The Theft of the Public Domain by Gift of the United States Supreme Court

© 2005 by Donald B. Dibble

 

It is replete with sound principles.... The idea that institutions established for the use of the nation cannot be touched nor modified, even to make them answer their end... is most absurd.... Yet our lawyers and priests generally inculcate this doctrine, and suppose that preceding generations held the earth more freely than we do; had a right to impose laws on us, unalterable by ourselves; ...in fine, that the earth belongs to the dead and not to the living.

-- Thomas Jefferson

Railroads & Clearcuts

On July 1, 1862, Congress passed "The Pacific Railroad Act" (Chapter 120, 37th Congress, Session II) An Act to aid in the construction of a Railroad and Telegraph line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for Postal, Military, and other purposes. In so doing Congress granted thirty year, six per-cent, first mortgage subsidysubsidy bonds of $16,000 per mile across the Great Plains, $48,000 per mile through the Rocky and the Sierra Nevada Mountain ranges and $32,000 between the ranges across the great desert. Congress also granted alternate (odd numbered sections of public land extending for five sections (ten miles) on either side of the track (amended to ten sections on either side of the track in 1864) as well as a four hundred foot wide right of way from which the railroad could collect timber, stone and other materials necessary for building the track. In addition they were granted any land necessary for turnouts, sidetracks and stations. The railroad company was charged with surveying the route and filing same with the Department of the Interior within two years, at which time the Department of the Interior would withdraw all lands within fifteen miles on either side of the track from any settlement and pre-emption authorized under the Homestead Act of May 20, 1862.

The land grants had a dual purpose: 1) to give the railroad companies land to sell or mortgage so that they could raise additional money to subsidize the building of the railroad and, at the same time, 2) to open the west to "actual settlers." The RR Act further stipulated "And all such lands, so granted by this section, which shall not be sold or disposed of by said company within three years after the entire road shall have been completed, shall be subject to settlement and pre-emption like other lands, at a price not exceeding one dollar and twenty-five cents per acre, to be paid to said company." The phrase "like other lands" refers to the Homestead Act of May 20,1862 An Act to secure Homesteads to actual Settlers on the Public Domain. .

The transcontinental railroad was completed in July of 1869 near Ogden, Utah, where the Central Pacific from the west met the Union from the east. Due to deficiencies in construction the government inspectors did not approve the Union Pacific section until 1871.

In 1874 a man named William H. Platt settled on a one-quarter section of land (one hundred and sixty acres) in Hall County, Nebraska. He built a house, a stable, and another out building. He erected fences and otherwise improved the land as required by the Homestead Act. In September of 1878 he proceeded to the local government land office and attempted to file a Homestead claim. He was refused on the grounds that the land had been patented to the Union Pacific Railroad Company. Platt returned the next day with two hundred dollars that he paid to the agent on behalf of the Union Pacific. He received a receipt to give to the UPRR so that they could collect their money from the government.

The UPRR refused to recognize Platt's claim on the grounds that the land had been mortgaged and, therefore, "'disposed of." The UPRR brought a suit of ejectment to have Platt removed. The Federal District Court sided with the Union Pacific and ordered Platt's removal. Platt appealed to the United States Supreme Court. With unusual alacrity Tthe Supreme Court heard the case in October 1878 (Platt v. Union Pacific R.R., 99 U.S. 48 (1878). After the attorneys for both sides had presented their cases Justice Strong delivered the opinion of the court. It was an oration that would have made Humpty Dumpty proud:

 

"When I use a word," Humpty Dumpty said, in a
rather scornful tone, "it means just what I choose it
to mean - neither more nor less."

-- Lewis Carroll, Through the Looking Glass

Dispose of -
1) to deal with conclusively; settle 2) to give away or sell 3) to get rid of; throw away.
-- Webster's New World Dictionary, 3rd College Ed.

Dispose of -
To exercise finally (emphasis added), in any manner, one's power of control over; to pass into the control of some else; to alienate, relinquish, part with, or get rid of; to put out of the way; to finish with; to bargain away.
-- Black's Law Dictionary, 5th Ed.

After a summary of the facts in the case Justice Strong begins, "In view of these facts, we are to determine whether the mortgage was a disposition of the lands granted to the company within the meaning of the last clause of section 2 of the act of 1862." Justice Strong goes on to say, "The more general modern doctrine in this country is, we admit, that it (the mortgage) creates merely a lien, without any transmission of title."

However, it becomes clear that Justice Strong is not satisfied with his own observations as to the difference between "'mortgage"' vs. "'dispose of"' and so he must pursue his chimera, '"dispose of."' He tells us, "This is not a question to be answered by references to definitions given in the dictionaries." He asks rhetorically "What did Congress mean in the act of 1862? If Congress used the words ' sold or disposed of' there must be some difference between selling and disposing."

Yes, Justice Strong, there is a distinction. 'Selling' is a subset of 'disposing.' In other words one may dispose of something by means other than selling. One may give away, throw away, or perhaps trade. It is entirely possible the railroad company might have bartered some of its land grant for rails, locomotives, labor, and other necessities for building the road. The company might have donated land for schools and municipal buildings at its station sites as was a practice sometimes used by others with grants.

Or Justice Strong might have looked in the preceding paragraph of the Act of 1862 to see that the words "...not sold, reserved, or otherwise disposed of by the United States..." are used in the grant to the company. Here we have one of those legal phrases lawyers are so prone to parade around, the monotony of which is apt to mesmerize the reader or listener to the degree the person is no longer aware of being led a path that doesn't entirely make sense.

Justice Strong purports to read the whole will and intent of Congress into a legal syllogism. He goes on:

 

The phrase "or disposed of" must, therefore, have some distinctive meaning beyond the word "sold."

What that is may be seen very plainly when the whole act of 1862 is examined. We are seeking for the intention of Congress.... Congress addressed itself to the work of securing a railroad from the Missouri River to the western boundary of the Territory of Nevada, and thence to the Pacific Ocean... We do not say that other incidental considerations were not kept in mind....

Those other "incidental considerations" which Mr. Justice Strong so blithely relegates to insignificance include opening the west to "actual settlers" as the Homestead Act, which antedates the Railroad Act, so states and to prevent the railroad from becoming another land Bbaron on the western frontier, charging prices in excess of what most settlers could afford, hence the stipulation "not to exceed one dollar and twenty-five cents per acre." Congress was also concerned with protecting the public interest, hence the three year limit on how long the railroad had to "sell or dispose of" the land before settlers could simply pre-empt the granted land.

Justice Strong goes on to tell us, "...the lands were of little worth... unsalable at any price. Their value was wholly prospective, dependent on the construction of the road." The fact of the matter is that long before the existence of the United States, of roads, canals, or railroads, Native Americans, explorers, frontiersmen, and settlers had moved west far in advance of civilization. Indeed, if the lands was were so worthless why would Platt have wanted it in the first place?

True, building the railroad enhanced the value of the lands, but it did not create their value. Water transportation was readily available down the Platte River valley (the route of the railroad) and the many other tributaries to the Missouri, hence to the Mississippi River and onwards to New Orleans on the Gulf of Mexico.

Justice Strong goes on with his theory of Congressional intent:

 

The words "disposed of" are undeniably apt words to indicate a transfer by mortgage... the grant made... was obviously made... with the intent of giving present assistance to the company in the construction of the road. It was not intended to be available only after the company had raised all the money necessary for the work.

Justice Strong continues in his judicial rationalizations summarizing his arguments to conclude: "Congress, when speaking of a disposition of the lands other than a sale, contemplated making them for the purpose of the grant by mortgage."

Justice Strong conveniently forgets that the United States government had a first mortgage on the lands by the act of 1862. That mortgage was reduced to a second mortgage by the amendatory act of 1864. The amendment was necessary so that the company could mortgage the lands to another lender. Justice Strong's logic collapses upon itself. The mortgage value of the lands had nothing to do with their disposal. If a mortgage constituted "disposing of" the land grant, those words would not have been in the Act of 1862 as they would have been contradictory. As to "giving present assistance to the company" Justice Strong seems to ignore that the railroad received millions of dollars in subsidy bonds not due and payable for thirty years. The RR companies also had the lands available for sale which, at minimum price of one dollar and twenty-five cents an acre, would have yielded another ten thousand dollars a mile.

The mortgage contract for ten million four hundred thousand dollars stipulates after all the legalese of "party of the first part," "party of the second part," "said mortgagee," and "said mortgagor," the seventh paragraph states:

 

...said trustees shall cause all such lands... to be carefully examined and surveyed, and shall affix to each tract or parcel such price as in their judgment shall be most judicious having in view the interests of all parties... the prices being, nevertheless, at all times subject to revisions and alteration by said parties.

So much for the one dollar and twenty-five cents per acre. Here we see a clear attempt to circumvent the intent of Congress to establish what seemed to Congress a reasonable price for the land granted.

In the third paragraph after the preceding we find: "The said trustees shall apply the proceeds of all sales made by them of lands hereby conveyed to the sole and exclusive purpose of payment of the bonds..." Here, it seems is the real purpose of the ejectment suit against Platt. It wasn't that the lands had been 'disposed of' by mortgage because the mortgage holders holders would receive their money whatever the price of the land. The Union Pacific Company simply wanted to be able to charge for the land as they saw fit thus contravening Congressional intent as to the price of the land and Congressional homesteading policy.

The seventh paragraph of the mortgage document reads:

 

It is hereby declared by the parties to this indenture that all the provisions of said acts of Congress, so far as they are applicable, are hereby made, and shall be deemed and taken to be, a part of this instrument, and the said provisions in all that concerns the sale and disposal of the said lands hereby conveyed to the parties of the second part, are to be observed and strictly and faithfully carried out and fulfilled.

How can the same document which that contravenes Congressional intent as to price to be charged and the time to open to for sale comply with "said acts of Congress?"

Justice Strong enlightens us on this question. He seems to be clairvoyant. He informs us:

 

...The provision that at the expiration of three years from the completion of the road the unsold or undisposed of lands, should be open to pre-emption, was in its nature not one to be "strictly and faithfully carried out and fulfilled" by the company.

As Joseph Heller says in Catch 22 "They can do whatever you can't stop them from doing."

Justice Strong continues his tortured logic for several more paragraphs before finally concluding:

 

...we are constrained to hold that the mortgage of 1867 was a disposition of the lands mortgaged within the meaning of the statute, and consequently, that the tracts of land claimed by the claimant (Platt) was not open to pre-emption when he undertook to pre-empt it. He has, therefore, no equitable title to it. Decree Affirmed

"You are old" said the youth, "and your jaws are too weak for anything tougher than suet;
yet you finished the goose, with bones and the beak -
Pray, how did you manage it?"
"In my youth," said the father, "I took to the law and argued each case with my wife;
And the muscular strength, which it gave to my jaw has lasted the rest of my life."

-- Lewis Carroll, Alice in Wonderland

The following is a partial recital of the dissenting justices from the decision:

 

Mr. Justice Bradley, with whom concurred Mr. Justice Clifford and Mr. Justice Miller, dissenting.
I dissent from the judgment of the court in this case.... In my judgment, Congress had in view such a sale and disposition of the lands as would secure a settlement thereof. The object was to encourage a speedy settlement of the country along the line of the road; and hence it was provided, if the company did not dispose of them, they should be open to settlers, at the usual prices, reserving to the company, however, the right to receive the purchase money for the same. If the company, by one sweeping deed of trust, or mortgage, could cover the whole domain as with a blanket, and thus prevent a settlement thereon until the lands, by advance in prices would be out of the reach of actual settlers desirous of occupying and improving them, it seems to me would entirely defeat the objects of the act...

By this decision tens of millions of acres of land remained in the hands not only of the Union Pacific, but also the Central Pacific, the Southern Pacific, and other smaller land grant railroad companies to dispose of at a price and time of their choosing, that is, whatever the market would bear.

The Union Pacific and the Southern Pacific (heir to the Central Pacific) became the prototype for future corporate development. The two railroad companies were the grand daddies and the largest concentration of corporate wealth up to that time in the history of the United States.

 

 

Railroads & Clearcuts home