Wednesday, May 21, 2008

19th Century Robber Barons Paved the Way

I just finished reading Hear That Lonesome Whistle Blow by Dee Brown. It was a painstaking report of how the frontier was settled by the railroads. It began with a few honest visionaries who failed to get enough backers to fund a railroad project. Then big business got involved. They wrapped the railroads in the American flag and made it a patriotic duty. They convinced Congress of the necessity of connecting the Atlantic with the Pacific oceans, which then passed legislation that granted cash money and tens of thousands of acres of land for every mile of track that was laid. The corporate profiteers laid track on the longest routes possible to reap ever more money and land from Congress. Congress took federally granted lands from the Native Americans and transferred it to the railroad companies without notifying the tribes. Then they sent Civil War generals Sherman and Sheridan to wipe out the Indians that were blocking the railroad from entering tribal lands.

The railroad companies then subdivided the land grants and sold them for a huge profit. There was more profit in subdividing the land than in the RR itself. The railroad companies gave Congress doubly inflated estimates of the cost of building the railroads bilking the Treasury of huge amounts of grants. A couple of railroad companies even set up shell holding corporations to siphon off the biggest profits. They additionally sold stocks and bonds in the railroads; if your town didn't buy RR bonds, then the tracks didn't come your way.

Once the Native Americans were crushed and the land grants were subdivided, the RR companies sent solicitors all over Europe to bring whole communities to their dream of new hope in America. Europeans would give their life savings to the RR companies for the lots in the prairies and mountains of the west and get 3-year mortgages on their houses. Just like the sub-prime mortgage debacle of today, most of the European immigrants ended up broken and penniless. The railroads effectively ruined the lives of generations of settlers as well as generations of Native Americans from whom the land was stolen.

After all the tracks were all laid, and the immigrants were settled in the subdivided lots, then the RR monopolies charged enormous fees from farmers to transport their produce to markets. The high transportation fees made farming a money losing endeavor.

The Supreme Court ruled twice within 15 years against the railroad companies taking federally appropriated tribal lands. Yet, Congress ignored the Supreme Court. Many members of Congress were also involved in the RR profiteering. The railroads of the 19th century were akin to the war profiteers and oil companies of the 21st century. Both sets of profiteers own Congress on both sides of the aisle. Even our esteemed president Abraham Lincoln reaped profits from railroad land speculation. Don't forget, it was Democrat John Kerry who amassed the largest profits of anyone in Congress from his investments in Iraq.

In addition, a Supreme Court ruling in 1886, Santa Clara County v. Southern Pacific Railroad, gave "personhood" under the 14th Amendment to the RR corporations in order to have legal standing in court and be taxed. I read that Supreme Court ruling several times. It was not, in fact, the ruling itself that gave "personhood" to corporations, but, rather, the railroad barons got human rights for corporations inserted in the court reporter's headnotes on the case. Since that time, the mega corporations have exploited that single court reporter's note, and layers of statutes have built upon it.

After all the profits were tidily secured in the private pockets of about 70 RR barons, the house of cards fell and the railroads went bankrupt. RR stocks and bonds became worthless. Tracks were left unused. Towns were laid waste without the RR to connect them to markets. The profiteers anticipated the fall and sold their stocks and bonds at a profit before the prices plummeted. It took two decades for the American public to notice the monumental rip off. Congressional investigations exposed the fraud, but they didn't want to go too deep into the details, since too many members of Congress had an embarrassing history of involvement.

One of the lessons I learned from this story was that the neo-cons have a longer history in America than the massive mid-20th century post-war immigration that I know about. Another lesson I learned is that corporate profiteers like Jay Gould, Durant, and Henry Villner can get ever more creative to invent ways to separate innocent victims from their money. Very Rovian. The third lesson was that fascists care nothing for the sanctity of life; they kill not only the enemies, but also kill their women, children and elders. Sherman and Sheridan killed whole villages of undefended Native peoples on tribal lands tantamount to genocide. Warriors would leave their villages undefended because they couldn't imagine that unarmed innocents would become targets. Nowadays, state-sponsored terrorism like the occupation of Iraq doesn't hesitate to kill everyone whether they are insurgents or not. What Che Guevara taught us was that protecting the innocents and only fighting the armed warriors wins the popular sentiment to your side. Batista killed anyone, which led to his defeat by the popular revolution.

1 comment:

  1. Excellent "review/report!" You so nicely highlight another aspect of the ruination that has plagued this country ever since the corporations took over. I say, "took over" because with the passing of a "toothless" health reform act, the takeover will be complete for all to see. Too bad we couldn't find our way to simply insert the word, "natural" into the 14th Amendment.