when I say to Mr. Hill, of course I mean the Northern Pacific; we gave outright a strip of land 2,000 miles long, and 20 miles wide in the States, and 40 miles wide in the Territories! Worse than that, instead of giving it in a solid body, we gave every even-numbered section so that it carried an immense advantage over anybody else coming in from the outside. Now it is easy to demonstrate, and I hardly believe Mr. Hill would care to deny it if he does, I will get the figures and demonstrate it-that this land was worth, at a fair figure, ten dollars an acre, at the very least. That is $600,000,000 of our property that we have 'extravagantly and improvidently wasted', as Mr. Hill would call it. And I agree with him."

Mr. Heney's picture of our national generosity to the Northern Pacific suggests only half the measure of that generosity. Long after that grant was made, the Government set about creating forest reserves. In order to locate these, where they would do the most good, and to get large continuous bodies of land, it became necessary to recover from some of the railroads, large areas of the lands included in their grants. So a provision was written into the law to the effect that when the Government wanted to take back a piece of land in order to include it in a forest reserve, the "settler" might have the privilege of going into any part of the unappropriated public domain, and picking out a corresponding area which he should receive in exchange for the lands he was turning over to the forest reserves.

Here is the way this plan operated: the Northern Pacific had great areas of lands, some of which had never been of any particular value, while others had once been covered with timber, now long since cut off. The railroad persisted that it was a "settler", and therefore entitled to exchange lands in this way. It was allowed to do so. It picked out immense tracts of fine, heavily timbered lands, in the North Pacific forest regions, and received the Government's patent to them, by the simple process of turning over to the Government an equal area of the worthless, untimbered, or cut over lands that had been included in its original

331

This pleasant exchange, by which the Northern Pacific profited to the extent of untold millions, was effected by virtue of a little clause that was sneaked into the sundry civil-appropriation bill passed by Congress in 1901. Perhaps the man, who offered the provision, did not himself quite realize what it would lead to. It is charitable to assume that he did not. He was a senator from one of the States through which the railroad ran and in which, under this act, it secured great and large holdings of the richest timber lands.

This little clause thus roughly described, is one of the most famous of many legislative devices that have helped loot the public domains; and that only twelve years ago. Scores of others, equally discreditable to either the honesty or the discernment of Congress, might be enumerated. The frauds, that have been perpetrated under the "timber and stone act" and the commutation clause of the "home act," have been so extensive that even experts, in the administration of the public lands, continue even to this day to make new discoveries of frauds made possible by these enactments. H. H. Schwartz, late chief of special agents in the General Land Office, in one report says:

"I recall a specific instance in the Susan Bill and Redding districts, California, where a single investor, in the course of probably three years, acquires approximately 700,000 acres of heavily timbered land, a large amount of which was secured under the "timber and stone act."

"In another large operation in central Oregon, train loads of women schoolteachers were shipped out from St. Paul and entered land under the "timber and stone act." A hundred citizens of Oregon made like entry. These lands were then transferred to a timber investor from Minneapolis, Minnesota, transfers going to him by deed to a corporation. The articles of this incorporation were peculiar. They provided that only the presi dent need own stock therein; its officers were composed of the president (who was the investor) and his wife and son, who were respectively, secretary and treasurer.

been like individual operations in Montana, Idaho, Washington, and Colorado."

By dint of such operations as these, the combination in control of the country's timber supply, has proceeded to the point where the timber trust has become a definite, definable, apparent entity. The Commissioner of Corporations, discussing this situation in a voluminous report issued on January 20, 1913, says:

"Three vast holdings, the greatest in the country, those of the Southern Pacific Company, the Weyerhaeuser Timber Company, and the Northern Pacific Railway Company, (including their subsidiaries) together have 238,000,000,000 feet, or nearly eleven per cent of all our privately owned timber. With

the five next largest they have

NEW MEXICO

ing is the greatest in the United States106,000,000,000 feet. This is about six per cent of the private timber in the investigated area and ten per cent in the Pacific Northwest. It is difficult to give an adequate idea of its immensity: It stretches practically 680 miles along the railroad between Portland and Sacramento. The fastest train over this distance takes thirty-one hours. During all that time the traveler is passing through lands, a large proportion of which for a long time belonged to the railroad company, and in almost the entire strip this corporation is the dominating holder of both timber and land.

"The second largest holder is the Weyerhaeuser Timber Company, including with its subsidiaries 96,000,000,000

STATE LAND

IDAHO

STATE LAND

over fifteen per cent of the total privately-owned timber. Finally, fortyeight per cent of the private timber within the area of this investigation is held by only 195 holders.

"Five-elevenths of the country's privately-owned, standing timber are in California, Oregon, Washington, Idaho, and Montana-113,000,000,000 feet. One half of this is now owned by thirty-seven holders; many of these closely connected. The three largest holders, named above, alone have nearly one quarter. This section now furnishes only one-sixth of the annual cut. Thus its timber is being largely held for the future, and the owners of these forests will be the dominating influence in the industry.

"The Southern Pacific Company hold

ber interests of the Weyerhaeuser family and close associates.

"These two holdings would supply the 46,584 saw mills in the country for four and one-half years. They have oneeleventh of our total private timber.

"The third largest, the Northern Pacific Railroad, has 36,000,000,000 feet.

"These three holdings have enough standing timber to build an ordinary five or six room house for each of the 16,000,000 families in the United States in 1900. If sawed into lumber and placed in cars their timber would load a train about a hundred thousand miles long.

"The holdings of the two railroad companies are government grants and eighty. per cent of the Weyerhaeuser Timber

Company was bought from the North Pacific Grant. Many other large holdings here and in other regions were mainly purchased from some land grant."

The remarkable report, by Commissioner of Corporations, Conant, from which the foregoing is quoted, discusses also the rapid concentration of timber ownership in the lake States and in the southern pine regions. In the conclusion of his letter transmitting the report to the President, the Commissioner makes these impressive observations:

"These are the facts of the lumber in its most important feature, the natural supply. The paramount consideration remains still to be States. There are many great combinations in other industries whose formation is not complete. In the lumber industry on the other hand, the bureau finds now in the making, a combination caused, fundamentally, by a long-standing public policy. The concentration already existing is sufficiently impressive. Still more impressive are the possibilities for the future. In the last forty years concentration has so proceeded that 195 holders, many interrelated, now have practically one-half of the privately-owned timber in the investigation area (which contains 80 per cent of the whole). This formidable process of concentration in timber and in land, certainly involves great future possibilities of impregnable, monopolistic conditions, whose far reaching consequences to society it is now difficult to anticipate fully or to overestimate.

The underlying cause is our public land policy, resulting in enormous loss of wealth to the public and its monopolization by a few interests. It lies before us now as a forcible object lesson for the future management of all the natural resources still remaining in the hands of the Government.'

These quotations are from an authoritative government report which presents the results of a study that required years in the making. It tells the story of how profligate disposal of the public domain. has made lumber and timber monopoly possible.

A similar study of concentration, and increasing tendency to monopoly in the domain of water power, has been published by the same government authority, the Bureau of Corporations. The investigation of the steel industry, within the last two years by the special committee. of the House of Representatives, headed by Congressman Stanley of Kentucky, has performed a like service in the realm of iron and coal. In each of these cases the same general conclusion is in force by a consideration of all the facts, namely, that we have been and still are managing our great natural resources (once the heritage of our whole people), in such manner that they are passing from the people's ownership into the control of a little group of the most gigantic monopolies the world has ever known. The same story has been told for the oil industry many times.

(Continued on page 446)

W

ILL the opening of the Panama Canal produce the tremendous reduction in rates confidently expected by the cities of the South and West for the past four years? Literally, from Portland to Pensacola, millions-it would be safe to say hundreds of millions have been spent on harbor improvements, dock facilities and belt-line civic railroads, solely in anticipation of the great traffic expected to result from the opening of the Canal.

Water rates are cheaper than rail rates, even on the most expensive basis as to water, namely, as 1 is to 2; on a cheap basis as to water, such as barge work, or on the Great Lakes, water rates are cheaper than rail, namely, as 1 is to 7. That being the case and Panama giving access from Atlantic to Pacific by water, why will freight not travel almost solely by water? You can ship a ton of groceries from Antwerp to Los Angeles for the same rate as from Los Angeles by rail to San Francisco; and the voyage round the Horn is 8,000 to 10,000 miles longer than Panama will be. Why, then, will not freights be revolutionized?

Take a look at this whole proposition of water vs. rail.

S. A. Thompson, Secretary of the Rivers and Harbors Congress, proves that $1 will carry a ton of freight 127 miles on a railroad, 1,250 miles on the Great Lakes, or 2,000 miles by barge on a river.

Improvements in navigation on the Great Lakes have reduced the freight rate on ore from $80 a ton seventy years ago, to $7.50, thirty years ago, to 25 cents a ton from Duluth to Buffalo today -this on the authority of Mr. Harvey Goulder, the attorney for many of the Great Lakes Transportation Companies. Wheat by rail from Duluth, or Ft. William, to Buffalo, runs from 12 cents up; by water, from 5 cents and 42 cents down as low as 12 cents a hundred, in years when cargoes were scarce.

To ship oranges from Los Angeles to New York by rail costs $1 a box in freight. To ship apples from Washington to New York by rail costs 50 cents in freight. By water, the oranges can be shipped for 40 cents a box, the apples for 20 cents. When a rate war occurred, 1910-11, among the various coastal lines from the Pacific to the Atlantic, now breaking their freight in bulk and shipping it across the railroad at Panama, or the Mexican road at Tehauntepec, rates fell as low as $3 a ton for freights of fruit, lumber, and salt. It is said these low rates caused the ruin of one company-the California-Atlantic — but the fact remains that the president of the ruined company has testified that he could carry freight at from $7.50 to $10 a ton from the Pacific Coast to the Atlantic, and make a good profit. If you average up all the rail rates from Atlantic to Pacific, they come to $20 a ton.

Or take the rates on lumber from Pacific to Atlantic. If you go to build