The power to make the notes of the United States the legal equivalent to gold and silver necessarily includes the power to cancel with them specific contracts for gold as well as money contracts generally. Before the pa.s.sage of the act of 1862, there was no legal money except that which consisted of metallic coins, struck or regulated by the authority of congress. Dollars then meant, as already said, certain pieces of gold or silver, certified to be of a prescribed weight and purity by their form and impress received at the mint. The designation of dollars, in previous contracts, meant gold or silver dollars as plainly as if those metals were specifically named.

It follows, then, logically, from the doctrine advanced by the majority of the court as to the power of congress over the subject of legal tender, that congress may borrow gold coin upon a pledge of the public faith to repay gold at the maturity of its obligations, and yet, in direct disregard of its pledge, in open violation of faith, may compel the lender to take, in place of the gold stipulated, its own promises; and that legislation of this character would not be in violation of the const.i.tution, but in harmony with its letter and spirit.

The government is, at the present time, seeking in the markets of the world a loan of several hundred millions of dollars in gold, upon securities containing the promises of the United States to repay the money, princ.i.p.al and interest, in gold; yet this court, the highest tribunal of the country, this day declares, by its solemn decision, that should such loan be obtained, it is entirely competent for congress to pay it off, not in gold, but in notes of the United States themselves, payable at such time and in such manner as congress may itself determine, and that legislation sanctioning such gross breach of faith would not be repugnant to the fundamental law of the land.

What is this but declaring that repudiation by the government of the United States of its solemn obligations would be const.i.tutional?

Whenever the fulfilment of the obligation in the manner stipulated is refused, and the acceptance of something different from that stipulated is enforced against the will of the creditor, a breach of faith is committed; and to the extent of the difference of value between the thing stipulated and the thing which the creditor is compelled to receive, there is repudiation of the original obligation. I am not willing to admit that the const.i.tution, the boast and glory of our country, would sanction or permit any such legislation. Repudiation in any form, or to any extent, would be dishonor, and for the commission of this public crime no warrant, in my judgment, can ever be found in that instrument.

Some stress has been placed in argument in support of the a.s.serted power of congress over the subject of legal tender in the fact that congress can regulate the alloy of the coins issued under its authority, and has exercised its power in this respect without question, by diminishing in some instances, the actual quant.i.ty of gold or silver they contain.

Congress, it is a.s.sumed, can thus put upon the coins issued other than their intrinsic value; therefore, it is argued, congress may, by its declaration, give a value to the notes of the United States, issued to be used as money, other than that which they actually possess.

The a.s.sumption and the inference are both erroneous, and the argument thus advanced is without force, and is only significant of the weakness of the position which has to rest for its support on an a.s.sumed authority of the government to debase the coin of the country.

Undoubtedly congress can alter the value of the coins issued by its authority by increasing or diminishing, from time to time, the alloy they contain, just as it may alter, at its pleasure, the denominations of the several coins issued, but there its power stops. It cannot make these altered coins the equivalent of the coins in their previous condition; and, if the new coins should retain the same names as the original, they would only be current at their true value. Any declaration that they should have any other value would be inoperative in fact, and a monstrous disregard by congress of its const.i.tutional duty. The power to coin money, as already declared by this court, is a great trust devolved upon congress, carrying with it the duty of creating and maintaining a uniform standard of value throughout the Union, and it would be a manifest abuse of this trust to give to the coins issued by its authority any other than their real value. By debasing the coins, when once the standard is fixed, is meant giving to the coins, by their form and impress, a certificate of their having a relation to that standard different from that which, in truth, they possess; in other words, giving to the coins a false certificate of their value. Arbitrary and profligate governments have often resorted to this miserable scheme of robbery, which Mill designates as a shallow and impudent artifice, the "least covert of all modes of knavery, which consists in calling a shilling a pound, that a debt of one hundred pounds may be cancelled by the payment of one hundred shillings."

In this country no such debas.e.m.e.nt has ever been attempted, and I feel confident that none will ever be tolerated. The changes in the quant.i.ty of alloy in the different coins has been made from time to time, not with any idea of debasing them, but for the purpose of preserving the proper relative value between gold and silver. The first coinage act, pa.s.sed in 1792, provided that the coins should consist of gold, silver, and copper--the coins of cents and half-cents consisting of copper, and the other coins consisting of gold and silver--and that the relative value of gold and silver should be as fifteen to one, that is, that an ounce of gold should be taken as the equal in value of fifteen ounces of silver.

In progress of time, owing to the increased production of silver, particularly from the mines of Mexico and South America, this relative value was changed. Silver declined in relative value to gold until it bore the relation of one to sixteen instead of one to fifteen. The result was that the gold was bought up as soon as coined, being worth intrinsically sixteen times the value of silver, and yet pa.s.sing by law only at fifteen times such value, and was sent out of the country to be recoined. The attention of congress was called to this change in the relative value of the two metals and the consequent disappearance of gold coin. This led, in 1834, to an act adjusting the rate of gold coin to its true relation to silver coin.

The discovery of gold in California, some years afterwards, and the great production of that metal, again changed in another direction the relative value of the two metals. Gold declined, or in other words, silver was at a premium, and as gold coin before 1834 was bought up, so now silver coin was bought up, and a scarcity of small coin for change was felt in the community. Congress again interfered, and in 1853 reduced the amount of silver in coins representing fractional parts of a dollar, but even then these coins were restricted from being a legal tender for sums exceeding five dollars, although the small silver coins of previous issue continued to be a legal tender for any amount. Silver pieces of the denomination of three cents had been previously authorized in 1851, but were only made a tender for sums of thirty cents and under.

These coins did not express their actual value, and their issue was soon stopped, and in 1853 their value was increased to the standard of coins of other fractional parts of a dollar.

The whole of this subject has been fully and satisfactorily explained in the very able and learned argument of the counsel who contended for the maintenance of the original decision of this court in _Hepburn_ v.

_Griswold_. He showed by the debates that congress has been moved, in all its actions under the coinage power, only by an anxious desire to ascertain the true relative value of the two precious metals, and to fix the coinage in accordance with it; and that in no case has any deviation from intrinsic value been permitted except in coins for fractional parts of a dollar, and even that has been only of so slight a character as to prevent them from being converted into bullion, the actual depreciation being made up by their portability and convenience.

It follows, from this statement of the action of congress in altering at different times the alloy of certain coins, that the a.s.sumption of power to stamp metal with an arbitrary value and give it currency, does not rest upon any solid foundation, and that the argument built thereon goes with it to the ground.

I have thus far spoken of the legal tender provision with particular reference to its application to debts contracted previous to its pa.s.sage. It only remains to say a few words as to its validity when applied to subsequent transactions.

So far as subsequent contracts are made payable in notes of the United States, there can of course be no objection to their specific enforcement by compelling a delivery of an equal amount of the notes, or by a judgment in damages for their value as estimated in gold or silver dollars, nor would there be any objection to such enforcement if the legal tender provision had never existed. From the general use of the notes throughout the country and the disappearance of gold and silver coin from circulation, it may perhaps be inferred in most cases, that notes of the United States are intended by the parties where gold or silver dollars are not expressly designated, except in contracts made in the Pacific states, where the const.i.tutional currency has always continued in uses. As to subsequent contracts, the legal tender provision is not as unjust in its operation as when applied to past contracts, and does not impair to the same extent private rights. But so far as it makes the receipt of the notes, in absence of any agreement of the parties, compulsory in payment of such contracts, it is, in my judgment, equally unconst.i.tutional. This seems to me to follow necessarily from the duty already mentioned cast upon congress by the coinage power,--to create and maintain a uniform metallic standard of value throughout the Union. Without a standard of value of some kind, commerce would be difficult, if not impossible, and just in proportion to the uniformity and stability of the standard is the security and consequent extent of commercial transactions. How is it possible for congress to discharge its duty by making the acceptance of paper promises compulsory in all future dealings--promises which necessarily depend for their value upon the confidence entertained by the public in their ultimate payment, and the consequent ability of the holder to convert them into gold or silver--promises which can never be uniform throughout the Union, but must have different values in different portions of the country; one value in New York, another at New Orleans, and still a different one at San Francisco.

Speaking of paper money issued by the states,--and the same language is equally true of paper money issued by the United States--Chief Justice Marshall says, in _Craig_ v. _The State of Missouri_: "Such a medium has been always liable to considerable fluctuation. Its value is continually changing; and these changes, often great and sudden, expose individuals to immense loss, are the sources of ruinous speculations, and destroy all confidence between man and man. To cut up this mischief by the roots, a mischief which was felt by the United States, and which deeply affected the interest and prosperity of all, the people declared in their const.i.tution that no state should emit bills of credit."

Mr. Justice Washington, after referring, in _Ogden_ v. _Saunders_, to the provision of the const.i.tution declaring that no state shall coin money, emit bills of credit, make anything but gold and silver coin a tender in payment of debts, says: "These prohibitions, a.s.sociated with the powers granted to congress 'to coin money and to regulate the value thereof, and of foreign coin,' most obviously const.i.tute members of the same family, being upon the same subject and governed by the same policy. This policy was to provide a fixed and uniform standard of value throughout the United States, by which the commercial and other dealings between the citizens thereof, or between them and foreigners, as well as the moneyed transactions of the government, should be regulated. For it might well be asked, Why vest in congress the power to establish a uniform standard of value by the means pointed out, if the states might use the same means, and thus defeat the uniformity of the standard, and consequently the standard itself? And why establish a standard at all for the government of the various contracts which might be entered into, if those contracts might afterwards be discharged by a different standard, or by that which is not money, under the authority of state tender laws? It is obvious, therefore, that these prohibitions in the tenth section are entirely h.o.m.ogeneous, and are essential to the establishment of a uniform standard of value in the formation and discharge of contracts."

It is plain that this policy cannot be carried out, and this fixed and uniform metallic standard of value throughout the United States be maintained, so long as any other standard is adopted, which of itself has no intrinsic value and is forever fluctuating and uncertain.

For the reasons which I have endeavored to unfold, I am compelled to dissent from the judgment of the majority of the court. I know that the measure, the validity of which I have called in question, was pa.s.sed in the midst of a gigantic rebellion, when even the bravest hearts sometimes doubted the safety of the republic, and that the patriotic men who adopted it did so under the conviction that it would increase the ability of the government to obtain funds and supplies, and thus advance the national cause. Were I to be governed by my appreciation of the character of those men, instead of my views of the requirements of the const.i.tution, I should readily a.s.sent to the views of the majority of the court. But, sitting as a judicial officer, and bound to compare every law enacted by congress with the greater law enacted by the people, and being unable to reconcile the measure in question with that fundamental law, I cannot hesitate to p.r.o.nounce it as being, in my judgment, unconst.i.tutional and void.

In the discussions which have attended this subject of legal tender there has been at times what seemed to me to be a covert intimation, that opposition to the measure in question was the expression of a spirit not altogether favorable to the cause, in the interest of which that measure was adopted. All such intimations I repel with all the energy I can express. I do not yield to any one in honoring and reverencing the n.o.ble and patriotic men who were in the councils of the nation during the terrible struggle with the rebellion. To them belong the greatest of all glories in our history,--that of having saved the Union, and that of having emanc.i.p.ated a race. For these results they will be remembered and honored so long as the English language is spoken or read among men. But I do not admit that a blind approval of every measure which they may have thought essential to put down the rebellion is any evidence of loyalty to the country. The only loyalty which I can admit consists in obedience to the const.i.tution and laws made in pursuance of it. It is only by obedience that affection and reverence can be shown to a superior having a right to command. So thought our great Master when he said to his disciples: "If ye love me, keep my commandments."

CHAPTER V.

GOVERNMENT CONTROL OF RAILROADS.

Since concluding what we desired to say on the subject of controlling and regulating railroads and railroad corporations, our attention has been directed to a circular from _The New York Nation_, of July 27th, 1873, ent.i.tled: "The Railroad Discussion, and Common Sense." This singular article challenges attention. If it is put forth in the interest of railroad corporations, we can readily account for the views expressed, and the covert foreshadowing of national control of railroads; but if it be published and circulated in the interest of the people as _The Nation_ would have us understand, it is not calculated to a.s.sist them in their efforts at reform, but on the contrary will tend to divide and distract their counsels, and delay the relief sought.

We copy the circular, that the reader may judge of its merits, and to give a more intelligent understanding of our remarks upon it:--

THE RAILROAD DISCUSSION AND COMMON SENSE--THE LATEST DEVICE FOR FIXING RATES OF TRANSPORTATION.

(From the Nation [N. Y.] of July 17.)

We have followed, and shall continue to follow, the "farmers' movement"

with great interest, but it must be confessed that it seems at times of no little difficulty, owing to the very heterogeneous composition of the organizations which are carrying it on, and the wide diversity of their character and avowed aims. When Judge Lawrence was turned out of office in Illinois by the "Grangers," and Judge Craig put in his place, we took it for granted that they were going to deliver themselves from the tyranny of the railroads by putting judges on the bench pledged to interpret the state const.i.tution in a particular way, or in other words, as one of the local papers put it, by showing that "the people"

were superior to both laws and judges. It has, however, since been stoutly denied that this interference with the bench was anything more than a local accident, and we have been a.s.sured that the farmers seek changes of a much more legitimate character, and resting on more solid foundations than the creation of a subservient judiciary. The recent platforms have certainly had a much wider sweep than the earlier ones, and, unless language has been strangely abused in making them, embrace grave modifications in fiscal as well as in railroad legislation. But the question how to reduce the railroads to the condition of public highways, controllable by and existing solely or mainly for the convenience of the community, is still apparently as far from solution as ever. It is by no means surprising that this should be the case, but that it is the case we are forced to conclude by the extraordinary character of the latest plan propounded by the reformers, which has had sufficient plausibility to command the approval of so sober-minded a paper as the Chicago _Tribune_.

The farmers have been accused, partly in consequence of their escapade about the judges in Illinois, of seeking to rob the railroad companies of their lawful earnings by forcing them to carry on their business at a loss, under the operation of cast-iron rules, drawn up without reference to its peculiar nature. This was a charge of which the farmers soon began to see the gravity, and they accordingly now announce that they have no scheme of spoliation or confiscation in their minds, but that they have at last hit upon a mode of ascertaining what are "reasonable rates," which consists in discovering what was the amount of capital "actually invested in constructing and operating the roads," and treating a fair percentage of this as a proper return to the stockholders, and all charges which bring in more than this as "unreasonable," and therefore open to prohibition by the courts and state legislatures. Under this theory of railroad property, all stock which does not represent money actually invested is treated as "fict.i.tious," and all attempts to earn dividends on such stock as attempts at extortion. For instance--to put a case of frequent occurrence--a corporation obtains a charter for a road which will cost two million dollars to build. It accordingly borrows the two millions on mortgage bonds, and constructs the road, while the members divide among themselves two millions of stock more, and they work the road so as to make it pay interest on the four millions. The farmers now say that no road shall be so worked as to pay interest on anything but the proceeds of the bonds, or, in other words, the actual cost of construction and equipment. This, stripped of details, is the new plan, as gravely propounded by the Chicago _Tribune_.

Now, if anybody will get up and propose a general railroad act of this nature, applicable to all roads hereafter to be built, we think we can promise that he will have the hearty support of everybody who has seriously reflected on the railroad problem. Forbid the construction of any road except with the proceeds of paid-up stock, and forbid any higher dividends than a certain fixed percentage on this amount, and we shall have a rule of which n.o.body can complain. We do not believe that a single mile of railroad would ever be constructed under such a rule in a new and thinly settled country like the west or south. Safe investments are not so scarce as to induce people to go into one of the most unsafe of investments, and one promising in most cases no return at all for several years, for the mere chance of seven or even ten per cent at the outside. But we should, nevertheless, be heartily glad to see the plan tried, and believe it would, by stopping railroad construction for the present, bring the western farmers to a healthier comprehension of their relations to the roads, and railroad companies to a healthier comprehension of their relations to the community, and might tend to a solution of the railroad problem, which would be both permanent and satisfactory.

But the application of any such rule now to roads _already in operation_ would be spoliation pure and simple--spoliation as flagrant as any ever proposed by Karl Marx or Ben. Butler; if any attempt were made to carry it out, it would produce perhaps the greatest financial crash ever witnessed. It has in the first place that leading characteristic of Ben.

Butler's greenback scheme, that it would not only violate a tacit pledge made by the state to individuals, but it would deprive men of rewards already earned by running great risks. When a railroad constructed for two million dollars is made to earn interest on four millions, the case is precisely similar to that of a government which in a time of great danger and perplexity sells seven per cent bonds at fifty; and the present proposal of the farmers resembles Butler's plan of paying the bondholders in 1870 what they gave for their bonds in 1862. In fact, it is the old-fashioned game on a great scale of "Heads I win, tails you lose." The west has, during the past thirty years, wanted railroads, which there was a very small chance of making profitable for a long time. It encouraged eastern men and foreigners to make them in any way they pleased, running whatever risk there was, and pocketing whatever gain there might be, and they were made. The investment then was one of great danger and difficulty; _to treat it now as one of no danger and no difficulty would, be simply swindling_. The word is hard, but the times demand plain speech. This was perhaps a bad mode of securing lines of communication, but the laws allowed it and encouraged it, and the people applauded it, and it is now a contract as binding in morals as in law.

It is open to us to turn over a new leaf, and permit no more roads to be made in that way, but it is not open to us to treat those who lent us their money as dupes. As there has been enough of this sharp practice already, more of it would seriously shake the foundations of social order.

In the second place, as regards the older roads, it is not possible for "the people" or anybody else to ascertain what is the exact amount on which, in abstract justice, the earnings ought to pay interest. The stock, whether "fict.i.tious" or not, has in most cases pa.s.sed out of the hands of the original holders. It has been sold and resold, in open market, under the most solemn guarantees known to civilized society, with the understanding that it represented the _bona fide_ ownership of the roads, with all their earnings, possible as well as actual. The laws, the courts, and public opinion, a.s.sured to it this character without reservation or qualification. In this character it has pa.s.sed into the hands of widows, orphans, and helpless people generally, of charitable corporations, of colleges, banks, and inst.i.tutions of all kinds by which the affairs of the community are administered. To throw any doubt on its value now would be to cause an amount of misery and alarm which no thinking man could contemplate without a shudder. If the state wants to make the railroads common highways, it has the right to take them, but at their market value, paying the owners what other people would pay them, and not enquiring curiously and knavishly into the original cost. Between honest parties to a bargain, that, to use a homely phrase, is "Neither here or there." The people ought, undoubtedly, to have looked forward a little when they first began to grant charters; but not having done so, they ought not to now throw on others the whole damage done by their own laches.

Though last, not least, much of the outcry over the high rates charged by railroads is due to an immense but deeply seated popular delusion as to the value of railroad property. When one puts his newspaper aside, and sits down calmly to examine the receipts which the farmers are so anxious to have cut down, the proposal we are discussing a.s.sumes a somewhat ludicrous aspect. We have before us the last issue of "Poor's Railroad Manual," which certainly ought to be perfectly studied before the minds of the public are filled with wild and revolutionary notions about railroad property. There were in operation last year in the United States, 57,323 miles of railroad, the net earnings of which bore to the _cost_ of the roads the relation of 5.20 per cent, and to the capital stock of 3.21. This means simply that the work of transportation in the United States is, on the average, already done at a loss to the owners of the lines, or, in other words, vastly more cheaply to the public than there is the least likelihood of its being done in any other way--an a.s.sertion which anybody may verify by examining the accounts of the New York state ca.n.a.ls. Now, fancy anybody seriously proposing to capitalists to construct railroads, as most of the western railroads were constructed, through a howling wilderness, for _the chance_ of five and a half per cent, whenever the earnings allowed it; and fancy what subjects for spoliation are presented by the bloated owners of railroad property who pocket on the average less than four per cent on the face value of their stock. Let us add, finally, that no corporation should be restricted by law to a certain rate of earnings, unless it contracts freely to do the work on those terms or has a minimum guaranteed to it by the state. In short, the railroad question, we would remind the Chicago _Tribune_, is not simply a question of dollars and cents. It is a question of morality in its highest and most important phases, and one the settlement of which must touch the security of all property, and affect the value of const.i.tutions as safeguards of individual rights.

We have gone on for thirty years treating railroads as private property, and permitting and encouraging their construction by private enterprise.

Out of this numerous abuses have grown up which ought to be remedied.

The corporations have grown too powerful; their influence in politics is corrupting; the power of directors in the management is too great. For the reform of all this, careful legislation _preceded by careful inquiry_ is necessary. The prohibition of special legislation would do much to abate the corruption. Some means ought also to be devised for protecting the minority of the stockholders against the despotic power, which in some cases amounts to virtual confiscation, of those holding a bare majority of the stock, or, in other words, of giving stockholders the means of actually superintending the management of their own property and defending themselves against "rings" and "raids." Moreover, the power of directors to do anything but work the road ought to be diminished. Their discretion as regards extensions, combinations, consolidations, leases, and purchases, ought to be greatly reduced, if not destroyed. This involves two things not easily supplied. One is wise legislation, and the other honest government inspection. How far we are from both is best shown by the Illinois attempt at reform, which consists at present in taking the working of the roads out of the hands of the exceedingly able body of trained business men who now have charge of it, and compelling them to use a crazy table of "rates" drawn up by a mob of excited and ignorant politicians. If we are not prepared for this, the alternative, and the only one, is the purchase of the railroads by the state, and their management by our Murphys and Caseys.

We shall not argue against this at present, for obvious reasons. But this, whatever difficulties it may present, is the only honorable way of escaping the necessity of such reforms in the present system as we have indicated above. Whatever the evils of our railroad system, they are not to be met or removed by fraud.

_First._ _The Nation_ says that it has "followed the 'farmers' movement'

with great interest, and with no little difficulty, owing to the heterogeneous composition of the organizations which are carrying it on, and the wide diversity of their character and avowed aims." The thought suggested is, that because the farmers are not united in their views relative to the best means to effect reform, because of the heterogeniety of their composition, the author of the circular could not understand their objects and aims. Unity of thought and action is rarely found in any body of men, even when few in number, during the discussion of ends sought to be obtained. Such unity cannot be expected in the first stages of the organization, and discussions of plans for future action. When the people living in various parts of the country, in different states, with diverse interests, but all having in view the accomplishment of a common end, attempt to unite their efforts, it would be too much to expect that they would harmonize at the outset in their views, or that they would not commit some errors. The "farmers'

movement" is in its incipiency; it maybe said to be now only preparing for action, and it is yet too soon to look for united effort. The first a.s.sertion of the circular is only a covert thrust at the "farmers'

movement"--an attempt to impress upon the public mind the belief that it is the effort of an irresponsible _mob_ or _rabble_ to defy law and override the rights of other cla.s.ses, and especially of railroad corporations. Hence _The Nation_ is desirous of talking "common sense,"

and in its opening discloses its "common sense" to be a plea in behalf of railroad corporations.

_Second._ The circular casts odium on the efforts now being made to correct the abuses practiced by railroad corporations, by the use of the following language; "When Judge Lawrence was turned out of office in Illinois by the Grangers, and Judge Craig was put in his place, we took it for granted that they were going to deliver themselves from the tyranny of railroads by putting judges on the bench pledged to interpret the state const.i.tution in a particular way, or, in other words, as a local paper has it, by showing that 'the people were superior to both laws and judges.'" Is it true that "Judge Lawrence was turned out of office?" He was a candidate for re-election, but a majority of the people voted for another man. Judge Craig was elected to office in the const.i.tutional method, and took the seat formerly occupied by Judge Lawrence. The people did not "turn him out," but in the legal method, when his term had expired, elected another man. But, says the circular, "we took it for granted that they (the Grangers) were going to deliver themselves," etc. There were no other judges to be elected, and there was nothing in the election of Craig that would warrant _The Nation_ in arriving at the conclusion that control of the state was to be taken, and judges elected pledged to decide const.i.tutional questions in a particular way. The idea is put prominently forth that the people who are attempting reform are a heterogeneous, irresponsible, body of men--a mob, who, by the mere strength of numbers, are going to overturn all law, pack the courts, and rule as mere caprice should dictate. This was taken for granted, because the people had elected one judge whom they believed was in sympathy with them. By the same rule we are warranted in a.s.suming that the appointment of two judges in sympathy with the railroad interest of the county will revolutionize this whole government, and that all judges to be hereafter appointed will be pledged to decide all const.i.tutional questions in favor of railroads.

The author of this circular, however, is forced to admit that he was mistaken in his conclusions, and that the farmers "seek changes of a more legitimate character, and resting on a more solid formation than the creation of a subservient judiciary." While the people of the whole country knew and fully understood that the objects the farmers were seeking to accomplish were relief from the oppressions and extortions practiced by railroad companies; while the agricultural, political, and religious press of the land had been discussing the various propositions, and conventions of farmers and mechanics were meeting, and platforms and principles were being published, and the Patrons of Husbandry were discussing at public meetings and in the newspapers the best means for adoption, the author of this circular, who is now coming to the front as the champion of railroad corporations, or of the people, or of both, and is scattering his circular throughout the land, had heard nothing of the movement, and took it for granted that all that was sought by the "Grangers" was to elect "judges pledged to decide const.i.tutional questions in a particular way;" and it required the "recent platforms" to admonish him that the Grangers looked to a reform of the abuses connected with the railroads and finances of the country.

With the new light our author received from the "platforms," he hastens to illuminate the public mind on this "vexed" railroad question. Having now mastered the situation, the writer takes it for granted that the all-important question is, "How to reduce railroads to the condition of public highways, controllable and existing solely or mainly for the convenience of the community," and concludes that the question is "as far from solution as ever."

It matters little whether railroads are considered "public highways" or private property. The name by which they are known will not make any difference. The real question is, how to make them subserve the objects for which they were intended, and at the same time afford a fair remuneration to the persons owning them. Some of the courts have already decided that the railroads of the country are public highways; but such decisions afford no relief. _The Nation_ does not give us its opinion, nor does it seem to be aware that the supreme court of the United States has decided that railroads are public highways.

_Third._ _The Nation_ says that "The farmers have been accused partly because of their escapade about the judges of Illinois, of seeking to rob the railroad companies of their lawful earnings, by forcing them to carry on their business at a loss, under the operation of cast-iron rules, drawn up without reference to its peculiar nature; that the farmers virtually acknowledged this charge when they saw its gravity, and that they accordingly now announce that they have no scheme of spoliation or confiscation in their minds, but have at last hit upon a mode of ascertaining what are 'reasonable rates,' which consists in discovering what was the amount of capital invested in constructing and operating the roads, and treating a fair per cent on this as a proper return to the stockholders, and all charges which bring in more than this as 'unreasonable,' and therefore open to prohibition by the courts and state legislatures." _The Nation_ admits that this rule applied to companies hereafter organized, and roads hereafter built, would be just, and a.s.sures us that everybody would approve of such a law. Let the road be built with the proceeds of paid-up stock, and restricted to a fair per cent dividend on such paid stock, and _The Nation_ will approve. To verify its hearty indors.e.m.e.nt of this plan, it tells us in the next sentence that it does "not believe that a single mile of railroad would ever be constructed under such a rule in a new and thinly-settled country like the west and south." It would be glad to see it tried, believing "it would stop building railroads for the present, bring western farmers to a healthier comprehension of their relation to the roads, and railroad companies to a healthier comprehension of their relation to the community, and might tend to a solution of the railroad problem which would be both permanent and satisfactory." It gives as a reason why no roads would be built, that capitalists would not invest their money on unsafe security, or where the return would be uncertain.

The logical deduction is, that if railroad companies are limited in the amount of their stock to the actual cost of the roads, no money can be obtained to build them; but if the company is allowed to add fict.i.tious stock--to "water" it at pleasure, then capital can be had.

We do not discover the force of this reasoning. Railroads are usually constructed with borrowed capital. The capitalist loaning his money loans it on what he believes to be advantageous terms and good security.