340 RAILROAD LEGISLATION AND INVESTIGATION IN WISCONSIN&quot;. 



It is impossible to estimate with any degree of accuracy Jie 

 amount of the burden upon the industry of this country by fraud 

 ulent building contracts, but it is safely assumed to be enormous. 



5. Fraudulent purchase of lines. 



Kindred to the corrupt letting of contracts is the wrong of pur 

 chasing lines already owned, at prices far above their real value, the 

 excess being divided secretly between the &quot; ring&quot; managers of the 

 two companies. Transactions of this sort are usually managed with 

 such adroitness that detection is difficult, if not impossible; but the 

 cases are neither few nor far to seek in which the evidence is convinc 

 ing that the terms conceded by purchasers must be accounted for 

 either on the ground of dishonesty or lack of judgment. 



G. Misappropriation of land grants. 



The American government is the only one that has adopted the 

 policy of making donations of the public lands of the country to 

 aid in the construction of internal improvements, looking at the in 

 dustrial progress of the nation. 



In view of the newness of the country, the deficiency of cash cap 

 ital for the construction of expensive works, and the extent and 

 variety of its material resources, which must otherwise long remain 

 undeveloped, this policy may have appeared at the time to be a wise 

 one; indeed, it has promoted the industrial prosperity of the nation. 



In the case of the trans-continental railways, the Union and the 

 Central, already in use, and the Northern and Southern, now in 

 construction there was still another motive that influenced the 

 government to bestow the immense grants they have received. The 

 rebellion had taught us the danger of disintegration. The Atlantic 

 and Pacific States were so removed that there was danger of an 

 early political falling apart; there was need, therefore, that these 

 great divisions of our common country be brought into closer rela 

 tions. This was the argument. 



Unhappily, experience has shown that there is another side to this 

 question of government aid in the construction of railways that 

 land grants, how much soever needed for the encouragement of im 

 provements in the interest of industry and commerce, have by no 

 means been an unmixed good that, in view of the corruptions en 

 gendered, and the public demoralization they have produced, it is 

 quite doubtful whether they have not been a curse rather than a 

 benefit. 



In the act of conferring lands upon the Illinois Central Eailroad 

 Company, the State of Illinois made an honorable exception to the 

 general rule, requiring, as a condition of receiving a grant, that the 

 company should annually pay into the public treasury seven per 

 cent, of its gross earnings, a sum now amounting, we believe, to 

 something over three quarters of a million of dollars. So far as we 

 know, this act of a provident Legislature stands conspicuous as 

 being the only instance in which the interests of the public, in grants 

 made to the States to aid in the construction of railways, have been 

 carefully protected. 



The lands granted to Iowa and Minnesota, as well as to Missouri, 

 Kansas, and Nebraska, have been given to the roads in those States, 

 without other condition than the construction of the roads within 

 a given date. 



