The Fremont weekly journal. [volume] (Fremont, Sandusky County, Ohio) 1867-1877, 1873-01-17
Gigantic Coal Ring.

the puDllc generally are eXclJeQ over
the reports of a great coal cornerby
which the railroad magnates propose
to crush small operators. If the
railroad should join with
the other three, all the East would
be at their mercy. The millions of
tons now raised by them supply the
factories and houses. BY a perfect
union, with a monopoly of the mar
ket, they could raise coal dollar a
ton. Such a measure would result
in the total extinguishment of sew
eral branches of industry, would add
to the present high prices of iron,
and would compel every family
throughout the Northeast to pay a
yearly tax of five or ten dollars.
There are no other available mines
except those of Maryland, which
produce only about two million tons
year. This would be the most
gigantic ring ever known in Ameri-
can monetary circles. The operators
are not sitting down and folding
their hands; they rely on the action
of the Pennsylvania Constitutional
Convention now sitting in Philadel-
phia. They have engaged counsel
and will contest the matter to the
end. Franklin B. Gowan, President
of the Reading Company, and its
leading men, at meeting held day
or two since, it is said, told the body
of operators "that this thing was go
ing through; if you object, and put
obstacles in the way l shall reduce
my price one dollar a TOM That
would ruin the operators. The
Reading Company are said te have
borrowed lare sums of money in
England to carry on the scheme.
-.
The Relations Of the Credit Mobilie1
to the Union Pacific Railroad Com
pany.
For long time the existence OF
the Credit Mobilier organization was
considered a myth; one of the hal
lucinations of George Francis
Trains unsettled brain. The gen
eral public never heard it mentioned
save in the boasts of Train that he
was the owner of enormous wealth,
the builder of numerous cities, and
"the originator of the Credit Mobil-
ier of America" Time has devel-
oped the fact that it was no luna
tics myth, but not the less a sham
and a fraud. What purports to be
the true story of the Credit Mobilier,
as developed by the evidence given
in the Courts and before the Con
gressional Committee, has been at
last reached, and a more gigantic
scheme got up "with, intent to de
ceive" has rarely been brought to
light.
When the Union Pacific Railroad
Company was organized it was mu-
nifcently endowed by Congress. A
land grant of ten square miles of
public land to every mile of track
laid was the first gift. Then it was
further aided by loan of United
States six per cent bonds, secured
by mortgage on the line, at the
rate of $16, 900 per mile for the first
two hundred and seven miles going
westward, $4,000 per mile for the
next six hundred miles through the
"desert," and $4,000 per mile for the
Rocky Mountain portion. Exper-
ience has shown that this was con
siderably more aid than was needed
to build the line, and as much seems
to have been suspected by the stock
holders of the company, for they
voted to call in but five per cent on
the stock subscription, and then to
issue to themselves fully paid up
shares of one hundred dollars each.
At this point the Credit Mobilier APP
peared on the scene.
With the Government bonds and
land grant as available assets there
was clearly enough to give the
builders of the railroad fat con
tract, and there was, moreover, very
little opportunity for the public or
the Government-which was the 81
lent partner in the ownership of the
railroad and furnished the capital
to Judge whether the contract was
an extravagant one or not The
bright idea struck the stockholders
of the Union Pacific that it would
be a good thing to build the road
themselves = as individuals = and
thus secure all the profits, whilst
their partner, Uncle Sam, paid all the
The Credit Mobiier was
with the stockholders of
the Union Pacific as it's stockhold-
ers and the stockholders of the IN
ion Pacific made a contract with
themselves as stockholders of the
Credit Mobilier to build the railroad,
giving the entire assets OF the road
subscriptions, donations, land grant,
Government bonds, and everything
lin payment.
Plain, blunt men may be swift to
characterize this as a monstrous
swindle on the people of the United
States, who are by force of the land
grant and bonded aid the silent part
ners who were to be fieeced by the
operation, but when it is considered
for moment, the principle on which
it is based is nothing new in railway
The nature of
many freight dispatch lines and
rolling stock organizations diff
iers little from the Credit Mobil-
er scheme. The officers of a line
Of railroads organize "freight dis
patch" company to run over their
ines. AS railroad officers they Sc
cure contract with themselves as a |
transportation company, by which |
he cars of the latter are hauled over
he railroad at a rate of mileage |
more profitable to the transportation
inc than to the railroad company; |
n itis the other way, and the mana
5ers, or a portion of the owners of |
he railroad, lend cars to the rail
Dad company at rate of mileage
lighly renumerative to the car
'Wners, but not to the railroad. /
n either case the stockholders
n the railroad company outside
he "ring"- just the
'osition of the United States in the
Union Pacific Company-are de-
rauded of a portion of their just
,rofits and those inside the ''ring"