The Story of a Great Monopoly

"America has the proud satisfaction of having furnished the world with the greatest, wisest, and meanest monopoly known to history."
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To-day the only visible hope of cheap light for the people of this country is the discovery, announced by the Atlantic cable on January 28th, that in the Hanover petroleum district in Germany a basin has been found, which is thought by experts to be, beyond doubt, as large and rich as the one in Pennsylvania. In Europe, such alliances between the railroads and the refiners as created the Standard monopoly are impossible. German oil wells, German refineries, and the Canadian canals may yet give the people of the interior of this continent what the American Standard and the American railroads have denied them,—cheap light.

It is the railroads that have bred the millionaires who are now buying newspapers, and getting up corners in wheat, corn, and cotton, and are making railroad consolidations that stretch across the continent. By the same tactics that the railroads have used to build up the Standard, they can give other combinations of capitalists the control of the wheat, lumber, cotton, or any other product of the United States. There is more than a suggestion of this in the action, last winter, of the railroads connecting the East and West, in raising rates at a stroke of the pen from fifteen and twenty cents a hundred pounds, between New York and Chicago, to forty and forty-five cents a hundred.

The immediate result was a jam at Chicago of $26,000,000 of the products of the farm. Chicago was filled up, and word had to be sent back along the railroads to take no more grain for shipment. The roadside elevators filled up, and the farmers found their market gone. As it happened, on this occasion they had already sold the most of their crop, but the occurrence shows how the outlet for wheat could be cut off by a combination of railroad men and speculators, just as the outflow of oil was cut off by the Standard and the railroads. Some of the speculators most prominent in the recent wheat speculations are powerful railroad owners and directors. Given the power to raise and change the freight rate at will, these speculating directors can control the prices the West shall get for its grain and cattle, and those of the East shall pay for its bread and meat.

The New York Chamber of Commerce, on February 5, 1880, unanimously adopted a report,—signed by Charles S. Smith, Jackson S. Schultz, Benjamin B. Sherman, Francis B. Thurber, Benjamin G. Arnold, Jacob Wendell, and Charles C. Dodge,—in which these significant words occur: "What has happened in the case of the Standard Oil Company may happen in other lines of business. With the favor of the managers of the trunk lines, what is to prevent commerce in the rest of the great staples from being monopolized in a similar manner? Already it is taking this course. One or two firms in Baltimore, Philadelphia, New York, and Boston, with their branch houses in the West, are, by the favor of the railroads, fast monopolizing the export trade in wheat, corn, cattle, and provisions, driving their competitors to the wall with absolute certainty, breaking down and crushing out the energy and enterprise of the many for the benefit of the favored few."

The case of the Standard Oil Company brings the three great trunk lines and their magnates, Scott, Vanderbilt, and Jewett, a great national export and interstate commerce, into one condensed illustration of our subject, but otherwise it is not peculiar. Mr. Vanderbilt assured the public over his own signature that the New York Central made no special rates. Mr. Sterne's examination of the officers and books of the road proved the existence of 6000 special contracts. The Northern Pacific, which has been built by grants of land from the people, and which is now an applicant before the people's Congress for the extension of its lands grant, gives special rates to the Dalrymples, the Casses, the Grandins, with their 30,000 and 40,000 acre farms, and charges the poor farmers full rates. The St. Paul and Sioux City Railroad furnishes the large farmers along its route with rates one half those charged the small farmers. Who are the large farmers? President Drake, of the road; General Bishop, its manager; President George T. Siney, of the Metropolitan Bank of New York; Mr. Orr, a partner of the great house of David Dows & Co., of New York; Goldschmidt, the rich German banker, of Frankfort-on-the-Main; and every director on the road. The investments of these men average a return of twenty per cent the first year, and fifty-five per cent the second year.

One mind invented the locomotive, established the railroad, and discovered the law of this new force. All railroad history has been a vindication of George Stephenson's saying that where combination was possible competition was impossible. To-day, wherever in this country there is a group of railroads doing business at a common point, you will find a pool. These pools are nothing more mysterious than combinations to prevent competition. They are continually breaking up into railroad wars, but as constantly forming again with improvements gained from experience. The Saratoga agreement, the Colorado pool, the Evening system, the Omaha pool, the Southwestern Rate Association, the Southern Steamship and Railway Association, accounts of which are continually appearing in the papers, to be always skipped by the general reader, are all experiments in this one direction,—combination to kill competition. For three years our ablest railroad men have been trying to invent a pool that should put all railroad traffic between the Mississippi River and the ports of Europe under one control. The New York Central, the Erie, the Pennsylvania, and the Baltimore and Ohio roads, under the direction of Mr. Albert Fink, the greatest of our railroad experts, have formed a combination under the title of the Trunk Line Executive Committee, which besides themselves included thirty-two Western roads and one great Southern road,—the Louisville and Nashville. These roads tax the people in their territory $155,000,000 a year for transportation. This pool fixes for each of these roads the rates which it shall charge and the proportion of the entire business it shall do.

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