HIS FRAUDS IN EVADING TAXES.

As in the larger sense all criticism of conditions was systematically smothered, so were details of the methods of the rich carefully obscured or altogether passed by in silence. At Vanderbilt's death the newspapers laved in gorgeous descriptions of his mansion. Yet apart from the proceeds of his great frauds, the amounts out of which he had cheated the city and State in taxation were alone much more than enough to have paid for his splendor of living. Like the Astors, the Goelets, Marshall Field and every other millionaire without exception, he continuously defrauded in taxes.

We have seen how the Vanderbilts seized hold of tens of millions of dollars of bonds by fraud. Certain of their railroad stocks were exempted from individual taxation, but railroad bonds ranked as taxable personal property. Year after year William H. Vanderbilt had perjured himself in swearing that his personal property did not exceed $500,000. On more than this amount he would not pay. When at his death his will revealed to the public the proportions of his estate, the New York City Commissioners of Assessments and Taxes made an apparent effort to collect some of the millions of dollars out of which he had cheated the city. It was now that the obsequious and time-serving Depew, grown gray and wrinkled in the retainership of the Vanderbilt generations, came forward with this threat: "He informed us," testified Michael Coleman, president of the commission, "that if we attempted to press too hard he would take proceedings by which most of the securities would be placed beyond our reach so that we could not tax them. The Vanderbilt family could convert everything they had into non-taxable securities, such as New York Central, Government and city bonds, Delaware and Lackawanna, and Delaware and Western Railroad stocks, and pay not a dollar provided they wished to do so." [Footnote: The New York Senate Committee on Cities, 1890, iii: 2355-2356.]

The Vanderbilt estate compromised by paying the city a mere part of the sum owed. It succeeded in keeping the greatest part of its possessions immune from taxation, in doing which it but did what the whole of the large propertied class was doing, as was disclosed in further detailed testimony before the New York Senate Committee on Cities in 1890.

HIS WILL TRANSMITS $200,000,000.

Unlike his father, William H. Vanderbilt did not bequeath the major portion of his fortune to one son. He left $50,000,000 equally to each of his two sons, Cornelius and William K. Vanderbilt. Supplementing the fortunes they already had, these legacies swelled their individual fortunes to approximately $100,000,000 each—about the same amount as their father had himself inherited. The remaining $100,000,000 was thus disposed of in William H. Vanderbilt's will: $40,000,000, in railroad and other securities, was set apart as a trust fund, the income of which was to be apportioned equally among each of his eight children. This provided them each with an annual income of $500,000. In turn, the principal was to descend to their children, as they should direct by will. Another $40,000,000 was shared outright among his eight children. The remaining $20,000,000 was variously divided: the greater part to his widow; $2,000,000 as an additional gift to Cornelius; $1,000,000 to a favorite grandson; sundry items to other relatives and friends, and about $1,000,000 to charitable and public institutions.

He was buried in a mausoleum costing $300,000, which he himself had ordered to be built at New Dorp, Staten Island; and there to-day his ashes lie, splendidly interred, while millions of the living plundered and disinherited are suffered to live in the deadly congestion of miserable habitations.



CHAPTER VII

THE VANDERBILT FORTUNE IN THE PRESENT GENERATION

With the demise of William H. Vanderbilt the Vanderbilt fortune ceased being a one-man factor. Although apportioned among the eight children, the two who inherited by far the greater part of it— Cornelius and William K. Vanderbilt—were its rulers paramount. To them descended the sway of the extensive railroad systems appropriated by their grandfather and father, with all of the allied and collateral properties. Both of these heirs had been put through a punctilious course of training in the management of railroad affairs; all of the subtle arts and intricacies of finance, and the grand tactical and strategic strokes of railroad manipulation, had been drilled into them with extraordinary care.

Their first move upon coming into their inheritance was to surround themselves with the magnificence of imposing residences, as befitted their state and estate. A signatory stroke of the pen was the only exertion required of them; thereupon architects and a host of artisans yielded service and built palaces for them, for the one at Fifth avenue and Fifty-second street, for the other at Fifth avenue and Fifty-seventh street.

Millions were spent with prodigal lavishness. On his Fifth avenue mansion alone, Cornelius expended $5,000,000. To get the space for three beds of blossoms and a few square yards of turf, a brownstone house adjoining his mansion was torn down, and the garden created at an expense of $400,000. George, a brother of Cornelius and of William K. Vanderbilt, and a man of retiring disposition, spent $6,000,000 in building a palatial home in the heart of the North Carolina mountains. For three years three hundred stonemasons were kept busy; and he gradually added land to his surrounding estate until it embraced one hundred and eighty square miles. His game preserves were enlarged until they covered 20,000 acres. So, within thirty years from the time their grandfather, Commodore Vanderbilt, was extorting his original millions by blackmailing, did they live like princes, and in greater luxury and power than perhaps any of the titular princes of ancient or modern days. But the splendor of these abodes was intended merely for partial use. At their command spacious, majestic palaces arose at Newport, whither in the torrid season some of the Vanderbilts transferred their august seat of power and pleasure.

Hardly had they settled themselves down in the vested security of their great fortunes when an ominous situation presented itself to shake the entire propertied class into a violent state of uneasiness. Hitherto the main antagonistic movement perturbing the magnates was that of the obstreperous and still powerful middle class. Dazed and enraged at the certain prospect of their complete subjugation and eventual annihilation, these small capitalists had clamored for laws restricting the power of the great capitalists. Some of their demands were constantly being enacted into law, without, however, the expected results.

THE GREAT LABOR MOVEMENT OF 1886

Now, to the intense alarm of all sections of the capitalist class, a very different quality of movement reared itself upward from the deeps of the social formation. [Footnote: It may be asked why an extended description of this movement is interposed here. Because, inasmuch as it is a part of the plan of this work to present a constant succession of contrasts, this is, perhaps, as appropriate a place as any to give an account of the highly important labor movement of 1886. Of course, it will be understood that this movement was not the result of any one capitalist fortune or process, but was a general revolt to compel all forms of capitalist control to concede better conditions to the workers.]

This time it was the laboring masses preparing for the most vigorous and comprehensive attack that they had ever made upon capitalism's intrenchments. Long exploited, oppressed and betrayed, starved or clubbed into intervals of apathy or submission, they were again in motion, moving forward with a set deliberation and determination which disconcerted the capitalist class. No mere local conflict of class interests was it on this occasion, but a general cohesive revolt of the workers against some of the conditions and laws under which they had to labor.

In 1884 the Federation of Trades and Labor Unions of the United States and Canada had issued a manifesto calling upon all trades to unite in the demand for an eight-hour workday. The date for a general strike was finally fixed for May 1, 1886. The year 1886, therefore, was one of general agitation throughout the United States. With rapidity and enthusiasm the movement spread. Presently it took on a radical character. Realizing it to be at basis the first national awakening of the proletariat, progressive men and women of every shade of opinion hastened forward to support it and direct it into one of opposition, not merely to a few of the evils of wage slavery, but to what they considered the fundamental cause itself—the capitalist system.

The propertied classes were not deceived. They knew that while this labor movement nominally confined itself to one for a shorter workday, yet its impetus was such that it contained the fullest potentialities for developing into a mighty uprising against the very system by which they were enabled to enrich themselves and enslave the masses.

The moment this fact was discerned, both great and small capitalists instinctively suspended hostilities. They tacitly agreed to hold their bitter warfare for supremacy in abeyance, and unite in the face of their common danger. The triangular conflict between the large and small capitalists and the trades unions now resolved into a duel between the propertied classes of all descriptions on the one hand, and, on the other, the workingmen's organizations. The Farmers' Alliance, essentially a middle-class movement of the employing farmers in the South and West, was counted upon as aligned with the propertied classes. On the part of the capitalists there was no unity of organization in the sense of selected leaders or committees. It was not necessary. A stronger bond than that of formal organization drove them into acting in conscious unison—namely, the immediate peril involved to their property interests. Apprehension soon gave way to grim decision. This formidable labor movement had to be broken and dispersed at any cost.

But how was the work of destruction to be done? This was the predicament. Vested wealth could succeed in bribing a labor leader here and there; but the movement had bounded far beyond the elemental stage, and had become a glowing agitation which no traitor or set of traitors could have stopped.

One effective way of discrediting and suppressing it there was; the ancient one of virtually outlawing it, and throwing against it the whole brute force of Government. The task of putting it down was preminently one for the police, army and judiciary. They had been used to stifle many another protest of the workers; why not this? As the great labor movement rolled on, enlisting the ardent attachment of the masses, denouncing the injustices, corruption and robberies of the existing industrial system, the propertied classes more acutely understood that they must hasten to stamp it out by whatever means. The municipal and State governments and the National Government, completely representing their interests and ideas, and dominated by them, stood ready to use force. But there had to be some kind of pretext. The hosts of labor were acting peacefully and with remarkable self control and discipline.

* * * * * * *

THE PROPERTIED CLASSES STRIKE BACK.

The propitious occasion soon came. It was in Chicago that the blow was struck which succeeded in discrediting the cause of the workers, stayed the progress of their movement, and covered it with a prejudice and an odium lasting for years. There, in that maddening bedlam, called a city, the acknowledged inferno of industrialism, the agitation was tensest. With its brutalities, cruelties, corruptions and industrial carnage, its hideous contrasts of dissolute riches and woe-begone poverty, its arrogant wealth lashing the working population lower and lower into squalor, pauperism and misery, Chicago was overripe for any movement seeking to elevate conditions.

In the first months of 1886, strike followed strike throughout the United States for an eight-hour day. At McCormick's reaper works in Chicago [Footnote: The McCormick fortune was the outgrowth, to a large extent, of a variety of frauds and corruptions. Later on in this work, the facts are given as to how Cyrus H. McCormick, the founder of the fortune, bribed Congress, in 1854, to give him a time extension of his patent rights.] a prolonged strike of many months began in February. Determined not only to refuse shorter hours, but to force his twelve hundred wage workers to desert labor unions, McCormick drove them from his factory, hired armed mercenaries, called Pinkerton detectives, and substituted in the place of the union workers those despised irresponsibles called "scabs"— signifying laborers willing to help defeat the battles of organized labor, and, if the unions won, share in the benefits without incurring any of the responsibilities, risks or struggles. On May 1, 1886, forty thousand men and women in Chicago went on strike for an eight-hour day. Thus far, the aim of inciting violence on the part of the strikers had completely failed everywhere.

The Knights of Labor were conducting their strikes with a coolness, method and sober sense of order, giving no opportunity for the exercise of force. On May 2, a great demonstration of the McCormick workers was held near that company's factories to protest against the employment of armed Pinkertons. The Pinkerton detective bureau was a private establishment, founded during the Civil War; in the ensuing contests between labor and capital it was alleged to have made a profitable business of supplying spies and armed men to capitalists under the pretense of safeguarding property. These armed bands really constituted private armies; recruited often from the most debased and worthless part of the population, as well as from the needy and shifty, they were, it was charged, composed largely of men who would perjure themselves, fabricate evidence, provoke trouble, and slaughter without scruple for pay. Some, as was well established, were ex-convicts, others thugs, and still others were driven to the ignoble employment by necessity. [Footnote: The prevailing view of the working class toward the Pinkerton detectives was thus expressed at the time in a chapter on the mine workers by John McBride, one of the trade union leaders: "They have awakened," he wrote, "the hatred and detestation of the workingmen of the United States; and this hatred is due, not only to the fact that they protect the men who are stealing the bread from the mouths of the families of strikers, but to the fact that as a class they seem rather to invite trouble than to allay it.... They are employed to terrorize the workingmen, and to create in the minds of the public the idea that the miners are a dangerous class of citizens that have to be kept down by armed force. These men had an interest in keeping up and creating troubles which gave employers opportunity to demand protection from the State militia at the expense of the State, and which the State has too readily granted."—"The Labor Movement": 264-265.] During the course of the meeting in the afternoon the factory bell rung, and the "scabs" were seen leaving. Some boys in the audience began throwing stones and there was hooting. Fully aware of the combustible accounts wanted by their offices, the reporters immediately telephoned exaggerated, inflammatory stories of a riot being under way; the police on the spot likewise notified headquarters. [Footnote: In a statement published in the Chicago "Daily News," issue of May 10, 1889, Captain Ebersold, chief of police in 1886, charged that Captain Schaack, who had been the police official most active in proceeding against the labor leaders and causing them to be executed and imprisoned, had deliberately set about concocting "anarchist" conspiracies in order to get the credit for discovering and breaking them up.] Police in large numbers soon arrived; the boys kept throwing stones; and suddenly, without warning, the police drew their revolvers and indiscriminately opened a general fire upon the men, women and children in the crowd, killing four and wounding many. Terror stricken and in horror the crowd fled.

There was a group of radical spirits in Chicago, popularly branded as anarchists, but in reality men of advanced ideas who, while differing from one another in economic views, agreed in denouncing the existing system as the prolific cause of bitter wrongs and rooted injustices. Sincere, self-sacrificing, intellectual, outspoken, absolutely devoted to their convictions, burning with compassion and noble ideals for suffering humanity, they had stepped forward and had greatly assisted in arousing the militant spirit in the working class in Chicago. At all of the meetings they had spoken with an ardor and ability that put them in the front ranks of the proletarian leaders; and in two newspapers published by them, the "Alarm," in English, and the "Arbeiter Zeitung," in German, they unceasingly advocated the interests of the working class. These men were Albert R. Parsons, a printer, editor of the "Alarm;" August Spies, an upholsterer by trade, and editor of the "Arbeiter Zeitung;" Adolph Fischer, a printer; Louis Lingg, a carpenter; Samuel Fielden, the son of a British factory owner; George Engel, a painter; Oscar Neebe, a well- to-do business man, and Michael Schwab, a bookbinder. All of them were more or less deep students of economics and sociology; they had become convinced that the fundamental cause of the prevalent inequalities of opportunity and of the widespread misery was the capitalist system itself. Hence they opposed it uncompromisingly. [Footnote: The utterances of these leaders revealed the reasons why they were so greatly feared by the capitalist class. Fischer, for instance, said: "I perceive that the diligent, never-resting human working bees, who create all wealth and fill the magazines with provisions, fuel and clothing, enjoy only a minor part of this product, while the drones, the idlers, keep the warehouses locked up, and revel in luxury and voluptuousness." Engel said: "The history of all times teaches us that the oppressing always maintain their tyrannies by force and violence. Some day the war will break out; therefore all workingmen should unite and prepare for the last war, the outcome of which will be the end forever of all war, and bring peace and happiness to mankind."]

The newspapers, voicing the interests and demands of the intrenched classes, denounced these radicals with a sinister emphasis as destructionists. But it was not ignorance which led them to do this; it was intended as a deliberate poisoning and inflaming of public opinion. Themselves bribing, corrupting, intimidating, violating laws and slaying for profit everywhere, the propertied classes ever assumed, as has so often been pointed out, the pose of being the staunch conservers of law and order. To fasten upon the advanced leaders of the labor movement the stigma of being sowers of disorder, and then judicially get rid of them, and crush the spirit and movement of the aroused proletariat—this was the plan determined upon. Labor leaders who confined their programme to the industrial arena were not feared so much; but Parsons, Spies and their comrades were not only pointing out to the masses truths extremely unpalatable to the capitalists, but were urging, although in a crude way, a definite political movement to overthrow capitalism. With the finest perception, fully alert to their danger, the propertied classes were intent upon exterminating this portentous movement by striking down its leaders and terrifying their followers.

THE HAYMARKET TRAGEDY.

Fired with indignation at the slaughter at the McCormick meeting, Spies and others of his group issued a call for a meeting on the night of May 4, at the Haymarket, to protest against the police assaults. Spies opened the meeting, and was followed by Fielden. Observers agreed that the meeting was proceeding in perfect quiet, so quietly that the Mayor of Chicago, who was present to suppress it if necessary, went home—when suddenly one hundred and eighty policemen, with arms in readiness, appeared and peremptorily ordered the meeting to disperse. It seems that without pausing for a reply they immediately charged, and began clubbing and mauling the few hundred persons present. At this juncture a small bomb, thrown by someone, exploded in the ranks of the police, felling sixty and killing one. The police instantly began firing into the crowd.

No one has ever been able to find out definitely who threw the bomb. Suspicions were not lacking that it was done by a mercenary of corporate wealth. At Pittsburg, in 1877, as we have seen, the Pennsylvania railroad hirelings deliberately destroyed property and incited riot in order to charge the strikers with crime. In the coal mining regions of Pennsylvania, subsidized detectives had provoked trouble during the strikes, and by means of bogus evidence and packed juries had hung some labor leaders and imprisoned others.

The hurling of the bomb, whether done by a secret emissary, or by a sympathizer with labor, proved the lever which the propertied classes had been feverishly awaiting. Spies, Fielding and their comrades were at once cast into jail; the newspapers invented wild yarns of conspiracies and midnight plots, and raucously demanded the hanging of the leaders. The trifling formality of waiting until their guilt had been proved was not considered. The most significant event, however, was the secret meeting of about three hundred leading American capitalists to plan the suppression of "anarchy." Very horrified they professed themselves to be at violent outrages and destruction of property and life. Their views were given wide circulation and commendation; they were the finest types of commercial success and prestige. They were the owners of railroads that slaughtered thousands of human beings every year, because of the demands of profit; of factories which sucked the very life out of their toilers, and which filled the hospitals, slums, brothels and graveyards with an ever-increasing assemblage; every man in that conclave, as a beneficiary of the existing system, had drained his fortune from the sweat, sorrow, miseries and death agonies of a multitude of workers. [Footnote: This seems a very sweeping and extraordinary prejudicial statement. It should be remembered, however, that these capitalists, both individually and collectively, had contested the passage of every proposed law, the aim of which was to improve conditions for the workers on the railroads and in mines and factories. Time after time they succeeded in defeating or ignoring this legislation. Although the number of workers killed or injured in accidents every year was enormous, and although the number slain by diseases contracted in workshops or dwellings was even greater, the capitalists insisted that the law had no right to interfere with the conduct of their "private business."] These were the men who came forth to form the "Citizens' Association," and within a few hours subscribed $100,000 as a fighting fund.

JUDICIAL MURDER OF LABOR'S LEADERS.

The details of the trial will not be gone into here. The trial itself is now everywhere recognized as having been a tragic farce. The jury, it is clear, was purposely drawn from the employing class, or their dependents; of a thousand talesmen summoned, only five or six belonged to the working class. The malignant class nature of the trial was revealed by the questions asked of the talesmen; nearly all declared that they had a prejudice against Socialists, Anarchists and Communists. Soon the blindest could see that the conviction of the group was determined upon in advance, and that it was but the visible evidence of a huge conspiracy to terrorize the whole working class.

The theory upon which the group was prosecuted was that they were actively engaged in a conspiracy against the existing authorities, and that they advocated violence and bloodshed. No jurist would now presume to contend that the slightest evidence was adduced to prove this. But all were rushed to conviction: Spies, Parsons, Fischer, and Engel were hanged on November 11, 1887, after fruitless appeals to the higher courts; Lingg committed suicide in prison, and Fielden, Neebe and Schwab were sentenced to long terms in prison. The four executed leaders met their death with the heroic calmness of martyrdom. "Let the voice of the people be heard!" were Parsons' last words. Fielden, Neebe and Schwab might have rotted away in prison, were it not that one of the noblest-minded and most maligned men of his time, in the person of John P. Altgeld, was Governor of Illinois in 1893. Governor Altgeld pardoned them on these grounds, which he undoubtedly proved in an exhaustive review: (1) The jury was a packed one selected to convict; (2) the jurors were prejudiced; (3) no guilt was proved; (4) the State's attorney had admitted no case against Neebe, yet he had been imprisoned; (5)the trial judge (Gary) was either so prejudiced or subservient to class influence that he did not or could not give a fair trial. Even many of those who denounced Altgeld for this action, now admit that his grounds were justified.

THE LABOR UPRISING IN NEW YORK.

In the meanwhile, between the time of the Haymarket episode and the hanging and imprisonment of the Chicago group, the labor movement in New York City had assumed so strong a political form that the ruling class was seized with consternation. The Knights of Labor, then at the summit of organization and solidarity, were ripe for independent political action; the effects of the years of active propaganda carried on in their ranks by the Socialists and Single-Tax advocates now began to show fruit. At the critical time, when the labor unions were wavering in the decision as to whether they ought to strike out politically or not, the ruling class supplied the necessary vital impulsion. While in Chicago the courts were being used to condemn the labor leaders to death or prison, in the East they were used to paralyze the weapons of offense and defence by which the unions were able to carry on their industrial warfare.

The conviction, in New York City, of certain members of a union for declaring a boycott, proved the one compelling force needed to mass all of the unions and radical societies and individuals into a mighty movement resulting in an independent labor party. To meet this exigency an effort was made by the politicians to buy off Henry George, the distinguished Single-Tax advocate, who was recognized as the leader of the labor party. But this flanking attempt at bribing an incorruptible man failed; the labor unions proceeded to nominate George for Mayor, and a campaign was begun of an ardor, vigor and enthusiasm such as had not been known since the Workingmen's party movement in 1829.

The election was for local officers of the foremost city in the United States—a point of vantage worth contending for, since the moral effect of such a victory of the working class would be incalculable, even if short-lived. To the ruling classes the triumph of the labor unions, while restricted to one city, would unmistakably denote the glimmerings of the beginning of the end of their regime. Such rebellious movements are highly contagious; from the confines of one municipality they sweep on to other sections, stimulating action and inspiring emulation. The New York labor campaign of 1886 was an intrinsic part and result of the general labor movement throughout the United States. And it was the most significant manifestation of the onward march of the workers; elsewhere the labor unions had not gone beyond the stage of agitation and industrial warfare; but in New York, with the most acute perception of the real road it must traverse, the labor movement had plunged boldly into political action. It realized that it must get hold of the governmental powers. Its antagonists, the capitalists, had long had a rigid grip on them, and had used them almost wholly as they willed.

But the capitalist class was even more doggedly determined upon retaining and intensifying those powers. Government was an essential requisite to its plans and development. The small capitalists bitterly fought the great; but both agreed that Government with its legislators, laws, precedents, and the habits of thought it created, must be capitalistic. Both saw in the uprising of labor a prospective overturning of conditions.

From this identity of interest a singular concrete alliance resulted. The great capitalists, whom the middle-class had denounced as pirates, now became the decorous and orthodox "saviors of society," with the small capitalists trailing behind their leadership, and shouting their praises as the upholders of law and the conservators of order. In Chicago the same men who had bribed legislators and common councils to give them public franchises, and who had hugely swindled and stolen under guise of law, had been the principals in calling for the execution and imprisonment of the group of labor leaders, and this they had decreed in the name of law. In New York City a pretext for dealing similarly with the labor leaders was entirely lacking, but another method was found effective in the subjugation and dispersion of the movement.

CAPITALIST TRIUMPH BY FRAUD.

This was the familiar one of corruption and fraud. It was a method in the exercise of which the capitalists as a class had proved themselves adepts; they now summoned to their aid all of the ignoble and subterranean devices of criminal politics.

In the New York City election of 1886 three parties contested, the Labor party, Tammany Hall and the Republican party. Steeped in decades of the most loathsome corruption, Tammany Hall was chosen as the medium by which the Labor party was to be defrauded and effaced. Pretending to be the "champion of the people's rights," and boasting that it stood for democracy against aristocracy, Tammany Hall had long deceived the mass of the people to plunder them. It was a powerful, splendidly-organized body of mercenaries and selfseekers which, by trading on the principles of democracy, had been able to count on the partisan votes of a predominating element of the wage- working class. In reality, however, it was absolutely directed by a leader or "boss," who, with his confederates, made a regular traffic of selling legislation to the capitalists, on the one hand, and who, on the other, enriched themselves by a colossal system of blackmail. They sold immunity to pickpockets, confidence men and burglars, compelled the saloonkeepers to pay for protection, and even extorted from the wretched women of the street and brothels. This was the organization that the ruling class, with its fine assumptions of respectability, now depended upon to do its work of breaking up the political labor revolt.

The candidate of Tammany Hall was the ultra-respectable Abram S. Hewitt, a millionaire capitalist. The Republican party nominated a verbose, pushful, self-glorifying young man, who, by a combination of fortuitous circumstances, later attained the position of President of the United States. This was Theodore Roosevelt, the scion of a moderately rich New York family, and a remarkable character whose pugnacious disposition, indifference to political conventionalities, capacity for exhortation, and bold political shrewdness were mistaken for greatness of personality. The phenomenal success to which he subsequently rose was characteristic of the prevailing turgidity and confusion of the popular mind. Both Hewitt and Roosevelt were, of course, acceptable to the capitalist class. As, however, New York was normally a city of Democratic politics, and as Hewitt stood the greater chance of winning, the support of those opposed to the labor movement was concentrated upon him.

Intrenched respectability, for the most part, came forth to join sanctimony with Tammany scoundrelism. It was an edifying union, yet did not comprise all of the forces linked in that historic coalition. The Church, as an institution, cast into it the whole weight of its influence and power. Soaked with the materialist spirit while dogmatically preaching the spiritual, dominated and pervaded by capitalist influences, the Church, of all creeds and denominations, lost no time in subtly aligning itself in its expected place. And woe to the minister or priest who defied the attitude of his church! Father McGlynn, for example, was excommunicated by the Pope, ostensibly for heretical utterances, but in actuality for espousing the cause of the labor movement.

Despite every legitimate argument coupled with venomous ridicule and coercive and corrupt influence that wealth, press and church could bring to bear, the labor unions stood solidly together. On election day groups of Tammany repeaters, composed of dissolutes, profligates, thugs and criminals, systematically, under directions from above, filled the ballot boxes with fraudulent votes. The same rich class that declaimed with such superior indignation against rule by the "mob" had poured in funds which were distributed by the politicians for these frauds. But the vote of the labor forces was so overwhelming, that even piles of fraudulent votes could not suffice to overcome it. One final resource was left. This was to count out Henry George by grossly tampering with the election returns and misrepresenting them. And this is precisely what was done, if the testimony of numerous eye-witnesses is to be believed. The Labor party, it is quite clear, was deliberately cheated out of an election won in the teeth of the severest and most corrupt opposition. This result it had to accept; the entire elaborate machinery of elections was in the full control of the Labor party's opponents; and had it instituted a contest in the courts, the Labor party would have found its efforts completely fruitless in the face of an adverse judiciary.

THE LABOR PARTY EVAPORATES.

By the end of the year 1887 the political phase of the labor movement had shrunk to insignificant proportions, and soon thereafter collapsed. The capitalist interests had followed up their onslaught in hanging and imprisoning some of the foremost leaders, and in corruption and fraud at the polls, by the repetition of other tactics that they had long so successfully used.

Acting through the old political parties they further insured the disintegration of the Labor party by bribing a sufficient number of its influential men. This bribery took the form of giving them sinecurist offices under either Democratic or Republican local, State or National administrations. Many of the most conspicuous organizers of the labor movement were thus won over, by the proffer of well- paying political posts, to betray the cause in the furtherance of which they had shown such energy. Deprived of some of its leaders, deserted by others, the labor political movement sank into a state of disorganization, and finally reverted to its old servile position of dividing its vote between the two capitalist parties.

From now one, for many years, the labor movement existed purely as an industrial one, disclaiming all connection with politics. Voting into power either of the old political parties, it then humbly begged a few crumbs of legislation from them, only to have a few sops thrown to it, or to receive contemptuous kicks and humiliations, and, if it grew too importunate or aggressive, insults backed with the strong might of judicial, police and military power.

When it was jubilantly seen by the coalesced propertied classes that the much-dreaded labor movement had been thrust aside and shorn, they resumed their interrupted conflict.

The small capitalist evinced a fierce energy in seeking to hinder in every possible way the development of the great. It was in these years that a multitude of middle-class laws were enacted both by Congress and by the State legislatures; the representatives of that class from the North and East joined with those of the Farmers' Alliance from the West and South. Laws were passed declaring combinations conspiracies in restraint of trade and prohibiting the granting of secret discriminative rates by the railroads. In 1889 no fewer than eighteen States passed anti-trust laws; five more followed the next year. Every one of these laws was apparently of the most explicit character, and carried with it drastic penal provisions. "Now," exulted the small capitalists in high spirits of elation, "we have the upper hand. We have laws enough to throttle the monopolists and preserve our righteous system of competition. They don't dare violate them, with the prospects of long terms in prison staring them in the face."

THE SMALL CAPITALISTS' LOSING FIGHT.

The great capitalists both dared and did. If specific statutes were against them, the impelling forces of economic development and the power of might were wholly on their side. The competitive system was already doomed; the middle class was too blind to realize that what seemed to be victory was the rattle of the slow death struggle. At first, the great capitalists made no attempt to have these laws altered or repealed. They adopted a slyer and more circuitous mode of warfare. They simply evaded them. As fast as one trust was dissolved by court decision, it nominally complied, as did, for instance, the Standard Oil Trust and the Sugar Trust, and then furtively caused itself to be reborn into a new combination so cunningly sheltered within the technicalities of the law that it was fairly safe from judicial overthrow.

But the great capitalists were too wise to stake their existence upon the thin refuge of technicalities. With their huge funds they now systematically struck out to control the machinery of the two main political parties; they used the ponderous weight of their influence to secure the appointment of men favorable to them as Attorneys General of the United States, and of the States, and they carried on a definite plan of bringing about the appointment or election of judges upon whose decisions they could depend. The laws passed by the middle class remained ornamental encumbrances on the statute books; the great capitalists, although harassed continually by futile attacks, triumphantly swept forward, gradually in their consecutive progress strangling the middle class beyond resurrection.

Such was the integral impotence of the warfare of the small against the great capitalists that, during this convulsive period, the existing magnates increased their wealth and power on every hand, and their ranks were increased by the accession of new members. From the chaos of middle-class industrial institutions, one trust after another sprang full-armed, until presently there was a whole array of them. The trust system had proved itself immensely superior in every respect to the competitive, and by its own superiority it was bound to supplant the other.

Where William H. Vanderbilt had thought himself compelled to temporize with the middle class agitation by making a show of dividing the stock ownership of the New York Central Railroad, his sons Cornelius and William ignored or defied it. Utterly disdainful of the bitter feeling, especially in the West, against the consolidation of railroads in the hands of the powerful few, they tranquilly went ahead to gather more railroads in their ownership. The Cleveland, Cincinnati, Chicago and St. Louis Railroad (popularly dubbed the "Big Four") acquired by them in 1890 was one of these. It would be tiresome, however, to enter into a narrative of the complex, tortuous methods by which they possessed themselves of these railroads. By the beginning of the year 1893 the Vanderbilt system embraced at least 12,000 miles of railways, with a capitalized value of several hundred million dollars, and a total gross earning power of more than $60,000,000 a year. "All of the best railroad territory," says John Moody in his sketch entitled "The Romance of the Railways," "outside of New England, Pennsylvania and New Jersey was penetrated by the Vanderbilt lines, and no other railroad system in the country, with the single notable exception of the Pennsylvania Railroad, covered anything like the same amount of rich and settled territory, or reached so many towns and cities of importance. New York, Buffalo, Chicago, Cleveland, St. Louis, Cincinnati, Detroit, Indianapolis, Omaha—these were a few of the great marts which were embraced in the Vanderbilt preserves." So impregnably rich and powerful were the Vanderbilts, so profitable their railroads, and their command of resources, financial institutions and legislation so great, that the panic of 1893 instead of impairing their fortunes gave them extraordinary opportunities for getting hold of the properties of weaker railroads.

It was now, acting jointly with other puissant interests, that they saw their chance to get control of a large part of the fabulously rich coal mines of Pennsylvania. These coal mines had originally been owned by separate companies or operators, each independent of the other. But by about the year 1867 the railroads penetrating the coal regions had conceived the plan of owning the mines themselves. Why continue to act as middlemen in transporting the coal? Why not vest in themselves the ownership of these vast areas of coal lands, and secure all the profits instead of those from merely handling the coal?

The plan ingratiated itself as a capital one; it could be easily carried out with little expenditure. All that was necessary for the railroad to do was to burden down the operators with exorbitant charges, and hamper and beleaguer them in a variety of compressing ways. [Footnote: See testimony before the committee to investigate the Philadelphia and Reading Railroad Company, and the Philadelphia and Reading Coal and Iron Company, Pennsylvania Legislative Docs. 1876, Vol. v, Doc. No. 2. This investigation fully revealed how the railroads detained the cars of the "independent" operators, and otherwise used oppressive methods.] As was proved in subsequent lawsuits, the railroads frequently declined to carry coal for this or that mine, on the pretext that they had no cars available. Every means was used to crush the independent operators and depreciate the selling value of their property. It was a campaign of ruination; in law it stood as criminal conspiracy; but the railroads persisted in it without any further molestation than prolix civil suits, and they finally forced a number of the well-nigh bankrupted independent operators to sell out to them for comparatively trifling sums. [Footnote: Spahr quotes an independent operator in 1900 as saying that the railroads charged the independents three times as much for handling hard coal as they charged for handling soft coal from the West—"America's Working People": 122-223.]

By these methods such railroads as the Philadelphia and Reading, the Delaware, Lackawana and Western, the Central Railroad of New Jersey, the Lehigh Valley and others gradually succeeded, in the course of years, in extending an ownership over the coal mines. The more powerful independent operators struck back early at them by getting a constitutional provision passed in Pennsylvania, in 1873, prohibiting railroads from owning and operating coal mines. The railroads evaded this law with facility by an illegal system of leasing, and by organizing nominally separate and independent companies the stock of which, in reality, was owned by them.

To the men who did the actual labor of working in the mines—the coal miners—this change of ownership was not regarded with alarm. Indeed, they at first cherished the pathetic hope that it might benefit their condition, which had been desperate and intolerable enough under the old company system. The small coal-owning capitalists, who had emitted such wailings at their own oppression by the railroads, had long relentlessly exploited their tens of thousands of workers. One abuse had been piled upon another. The miners were paid by the ton; the companies had fraudulently increased the size of the ton, so that the miners had to perform much more labor while wages remained stationary or were reduced.

But one of the most serious grievances was that against what were called "company or truck stores." Ingenious contrivances for getting back the miserable wages paid out, these were company-owned merchandise stores in which the miners were compelled to buy their supplies. In many collieries the mine worker was not paid in money but was given an order on the company store, where he was forced to purchase inferior goods at exorbitant prices.

To blast in the mines powder was necessary; the miner had to buy it at his own expense, and was charged $2.75 a keg, although its selling value was not more than $1.10 or 90 cents. In every direction the mine worker was defrauded and plundered. "Often," says John Mitchell, long the leader of the miners, and a compromiser whose career proves that he cannot be charged with any deep-seated antagonism to capitalist interests, "a man together with his children would work for months without receiving a dollar of money, and not infrequently he would find at the end of the month nothing in his envelope but a statement that his indebtedness to the company had increased so many dollars." [Footnote: "Organized Labor": 359. Mitchell's comments were fully supported by the vast mass of testimony taken by the United States Anthracite Coal Commission in 1902. Mitchell is, at this writing (1909), in the employ of the Civic Federation, an organization financed by capitalists. Its alleged purpose is to bring about "harmony" between capital and labor.] Mitchell adds that the Legislature of Pennsylvania passed anti-truck store laws, "but the operators who have always cried out loudest against illegal action by miners openly and unhesitatingly violated the act and subsequently evaded it by various devices." [Footnote: Ibid.] The wretched houses the miners occupied "also," says Mitchell, "served as a means of extortion, and, in other instances, as a weapon to be used against the miners." In case they complained or struck, the miners were evicted under the most cruel circumstances. Many other media of extortion were common. In the entire year the miners averaged only one hundred and ninety working days of ten hours each, and, of course, were paid for working time only. According to Spahr 350,000 miners drudged for an average wage of $350 a year. [Footnote: "The Present Distribution of Wealth in the United States": 110-111.]

SEIZING RAILROADS AND COAL MINES.

This system of abject slavery was in full force when the railroads ousted many of the small operators, and largely by pressure of power took possession of the mines. In vain did the miners' unions implore the railroad magnates for redress of some kind. The magnates abruptly refused, and went on extending and intrenching their authority. The Vanderbilts manipulated themselves into being important factors in the Delaware and Hudson Railroad, and in the Delaware, Lackawana and Western Railroad, which had deviously obtained title to some of the richest coal deposits in Wyoming County, and they also became prominent in the directing of the Lehigh Valley Railroad.

The most important coal-owning railroad, however, which they and other magnates coveted was the Philadelphia and Reading Railroad. At least one-half of the anthracite coal supply of Pennsylvania was owned or controlled by this railroad. The ownership of the Reading Railroad, with its subordinate lines, was the pivotal requisite towards getting a complete monopoly of the anthracite coal deposits. William H. Vanderbilt had acquired an interest in it years before, but the actual controlling ownership at this time was held by a group of Philadelphia capitalists of the second rank with their three hundred thousand shares.

Unfortunately for this group, the Philadelphia and Reading Railroad was afflicted with a president, one Arthur A. McLeod, who was not only too recklessly ambitious, but who was temerarious enough to cross the path of the really powerful magnates. With immense confidence in his plans and in his ability to carry them out, he set out to monopolize the anthracite coal supply and to make the Reading Railroad a great trunk line. To perfect this monopoly he leased some coal-carrying railroads and made "a gentlemen's agreement" with others; and in line with his policy of raising the importance of the road, he borrowed large sums of money for the construction of new terminals and approaches and for equipment.

Now, all of these plans interfered seriously with the aims and ambition of magnates far greater than he. These magnates quickly saw the stupendous possibilities of a monopoly of the coal supply—the hundreds of millions of dollars of profits it held out—and decided that it was precisely what they themselves should control and nobody else. Second, in his aim to have his own railroad connections with the rich manufacturing and heavily-populated New England districts, McLeod had arranged with various small railroads a complete line from the coal fields of Pennsylvania into the heart of New England. In doing this he overreached his mark. He was soon taught the folly of presuming to run counter to the interests of the big magnates.

AND THE WAY IN WHICH IT WAS DONE.

The two powers controlling the large railroads traversing most of the New England States were the Vanderbilts and J. Pierpont Morgan. The one owned the New York Central, the other dominated the New York, New Haven and Hartford Railroad. The Pennsylvania Railroad likewise had no intention of allowing such a powerful competitor in its own province. These magnates viewed with intense amazement the effrontery of what they regarded as an upstart interloper. Although they had been constantly fighting one another for supremacy, these three interests now made common cause.

They adroitly prepared to crush McLeod and bankrupt the railroad of which he was the head. By this process they would accomplish three highly important objects; one the wresting of the Philadelphia and Reading Railroad into their own divisible ownership; second, the securing of their personal hold on the connecting railroads that McLeod had leased; and, finally, the obtaining of undisputed sovereignty over a great part of the anthracite coal mines. The warfare now began without those fanciful ceremonials, heralds or proclamations considered so necessary by Governments as a prelude to slaughter. These formalities are dispensed with by business combatants.

First, the Morgan-Vanderbilt interest caused the publication of terrifying reports that grave legislation hostile to the coal combination was imminent. The price of Reading stock on the Stock Exchange immediately declined. Then, following up their advantage, this dual alliance inspired even more ruinous reports. The credit of the Philadelphia and Reading Railroad was represented as being in a very bad state. As the railroad had borrowed immense sums of money both to finance its coal combination and to build extensive terminals and other equipment, large payments to creditors were due from time to time. To pay these creditors the railroad had to borrow more; but when the credit of the railroad was assailed, it found that its sources of borrowing were suddenly shut off. The group of Philadelphia capitalists had already borrowed large sums of money, giving Reading shares as collateral. When the market price of the stock kept going down they were called upon to pay back their loans. Declining or unable to do so, their fifty thousand shares of pledged stock were sold. This sale still more depressed the price of Reading stock.

In this group of Philadelphia capitalist were men who were reckoned as very astute business lights—George M. Pullman, Thomas Dolan, one of the street railway syndicate whose briberies of legislatures and common councils, and whose manipulation of street railways in Philadelphia and other cities were so notorious a scandal; John Wanamaker, combining piety and sharp business;—these were three of them. But they were no match for the much more powerful and wily Vanderbilt-Morgan forces. They were compelled under resistless pressure to throw over their Reading stock at a great loss to themselves. Most of it was promptly bought up by J. P. Morgan and Company and the Vanderbilts, who then leisurely arranged a division of the spoils between themselves.

This transaction (strict interpreters of the law would have styled it a conspiracy) opened a facile way for a number of extremely important changes. The Vanderbilts and the Morgan interests apportioned between them much of the ownership of the Philadelphia and Reading Railroad with its vast ownership of coal deposits and its coal carrying traffic. [Footnote: An investigation, in 1905, showed that the "Baltimore and Ohio Railroad and the New York Central and Hudson River Railroad owned about 43.3 per cent. of the entire capital stock of the Philadelphia and Reading Railroad Company." "Report on Discriminations and Monopolies in Coal and Oil, Interstate Commerce Commission, January 25, 1907": 46.] The New York, New Haven and Hartford Railroad grasped the New York and New England Railroad from the Reading's broken hold, and there were further far-reaching changes militating to increase the railroad, and other, possessions of both parties. [Footnote: A good account of this expropriating transaction is that of Wolcott Drew, "The Reading Crash in 1903" in "Moody's Magazine" (a leading financial periodical), issue of January, 1907.] It was but another of the many instances of the supreme capitalists driving out the smaller fry and seizing the property which they had previously seized by fraud. [Footnote: One of the particularly indisputable examples of the glaring fraud by which immense areas of coal fields were originally obtained was that of the disposition of the estate of John Nicholson.

Dying in December, 1800, Nicholson left an estate embracing land, the extent of which was variously estimated at from three to five million acres. Some of the Pennsylvania legislative documents place the area at from three to four million acres, while others, notably a report in 1842, by the judiciary committee of the Pennsylvania House of Representatives, state that it was 5,000,000 acres. Nicholson was a leading figure in the Pennsylvania Land Company which had obtained most of its vast land possessions by fraud. Some of Nicholson's landed estate lay in Virginia, Kentucky, North Carolina, South Carolina, Georgia and other States, but the bulk of it was in Pennsylvania, and included extensive regions containing the very richest coal deposits.

The State of Pennsylvania held a lien upon Nicholson's estate for unpaid taxes amounting to $300,000. Notwithstanding this lien, different individuals and corporations contrived to get hold of practically the whole of the estate in dispute. How they did it is told in many legislative documents; the fraud and theft connected with it were a great scandal in Pennsylvania for forty-five years. We will quote only one of these documents. Writing on January 24, 1842, to William Elwell, chairman of the Judiciary Committee of the Pennsylvania House of Representatives, Judge J. B. Anthony, of the Nicholson Court (a court especially established to pass upon questions arising from the disposition of the estate), said:

"On the 11th of April, 1825, an act passed the Governor to appoint agents to discover and sell the Nicholson lands at auction, for which they were allowed twenty-five per cent. A Special Board of Property was also formed to compromise and settle with claimants. From what has come to my knowledge in relation to this Act, I am satisfied that the commonwealth was seriously injured by the manner in which it was carried out by some of the agents. It was made use of principally for the benefit of land speculators; and the very small sums received by the State treasurer for large and valuable tracts sold and compromised, show that the cunning and astute land jobbers could easily overreach the Board of Property at Harrisburg. ... Many instances of gross fraud might be enumerated, but it would serve no useful purpose." Judge Anthony further said that "very many of the most influential, astute and intelligent inhabitants" and "gentlemen of high standing" were participants in the frauds.—Pennsylvania House Journal, 1842, Vol. ii, Doc. No. 127: 700-704.]

The Vanderbilts' ownership of a large part of the shares of railroads, which, in turn, own and control the coal mines, may be summed up as follows: Through the Lake Shore Railroad, which they have owned almost absolutely, they own, or until recently did own, $30,000,000 of shares in the Philadelphia and Reading Railroad with its stupendous anthracite coal deposits, and they owned, for a long time, large amounts of stock in the Lehigh Valley Railroad with its unmined coal deposits of 400,000,000 tons. In 1908 they disposed of their Lehigh Valley Railroad ownings, receiving an equivalent in either money or some other form of property. The ownership of the Delaware, Lackawana and Western Railroad with its equally large unmined coal deposits is divided between the Vanderbilt family and the Standard Oil interests. The Vanderbilts, according to the latest official reports, also own heavy interests in the Delaware and Hudson Railroad, the New York, Ontario and Western Railroad, $12,500,000 of stock in the Chesapeake and Ohio Railroad, and large amounts of stock in other coal mining and coal carrying railroads. [Footnote: See Special Report No. 1 of the Interstate Commerce Commission on Intercorporate Relationship of Railroads: 39. Also Carl Snyder's "American Railways as Investments": 473.]

Here, then is another important step in the acquisition of a large part of the country's resources by the Vanderbilts. A recapitulation will not be out of place. His first millions obtained by blackmailing, Commodore Vanderbilt then uses those millions to buy a railroad. By further fraudulent methods, based upon bribery of lawmaking bodies, he obtains more railroads and more wealth. His son, following his methods, adds other railroads to the inventory, and converts tens of millions of fraudulently-acquired millions into interest-bearing Government, State, city and other bonds. The third generation (in point of order from the founder) continues the methods of the father and grandfather, gets hold of still more railroads, and emerges as one of the powers owning the great coal deposits of Pennsylvania.

THE DICTATION OF THE COAL FIELDS.

The Vanderbilt and Morgan interest at once increased the price of anthracite coal, adding to it $1.25 to $1.35 a ton. In 1900 they appeared in the open with a new and gigantic plan of consolidation by which they were able to control almost absolutely the production and prices. That the Vanderbilt family and the Morgan interests were the main parties to this combination was well established. [Footnote: Final Report of the U. S. Industrial Commission, 1902, xix: 462-463.] Already high, a still heavier increase of price at once was put on the 40,000,000 tons of anthracite then produced, and the price was successively raised until consumers were taxed seven times the cost of production and transportation.

The population was completely at the mercy of a few magnates; each year, as the winter drew on, the Coal Trust increased its price. In the needs and suffering of millions of people it found a ready means of laying on fresher and heavier tribute. By the mandate of the Coal Trust, housekeepers were taxed $70,000,000 in extra impositions a year, in addition to the $40,000,000 annually extorted by the exorbitant prices of previous years. At a stroke the magnates were able to confiscate by successive grabs the labor of the people of the United States at will. Neither was there any redress; for those same magnates controlled all of the ramifications of Government.

What, however, of the workers in the mines? While the combination was high-handedly forcing the consumer to pay enormous prices, how was it acting toward them? The question is almost superfluous. The railroads made little concealment of their hostility to the trades unions, and refused to grant reforms or concessions. Consequently a strike was declared in 1900 by which the mine workers obtained a ten per cent increase in wages and the promise of semi-monthly wages in cash. But they had not resumed work before they discovered the hollowness of these concessions. Two years of futile application for better conditions passed, and then, in 1902, 150,000 men and boys went on strike. This strike lasted one hundred and sixty-three days. The magnates were generally regarded as arrogant and defiant; they contended that they had nothing to arbitrate; [Footnote: It was on this occasion that George F. Baer, president of the Philadelphia and Reading Railroad, in scoring the public sympathy for the strikers, justified the attitude of the railroads in his celebrated utterance in which he spoke "of the Christian men and women to whom God in His infinite wisdom has intrusted the property interests of the country," which alleged divine sanction he was never able to prove.] and only yielded to an arbitration board when President Roosevelt threatened them with the full punitive force of Government action.

By the decision of this board the miners secured an increase of wages (which was assessed on the consumer in the form of higher prices) and several minor concessions. Yet at best, their lot is excessively hard. Writing a few years later, Dr. Peter Roberts, who, if anything, is not partial to the working class, stated that the wages of the contract miners were (in 1907) about $600 a year, while adults in other classes of mine workers, who formed more than sixty per cent, of the labor forces, did not receive an annual wage of $450. Yet Roberts quotes the Massachusetts Bureau of Statistics as saying that "a family of five persons requires $754 a year to live on." The average number in the family of a mine worker is five or six. "This small income," Roberts observes, "drives many of our people to live in cheap and rickety houses, where the sense of shame and decency is blunted in early youth, and where men cannot find such home comforts as will counteract the attractions of the saloon." Hundreds of company houses, according to Roberts, are unfit for habitation, and "in the houses of mine employees, of all nationalities, is an appalling infant mortality." [Footnote: "The Anthracite Coal Communities": 346-347.]

THE BITUMINOUS COAL MINES ALSO.

The sway of the Vanderbilts, however, extends not only over the anthracite, but over a great extent of the bituminous coal fields in Pennsylvania, Maryland, West Virginia, Ohio and other States. By their control of the New York Central Railroad, they own various ostensibly independent bituminous coal mining companies. The Clearfield Corporation, the Pennsylvania Coal and Coke Co., and the West Branch Coal Company are some of these. By their great holdings in other railroads traversing the soft coal regions, the Vanderbilts control about one-half of the bituminous coal supply in the Eastern, and most of the Middle-Western, States.

According to the Interstate Commerce Commission's report, in 1907, the New York Central Railroad and the Pennsylvania Railroad owned in that year about forty-five per cent. of the stock of the Chesapeake and Ohio Railroad, and the New York Central owned large amounts of stock in other railroads. "The Commission, therefore, reaches the conclusion," the report reads on after going into the question of ownership in detail, "that, as a matter of fact, the Baltimore and Ohio Railroad Company, the Norfolk and Western Railroad Company, and the Philadelphia and Reading Railway Company were practically controlled by the Pennsylvania Railroad Company and the New York Central and Hudson River Railroad Company, and that the result was to practically abolish substantial competition between the carriers of coal in the territories under consideration." Although the Standard Oil oligarchy now owns considerable stock in the Vanderbilt railroads, it is an undoubted fact that the Vanderbilts share to a great extent the mastery of both hard and soft coal fields.

It is not possible here to present even in condensed form the outline, much less the full narrative, of the labyrinth of tricks, conspiracies and frauds which the railroad magnates have resorted to, and still practice, in the throttling of the small capitalists, and in guaranteeing themselves a monopoly. A great array of facts are to be found in the reports of the exhaustive investigations made by the United States Industrial Commission in 1901-1902, and by the Interstate Commerce Commission in 1907.

Thousands of times was the law glaringly violated yet the magnates were at all times safe from prosecution. Periodically the Government would make a pretense of subjecting them to an inquiry, but in no serious sense were they interfered with. These investigations all have shown that the railroads first crushed out the small operators by a conspiracy of rates, blockades and reprisals, and then by a juggling process of stocks and bonds, bought in the mines with the expenditure of scarcely any actual money. Having done this they formed a monopoly and raised prices which, in law, was a criminal conspiracy. The same weapons destructively used against the small coal operators years ago are still being employed against the few independent companies remaining in the coal fields, as was disclosed, in 1908, in the suit of the Government to dissolve the workings of the various railroad companies in the anthracite coal combination. [Footnote: See testimony brought out before Charles H. Guilbert, Examiner appointed by the United States District Court in Philadelphia. The Government's petition charged the defendants with entering into a conspiracy contrary to the letter and the spirit of the Sherman act.]

THE HUGE PROFITS FROM THE COAL MINES.

No one knows or can ascertain the exact profits of the Vanderbilts and of other railroad owners from their control of both the anthracite, and largely the bituminous, coal mines. As has been noted, the railroad magnates cloud their trail by operating through subsidiary companies. That their extortions reach hundreds of millions of dollars every year is a patent enough fact. Some of the accompaniments of this process of extortion have been referred to;— the confiscation, on the one hand, of the labor of the whole consuming population by taxing from them more and more of the products of their labor by repeated increases in the price of coal, and, on the other, the confiscation of the labor of the several hundred thousand miners who are compelled to work for the most precarious wages, and in conditions worse, in some respects, than chattel slavery.

But not alone is labor confiscated. Life is also immolated. The yearly sacrifice of life in the coal mines of the United States is steadily growing. The report for 1908 of the United States Geological Survey showed that 3,125 coal miners were killed by accidents in the current year, and that 5,316 were injured. The number of fatalities was 1,033 more than in 1906. "These figures," the report explains, "do not represent the full extent of the disasters, as reports were not received from certain States having no mine inspectors." Side by side with these appalling figures must be again brought out the fact adverted to already: that the owners of the coal mines have at all times violently opposed the passage of laws drafted to afford greater safeguard for life in the working of the mines. Being the owners, at the same time, of the railroads, their opposition in that field to life-saving improvements has been as consistent.

Improvements are expensive; human life is contemptibly cheap; so long as there is a surplus of labor it is held to be commercial folly to go to the unnecessary expense of protecting an article of merchandise which can be had so cheaply. Human tragedies do not enter into the making of profit and loss accounts; outlays for mechanical appliances do. Assuredly this is a business age wherein profits must take precedence over every other consideration, which principle has been most elaborately enunciated and established by a long list of exalted court decisions. Yea, and the very magnates whose power rests on force and fraud are precisely those who insidiously dictate what men shall be appointed to these omniscient courts, before whose edicts all men are expected to bow in speechless reverence. [Footnote: This is far from being a rhetorical figure of speech. Witness the dictating of the appointment and nominations of judges by the Standard Oil Company (which now owns immense railroad systems and industrial plants) as revealed by certain authentic correspondence of that trust made public in the Presidential campaign of 1908.]



CHAPTER VIII

FURTHER ASPECTS OF THE VANDERBILT FORTUNE

The juggling of railroads and the virtual seizure of coal mines were by no means the only accomplishments of the Vanderbilt family in the years under consideration. Colorless as was the third generation, undistinguished by any marked characteristic, extremely commonplace in its conventions, it yet proved itself a worthy successor of Commodore Vanderbilt. The lessons he had taught of how to appropriate wealth were duly followed by his descendants, and all of the ancestral methods were closely adhered to by the third generation. Whatever might be its pretensions to a certain integrity and to a profound respectability, there was really no difference between its methods and those of the Commodore. Times had changed; that was all. What had once been regarded as outright theft and piracy were now cloaked under high-sounding phrases as "corporate extension" and "high finance" and other catchwords calculated to lull public suspicion and resentment. A refinement of phraseology had set in; and it served its purpose.

Concomitantly, while executing the transactions already described, the Vanderbilts of the third generation put through many others, both large and small, which were converted into further heaps of wealth. An enumeration of all of these diverse frauds would necessitate a tiresome presentation. A few examples will suffice.

The small frauds were but lesser in relation to the larger. At this period of the economic development of the country, when immense thefts were being consummated, a fraud had to rise to the dignity of at least fifty million dollars to be regarded a large one. The law, it is true, proscribed any theft involving more than $25 as grand larceny, but it was law applying to the poor only, and operative on them exclusively. The inordinately rich were beyond all law, seeing that they could either manufacture it, or its interpretation, at will. Among the conspicuous, audacious capitalists the fraud of a few paltry millions shrank to the modesty of a small, cursory, off-hand operation. Yet, in the aggregate, these petty frauds constituted great results, and for that reason were valued accordingly.

AN $8,000,000 AREA CONFISCATED.

Such a slight fraud was, for instance, the Vanderbilts' confiscation of an entire section of New York City. In 1887 they decided that they had urgent and particular need for railroad yard purposes of a sweep of streets from Sixtieth street to Seventy-second street along the Hudson River Railroad division. What if this property had been bought, laid out and graded by the city at considerable expense? The Vanderbilts resolved to have it and get it for nothing. Under special forms of law dictated by them they thereupon took it. The method was absurdly easy.

Ever compliant to their interests, and composed as usual of men retained by them or responsive to their influences, the Legislature of 1887 passed an act compelling the city authorities to close up the required area of streets. Then the city officials, fully as accommodating, turned the property over to the exclusive, and practically perpetual, use of the New York Central and Hudson River Railroad. With the profusest expressions of regard for the public interests, the railroad officials did not in the slightest demur at signing an agreement with the municipal authorities. In this paper they pledged themselves to cooperate with the city in conferring upon the Board of Street Openings the right to reopen any of the streets at any time. This agreement was but a decoy for immediate popular effect. No such reopening ordinance was ever passed; the streets remained closed to the public which, theoretically at least, was left with the title. In fact, the memorandum of the agreement strangely disappeared from the Corporation Counsel's office, and did not turn up until twenty years later, when it was accidentally and most mysteriously discovered in the Lenox Library. Whence came it to this curious repository? The query remains unanswered.

For seventeen and a half acres of this confiscated land, comprising about three hundred and fifty city lots, now valued at a round $8,000,000, the New York Central and Hudson River Railroad has not paid a cent in rental or taxes since the act of 1887 was passed. On the island of Manhattan alone 70,000 poor families are every year evicted for inability to pay rent—a continuous and horribly tragic event well worth comparing with the preposterous facility with which the great possessing classes everywhere either buy or defy law, and confiscate when it suits them. So cunningly drafted was the act of 1887 that while New York City was obliged to give the exclusive use of this large stretch of property to the company, yet the title to the property—the empty name—remained vested in the city. This being so, a corporation counsel complaisantly decided that the railroad company could not be taxed so long as the city owned the title. [Footnote: Minutes of the New York City Board of Estimate and Apportionment—Financial and Franchise Matters, 1907:1071-1085. "It will thus be seen," reported Harry P. Nichols, Engineer-in-Charge of the Franchise Bureau, "that the railroad is at present, and has been for twenty years, occupying more than three hundred city lots, or something less than twenty acres, without compensation to the city."]

Another of what may be called—for purposes of distinction—the numerous small frauds at this time, was that foisting upon New York City the cost of replacing the New York Central's masonry viaduct approaches with a fine steel elevated system. This fraud cost the public treasury about $1,200,000, quite a sizable sum, it will be admitted, but one nevertheless of pitiful proportions in comparison with previous and later transactions of the Vanderbilt family.

We have seen how, in 1872, Commodore Vanderbilt put through the Legislature an act forcing New York City to pay $4,000,000 for improving the railroad's roadway on Park avenue. His grandsons now repeated his method. In 1892 the United States Government was engaged in dredging a ship canal through the Harlem River. The Secretary of War, having jurisdiction of all navigable waters, issued a mandate to the New York Central to raise its bridge to a given height, so as to permit the passing under of large vessels.

To comply with this order it was necessary to raise the track structure both north and south of the Harlem River. Had an ordinary citizen, upon receiving an order from the authorities to make improvements or alterations in his property, attempted to compel the city to pay all or any part of the cost, he would have been laughed at or summarily dealt with. The Vanderbilts were not ordinary property holders. Having the power to order legislatures to do their bidding, they now proceeded to imitate their grandfather, and compel the city to pay the greater portion of the cost of supplying them with a splendid steel elevated structure.

PUBLIC TAXATION TO SUPPLY PRIVATE CAPITAL.

The Legislature of 1892 was thoroughly responsive. This was a Legislature which was not merely corrupt, but brazenly and frankly so, as was proved by the scandalous openness with which various spoliative measures were rushed through.

An act was passed compelling New York City to pay one-half of the cost of the projected elevated approaches up to the sum of $1,600,000. New York City was thus forced to pay $800,000 for constructing that portion south of the Harlem River. If, so the law read on, the cost exceeded the estimate of $800,000, then the New York Central was to pay the difference. Additional provision was made for the compelling of New York City to pay for the building of the section north of the Harlem River. But who did the work of contracting and building, and who determined what the cost was? The railroad company itself. It charged what it pleased for material and work, and had complete control of the disbursing of the appropriations. The city's supervising commissions had, perforce, to accept its arbitrary demands, and lacked all power to question, or even scrutinize, its reports of expenditures. Apart from the New York Central's officials, no one to-day knows what the actual cost has been, except as stated by the company.

South of the Harlem River this report cost has been $800,000, north of the Harlem River $400,000. At practically no expense to themselves, the Vanderbilts obtained a massive four-track elevated structure, running for miles over the city streets. The people of the city of New York were forced to bear a compulsory taxation of $1,200,000 without getting the slightest equivalent for it. The Vanderbilts own these elevated approaches absolutely; not a cent's worth of claim or title have the people in them. Together with the $4,000,000 of public money extorted by Commodore Vanderbilt in 1872, this sum of $1,200,000 makes a total amount of $5,200,000 plucked from the public treasury under form of law to make improvements in which the people who have footed the bill have not a moiety of ownership. [Footnote: The facts as to the expenses incurred under the act of 1892 were stated to the author by Ernest Harvier, a member of the Change of Grade Commission representing New York City in supervising the work.] The Vanderbilts have capitalized these terminal approaches as though they had been built with private money. [Footnote: The New York Central has long compelled the New York, New Haven and Hartford Railroad to pay seven cents toll for every passenger transported south of Woodlawn, and also one-third of the maintenance cost, including interest, of the terminal. In reporting an effort of the New York, New Haven and Hartford Railroad to have these terms modified, the New York "Times" stated in its financial columns, issue of December 25, 1908: "As matters now stand the New Haven, without its consent, is forced to bear one-third of the charge arising from the increased capital invested in the Central's terminal"]



At this point a significant note may be made in passing. While these and other huge frauds were going on, Cornelius Vanderbilt was conspicuously presenting himself as a most ardent "reformer" in politics. He was, for instance, a distinguished member of the Committee of Seventy, organized in 1894, to combat and overthrow Tammany corruption! Such, as we have repeatedly observed, is the quality of the men who compose the bourgeois reform movements. For the most part great rogues, they win applause and respectability by virtuously denouncing petty, vulgar political corruption which they themselves often instigate, and thus they divert attention from their own extensive rascality.

A MULTITUDE OF ACQUISITIONS

Why tempt exhaustion by lingering upon a multitude of other frauds which went to increase the wealth and possessions of the Vanderbilt family? One after another—often several simultaneously—they were put through, sometimes surreptitiously, again with overt effrontery. Legislative measures in New York and many other States were drafted with such skill that sly provisions allowing the greatest frauds were concealed in the enactments; and the first knowledge that the plundered public frequently had of them was after they had already been accomplished. These frauds comprised corrupt laws that gave, in circumstances of notorious scandal, tracts of land in the Adirondack Mountains to railroad companies now included in the Vanderbilt system. They embraced laws, and still more laws, exempting this or that stock or property from taxation, and laws making presents of valuable franchises and allowing further consolidations. Laws were enacted in New York State the effects of which were to destroy the Erie Canal (which has cost the people of New York State $100,000,000) as a competitor of the New York Central Railroad. All of these and many other measures will be skimmed over by a simple reference, and attention focussed on a particularly large and notable transaction by which William K. Vanderbilt in 1898 added about $59,000,000 to his fortune at one superb swoop.

The Vanderbilt ownership of various railroad systems has been of an intricate, roundabout nature. A group of railroads, the majority of the stock of which was actually owned by the Vanderbilt family, were nominally put under the ownership of different, and apparently distinct, railroad companies. This devious arrangement was intended to conceal the real ownership, and to have a plausible claim in counteracting the charge that many railroads were concentrated in one ownership, and were combined in monopoly in restraint of trade. The plan ran thus: The Vanderbilts owned the New York Central and Hudson River Railroad. In turn this railroad, as a corporation, owned the greater part of the $50,000,000 stock of the Lake Shore Railroad. The Lake Shore, in turn, owned the control, or a chief share of the control, of other railroads, and thus on.

In 1897, William K. Vanderbilt began clandestinely campaigning to combine the New York Central and the Lake Shore under one definite, centralized management. This plan was one in strict harmony with the trend of the times, and it had the undoubted advantage of promising to save large sums in managing expenses. But this anticipated retrenchment was not the main incentive. A dazzling opportunity was presented of checking in an immense amount in loot. The grandson again followed his eminent grandfather's teachings; his plan was nothing more than a repetition of what the old Commodore had done in his consolidations.

During the summer and fall of 1897 the market gymnastics of Lake Shore stock were cleverly manipulated. By the declaration of a seven per cent. dividend the market price of the stock was run up from 115 to about 200. The object of this manipulation was to have a justification for issuing $100,000,000 in three and one-half per cent. New York Central bonds to buy $50,000,000 of Lake Shore seven per cent. capital stock. By his personal manipulation, William K. Vanderbilt at the same time ballooned the price of New York Central stock.

The purpose was kept a secret until shortly before the plan was consummated on February 4, 1898. On that day William K. Vanderbilt and his subservient directors of the New York Central gathered their corpulent and corporate persons about one table and voted to buy the Lake Shore stock. With due formalities they then adjourned, and moving over to another table, declared themselves in meeting as directors of the Lake Shore Railroad, and solemnly voted to accept the offer.

Presently, however, an awkward and slightly annoying defect was discovered. It turned out that the Stock Corporation law of New York State specifically prohibited the bonded indebtedness of any corporation being more than the value of the capital stock. This discovery was not disconcerting; the obstacle could be easily overcome with some well-distributed generosity. A bill was quickly drawn up to remedy the situation, and hurried to the Legislature then in session at Albany. The Assembly balked and ostentatiously refused to pass it. But after the lapse of a short time the Assembly saw a great new light, and rushed it through on March 3, on which same day it passed the Senate. It was at this precise time that a certain noted lobbyist at Albany somehow showed up, it was alleged, with a fund of $500,000, and members of the Assembly and Senate suddenly revealed evidences of being unusually flush with money. [Footnote: The author is so informed by an official who represented New York City's legal interests at this session and successive Legislative sessions, and who was thoroughly conversant with every move. See Chapter 80, Laws of 1898, Laws of New York, 1898, ii: 142. The amendment declared that Section 24 of the Stock Corporation Law did not apply to a railroad corporation.]

A very illuminating transaction, surely, and well deserving of philosophic comment. This, however, will be eschewed, and attention next turned to the manner in which the Vanderbilts, in 1899, obtained control of the Boston and Albany Railroad.

THE BOSTON AND ALBANY RAILROAD BECOMES THEIRS.

To a great extent, this railroad had been built with public funds raised by enforced taxation, the city of Albany contributing $1,000,000, and the State of Massachusetts $4,300,000 of public funds. Originally it looked as if the public interests were fully conserved. But gradually, little by little, predatory corporate interests got in their delicate work, and induced successive legislatures and State officials to betray the public interests. The public holdings of stock were entirely subordinated, so that in time a private corporation secured the practical ownership.

Finally, in 1899, the Legislature of Massachusetts effaced the last vestige of State ownership by giving the Vanderbilts a perpetual lease of this richly profitable railroad for a scant two million dollars' payment a year. During the debate over this act Representative Dean charged in the Legislature that "it is common rumor in the State House that members are receiving $300 apiece for their votes." The acquisition of this railroad enabled the New York Central to make direct connection with Boston, and with much of the New England coast, and added about four hundred miles to the Vanderbilt system. Most of the remainder of the New England territory is subservient to the Boston and Maine Railroad system in which the American Express Company, controlled by the Vanderbilts, owns 30,000 shares.

To pay interest and dividends on the hundreds of millions of dollars of inflated bonds and stock which three generations of the Vanderbilts had issued, and to maintain and enhance their value, it was necessary to keep on increasingly extorting revenues. The sources of the profits were palpable. Time after time freight rates were raised, as was more than sufficiently proved in various official investigations, despite denials. Conjunctively with this process, another method of extortion was the ceaseless one of beating down the wages of the workers to the very lowest point at which they could be hired. While the Vanderbilts and other magnates were manufacturing law at will, and boldly appropriating, under color of law, colossal possessions in real and personal property, how was the law, as embodied in legislatures, officials and courts acting toward the working class?

THE GOVERNMENT AN ENGINE OF TYRANNY.

The grievances and protests of the workers aroused no response save the ever-active one of contumely, coercion and violent reprisals. The treasury of Nation, States and cities, raised by a compulsory taxation falling heavily upon the workers, was at all times at the complete disposal of the propertied interests, who emptied it as fast as it was filled. The propertiless and jobless were left to starve; to them no helping arm was outstretched, and if they complained, no quarter given. The State as an institution, while supported by the toil of the producers, was wholly a capitalist State with the capitalists in complete supremacy to fashion and use it as they chose. They used the State political machinery to plunder the masses, and then, at the slightest tendency on the part of the workers to resist these crushing injustices and burdens, called upon the State to hurry out its armed forces to repress this dangerous discontent.

In Buffalo, in 1890-1891, thirty-one in every hundred destitutes were impoverished because of unemployment, and in New York City twenty- nine in every hundred. [Footnote: "Encyclopedia of Social Reform," Edition of 1897: 1073.] Hundreds of millions of dollars of public funds were given outright to the capitalists, but not a cent appropriated to provide work for the unemployed. In the panic of 1893, when millions of men, women and children were out of work, the machinery of government, National, State and municipal, proffered not the least aid, but, on the contrary, sought to suppress agitation and prohibit meetings by flinging the leaders into jail. Basing his conclusions upon the (Aldrich) United States Senate Report of 1893—a report highly favorable to capitalist interests, and not unexpectedly so, since Senator Aldrich was the recognized Senatorial mouthpiece of the great vested interests—Spahr found that the highest daily wage for all earners, taken in a mass, was $2.O4 [Footnote: "The Present Distribution of Wealth in The United States."]

More than three-quarters of all the railroad employees in the United States received less than two dollars a day. Large numbers of railroad employees were forced to work from twelve to fourteen hours a day, and their efficiency and stamina thus lowered. Periodically many were laid off in enforced idleness; and appalling numbers were maimed or killed in the course of duty. [Footnote: The report of the Wisconsin Railway Commissioners for 1894, Vol. xiii., says: "In a recent year more railway employees were killed in this country than three times the number of Union men slain at the battle of Lookout Mountain, Missionary Ridge and Orchard Knob combined. ... In the bloody Crimean War, the British lost 21,000 in killed and wounded— not as many as are slain, maimed and mangled among the railroad men injured [Footnote: of the country in a single year." Various reports of the Interstate Commerce Commission state the same facts.] or slain largely because the railroad corporations refused to expend money in the introduction of improved automatic coupling devices, these workers or their heirs were next confronted by what? The unjust and oppressive provisions of worthless employers' liability laws drafted by corporation attorneys in such a form that the worker or his family generally had almost no claim. The very judges deciding these suits were, as a rule, put on the bench by the railroad corporations.

MACHINE GUNS FOR THE OVERWORKED.

These deadly conditions prevailed on the Vanderbilt railroads even more than on any others; it was notorious that the Vanderbilt system was not only managed in semi-antiquated ways so far as the operation was concerned, but also that its trainmen were terribly underpaid and overworked. [Footnote: "Semi-antiquated ways." Only recently the "Railway Age Gazette," issue of January, 1909, styled the New York Central's directors as mostly "concentrated absurdities, physically incompetent, mentally unfit, or largely unresident and inattentive."] In reply to a continued agitation for better hours on the part of the Vanderbilt employees, the New York Legislature passed an act, in 1892, which apparently limited the working hours of railroad employees to ten a day. There was a gleam of sunshine, but lo! when the act was critically examined after it had become a law, it was found that a "little joker" had been sneaked into its mass of lawyers' terminology. The surreptitious clause ran to this effect: That railroad companies were permitted to exact from their employees overtime work for extra compensation. This practically made the whole law a negation.

So it turned out; for in August, 1892, the switchmen employed by various railroad lines converging at Buffalo struck for shorter hours and more pay. The strike spread, and was meeting with tactical success; the strikers easily persuaded men who had been hired to fill their jobs to quit. What did the Vanderbilts and their allies now do? They fell back upon the old ruse of invoking armed force to suppress what they proclaimed to be violence. They who had bought law and had violated the law incessantly now represented that their property interests were endangered by "mob violence," and prated of the need of soldiers to "restore law and order." It was a serviceable pretext, and was immediately acted upon.

The Governor of New York State obediently ordered out the entire State militia, a force of 8,000, and dispatched it to Buffalo. The strikers were now confronted with bayonets and machine guns. The soldiery summarily stopped the strikers from picketing, that is to say, from attempting to persuade strikebreakers to refrain from taking their places. Against such odds the strike was lost.

If, however, the Vanderbilts could not afford to pay their workers a few cents more in wages a day, they could afford to pay millions of dollars for matrimonial alliances with foreign titles. These excursions into the realm of high-caste European nobility have thus far cost the Vanderbilt family about $15,000,000 or $20,000,000. When impecunious counts, lords, dukes and princes, having wasted the inheritance originally obtained by robbery, and perpetuated by robbery, are on the anxious lookout for marriages with great fortunes, and the American money magnates, satiated with vulgar wealth, aspire to titled connections, the arrangement becomes easy. [Footnote: More than 500 American women have married titled foreigners. The sum of about $220,000,000, it is estimated (1909), has followed them to Europe.] Romance can be dispensed with, and the lawyers depended upon to settle the preliminaries.

TEN MILLIONS FOR A DUKEDOM.

The announcement was made in 1895 that "a marriage had been arranged" between Consuelo, a young daughter of William K. Vanderbilt, and the Duke of Marlborough. The wedding ceremony was one of showy splendor; millions of dollars in gifts were lavished upon the couple. Other millions in cash, wrenched also from the labor of the American working population, went to rehabilitate and maintain Blenheim House, with its prodigal cost of reconstruction, its retinue of two hundred servants, and its annual expense roll of $100,000. Millions more flowed out from the Vanderbilt exchequer in defraying the cost of yachts and of innumerable appurtenances and luxuries. Not less than $2,500,000 was spent in building Sutherland House in London. Great as was this expense, it was not so serious as to perturb the duchess' father; his $50,000,000 feat of financial legerdemain, in 1898, alone far more than made up for these extravagant outlays. The Marlborough title was an expensive one; it turned out to be a better thing to retain than the man who bore it; after a thirteen years' compact, the couple decided to separate for "good and sufficient reasons," into which it is not our business to inquire. All told, the Marlborough dukedom had cost William K. Vanderbilt, it was said, fully $10,000,000.