Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1874-06-25
Funds for Railroad Construction.
From the Chicago Journal.

producers and shippers everywhere
were most cordial in it's welcome.
The steam engine was hailed as a
friend of farmers and the great agen-
cy in securing cheap transportation.
1t is undeniable that the country is
vastly indebted to the railroads for
the rapid development of wealth, for
comfort and Improvement in the gen-
eral condition of the people, 1t is
none the less true that no motive of
philanthropy has ever entered into
the conduct of railroad business, and
not few of our roads have from first
to last been frauds The charters
were secured by legislative corrup-
ton, the money to construct the line
was raised by false representations,
the people have been oppressed to
the utmost verge of forbearance, and
the stockholders have been swindled
in the interest of ring of managers
who ought to have been in the peni-
Tertiary. Notable exceptions could
be pointed out, but in no line of bus
mess has there been so much knavery
as in building and operating railroads,
including stock watering"
The first step in railway construe-
ton is to raise the money, or get re-
liable pledges to the extent necessary
to justify the prosecution Of the en-
terprise. Originally the people along
the line were induced to furnish the
funds to a very considerable extent,
in the expectation of dividends on
the stock, and of immense apprecia-
ton in the value of their property.
No state suffered so much from this
kind of investment as Wisconsin.
Many q thrifty farmer was induced
to mortgage his property in ad of
railroad construction, only to find
himself ruined by the means. and
compelled in many instances to sur
render his farm to satisfy the mort.
gage. Various attempts were made
to escape the liabilities incurred, but
to no purpose. The legality of the
contract could not be denied, nor it's
evil force abated. II would be i'm
possible to speak with precision on
the subject; but it is safe to say that
the farmers of the personal aid period
were more injured than benefited
by railroad enterprise, especially in
Wisconsin.
In the other Western states the
plan has been to aid railroad projects
by public subscriptions to the stock.
La theory it has been assumed that
dividends would be paid; but in real
ity it has been very generally under
stood that such subscriptions, like
United States bond subsidies, would
prove gifts in the end. In few
in stances the state itself has sub
scribed to the stock; but at the West
objections have existed
to that policy, and the public sub
have been confined to coun-
ties, cities and towns. All such sub,
are known as municipal
aid" In great many instances the
was secured by trickery,
bat still the technical provisions of
law were observed An immense
amount of litigation has resulted from
such aid. The right 10 tax the pee
Pile in the interest of corporations
created for profit has been denied.
In Illinois the state judiciary has uni
tormly maintained the validity of such
unless the same was
invalidated by some special defect.
In the other Western states the local
courts have inclined to the opinion
that the bonds were illegal, because
involving public taxation for private
benefit. But the Supreme Court of
the United States holds TO the con-
trary doctrine, and by this time it is
conceded that there is no escape from
such obligations. The latest decision
on the subject was rendered by the
Supreme Court of the nation to the
effect that though railroad corpora
ton is private corporation, its work
is public, as much SO as if 1t were to
be constructed by the State, and for
that reason the subscriptions must be
held valid. As all the stock so sub
scribed, or mum cipal aid bonds issu-
ed, are held outside of the State in
which they were issued, or may be
so held, it is impossible to escape the
force of this and kindred DECISIONS
The claim could be taken directly or
by appeal to the Federal courts
There is no longer any ground for
contest on that, the first issue raised
against the railroads by the people.
The Iowa case of Butz versus Musca-
tine. the Fond du Lac case and the
more recent Michigan case of Pine
Grove township versus E. B. Talcott,
and similar cases, settled the matter
beyond controversy. Whether right
or wrong, the position of the court of
last resort has been taken so firmly
as to be a fnality. The opinion OF
the United States Supreme Court on
the last case of the kind ad;udicated
by that tribunal is given in full in
the Chicago Legal News, OF June 6,
1874.
The triumph of the holders of these
bonds is generally spoken of as vic
tory for the railroads against the
people; but as matter of fact the
owners of our railroads hold very few
of the municipal aid bonds. They
have uniformly been thrown upon
the market almost as soon as issued.
The money realized was expended in
constructing or equipping the road.
1t is a specially significant fact that
in maintaining the validity of these
bonds the court has established the
public nature of the railroads, and
thereby prepared the way for victory
in the pending contest between the
railroads and the people. Having
declared railways public highways,
their amenability to legislative con
troll cannot be logically denied. In
the last decision on this subject the
Court said: Sail power may be
abused where no safeguards are pro-
:lod apd vary Significantly added