THE FARMERS NOT INIMICAL TO RAILROADS.

473

They attacked the unjust discriminations of certain railroad companies, which, in their fancied security of power, treated the whole matter in agitation with contempt.

It is, undoubtedly, true that some railroad corporations have suffered, perhaps, to the extent of actual injustice; but had not the people suffered untold wrong? And had they not borne and forborne, until forbearance ceased to be a virtue?

If the issue had been foreseen as clearly by these corporations as it was by the writer of these lines, who long ago urged a just compromise between the people and the railroad officials, much of the gall might have been made sweet to the takers on both sides. The real trouble was that the railroad interest of the country was then firmly in the grasp of a few manipulators, who thought themselves so strongly entrenched behind the power of their immense capital, that those honorable railroad officials who would gladly have done what they thought was right were powerless to act. The battle is not principally with railroad corporations as such, but rather with the corrupting influence of subsidized and protected monopolies. The corruption that has already been sloughed off from the festering ulcer— the partial crippling of the stock gamblers achieved thus early in the contest-gives token of brighter days in the future. These will surely come, if the masses unite to overthrow every official of whatever grade who violates the trust reposed in him by the people.

40

CHAPTER XL.

CREDITS MOBILIER, FAST FREIGHTS, ETC.

"CREDIT MOBILIER" DEFINED.

In the French language, from which "Credit Mobilier is derived, the term may be made to mean an innocent lending of money upon movable property, as upon chattels; but usage has really given it a more specific, limited signification. Under the empire of Napoleon III, certain of his cliques erected a system by which money was loaned, not only on real estate, but also upon personal property. This property might or might not be at the time valuable; in fact much of it was very doubtful; but, like the loans of the pawnbroker, who runs a credit mobilier shop on a small scale, if the risks were great, the interest corresponded. Money was thus lent upon enterprises, such as commercial railroads, and the like, while they were yet in embryo, and often of very uncertain outcome.

It was, in many cases, the lending of a credit upon credit for the stock of the Credit Mobilier; and the stock to which it lent its credit might be upon the market at the same time. In this case it was credit built upon credit; a row of bricks, one leaning upon the other an inverted pyramid built upon quicksand, liable, at any time, to fall by the moving of a single brick, or to topple by the shiftings of the quicksand. Upon this system of credit built upon credit,

it was that the French entered upon some of the wildest stock gambling the world has ever known. Transplanted to America, the same system found a congenial home, and made Wall Street a pandemonium-its votaries a horde of gamblers. It has well-nigh swamped the railroad system of America, covering the nation and many of our pubilcists, once in honorable repute, with a lasting disgrace.

The Stalking-horse of Swindlers.

The watered stock of a railroad may be a Credit Mobilier; the road itself may be one in the bad sense of the name; the warehouseman who issues fraudulent certificates upon grain in his elevator, is a sort of Credit Mobilier; the socalled fast transportation line that is run by a ring of railroad managers at the expense of the transporters, is a Credit Mobilier. In short, Credit Mobilier is a system of lending a fiction and getting a reality. This is one of the principal things that has ruined American credit abroad, and made the name of certain American statesmen and financiers to stink in the nostrils of all honest men.

THE GREAT CREDIT MOBILIER.

The American swindle was originally more an imitator in name than in actual organization. A charter had been issued in Pennsylvania to a company, but had not yet been used. The Credit Mobilier bought this loose charter, its stockholders and those of the Union Pacific Railway Company being identical. The railroad company had been endowed by Congress with twenty alternate sections of land per mile. The government had also agreed to loan it $16,000 for some two hundred miles, then $32,000 per mile for six hundred miles, and from thence $48,000 per mile. The Union Pacific Railway Company issued stock to the amount of $10,000,000, which stock was received by the stockholders upon the payment of five per cent. of its face value.

At this point the Credit Mobilier steps in. All the assets of the railroad company were turned over to this new company, in consideration of full paid shares of the new company's stock and its grant to build the road. In the meantime, the government had been induced to allow its first. mortgage bonds to become second mortgage bonds; whereupon the Union Pacific Railroad Company issued first mortgage bonds, which, of course, took precedence as a loan, and the government lien immediately became virtually worthless, since the new mortgage bonds amounted to the entire value of the road. The proceeds of this shameless transaction went to swell the ill-gotten hoards of the rascals who devised it, and the innocent Congressmen who helped to engineer the scheme. The Credit Mobilier had nothing to pay, except the mere cost of construction, the bonded debt of the road exceeding by $40,000,000 the cost of building the road. Is it strange that shares with which Congressmen were allowed to load up at $100 each, could not be pur

THE GREAT CREDIT MOBILIER.

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chased for less than $300 or $400? How nicely the film of decency, in charging these incorruptible Congressmen several months interest, was laid over; this interest having accrued while these shares were being held by Oakes Ames, to see where he could "put them to do the most good," in his own language; or, in plain words, to see whom he could buy the most cheaply.

It will be seen that an original share of Union Pacific stock, upon which was paid $5.00, became $100 Credit Mobilier, paying dividends to the Legislators with whom it was placed to do good amounting to three or four times its nominal value. And yet these honorables stalk majestically abroad, as though they had never been smirched with the filth of this swindling transaction!

Hon. D. C. Cloud, in his "Monopolies and the People," in speaking of the Central Pacific Railroad, from Ogden to Sacramento, says: "Taking the character of the route as given, with the facilities for building the road, and it is not probable that the actual cost of construction averaged more than $30,000 per mile, or $57,000,000 for the whole line. Taking, the highest rate, as given, viz., $50,000, and applying it to the whole road, the entire cost would be $94,000,000.

"To aid in the construction of this road the government issued subsidy bonds at the rate of $48,000 per mile for three hundred miles; $32,000 per mile for nine hundred and four miles, and $16,000 for the balance of the main road and branches. The funded debt of the companies owning and operating the road (not including the debts of the branches), after deducting the amount of bonds they re ceived from the government, to-wit: $65,000,000, is, as is shown by their own report, $93,000,000. How much their floating debt amounts to we can not tell. The stock on this