The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1889-10-15

VAOu 0AO, u4SG, Iud6 LII 10 u0AIuO1 OIS
solved o necessarily affected by the
death or bankruptcy of a stakeholder,
nor, as a rule, doesi its own bankruptcy
impose any further liability on a
stakeholder who has paid for his
stock; and secondly, the important
fact that the anne person may be a
member of any number of corpora
tions, and thus in effect deal with
himself in many capacities. The rail
way managers were familiar with all
these facts, especially with the last
named, and speedily used them for
their own advantage. Moneys for
building the roads came from stock
subscribed, the sale of bonds, and
occ asionally from public subscriptions
in some form. AS the roads grew in
magnitude the stockholders and the
bondholders, who frequently lived
abroad, had less immediate oversight
and control over them, and the man
agement became more secret and auto
cratic. The boards of directors, or,
more accurately, the immediate man
ayers, thus controlled great sums Of
money and great railroad properties,
as also great volumes of traffic, really
in a double trust-frst, for the private
interest of the owners of the read,
who had furnished the money to build
and operate it, and secondly, and in
no subordinate sense, for the public at
large, to whom they owed just, equal
and impartial service in return for the
corporate franchise, the right Of emf
nent domain, and the control of what
was in law a public highway. They
universally failed or refused to recog-
nize the latter trust, and they we're
too often fsithless to the former.
In other words, they universally
disclaimed their obligation of equal
service to the public, and they often
perverted their control of the great
properties they managed to their own
personal enrichment.
HOW THEY JET RICH.
Men have frequently wondered
how a railroad manager on his official
salary could suddenly grow into a
millionaire. The secret is largely in
the device of the subsidiary corpora.
tion, or as a recent writer, Mr.. Bon.
ham, in his excellent book on "Indus
trial Liberty" calls it, the "parasite
corporation" In the era of railroad
building the subsidiary corporation
took the contracts for constructing
equipping or otherwise supplying the
road.
1t was composed of the railroad
managers, with enough associates tc
act as its officers. Stripped of al
disguise, the transaction was one in
which the managers used their posi-
tions to enrich themselves by favored
contracts. This scheme was brought
to the attention of all the people when
the connection between the Credit
Mobilier and the Union Pacific Rail
way Company was discovered, a con
nection which Mr.. Hoar, of Massachu
sets, doubtless had in mind when, a:
a manager on the part of the House
in the Belknap impeachment trial, be
said: when the greatest railroad o.
the world, binding together the con
tinent and uniting the great e that
wash our shores, was finished, 1 have
seen our national triumph and exulta
ton turned to bitterness and shame
by the unanimous report of three com
mittees of Congress-two of the House
and one here-that every step of thai
mighty enterprise had been taken ir
fraud"
And Mr.. G. F. Adams, with less
rhetoric but more information, de
clares that the general railroad man
agement "was fairly h~oneycombed
with jobbery and corruption. They
began high up in the wretched ma
chinery of the construction company
with all its thimble rig contrivances
to effect the unseen transfer of assets
from the treasury of the corporation
to the pockets of it's directors. Thence
they spread downward through the
whole system of supplies and contracts
and rolling stock companies" The
subsidiary corporation once invented
and it's wonderful capacity for divert
ing company assets into the pocket o:
the company officials, and making
millionaire managers, while stockhold
ers vainly waited for dividends or in
terest, it followed the railroad cor
porations in all their development, ex
tensions and struggles.
I have already alluded to the gross
discrimination made by the railroad
between competitive and non.competi
tive points. For such discrimination
they pleaded the pressure of competi
ton. But they further and every
where claimed the right to discrimi
nate between individual shippers anc
between localities. According to thei
ideas of interest, or out of shee
favoritism or the reverse, they Con
demned one locality or shipper t.