The New York herald., 1869-05-26
Railway Imperialism and the Public Tax


by all means, the building should stand
Railway Imperialism and the Public Tax
payers.
The stupendous rise and magnificent opera
lions of our railway kings form one of the
Anost pregnant and serious questions before
the country. On every hand we find them
controlling our State Legislatures and Gov
Srnors, who pass laws and sign bills control
fling the trade aud production of the land-for
Trade Is only the question of the distribution
of the products of labor-entirely in the in
Berests of the railroad managers, and without
the slightest consideration of how these mea-
eures may affect the people No hesitancy is
exhibited in giving the sanction Of the law to
bchemes like that Of the scrip issue of the
Hudson River Road "a scheme contrived In
private parlor at late hour of the night by a
Jew cunning men), the consolidation of the
Hudson and Central, the continuance in Office
For years Of boards of directors, whether the
stockholders wish it or not, as in the Erie and
Fort Wayne roads, and the general increase Of
capital stock to every corporation that seeks
to sell water as capital to the general public.
In contemplating this vast field Of cunning
schemes and speculative contrivances the first
inquiry that presents itself is whether the
Cornelius Vanderbilts and Jay Goulds of
our day are the legitimate successors of
John Law, of Mississippi bubble notoriety,
and George Hudson, of railway king in
fanny, OF other days; or are they the legiti-
mate growth of modern American Imperialism
Their plans belong to the great contest of capi-
tai against the people they aspire to the con-
troll Of the general enterprise of the country
and if they are to attain permanency we shall
in few years be governed by little knot Of
ten or fifteen railroad emperors meeting in
some dark room in Wall street or private parlor
of the railroad palaces.
We know that the argument of the railroad
men is that they have the right to control their
own property; that if its earnings make
profit of fifteen per cent on the capital, and thus
give the stock market value of one hundred
and fifty for one hundred invested, it repre-
sents real increase in the value of their pro-
perty, which belongs to them as much as the
increase of value in real estate belongs to the
owner; and that if the owners of two roads
find it to their interest to unite for their own
benefit they have the right to do so. This all
looks very plausible and fair, but there are
really other issues involved which limit the
rights of railroad proprietors in the same way
that they limit the rights of other property
owners. These are the community rights,
which affect the great mass of the people.
Under these the gathering Of immense landed
estates by entail, or by cunningly contrived
willis, are prohibited, because they are perni-
cious to the general interest. The same prin-
ciple of public right holds in the case Of rail
way property, and will prevail whenever the
public becomes awakened or the evil grows
too onerous to be borne The principles that
lie at the foundation of the growth OF our rail-
road kings are repugnant to the controlling
ideas of American society and modern civiliza-
tion.
But there is another fallacy in the argument
of the railway kings, which should be brought
to control their schemes, even before the appli-
cation of the general principle we have refer
red to. What they look upon as their property,
held in fee simple, is, in fact but grant from
the State, or its outgrowth, held during the
pleasure of the State. Arailroad franchise is
In fact, grant by the Legislature to a person,
or community Of persons, of a monopoly to
tax the travel and transit of the people. We
say 1t is so in fact because, by the practice
now pursued it is made such, though that in
tention was not its original purpose. This will
be seen better by an examples When the
Hudson River Railroad franchise was granted
The proclaimed object was the public benefit.
At that time IL q railroad earned sufficient to
replace wear and tear and pay dividend of
eight per cent, it was held to be good property.
With this franchise this road is making earnings
supposed to amount to thirty per cent annually
of it's capital part of which is being issued in
scrip, or, in other words, used in a shape to
bring In compound interest, or profits on
profits. Another portion is used 10 prevent
the grant Of a competing line on the west shore
of the Hudson river, and this having been so
urgently demanded by the public interest that
Its concession could not be denied. Another
portion of it's profits derived through the origi-
nal franchise is devoted to the purchase of
controlling number of the subscriptions to the
competing line, when suddenly the new CON-
pany determines not to build. Thus the fran
chise of the State Is really made to defeat the
requirements Of the community. The proposed
consolidation of the Hudson River and Central
railroads will only add to the power Of the
railway kings to defeat competitive construc-
tion and tax the public.
The instance we have cited is only one Of
the m,''titudinous forms in which the monopo-
lizers increase their power, and If these are at
tentiveIy studied II will be seen that our mod
ern vanderbts and Goulds are not repro.
duction of the Laws and Hudsons of other