Railroad Land Grants
A Statement of their
History, their Value and
their Cost
ßy
W. wítíALDWIN,
Land Commissioner,
Chicago, Burlington & Quincy Railroad Company
Remarks of Mr. Baldwin, which appeared in the
Congressional Record Monday, January 12,1920,
in answer to speech of Senator Chamberlain of
Oregon delivered in the Ünited States Senate,
on the subject of Railroad Land Grants
Railroad Land Grants
Their History, their Value and their Cost
By W. W, Baldwin^ Land Commissioner, Chicago, Burlington &
Quincy Railroad Company,
In the United States Senate on Friday, December 19, 1919, when the
Cummins Bill, providing for return of the railroads to their owners,
was under discussion, Hon. George E. Chamberlain of Oregon addressed
the Senate in opposition to the bill. He denounced the claims of the
owners of railroad properties regarding the losses under government con¬
trol, and the financial hardships that will ensue if they are,turned back
without adequate safeguards, as cries of " Wolf when there is no Wolf."
He spoke of a " wild era of extravagance " on the part of Congress in
the matter of railroad land grants beginning in 1850, and repeated the
statement that has been so often made that " empires were given to
railroads."
Senator Chamberlain had taken the Cummins Bill as an oppor¬
tunity for making a speech on Railroad Land Grants. His speech
consisted mainly in a long extract from the " Encyclopedia of Ameri¬
can Government," and a table copied from the Report of the Com¬
missioner of the General Land Office which names the railroad com¬
panies that received land grants and the acreage granted to each. Upon
the strength of these tables of acreage showing " empires " given to the
roads in 1850 to 1871, Senator Chamberlain proceeded to denounce the
companies for inefficiency of management," and other vices. This
speech was called to the attention of Mr. W. W. Baldwin, for many years
the Land Commissioner of the Chicago, Burlington & Quincy Railroad
Company in charge of the sale and disposition of the lands granted to
its predecessors in the States of Iowa, Missouri and Nebraska, who pre¬
pared a statement in reply to Senator Chamberlain.
Through the courtesy of Senator King of Utah, Mr. Baldwin^s state¬
ment appeared in the Congressional Record on Monday, January 12,
1920, as follows :
1
Stalemeut of W. W. Baldwin on Land Grants to Railroads
The remarks of Senator Chamberlain, of Oregon, in the Senate on
Friday, December 19, 1919, contain so many mistakes of fact and so
many half truths that they do not correctly represent the subject of
land grants to railroads. The Senator himself is probably an uncon¬
scious victim of this misrepresentation, because his speech consists
largely of quotations from a publication called Encyclopedia of Ameri¬
can Government."
The most casual reading of this encyclopedia article will show that
it was hastily and carelessly compiled and that, so far as the Govern¬
ment land grants are concerned, it entirely omits considération of the
essential features. These features are the conditions and circumstances
which led to the making of these land grants.
What were the lands worth ; that is, what value did the Government
part with, and what exactions did the Government make from the com¬
panies to whom the grants were made?
The first important Government land grant in aid of the construction
of railroads was in 1850, which was a grant of 2,500,000 acres in Illinois
to aid in the construction of the Illinois Central Railrpad. The father
of this measure was Stephen A. Douglas. Prior to 1850 there were no
Government land grants, and a reading of the encyclopedia article
quoted by Senator Chamberlain will show how insignificant were the
money contributions prior to 1850. The fact is that in almost every
case the States either owned the roads or were financially interested in
them. The State of Michigan, for instance, built and owned the Michi¬
gan Central road from Detroit to Kalamazoo, which it operated for
years at a loss and sold in 1846 for a small consideration. The land-
grant policy of aid to railroads began in 1850 with the Illinois Central
grant.
If Senator Chamb.erlain had had an opportunity to read the debates
in the Senate when these land grants were made, instead of inserting
into the Record a mass of statements from an encyclopedia, he would
have learned the conditions which existed in 1850, the motives and rea¬
sons which inspired the Senators of that day to vote these land grants,
the values which the Government parted with, and the valuable financial
reservations that were inserted as conditions of the grants, and the
wisdom of the policy.
The following àre extracts from speeches of Henry Clay, Thomas H.
Benton, and Stephen A. Douglas in the Senate upon the subject of the
Illinois land grant which throw an illuminating light upon this whole
subject and are typical of all the speeches made on the subject:
" Mr. Douglas. It is simply carrying out a principle which has been
acted upon for 30 years, by which you cede each alternate section of land
and double the price of the alternate sections not ceded, so that the same
price is received for the whole. These lands have been in the market
for 15 to 30 years; the average time is about 23 years; but they will not
sell at the usual price of $1.25 per acre, because they are distant-from
2
any navigable stream or a market for produce. A railroad will make the
lands salable at double the usual price, because the improvement made
will make them valuable."
Henry Clay. With respect to the State of Illinois — and I believe
the same is true to a considerable extent with reference to Mississippi
and Alabama, but I happen to know something personally of the interior
of the State of Illinois — that portion of the State through which this
road will run is a succession of prairies, the principal of which is de¬
nominated the * Grand Prairie.' I do not recollect its exact length ; it
is, I believe, about 300 miles in length and but 100 in breadth. Now,
this road will pass directly through that Grand Prairie lengthwise, and
there is nobody who knows anything of that Grand Prairie who does not
know that the land is utterly worthless for any present purpose -— not
because it is not fertile but for want of wood and water and from the
fact that it is inaccessible, wanting all facilities for reaching a ma^rket
or for transporting timber, so that nobody will go there and settle while
it is so destitute of all the advantages of society and the conveniences
which arise from a social state. And now, by constructing this road
through the prairie, through the center of the State of Illinois, you
bring millions of acres of land immediately into the market, which will
otherwise remain for years and years entirely unsalable."
" Thomas H. Benton. From the consideration which I gave to that
subject at that early day, it appeared to me that it was a beneficial dis¬
position for the United States to make of her refuse lands, to cede them
to the States in which they lay. Lands which had been 20 or 25 years in
the market at the minimum price, and had never found a purchaser up
to that time, were classed as refuse, and it was deemed that the State,
as a local authority,.might be able to make some disposition of them,
which the General Government, without machinery of land offices, could
not. The principle of the bill before the Senate is to take the refuse
lands and appropriate them to a great object of internal improvement,
which, although it has its locality in a particular State, produces advan¬
tages which we all know spread far and wide, for a good road can not be
made anywhere without being beneficial to the whole United States.
" But, Mr. President, with respect to the general proposition, this
application rests upon a principle that young States are made desolate,
in a great degree, by having lands in their midst that pay no taxes,
undergo no cultivation, that are held at a price that nobody will pay,
and which, in fact, in some parts of the country become jungles for the
protection of wild beasts that prey upon the flocks and herds of the
farmers."
Why did not Senator Chamberlain examine the record of these de¬
bates? Why did he not inquire and state what the railroad companies
were compelled to give back in return for what the Government granted
to them?
the illinois central grant.
Because it was the first of these Government land grants and em¬
braced the most valuable lands covered by any grant of agricultural
3
land a correct knowledge of its value will throw light upon the whole
subject.
The first point to consider is what were these lands worth in 1850;
what did the Government give to secure the construction of the Illinois
Central road? What value did the Government part with?
This all-important inquiry is ignored by Senator Chamberlain. The
reason for its importance has been well put by Prof. Allen, of the Uni¬
versity of Chicago, as follows:
" In determining the principle represented by the lands we must
take account of the actual value of the lands in 1851. The values which
the railroad company was to receive for the lands were not foreseen, and
the State could justly claim compensation only for the values it sur¬
rendered. The lands had been offered by the General Government at
$1.25 per acre without finding buyers, but as soon as the lands were
granted to the railroad company the minimum price for Government as
well as railroad lands became $2.50. More than this they were sure to
bring, but only in case the private corporation bring in the road to
develop them."
What contribution, then, did the Government make toward the con¬
struction of the Illinois Central Railroad?
Senator Douglas and all the other Senators state clearly what was
the value of these lands. They had been in the open market for sale for
25 years with no purchasers. The promoters of the road, who took the
risk of the venture, could have bought this land with no strings to it,
no restrictions whatever, at $1.25 per acre. The grant was for 2,500,000
acres, so that the outside estimate of what the Government contributed
was $3,100,000.
The officials of the road could have bought the land for $3,100,000.
But that is far more than the Government parted with, because not
only did the building of the road enable the Government to immediately
raise the price of all its adjoining lands from $1.25 to $2.50 per acre,
as Senator Douglas explains, but it gave them a market for land which,
without the railroad, was not salable at any price.
Senator Chamberlain in his speech was inconsistent in his attitude
toward the railroad companies in this matter of the value of their land
grants. In one sentence he denounces them for not holding the lands
for higher prices and in another denounces them for refusing to sell to
settlers at low prices. He says, " If thé lands had been husbanded as
carefully as they ought to have been, these grants ought to have built
the roads," but in the very next sentence he bitterly denounces an Ore¬
gon railroad company for refusing to sell lands which he describes as
" magnificent " and " covered with the finest timber in the world," at
$2.50 per acre. In one breath he condemns them because they sold the
lands at low prices and in the next breath condemns them for refusing
to sell at low prices.
The Illinois Central grant, as stated, had a possible market value
of $3,100,000. That is an outside estimate of what value the Govern¬
ment parted with as a contribution toward the building of a railroad
through a region which Henry Clay described as utterly worthless for
4
any present purpose " and Thomas H. Benton referred to as " jungles
for the protection of wild beasts that prey upon the flocks and herds of
the farmers."
But what has the Government and the State of Illinois taken from
the Illinois Central Co. and its owners in consideration of that land
grant worth $3,100,000? It has already taken more than $21,000,000 in
money and continues to take at the rate of hundreds of thousands of
dollars every year.
Senator Chamberlain protested, " I am not inimical to railroads ; I
am friendly to them." Why, then, did he not acquaint the Senate with
something of the other side of the story? Why did he not mention what
the railroad companies have been forced to pay for these land grants?
The acts of Congress granting the lands contained provisions which,
in some cases, have compelled the companies to pay out in money more
than the lands were worth, and the various States to which grants were
made in trust for specified companies added other costly conditions.
Two of the clauses that have proved most expensive to the railroads
are as follows:
In 1876 Congressman Holman, of Indiana, caused to be inserted in
the appropriation bill the following clause :
" Railroad companies whose railroads were constructed in whole or
in part by a land grant made by Congress, on the condition that the
mails should be transported over their roads at such price as Congress
should by law direct, shall receive only 80 per cent of the compensation
otherwise authorized by this section."
Another provision that was in all the grants reads as follows :
The railroad accepting such grant shall be free from toll or other
charge upon the transportation of any property or troops of the United
States."
In addition to the mail pay deductions and the stipulation for trans¬
portation of property and troops of the United States, the State of Illi¬
nois inserted in the Illinois Central grant a clause under which that
company must pay in perpetuity 7 per cent of the gross earnings of these
charter lines into the State treasury in lieu of general taxes, which
would be approximately 3 to 3^/^ per cent. Under the Federal valuation
law proceedings these figures are obliged to be correctly stated, and the
following is an official statement of these items as of the valuation date
of June 30, 1915:
Excess State tax on operating revenues $16,499,995.00
Mail pay deductions. 1,569,292.37
Freight deductions • 448,327.70
Deductions for handling troops, munitions of war, etc. . 2,630,643.24
$21,148,258.31
There is no doubting the significance of these figures. They are
typical of the greater part of all the land grants. ^
The value of the Illinois Central grant was $3,100,000, and up to
June 30, 1915, it had cost the company in cash $21,148,258, and these
charges against its revenues are to continue forever. Any business man
5
would say that the Illinois Central would be in better shape financially
today if, instead of accepting this land grant, it had borrowed the money
and bought this $3,100,000 worth of land outright and owned it free
from restrictions.
Concerning one important feature of the situation Senator Chamber¬
lain in his speech makes ^ most unfortunate misstatement. He says
that the grants provided that the roads would carry Government troops
and property and munitions of war free. They did not contain any such
provision. The clause referred to reserved to the Government the right
to use the railroad the same as it could use any other highway, but did
not require the companies to hire employees and buy coal and provide
cars for the free use of the Government. As the Senator states, this
question was submitted to the Supreme Court, which only allowed 50
per cent as the necessary operating charge. It is now over 80 per cent.
Because of this Supreme Court decision Senator Chamberlain de¬
nounces the railroads. He says : " The railroad companies did not
carry out their agreement, but repudiated the contract solemnly entered
itito."
They did carry out their agreement, and they did not repudiate their
contract. The Senator from Oregon seems willing to ignore the decision
of the Supreme Court in favor of the companies upon a question that
was open to reasonable doubt, and to characterize the acceptance by the
roads of that decision as a repudiation of contract, and yet claims to
be fair-minded! He offers that decision of the Supreme Court, which
was rendered 43 years ago, as a reason why he now opposes return of
these properties to their owners.
THE IOWA LAND GRANTS.
Next in agricultural value to the Illinois lands were the grants to
the State of Iowa in 1856 in trust for four named companies, namely,
the Burlington & Missouri River (now Chicago, Burlington & Quincy),
the Mississippi & Missouri (now Rock Island), the Cedar Rapids &
Missouri River (now Chicago & North Western), and the Dubuque &
Sioux City (now Illinois Central).
The table which the Senator from Oregon inserts in his remarks is
not a correct statement of the acreage received by the companies. In the
case of the Burlington road his table states the acreage as 389,990 acres,
when, in -fact, it was 358,424 acres, a discrepancy of nearly 10 per cent.
The explanation is this :
The grants were of the odd-numbered sections within 6 miles of the
line of road as definitely located, with indemnity for shortages to be
selected within 15 miles, but could only apply to the " public lands "
within the designated limits. No land to which any title or even a
" claim of right " in any other person existed at the date when the grant
took effect was " public land, and therefore no such land passed to
the railroad company. In the older Western States (Illinois, Iowa and
Missouri) a large part of the lands had been " entered " or filed upon
or settled under military bounty land warrants or under preemption
certificates, so that, although by the general terms of the act the "grant"
6
to the Burlington road in Iowa was over 900,000 acres, it was never
able to get over 358,400 acres. In many cases also where lands were
actually patented to railroad companies they afterwards lost them
through conflicts with prior Mexican grants, swamp-land grants, Indian
and military reservations, and other deductions.
Similar conditions as to value of lands and deductions made by the
Government in consideration of the grants prevailed in Iowa as in Illi¬
nois, and in some cases in a more marked degree.
Take as an illustration the case of the Burlington grant, with which
I am personally familiar. That company received 358,424 acres in Iowa,
which had been in the market for many years at $1.25 an acre, with no
buyers. Speculators would not buy these lands because they could not
be sold at a profit. Money in that country commanded 10 per cent, and
in many cases as high as 1 per cent a month. To the speculator it was
more profitable to lend his money than to buy land from the Government
at $1.25 an acre. Settlers would not buy the land even under the very
liberal provision of the preemption laws, because there was no market
for their products. Instances were numerous in western Iowa of land
selling at 70 cents an acre which had been entered at $1.25, because pur¬
chasers could not then make a living on the land. That same land now
sells for $200 an acre, because New England capital built a railroad for
them. Who received the chief profit in that case? The landowner and
not the owners of the railroad. For years after the Burlington road
was built its stock, which had been paid for at par, sold at 15 cents on
the dollar and its 10 per cent bonds sold much below par, although it
owned these lands as well as the railroad. The owners of the Burlington
road could have taken $450,000 in money and bought every acre of that
Iowa land grant. But how much money has the Government compelled
it to pay back as the price of that grant? Up to the first day of October,
1916, the company had paid to the Government $2,209,000 as the 20 per
cent deduction from its mail pay, pursuant to the Holman law of 1876.
Exact figures are not available since October, 1916, when the so-called
" space basis " for carrying the mails was inaugurated, but this exaction
is going on year after year ! Hundreds of thousands of dollars are now
being paid every year by these land-grant roads out of their mail pay
because of the " gift " which Congress presented to them in 1856.
ïn the case of the Burlington Co. in the State of Iowa it has repaid
to the Government in cash by these mail-pay deductions alone more than
five times the full money value which the Government parted with in
making the Iowa land grant.
Besides this, in carrying the train loads of troops and munitions of
war and Government property across the State of Iowa, during the 50
years since the road was completed from Burlington to Omaha, at half
the lawful tariff rates, that company has repaid several times over the
value of every acre of land that was granted to it.
There is another side to this particular feature that is often over¬
looked. Other railroads have been built across Iowa since the land-grant
period, such as the Milwaukee & St. Paul and Great Western, which
are, technically, not subject to the 50 per cent reductions in tariff, but,
7
being in land-grant territory the Government ^authorities force them to
also make the cut rate as a condition of giving them any business. The
result is a 50 per cent tariff throughout this whole region, whether the
road received a land grant or not. It is common practice for the Gov¬
ernment to enforce this 50 per cent reduction from the tariff along the
entire line of a transcontinental road which has no land grant, such as
the Rio Grande and Western Pacific, solely because the Northern Pacific
had a land grant for its entire length !
The discrimination thus forced upon western roads by the Govern¬
ment in both mail pay and traffic generally, in comparison with great
eastern lines, like the New York Central and the Pennsylvania and New
Haven, which had no " gift " of lands, is a severe and costly discrimina¬
tion, to which the Senator from Oregon, as a Western Senator, speaking
for his constituents, might well have called attention in discussing the
railroad land grants.
THE NEBRASKA GRANTS.
In the case of the large grant made to the Burlington road in Ne¬
braska the company sold thousands of acres of these lands at 25 cents
per acre, but at the date of the grant it is extremely doubtful whether
the entire grant could have been disposed of at $1 per acre, since the
United States Government had probably not sold an acre of its land
adjoining the lands covered by this grant at its standard price of $1.25
per acre, while at the same time many persons by the purchase of land
scrip acquired title to some of the choicest Nebraska lands, more favor¬
ably located than one-half or more of this grant, at a cost of less than
$1 per acre. In many counties wherein these lands are located no home¬
steads— at a total expense of $14 for 160 acres — were located until
long after the date of this grant, and many of these counties were not
" organized " until 1871 to 1878, years after the date of this grant.
THE NORTHERN PACIFIC GRANT.
The Northern Pacific Railway was not completed until 20 years after
its land grant was made, and since then it has gone through bankruptcy
twice, notwithstanding its ownership of these lands and of its railroad.
Plow much good did the original stockholders to whom the lands were
given realize from the gift? And the same inquiry is pertinent as to the
Union Pacific land grant and the grants made to the Rock Island, the
Santa Fe, and other western roads that have been foreclosed. Prior
to the actual construction of the Northern Pacific the settlement and
development of the country was insignificant. There were no dwellings,
much less towns, except in the vicinity of Army posts and mining camps
and a small community on Puget Sound. The whole country, excepting
Indian and military reservations, was open to homestead and other entry
under the public land laws, and the maximum charge by the United
States for agricultural lands entered prior to the definite location of
the road was $1.25 per acre. Generally speaking, the Indians were
occupying the territory to the exclusion of others. Practically all the
value the lands now have has resulted from the construction of the road.
8
Seven-eighths of all the lands granted to the Northern Pacific Rail¬
way have now been sold, and the net receipts and uncollected deferred
payments have produced for the company an average of $2.89 per acre,
as officially reported.
the union pacific grant.
Under date of November 11, 1919, the land commissioner of the
Union Pacific Railway made the following estimate of the value of the
lands covered by their grants at the time of the grants, namely :
In Nebraska and Kansas, $1 an acre.
In Colorado, 50 cents an acre.
In Wyoming and Utah, 25 cents an acre.
The table which the Senator from Oregon caused to be inserted in
the Record shows railroad grants of acreage in Southern States as
Hon. E. B. Stahlman, of Nashville, before a congressional committee,
when resisting an attempt to still further reduce the mail pay of the
land-grant roads, stated under oath:
" The land granted in Alabama consisted of hills and mountains not
susceptible of cultivation. The Florida lands were sand hills thinly
covered with small pine of little value. Of these the best have been sold
at 70 cents per acre. The companies can not realize 25 cents per acre
on what remains unsold. When the grants were made, their value could
not have exceeded 12 cents per acre. Lands of greater value were sold
all through Florida and Alabama for that price."
Hon. W. A. McRae, now commissioner of agriculture for the State
of Florida, wrote from Tallahassee under date of November 21, 1919:
" It would be fair to assume that the bulk of the lands granted to
Florida railroads brought them less than $1.25 per acre."
When account is taken of the taxes paid and commissions, advertis¬
ing, and other costs of selling, Mr. Stahlman's estimate that the value
which the Government contributed toward the construction of these
southern roads did not exceed 12% cents an acre does not seem far out
of the way.
The grant to the St. Louis & San Francisco Co. was for 1,668,000
acres in Missouri, and concerning its value the land commissioner says :
" Fifty per cent of this grant was wholly worthless ; 30 per cent was
fair, and similar lands sold for 25 cents per acre; the remaining 20
per cent were worth $1 per acre."
Concerning the Atlantic & Pacific grant, the vice-president of that
company says: " The company sold 3,500,000 acres at 75 cents per acre,
1,058,560 acres at 50 cents per acre to a cattle company, and 259,000
southern grants.
follows :
acres.
Alabama
Florida .
Arkansas
Missouri
Mississippi
1,075,345
2,746,560
2,216,980
2,562,095
1,837,968
9
acres at 70 cents per acre, an average of 87 cents per acre, or $4,670,000.
The taxes and expense of selling the lands to date have been $622,000,
the mail pay deductions $430,000, and large deductions on account of
transportation of troops and munitions of war. The company would
be glad to sell all the land it now owns or will receive at 25 cents per
acre. There is no demand for it and the truth is it can not be sold for
any sum."
TEXAS GRANTS.
More lands, by far, were granted by the State of Texas to aid in the
construction of railroads than by any other State, mainly because they
had more to give.
What was the value of these lands according to the views of Texans
who are qualified to speak?
Two of thé largest grants in Texas were those made to the Inter¬
national & Great Northern (5,646,720 acres) and to the Gulf, Colorado
& Santa Fe (3,554,560 acres).
The International & Great Northern lands (12,800 acres per mile)
were forced upon the railroad company in 1875, in place of bonds of
$10,000 per mile which had been granted and were promised — that is,
the company was compelled to accept the lands on a basis of 78 cents an
acre. But this was an exceptionally valuable grant because the surveys
were allowed to be made in solid bodies, and the lands were wholly
exempt from all taxes for 25 years. They had to be located in the arid
regions of Texas, and lands of better value were freely sold in those days
at 10 cents an acre.
The result of being compelled to accept these lands was that the
International & Great Northern was forced into bankruptcy in 1876,
and in those proceedings these lands were turned bodily over to the bond¬
holders, and did not really contribute to the building of a mile of the
road. * -
The Gulf, Colorado & Santa ¥e built 1,000 miles of railroad in Texas
and received land certificates on the first 200 miles, amounting to
3,554,560 acres, which they sold for $246,677, less $35,508, expenses,
the net proceeds being $211,168. The road was cheaply constructed
and the proceeds of their land grant were. sufficient to pay for the con¬
struction and equipment of 10 miles of the 1,000 miles, according to the
statement of date December 10, 1919, by the Federal manager, Mr. F.
G. Pettibone, well known all over Texas. This was not an improvident
or unusual sale. The prevailing price of similar lands in Texas from
1878 to along in the eighties averaged from 10 to I2V2 cents an acre.
Over 32,000,000 acres were granted in Texas, with an outside selling
value of $6,000,000, which would construct and equip about 150 miles
of the present 15,740 miles in that State, or less than 1 per cent.
VALUE OF ALL GRANTS.
The tables filed by the Senator from Oregon aggregate 124,000,000
acres, and if the swamp and other lands granted by States, including
Texas, are added, the grand total is approximately 174,000,000 acres,
which no reasonable man with knowledge of the facts would estimate as
10
having a value, when granted, to exceed $174,000,000, of which the com¬
panies have already repaid at least one-half in cash and are subject to
perpetual charges which in time will more than equal the other half.
That is equivalent to saying that all the lands granted to all rail¬
roads in the United States have not been equal in value to 1 per cent of
the cost of the roads. The figures of the gross sales will, of course,
aggregate a larger amount, but from these must be deducted taxes, com¬
missions, and sale expenses, and this increased value is a value which
the railroad has itself created.
The history of land grants to railroads in this country has not yet
been written. It was in the main a record of pioneering and risk, of
financial struggles, disappointments, and loss. When that history is
impartially written and the facts of each grant are disclosed it will
probably be made clear that from the point of view of the public it was
a wise and beneficent policy, the chief beneficiaries of which have been
the fortunate farmers who bought the lands and improved them.
The railroad companies were interested in getting the lands into the
ownership of actual settlers who would cultivate them and create traffic
for their roads, which was far better for the general good than to have
them owned by speculators. There is no evidence that they did not act
in good faith in promptly disposing of the lands and devoting the pro¬
ceeds to the construction of the roads.
Senator Chamberlain in speaking of these grants characterizes them
as " gifts." Gifts of this character are made by the public, not because
the givers love those to whom they are made, but to induce the recipients
to do something for them. What was the motive behind these so-called
gifts of land? It was to induce those to whom the lands were offered to
risk their money in building railroads through uninhabited regions in
order that the public might profit by their investment. Instead of mak¬
ing a gift the public received a full and adequate financial compensation
in the building of the roads entirely aside from the actual repayments of
cash that have been exacted.
Discussion of this subject from the standpoint of statesmanship, to
say nothing of common fairness, Avould take into consideration the state
of the country and conditions in the West and all the motives which led
to the adoption of the policy by Congress.
Instead of such discussion it has been the practice for years by a
certain class of politicians to bring out and reproduce at intervals this
detailed list of the acreage granted to railroads by States and by com¬
panies, v/ithout stating values, or the conditions of the grants, and then
by innuendo and insinuation, and sometimes by direct assertion, seek to
create in the public mind of the present day a belief that the railroads
were largely built by these gifts of land.
Those engaged like Mr. Plumb in a propaganda for gaining control
of the railroad property of the country without the investment of a
dollar and without the slightest responsibility for consequences may be
expected to indulge in more or less reckless assertion, but such indul¬
gence is not looked for in the Senate.
[Mr. Chamberlain addressed the Senate. His speech will be pub¬
lished hereafter.] "
11
Senator Chamberlain's Reply to Mr. Baldwin
The Congressional Record states above that on Monday, January 12,
Mr. Chamberlain took the floor to reply to Mr. Baldwin but " withheld
his remarks," as Senators may do. His speech in reply appeared two
days later, in the Congressional Record of Wednesday, January 14, so
that the Senator took two full days, with the statement in print before
him, to revise his speech and gather material to refute Mr. Baldwin's
figures.
Senator Chamberlain's reply on January 14th occupied fifty-two
pages of the Congressional Record, that is, from pages 1583 to 1635,
inclusive.
The following is a full, true and correct reproduction of every impor¬
tant statement contained in this " reply " of Senator Chamberlain. In¬
stead of answering any of Mr. Baldwin's points, the Senator sought to
vindicate himself personally and his attitude as disclosed in his speech
of December 19th. He says: I resent that I was unconsciously misled
by the Encyclopedia of American Government." He states that he not
only copied what this Encyclopedia had to say about land grants, but,
he adds, " I not only did that, but I made portions of the Report of the
Commissioner of the General Land Office a part of my remarks."
Then, as if it was a further and complete vindication of himself, he
adds :
" In order further to convince Mr. Baldwin of the accuracy of my
statements, I ask to have printed in the Record, as an appendix to my
remarks, a statement showing the land grants made by Congress to aid
in the construction of railroads, together with data relative thereto,
compiled from the records of the General Land Office by order of the
Secretary of the Interior and printed as a public document in 1915."
The statement from the General Land Office, to which the Senator
refers, occupies 49 pages of his speech in the Congressional Record, but
is simply a repetition in more extended detail of the dates, names of
companies and acreage. It is the same information that he copied from
an Encyclopedia and put into his speech of December 19th, only in a
different form.
Can it be possible the Senator from Oregon does not see that a mere
restatement of this acreage at length is not a vindication, and means
nothing? Nobody has denied the acreage, or the names of the railroads,
but what of it? Does the Senator think that his course is justified
because he copies a list of companies and acreage from an official report
of the General Land Office instead of from an Encyclopedia? For the
enlightenment of the Senate upon the subject of the land grant policy
he might as well have put into the Record 49 pages of the dictionary.
What the Senate and the public want to know is:
• \
Why were these land grants made to railroads?
What were the conditions and circumstances that led Congress in
1850, and subsequently, to enact this legislation?
What considerations were involved?
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What did the Government part with; that is, what were the lands
worth ?
What did the companies pay for the lands; what exactions and
reservations were embodied in the various Acts of Congress?
Was it a wise and beneficent policy, worthy of approval, or should
it be condemned?
How does it bear upon the question of whether the railroads should
be returned to their owners on March 1st?
Has Senator Chamberlain an answer to these questions, or any of
them? Apparently none. It is no answer to merely file a table of names
of railroad companies and acreage occupying 49 pages of the Congres¬
sional Record.
It is entirely immaterial whether the Senator relied upon an Ency¬
clopedia article or an official table from the Land Office for names and
acreage. What he has done and what Mr. Glenn Plumb has done and
what certain politicians and magazine and newspaper writers have been
doing for years to poison the public mind about the railroads, is simply
to print this long list of land grants, with names and acreage, and con-"^
tent themselves with that alone for facts, and then denounce and vilify
those who are struggling to save the roads from bankruptcy.
Mr. Baldwin gave details and facts regarding the land grants. He
furnished evidence, and criticized Senator Chamberlain because he had
furnished no evidence except the bare facts of acreage. Instead of the
railroads of the country having been built from the proceeds of land
grants, Mr. Baldwin showed that the entire net value which the Gov¬
ernment parted with would not build one per cent of the present railroad
system. He showed that instead of being a " gift " the lands were paid
for. He showed that in many cases the land grants were a burden in¬
stead of a help. He showed that the lands were handled economically
and to the best advantage possible and the proceeds applied honestly
in the building of the roads. Does Senator Chamberlain deny any of
the facts submitted by Mr. Baldwin? No, he does not. He virtually
admits the truth of all Mr. Baldwin^s statements as to the reasons, the
motives, the values, and the wisdom of the land grant policy.
Senator Chamberlain does, however, make one insinuation about
" slush accounts " that is unworthy. It is in the following language :
" I do not mean to charge that Mr. Baldwin has falsified anything,
because my friend the Senator from Utah (Mr. King) says he is a
highly honorable man; but I do know, and I charge, that in many in¬
stances railroad companies that had these immense grants have charged
up anything they pleased against the moneys received from the land
grants. It has constituted a sort of a slush account into which they
might inject many charges that ought not to have been made against
the proceeds of the land grants and ought not to have been charged
against the Government at all."
He says that he " knows " and he " charges " that in many in¬
stances " railroads have kept a " slush account into which they inject
charges that ought not to have been made against the proceeds of the
land grants."
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That statement calls for an immediate and unqualified denial. There
is no such slush account," and in the nature of the case it would be an
impossibility. The Illinois Central has paid $16,000,000 to the State of
Illinois in excess taxes because of its land grant. Is that a " slush
account "? The Burlington Company has had over $2,000,000 taken out
of the mail pay on its Iowa road because of its land grant, worth
$450,000. Is that a " slush account "? These deductions are made pur¬
suant to law. This insinuation of the Senator from Oregon is a reflec¬
tion upon the officials of every western road that received a land grant.
Will he make the charge good or retract it?
One other statement remains in the Senator's reply. In his original
speech he denounced the railroads for taking fifty per cent of their
regular tariff rates for transporting Government troops and property,
as the Supreme Court decided they are entitled to take. He said in do¬
ing this they were " repudiating their solemn contract." That statement
he wishes to retract. He says :
" Many of the roads agreed to carry Federal troops and munitions
of war under varying agreements. I may have stated it a little too
broadly if I said they agreed to carry them for nothing." He certainly
did state it too broadly ; his statement was without foundation.
In order to correctly state Senator Chamberlain's attitude towards
the railroads it is necessary to recall the circumstances of his original
speech of December 19th. He was addressing the Senate upon the ques¬
tion of whether the roads of the country shall be returned to their
owners or retained in control of the Government, as demanded in the
Glenn Plumb propaganda. The great eastern roads, such as the New
York Central and Pennsylvania,.never had any land grants, but to give
a semblance of point to his argument against the roads being restored
to their owners the Senator sneered at the representation of hardships
to the companies, which he characterized as a cry of " Wolf," and thus
found a pretext for placing in the Record the list of land grants to which
he so frequently alludes, saying, " With these magnificent and munifi¬
cent grants there is no reason except inefficiency of management for
the condition in which they have found themselves."
The subject of the proper disposition of the public domain has always
interested statesmen, and the policy of promoting the country's develop¬
ment by appropi^ating what Senator Benton described as " refuse "
lands for the construction of railroads was carefully considered and
had the unanimous support of the people of that day. William H.
Seward, Henry Clay, Stephen. A. Douglas, Thomas H. Benton and
statesmen of that class understood it, discussed it and established it.
Now that the country has had the benefits resulting from the building
of the railroads by private capital, and the lands have all been sold, it
is reserved for politicians of this later day to discuss it by Encyclopedia
and Land Office reports of acreage, and then proceed to denounce the
present owners of the roads who have inherited the perplexing prob¬
lems of the hour, few of which have any relation to the land grants, o^*
the land grant policy.
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