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Great Fortunes from Railroads

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ACTUAL SETTLERS EXCLUDED FROM PUBLIC DOMAIN.

"Wealthy speculators and powerful syndicates," reported Commissioner
Sparks,

covet the public domain, and a survey is the first step in the
accomplishment of this desire. The bulk of deposit surveys have been
made in timber districts and grazing regions, and the surveyed lands
have immediately been entered under the timber land, preëmption,
commuted homestead, timber-culture and desert-land acts. So
thoroughly organized has been the entire system of procuring the
survey and making illegal entry of lands, that agents and attorneys
engaged in this business have been advised of every official
proceeding, and enabled to present entry applications for the lands
at the very moment of the filing of the plots of survey in the local
land offices.

Prospectors employed by lumber firms and corporations seek out and
report the most valuable timber tracts in California, Oregon,
Washington Territory or elsewhere; settler's applications are
manufactured as a basis for survey; contracts are entered into and
pushed through the General Land Office in hot haste; a skeleton
survey is made... entry papers, made perfect in form by competent
attorneys, are filed in bulk, and the manipulators enter into
possession of the land. . . . This has been the course of proceeding
heretofore. [Footnote: House Documents, etc., 1885-86, ii: 167.]

Commissioner Sparks described a case where it was discovered by his
special agents in California that an English firm had obtained
100,000 acres of the choicest red-wood lands in that State. These
lands were then estimated to be worth $100 an acre. The cost of
procuring surveys and fraudulent entries did not probably exceed $3
an acre. [Footnote: House Ex. Docs., etc., 1885-86, ii: 167.]

"In the same manner," Commissioner Sparks continued, "extensive coal
deposits in our Western territory are acquired in mass through
expedited surveys, followed by fraudulent pre-emption and commuted
homestead entries." [Footnote: Ibid.] He went on to tell that nearly
the whole of the Territory (now State) of Wyoming, and large portions
of Montana, had been surveyed under the deposit system, and the lands
on the streams fraudulently taken up under the desert land act, to
the exclusion of actual settlers. Nearly all of Colorado, the very
best cattle-raising portions of New Mexico, the rich timber lands of
California, the splendid forest lands of Washington Territory and the
principal part of the extensive pine lands of Minnesota had been
fraudulently seized in the same way. [Footnote: Ibid., 168.] In all
of the Western States and Territories these fraudulent surveys had
accomplished the seizure of the best and most valuable lands. "To
enable the pressing tide of Western immigration to secure homes upon
the public domain," Commissioner Sparks urged, "it is necessary...
that hundreds of millions of acres of public lands now appropriated
should be wrested from illegal control." [Footnote: Ibid.] But
nothing was done to recover these stolen lands. At the very time
Commissioner Sparks--one of the very few incorruptible Commissioners
of Public Lands,--was writing this, the land-grabbing interests were
making the greatest exertions to get him removed. During his tenure
of office they caused him to be malevolently harassed and assailed.
After he left office they resumed complete domination of the Land
Commissioner's Bureau. [Footnote: The methods of capitalists in
causing the removal of officials who obstructed or exposed their
crimes and violent seizure of property were continuous and long
enduring. It was a very old practice. When Astor was debauching and
swindling Indian tribes, he succeeded, it seems, by exerting his
power at Washington, in causing Government agents standing in his way
to be dismissed from office. The following is an extract from a
communication, in 1821, of the U. S. Indian agent at Green Bay,
Wisconsin, to the U. S. Superintendent of Indian Trade:

"The Indians are frequently kept in a state of intoxication, giving
their furs, etc., at a great sacrifice for whiskey.... The agents of
Mr. Astor hold out the idea that they will, ere long be able to break
down the factories [Government agencies]; and they menace the Indian
agents and others who may interfere with them, with dismission from
office through Mr. Astor. They say that a representation from Messrs.
Crooks and Stewart (Mr. Astor's agents) led to the dismission of the
Indian agent at Mackinac, and they also say that the Indian agent
here is to be dismissed...."--U.S. Senate Documents, First Session,
Seventeenth Congress, 1821-22, Vol. i, Doc. No. 60:52-53.]


THE GIGANTIC PRIVATE LAND CLAIM FRAUDS.

The frauds in the settlement of private land claims on alleged grants
by Spain and Mexico were colossal. Vast estates in California, New
Mexico, Arizona, Colorado and other States were obtained by collusion
with the Government administrative officials and Congress. These were
secured upon the strength of either forged documents purporting to be
grants from the Spanish or Mexican authorities, or by means of
fraudulent surveys.

One of the most notorious of these was the Beaubin and Miranda grant,
otherwise famous thirty years ago as the Maxwell land grant. A
reference to it here is indispensable. It was by reason of this
transaction, as well as by other similar transactions, that one of
the American multimillionaires obtained his original millions. This
individual was Stephen B. Elkins, at present a powerful member of the
United States Senate, and one of the ruling oligarchy of wealth. He
is said to possess a fortune of at least $50,000,000, and his
daughter, it is reported, is to marry the Duke of the Abruzzi, a
scion of the royal family of Italy.

The New Mexico claim of Beaubin and Miranda transferred to L. B.
Maxwell, was allowed by the Government in 1869, but for ninety-six
thousand acres only. The owner refused to comply with the law, and in
1874 the Department of the Interior ordered the grant to be treated
as public lands and thrown open to settlement. Despite this order,
the Government officials in New Mexico, acting in collusion with
other interested parties, illegally continued to assess it as private
property. In 1877 a fraudulent tax sale was held, and the grant,
fraudulently enlarged to 1,714,764.94 acres, was purchased by M. M.
Mills, a member of the New Mexico Legislature. He transferred the
title to T. B. Catron, the United States Attorney for New Mexico.
Presently Elkins turned up as the principal owner. The details of how
this claim was repeatedly shown up to be fraudulent by Land
Commissioners and Congressional Committees; how the settlers in New
Mexico fought it and sought to have it declared void, and the law
enforced; [Footnote: "Land Titles in New Mexico and Colorado," House
Reports First Session, Fifty-second Congress, 1891-92, Vol. iv,
Report No. 1253. Also, House Reports, First Session, Fifty-second
Congress, 1891-92, Vol. vii, Report No. 1824. Also, House Reports,
First Session, Forty-ninth Congress, 1885-86, ii: 170.] and how
Elkins, for some years himself a Delegate in Congress from New
Mexico, succeeded in having the grant finally validated on technical
grounds, and "judicially cleared" of all taint of fraud, by an
astounding decision of the Supreme Court of the United States--a
decision contrary to the facts as specifically shown by successive
Government officials--all of these details are set forth fully in
another part of this work. [Footnote: See "The Elkins Fortune," in
Vol. iii.]

The forgeries and fraudulent surveys by which these huge estates were
secured were astoundingly bold and frequent. Large numbers of private
land claims, rejected by various Land Commissioners as fraudulent,
were corruptly confirmed by Congress. In 1870, the heirs of one
Gervacio Nolan applied for confirmation of two grants alleged to have
been made to an ancestor under the colonization laws of New Mexico.
They claimed more than 1,500,000 acres, but Congress conditionally
confirmed their claim to the extent of forty-eight thousand acres
only, asserting that the Mexican laws had limited to this area the
area of public lands that could be granted to one individual. In 1880
the Land Office re-opened the claim, and a new survey was made by
surveyors in collusion with the claimants, and hired by them. When
the report of this survey reached Washington, the Land Office
officials were interested to note that the estate had grown from
forty-eight thousand acres to five hundred and seventy-five thousand
acres, or twelve times the legal quantity. [Footnote: House Reports,
First Session, Forty-ninth Congress, 1885-86, ii: 171.] The actual
settlers were then evicted. The romancer might say that the officials
were amazed; they were not; such fraudulent enlargements were common.

The New Mexico estate of Francis Martinez, granted under the Mexican
laws restricting a single grant to forty-eight thousand acres, was by
a fraudulent survey, extended to 594,515.55 acres, and patented in
1881. [Footnote: Ibid., 172.] A New Mexico grant said to have been
made to Salvador Gonzales, in 1742, comprising "a spot of land to
enable him to plant a cornfield for the support of his family." was
fraudulently surveyed and enlarged to 103,959.31 acres--a survey
amended later by reducing the area to 23,661 acres. [Footnote: House
Reports, etc, 1885-86, ii: 172.] The B. M. Montaya grant in New
Mexico, limited to forty-eight thousand acres, under the Mexican
colonization laws, was fraudulently surveyed for 151,056.97 acres.
The Estancia grant in New Mexico also restricted under the
colonization act to forty-eight thousand acres, was enlarged by a
fraudulent survey to 415,036.56 acres. [Footnote: Ibid., 173.] In
1768, Ignacio Chaves and others in New Mexico petitioned for a tract
of about two and one-fourth superficial leagues, or approximately a
little less than ten thousand acres. A fraudulent survey magnified
this claim to 243,036.43 acres. [Footnote: Ibid.]

These are a very few of the large number of forged or otherwise
fraudulent claims.

Some were rejected by Congress; many, despite Land Office protests,
were confirmed. By these fraudulent and corrupt operations, enormous
estates were obtained in New Mexico, Colorado and in other sections.
The Pablo Montaya grant comprised in all, 655,468.07 acres; the Mora
grant 827,621.01 acres; the Tierra Amarilla grant 594,515 acres, and
the Sangre de Cristo grant 998,780.46 acres. All of these were
corruptly obtained. [Footnote: See Resolution of House Committee on
Private Land Claims, June, 1892, demanding a thorough investigation.
The House took no action.--Report No. 1824, 1892.] Scores of other
claims were confirmed for lesser areas. During Commissioner Sparks'
tenure of office, claims to 8,500,000 acres in New Mexico alone were
pending before Congress. A comprehensive account of the operations of
the land-grabbers, giving the explicit facts, as told in Government
and court records, of their system of fraud, is presented in the
chapter on the Elkins fortune.


FORGERY, PERJURY AND FRAUDULENT SURVEY.

Reporting, in 1881, to the Commissioner of the General Land Office,
Henry M. Atkinson, U. S. Surveyor-General of New Mexico, wrote that
"the investigation of this office for the past five years has
demonstrated that some of the alleged grants are forgeries." He set
forth that unless the court before which these claims were
adjudicated could have full access to the archives, "it is much more
liable to be imposed upon by fraudulent title papers." [Footnote:
"The Public Domain," etc. 1124. Also see next Footnote.] In fact, the
many official reports describe with what cleverness the claimants to
these great areas forged their papers, and the facility with which
they bought up witnesses to perjure for them. Finding it impossible
to go back of the aggregate and corroborative "evidence" thus
offered, the courts were frequently forced to decide in favor of the
claimants. To use a modern colloquial phrase, the cases were "framed
up." In the case of Luis Jamarillo's claim to eighteen thousand acres
in New Mexico, U. S. Surveyor-General Julian of New Mexico, in
recommending the rejection of the claim and calling attention to the
perjury committed, said:

When these facts are considered, in connection with the further and
well-known fact that such witnesses can readily be found by grant
claimants, and that in this way the most monstrous frauds have been
practiced in extending the lines of such grants in New Mexico, it is
not possible to accept the statement of this witness as to the west
boundary of this grant, which he locates at such a distance from the
east line as to include more than four times the amount of land
actually granted. [Footnote: Senate Executive Documents, First
Session, Fiftieth Congress, 1887-88, Vol. i, Private Land Claim No.
103, Ex. Doc. No. 20:3. Documents Nos. 3 to 11, 13 to 23, 25 to 29
and 38 in the same volume deal with similar claims.]

"The widespread belief of the people of this country," wrote
Commissioner Sparks in 1885, "that the land department has been
largely conducted to the advantage of speculation and monopoly,
private and corporate, rather than in the public interest, I have
found supported by developments in every branch of the service.... I
am satisfied that thousands of claims without foundation in law or
equity, involving millions of acres of public land, have been
annually passed to patent upon the single proposition that nobody but
the Government had any _adverse_ interest. The vast machinery of
the land department has been devoted to the chief result of conveying
the title of the United States to public lands upon fraudulent
entries under loose construction of law." [Footnote: House Ex. Docs.,
1885-86, ii: 156.] Whenever a capitalist's interest was involved, the
law was always "loosely construed," but the strictest interpretation
was invariably given to laws passed against the working population.

It was estimated, in 1892, that 57,000,000 acres of land in New
Mexico and Colorado had, for more than thirty years, been unlawfully
treated by public officers as having been ceded to the United States
by Mexico. The Maxwell, Sangre de Cristo, Nolan and other grants were
within this area. The House Committee on Private Land Claims reported
on April 29, 1892: "A long list of alleged Mexican and Spanish grants
within the limits of the Texas cession have been confirmed, or quit
claimed by Congress, under the false representation that said alleged
grants were located in the territory of New Mexico ceded by the
treaty; an enormous area of land has long been and is now held as
confirmed Mexican and Spanish grants, located in the territory of
Mexico ceded by the treaty when such is not the fact." [Footnote:
House Report, 1892, No. 1253:8.]

In Texas the fraudulent, and often, violent methods of the seizure of
land by the capitalists were fully as marked as those used elsewhere.

Upon its admittance to the Union, Texas retained the disposition of
its public lands. Up to about the year 1864, almost the entire area
of Texas, comprising 274,356 square miles, or 175,587,840 acres, was
one vast unfenced feeding ground for cattle, horses and sheep. In
about the year 1874, the agricultural movement began; large numbers
of intending farmers migrated to Texas, particularly with the
expectation of raising cattle, then a highly profitable business.
They found huge stretches of the land already preempted by individual
capitalists or corporations. In a number of instances, some of these
individuals, according to the report of a Congressional Committee, in
1884, dealing with Texas lands, had each acquired the ownership of
more than two hundred and fifty thousand acres.

"It is a notorious fact," this committee reported, "that the public
land laws, although framed with the special object of encouraging the
public domain, of developing its resources and protecting actual
settlers, have been extensively evaded and violated. Individuals and
corporations have, by purchasing the proved-up claims, or purchases
of ostensible settlers, employed by them to make entry, extensively
secured the ownership of large bodies of land." [Footnote: House
Reports, Second Session, Forty-eighth Congress, 1884-85, Vol. xxix,
Ex. Doc. No. 267:43.] The committee went on to describe how, to a
very considerable extent, "foreigners of large means" had obtained
these great areas, and had gone into the cattle business, and how the
titles to these lands were se-cured not only by individuals but by
foreign corporations. "Certain of these foreigners are titled
noblemen. Some of them have brought over from Europe, in considerable
numbers, herdsmen and other employees who sustain to them a dependent
relationship characteristic of the peasantry on the large landed
estates of Europe." Two British syndicates, for instance, held
7,500,000 acres in Texas. [Footnote: House Reports, etc., 1884-85,
Doc. No. 267:46.]

This spoliation of the public domain was one of the chief grievances
of the National Greenback-Labor party in 1880. This party, to a great
extent, was composed of the Western farming element. In his letter
accepting the nomination of that party for President of the United
States, Gen. Weaver, himself a member of long standing in Congress
from Iowa, wrote:

An area of our public domain larger than the territory occupied by
the great German Empire has been wantonly donated to wealthy
corporations; while a bill introduced by Hon. Hendrick B. Wright, of
Pennsylvania, to enable our poor people to reach and occupy the few
acres remaining, has been scouted, ridiculed, and defeated in
Congress. In consequence of this stupendous system of land-grabbing,
millions of the young men of America, and millions more of
industrious people from abroad, seeking homes in the New World, are
left homeless and destitute. The public domain must be sacredly
reserved to actual settlers, and where corporations have not complied
strictly with the terms of their grants, the lands should be at once
reclaimed.


INCREASE OF FARM TENANTRY.

Without dwelling upon all the causative factors--involving an
extended work in themselves--some significant general results will be
pointed out.

The original area of public domain amounted to 1,815,504,147 acres,
of which considerably more than half, embracing some of the very best
agricultural, grazing, mineral and timber lands, was already
alienated by the year 1880. By 1896 the alienation reached
806,532,362 acres. Of the original area, about 50,000,000 acres of
forests have been withdrawn from the public domain by the Government,
and converted into forest reservations. Large portions of such of the
agricultural, grazing, mineral and timber lands as were not seized by
various corporations and favored individuals before 1880, have been
expropriated west of the Mississippi since then, and the process is
still going, notably in Alaska. The nominal records of the General
Land Office as to the number of homesteaders are of little value and
are very misleading. Immense numbers of alleged homesteaders were, as
we have copiously seen, nothing but paid dummies by whose entries
vast tracts of land were seized under color of law. It is
indisputably clear that hundreds of millions of acres of the public
domain have been obtained by outright fraud.

Notwithstanding the fact that only a few years before, the Government
had held far more than enough land to have provided every
agriculturist with a farm, yet by 1880, a large farm tenant class had
already developed. Not less than 1,024,061 of the 4,008,907 farms in
the United States were held by renters. One-fourth of all the farms
in the United States were cultivated by men who did not own them.
Furthermore, and even more impressive, there were 3,323,876 farm
laborers composed of men who did not even rent land. Equally
significant was the increasing tendency to the operating of large
farms by capitalists with the hired labor. Of farms under
cultivation, extending from one hundred to five hundred acres, there
were nearly a million and a half--1,416,618, to give the exact
number--owned largely by capitalists and cultivated by laborers.
[Footnote: Tenth Census, Statistics of Agriculture: 28.]

Phillips, who had superior opportunities for getting at the real
facts, and whose volume upon the subject issued at the time is well
worthy of consideration, thus commented upon the census returns:

It will thus be seen that of the 7,670,493 persons in our country
engaged in agriculture, there are 1,024,601 who pay rent to persons
not cultivating the soil; 1,508,828 capitalist or speculating owners,
who own the soil and employ laborers; 804,522 of well-to-do farmers
who hire part of their work or employ laborers, and 670,944 who may
be said to actually cultivate the soil they own: the rest are hired
workers.

Phillips goes on to remark:

Another fact must be borne in mind, that a large number of the
2,984,306 farmers who own land are in debt for it to the money
lenders. From the writer's observation it is probable that forty per
cent, of them are so deeply in debt as to pay a rent in interest.
This squeezing process is going on at the rate of eight and ten per
cent., and in most cases can terminate in but one way. [Footnote:
"Labor, Land and Law": 353. It is difficult to get reliable
statistics on the number of mortgages on farms, and on the number of
farm tenants. The U.S. Industrial Commission estimated, in 1902, that
fifty per cent, of the homesteads in Eastern Minnesota were
mortgaged. Although admitting that such a condition had been general,
it represented in its Final Report that a large number of mortgages
in certain States had been paid off. According to the "Political
Science Quarterly" (Vol. xi, No. 4, 1896) the United States Census of
1890 showed a marked increase, not only absolutely, but relatively in
the number of farm tenants. It can hardly be doubted that farm
tenantry is rapidly increasing and will under the influence of
various causes increase still more.]


A LARGELY DISPOSSESSED NATION.

These are the statistics of a Government which, it is known, seeks to
make its showing as favorable as possible to the existing regime.
They make it clear that a rapid process of the dispossession of the
industrial working, the middle and the small farming classes has been
going on unceasingly. If the process was so marked in 1900 what must
it be now? All of the factors operating to impoverish the farming
population of the United States and turn them into homeless tenants
have been a thousandfold intensified and augmented in the last ten
years, beginning with the remarkable formation of hundreds of trusts
in 1898. Even though the farmer may get higher prices for his
products, as he did in 1908 and 1909, the benefits are deceptively
transient, while the expropriating process is persistent.

There was a time when farm land in Ohio, Illinois, Minnesota,
Indiana, Wisconsin, and many other States was considered of high
value. But in the last few years an extraordinary sight has been
witnessed. Hundreds of thousands of American farmers migrated to the
virgin fields of Northwest Canada and settled there--a portentous
movement significant of the straits to which the American farmer has
been driven.

Abandoned farms in the East are numerous; in New York State alone
22,000 are registered. Hitherto the farmer has considered himself a
sort of capitalist: if not hostile to the industrial working classes,
he has been generally apathetic. But now he is being forced to the
point of being an absolute dependant himself, and will inevitably
align his interests with those of his brothers in the factories and
in the shops.

With this contrast of the forces at work which gave empires of public
domain to the few, while dispossessing the tens of millions, we will
now proceed to a consideration of some of the fortunes based upon
railroads.




CHAPTER III

THE BEGINNINGS OF THE VANDERBILT FORTUNE


The first of the overshadowing fortunes to develop from the ownership
and manipulation of railroads was that of Cornelius Vanderbilt. The
Havemeyers and other factory owners, whose descendants are now
enrolled among the conspicuous multimillionaires, were still in the
embryonic stages when Vanderbilt towered aloft in a class by himself
with a fortune of $105,000,000. In these times of enormous individual
accumulations and centralization of wealth, the personal possession
of $105,000,000 does not excite a fraction of the astonished comment
that it did at Cornelius Vanderbilt's death in 1877. Accustomed as
the present generation is to the sight of billionaires or semi-
billionaires, it cannot be expected to show any wonderment at
fortunes of lesser proportions.


NINETY MILLIONS IN FIFTEEN YEARS.

Yet to the people of thirty years ago, a round hundred million was
something vast and unprecedented. In 1847 millionaires were so
infrequent that the very word, as we have seen, was significantly
italicised. But here was a man who, figuratively speaking, was a
hundred millionaires rolled in one. Compared with his wealth the
great fortunes of ten or fifteen years before dwindled into
bagatelles. During the Civil War a fortune of $15,000,000 had been
looked upon as monumental. Even the huge Astor fortune, so long far
outranking all competitors, lost its exceptional distinction and
ceased being the sole, unrivalled standard of immense wealth. Nearly
a century of fraud was behind the Astor fortune. The greater part of
Cornelius Vanderbilt's wealth was massed together in his last fifteen
years.

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