds for the purpose ; this was the same Carlisle who in 1895 turned over a bond issue, under circumstances of the greatest scandal, to a syndicate headed by J. Pierpont Morgan, thus virtually giving that syndicate a profit of $18,000,000. Morgans lawyer, Francis Lynde Stetson, had been Clevelands law partner from 1889 to 1892, and was now a frequent confidential visitor to the White House.
A Bit of Secret History.
What happened next was related to this author by Senator Pettigrew. The House, he said, passed an urgency deficit bill appropriating $250,000 to collect the tax. When this bill came before the Senate, Senator Quay of Pennsylvania telephoned me to come to his house. There I met a certain Standard Oil magnate. Quay argued that the Treasury Department had been tampered with, and urged me to say so in the Senate, and to get me and the other four Senators to vote against the bill. His object, of course, was to defeat the bill, so that the Treasury Department could again fall back upon the excuse that it had no available funds with which to collect the tax. Theres $250,000 for you, if you do this, Quay assured me. I refused.
The bill was passed. There was now only one possible way to get rid of the income tax act ; this was to have it declared unconstitutional by the Supreme Court of the United States. The preliminaries to an action were thus arranged :
The board of directors of the Farmers Loan and Trust Company met and passed a resolution that they would voluntarily pay the income tax, which notice was sent to all of the stockholders. One of the prominent capitalists in the company, Pollock, then brought a suit to restrain the company from paying the tax.
When the case was argued before the Supreme Court of the United States, Clarence A. Seward represented Pollock, and Joseph H. Choate, a prominent corporation attorney, was the Farmers Loan and Trust Companys principal counsel.72 To neutralize the rebuttal that the Supreme Court during past times had itself on no less than five occasions held that the income tax was valid, Choate submitted a lengthy list of precedents to persuade the court that it did not have to follow its own precedents !
Justice Jackson was ill at his home in Tennessee, which left eight Justices sitting. From later developments it is quite clear that at first five members of the whole body were opposed to declaring the income tax unconstitutional. On April 8, 1895, the Supreme Court declared some of the clauses of the act unconstitutional but the main point was not passed upon until May 20, 1895.
In the meantime, Justice Jackson, although sick and near death, was urgently solicited to hurry to Washington to participate in the final vote. According to a despatch in the New York World, published May 7, 1895, the Baltimore and Ohio Railroad which, as a corporation, was anxious to have the income tax declared unconstitutional, was eager to land Jackson in Washington. A sleeping car was sent to Belle Meade to enable him to get a comfortable sleep and to journey with the least fatigue. That this insinuation against Jackson was without foundation was soon shown.
A Justice Changes His Mind.
When the final vote was taken, it turned out that one Justice had changed his mind, over night, and arrayed himself against the income tax. This Justice was said to be Shiras who, as we have seen, came from the same State as Senator Quay, and who had been counsel at Pittsburg for the Baltimore and Ohio Railroad system. The pro-income tax newspapers freely stated that the vacillating Justice was Shiras, and denounced him. This tergiversation caused a very consequential sensation, and was bitterly commented upon in the speeches and declarations of supporters of the income tax. But, of course, none of Shiras critics were so venturesome as to make specific charges of improper motives or acts ; had such charges been made, no scintilla of proof could have been discovered in the records.
The Income Tax Declared Unconstitutional.
By a vote of five to four the Supreme Court declared the whole income tax act unconstitutional, in that it was a direct tax and violated the Constitution by making no provision for an apportionment among the States according to the population.
One of the reasons given by Justice Field in declaring the income tax unconstitutional was that it would reduce judicial salaries ; he pointed out, with great seriousness and solicitude, that the judges were protected by that clause of the Constitution which provides that their compensation shall not be diminished during their continuance in office !
Justices Brown, Jackson, Harlan and White entered a vigorous dissenting opinion.73 . . . By its present construction of the Constitution, said Harlan, the Court for the first time in all its history declares that our Government has been so framed that in matters of taxation for its support and maintenance those who have incomes derived from the renting of real estate or from the leasing or using of tangible property, bonds, stock, and investments of whatever kind, have privileges that cannot be accorded to those having incomes derived from the labor of their hands or the exercise of their skill or the use of their brains.
But this decision was only one of successive decisions fostering the growth of capitalism, and conceding its increasing demands, while at the same time other important decisions were forthcoming inimical to the working class and aimed to undermine, if not destroy, its organized defenses. The aggrandizing of plutocracy and hostile decrees against working-class action went hand in hand in the productions of the Supreme Court of the United States. What these decisions were, and the circumstances and forces behind them, are related in the next chapter.
1 Poors Railroad Manual, for 1890 : pp. 1297 and 1300.
2 Article XVI, Sec. 57, General Provisions, Constitution of Texas.
3 Report of the Capitol Building Commissioners to the Governor of Texas, Jan. 1, 1883: p. 31.
4 Third Biennial Report of the Capitol Building Commission, 1886 : p. 199.
5 Ibid., 201.
6 Third Biennial Report of the [Texas] Capitol Building Commission, 1886: p. 204.
7 Final Report of the Capitol Building Commissioners, 1888 : p. 32.
8 Ibid., p. 36. At the time this land was originally granted, its great value for agricultural and grazing purposes was pointed out. Much of it, reported N.L. Norton, Commissioner to survey the lands, in 1883, was wheat-bearing soil of a high degree. The thousands of prairie dogs met on every hand, and which are never located beyond the convenient reach of water, undoubtedly attest the fact of a supply underground, which may be utilized by mechanical appliances at a moderate cost. Report of the Capitol Building Commissioners to the Governor of Texas, Jan. 1, 1883 : p. 61.
9 XI Wallaces Reports, Supreme Court of the U.S., p. 108.
10 XIX Wallaces Reports, 499. Justice Field denied the injunction applied for, Fields ground being that the mere charge that a tax was illegal was not basis enough for an injunction in a suit of equity. Field pointed out that there must be other special circumstances, such as that the tax would produce irreparable injury, etc.
11 67 Illinois Reports, 298.
12 Ibid., 349.
13 93 Illinois Reports, 601-613.
14 101 Illinois Reports, 595-609.
15 Case of Chicago, Burlington and Quincy Railroad vs. Samuel Warner, 108 Illinois Reports, 544.
16 Ibid., 540-541.
17 108 Illinois Reports, 538-555. (Jan., 1884.) On the Illinois Supreme Court Bench at this time were also Justices Sheldon, Schofield, Dickey, Scott and Craig, nearly all of whom had been railroad attorneys. For example, Schofield had been attorney for the St. Louis, Vardalia and Terre Haute Railroad at the time of his election to the Illinois Supreme Court (67 Illinois Reports, 608, etc.), of which court he later became Chief Justice.
18 118 Illinois Reports, 17.
19 Poors railroad manual for 1890 : p. 1097, etc.
20 Nortons Chicago Traction, p. 142.
21 See, Ibid, in which this long-prevailing corruption is described.
22 See, Case of Speck et al. vs. Pullman Palace Car Company, 121 Illinois Reports, 34. (May, 1887.) The complaint recited that the lands were originally owned by Charles Dunn, who had died in 1869, and that his widow was defrauded out of the property by deceit, the trickery of lawyers and fraudulent sale. Justice Schofield (who, as has been noted, had been a railroad lawyer) decided in favor of the Pullman Company.
23 On that date a check for the amount was delivered to John R. Thompson, treasurer of Cook County. The Field estate decided to compromise before the action went to trial.
24 121 Illinois Reports, 532-542. Seventeen years later, Fuller, as Chief Justice of the Supreme Court of the United States, delivered that courts decision refusing an application of the Peoples Gaslight and Coke Company for an injunction to restrain the City of Chicago from enforcing an ordinance limiting gas rates to seventy-five cents per thousand feet. 194 U.S. Reports, 7.
25 33 Federal Reports, 721, and Ibid., 732.
26 By a bare majority vote of four to three. (146 U.S. Reports, 455.) The ground of the decision was that the legislature held the title to submerged lands under navigable waters in trust, and could not alienate those lands except in such small parcels as public interest might require. Justice Field wrote the courts opinion ; it was a commendably creditable decision for Field.
27 See a detailed account in the North American Review, issue of February, 1888. Gould and Sage, after looting the railroad of millions of dollars, had thrown it into bankruptcy, and caused the appointment of Humphreys and Tutt, two of its former directors and officers who had been part of the directorate that brought the system to bankruptcy.
28 XIII Michigan Reports, 382 and 440 ; XIX Ibid., 393 and 430 ; XXIII Ibid., 188 ; etc.
29 XIII Ibid., 37, and XXVIII Ibid., 290, etc.
30 XXX Ibid., 39 ; XXXI Ibid., 7; XXXII Ibid., 235.
31 House Executive Documents, 1885-1886, Vol. II.
32 Poors Railroad Manual for 1890 : p. 1327 ; IV Supreme Court Reporter, 369, etc.
33 163 United States Reports, 683.
34 Case of Chandler vs. Calumet and Hecla Mining Company, 149 U.S. Reports, 79-95.
35 U.S. Senate Documents, Special Session, Thirty-second Congress, 1851, Vol. III, Doc. No. 4.
36 See, Annual Report for 1885, of Commissioner Sparks, of the General Land Office, House Ex. Docs., 1885-1886, Vol. II.
37 John Moodys The Truth About The Trusts, p. 39.
38 From the New York World, of January 23, 1892 : Justice Bradley was, perhaps, the richest member of the Bench, and leaves a fortune of at least $1,000,000. Other newspaper estimates placed Bradleys wealth at from $500,000 to $700,000.
39 See, 56 Pa. State Reports, 295 (year 1867) ; 58 Ibid., 41 ; 76 Ibid., 392, 489 and 513 ; 77 Ibid., 183 ; 81 Ibid., III, etc., etc.
40 59 Ibid., 435.
41 56 Pa. State Reports, 295.
42 76 Pa. State Reports, 392.
43 69 Ibid., 338; 80 Ibid., 35 ; IV Supreme Court Reporter (Supreme Court of the U.S.), 336, etc.
44 The railroads, relates Lincoln Steffens, began the corruption of the city, and he then proceeds to describe the development and extent of that corruption. (See, Pittsburg : A City Ashamed in The Shame of the Cities, 149-i89.) Magees railways, combined into the Consolidated Traction Company, were capitalized at $30,000,000. The extensive graft investigation at Pittsburg, in March, 1910, revealed that the officers of the Second National Bank, the Farmers Deposit National Bank, the Columbia National Bank and other large banks had bribed city officials to favor them as depositories of city funds. The railroads, it was disclosed, had heavily and continuously bribed members of the Common Council by means (to a considerable extent) of free transportation passes, which the Aldermen then sold at a large profit to themselves. The ramifications of corruption brought out by this investigation were enormous. Two score of men who had been or who were members of the City Council were indicted, and a number of those inculpated confessed.
45 See, Heiskells Tennessee Reports, Vols. IX, X, etc., etc. ; Caldwells Reports, Vol. IV, etc.
46 This corporation was an extremely large one. It owned its own sources of iron ore and coal supply, estimated, in 1907, at from 500,000.000 to 700,000,000 tons of iron ore and two billion tons of coal. It is now a constituent part of the Steel Trust.
47 Summary of Report of the Commissioner of Corporations on the Lumber Industry, Part I, Standing Timber (Feb. 13, 1911): pp. 3 and 8.
48 41 Federal Reports, 494.
49 Ibid., 619.
50 41 Federal Reports, 624-626.
51 Ibid., 501.
52 See, 148 U.S. Reports, 44. Among the attorneys for the companies were Dolph, Ballinger, Mallory, Simon and others, some of whom became United States Senators.
53 Ibid., 31-49.
54 See, Case of Ames vs. Union Pacific Company, 64 Federal Reports, 176.
55 The Government is now suing to annul title to the Southern Pacific lands in Oregon for non-compliance with the terms of the original grants. It has also, it may be added, brought an action against the same company to recover 6,100 acres of oil lands in Kern County, California, alleging that they were patented by fraud.
56 Summary of Report of the Commissioner of Corporations on the Lumber Industry, Part I: 5, 25, 26, etc.
57 The report of the select committee of Congress exposing the corruption used is set forth in Report No. 243, Vol. III, Reports of Committees, Thirty-fourth Congress, Third Session, 1856-57. The corruption fund amounted to $100,000.
58 See, Case of Dubuque and Pacific Railroad Company vs. Litchfield, XXIII Howard, 85.
59 U.S. vs. Des Moines Navigation and Railway Company, 142 U.S. Reports, 540.
60 Ibid., 543.
61 Central Pacific Railroad vs. California, 162 U.S. Reports, 128.
62 These decrees are set forth in full in 171 U.S. Reports, 288-289.
63 Justice Brewer was not ignorant of the fact that Mexican governors fraudulently and indirectly made grants to themselves. At the exact time of his decision in the Camou case, the admitted facts in the case of Faxon vs. U.S. revealed that, in 1842, Governor Manuel Gandara, of Sonoro, boldly seized lands belonging to the Indian pueblo, and granted them to his brother-in-law, Francisco Aguilar, to be held in trust for him (Gandara). The purchase money was supplied by Gandara. (171 U.S. Reports, 246.)
It is interesting to observe that Francis J. Heney, who later was so much puffed up as an exposer of corruption, was Faxons attorney in this case. It is also worth noting that the Supreme Court of the United States decided that Gandara never had been vested with power to make the grant. Compare with decision in the Camou case.
64 General Santa Anna was elected President of Mexico for the term beginning April 1, 1833. He filled that office from 1841 to 1845. Deposed and exiled, he was recalled and made President in 1846, and commanded the army in the Mexican War with the United States. After Scotts occupation of Mexico, he resigned, but was recalled by the army and made president in April, 1853. A revolution of the land appropriators drove him into exile in August, 1855.
65 See, Case of Camou vs. U.S., 171 U.S. Reports, 277-291. Also similar case of Perrin vs. U.S., Ibid., 292. United States Senator John T. Morgan was Perrins attorney. Morgan had long been the law partner of John W. Lapsley, so conspicuous in the Texas land frauds. Early in his political career, Morgan was attorney for the Selma and Gulf Railroad, of which Lapsley was a director. See, 45 Alabama Reports, 698 (year 1871), and 46 Ibid., 235, etc.
66 Poors Railroad Manual for 1880, p. 381.
67 124 Mass. Reports, 520 and 528 ; 130 Ibid., 195 ; 133 Ibid., 115, etc.
68 See Amorys The Truth About Metropolitan, 190o6, in which the figures and modus operandi are set forth at length. Amory has never been sued for libel, nor have his facts been shown erroneous. Much of the corruption charged against the Metropolitan Street Railway Company was confirmed by the testimony before the New York Legislative ( Graft Hunt ) Committee, in September, 1910. It was then specifically revealed that the bribery of prominent members of the Legislature was an habitual performance, and that the corruption fund annually used was not merely considerable, but great. Another form of corruption was that of contributions to capitalist political parties. In the year 1902, for example, the Metropolitan Street Railway Company contributed $18,000 to the New York State Democratic Committee and $25,000 to the Republican State Committee.
69 In the History of the Great American Fortunes, Vol. II : 208-210.
70 See Case of Northern Securities Company vs. U.S., 193 U.S. Reports, 202. Lamont was sued by the Government jointly with Morgan, Baker, Stetson, etc.
71 161 U.S. Reports, 702 : 163 Ibid., 653, etc.
72 In the New York Times, issue of June 2, 1907, the statement was made that Choate received a fee of $200,000 for his argument in this case.
73 Chief Justice Fuller wrote the majority decision. In the opinion rendered on April 8, 1895, it was decided that rents from real estate were not taxable by Congress without interstate apportionment. (157 U.S. Reports, 429.) The final decision of May 20 exempted the entire income from direct taxation by Congress, whether that income were derived from rents or from any other sources, unless the tax were apportioned among the States as respected population. (158 U.S. Reports, 601.) Chief Justice Walter Clark of the North Carolina Supreme Court estimated that that change of a single vote saved the rich at least a billion dollars a year.