The Nonpartisan Leader Newspaper, September 15, 1919, Page 4

“Patriotism” and a $5,000,000 Trick " How John D. Ryan, Copper Chief and *“Dollar-a-Year Man,” Used War Job ~to Aid Milwaukee Road in Attempted Steal : 22z|N ATTEMPTED $5,000,000 steal | by the Chicago, Milwaukee & St. Paul railroad in the state of Washington has been uncov- ered by a congressional investi- gating committee. According to information telegraphed to Secretary of War Baker, most of this money has been spent on the construction of a railroad in the Olympie peninsula. The road was constructed during the war for the announced purpose of getting out spruce for airplane construction. Instead of build- ing a temporary logging road, which could have been done economically in a few months, thus en- abling the government to get out immediately the timber it needed, millions more were spent in con- structing a permanent line to connect with the Mil- waukee and later be bid in at a low sum by that system, as it would be of no use to any one else. Because of these tactics the new line failed to get out spruce timber needed by the government during the war. The greed for money on the part of the men who planned this line prevented the United States from protecting its troops properly with airplanes. - Not one American-built bombing or fighting plane reached the battlefront. Lack of this protection, it is admitted, cost the lives of d :tt:‘housands of American soldiers in the Argonne orest. John D. Ryan, president of the Anaconda Copper Mining company and in.charge of aircraft produc- tion for the United States government, is named by the congressional committee as the man re- - sponsible for the startling steal that is alleged. Ryan’s corporations have been engaged in a bit- i ter fight against the Nonpartisan league in Mon- : tana and the copper trust newspaper organs have ¢ been charging League farmers with disloyalty be- cause they objected to just such tactics as Ryan ' has used. The history of the Milwaukee railroad is full of graft from the beginning. When the road was in * its childhood it was known as the La Crosse & . Milwaukee. It began nowhere and went in the ; same direction for a few miles. When .the Wis- ; consin legislature granted it a charter in 1852 it { also granted the road many thousands of acres of public lands. In 1856 it received one of 30 land - grants from congress. An investigation the next | year showed that bribery had been used to accom- ! plish this result. The findings are included in a congressional document entitled, “Report of Select Committee to Investigate Certain Alleged Corrupt ! Combinations of Mem- | bers of Congress,” Vol. . IIL., Report No. 245. The | bribery used in the Wis- | consin legislature is list- ed in a report of a joint ! investigating committee | of Wisconsin in 1858. ROAD IS RIFLED OF $1,700,000 By this time the rail- . road had gone through a thorough education in finance. In its first four ! years it had been looted ¢ to the extent.of $1,700,- { 000 by its directors, Wall ~ . street operators.and i bankers, by exorbitant i contracts made by indi- { vidual directors for con- { struction work, by pur- i chases of property by the { directors individually and { then resold to the road . { at enormous profit, and { by wholly false construe- i tion charges. So com- pletely had its assets been rifled that it was | declared necessary for %the road to get a new {land grant of 1,000,000 jacres. .= < g This "new - land grant, according to the report of the president of the road airplanes. he is a director. This is a logging scene in the Ol picture, the Olympic peninsula ¢ at the sixth annual meeting, cost the road $1,000,000. Coles Bashford, governor, accord- ing to a subsequent report of a Wisconsin leg- islative investigating committee, got $16,000 in bonds, some of the senators got from $10,000 to $20,000 each, and assorted assemblymen brought an average price of $5,000. But the road got its land grant, later appraised at -something over-$17,000,000. In addition, the legislature had passed laws exempting the road from taxation and exempting the granted lands from taxation for 10 years, by which time the railroad would have a chance to sell them or strip them of timber. ~In spite of this enormous gift if took the Wall street pirates only a year to loot it again. In 1857 the road went bankrupt. At this stage there ap- peared upon the scene Russell Sage, who held the majority of the bonds which the roads had issued. With him he brought methods which had beén working with the greatest success in the East. Sage was a rising financier. He first appeared in the public records in a suit brought by two of his for- mer partners, who charged that Sage had connived with a Milwaukee man, who later became a United States senator, to swindle them out of money which they had helped him take away from another group. Later Mr. Sage appeared in congress and helped vote on the 30 land grants referred to previously. With ‘control of the bonds, Mr. Sage threw the Milwaukee into bankruptcy, reorganized it as the Milwaukee & Minnesota Railroad company and re- pudiated all debts of the parent road. Then, by devious means, the Milwaukee & Horicon railroad was absorbed and the road started to grow into a great railroad system. Within the last 10 years the Milwaukee hés pushed its lines to the Pacific coast. New capital was interested for this purpose. The financial groups now interested may be classified as the Rockefeller group, the Rockefeller family owning a large portion of the road’s securities, the Chicago packers, represented on the board of directors by J. Odgen Armour, and the Montana interests, head- ed by the Anaconda Copper Mining company. In extending its road through the West the Mil- waukee decided to electrify its lines in Montana, Idaho and Washington. For this purpose it bought power from the Montana Power company, which’ was organized by Anaconda Copper Mining com- pany interests and of which John D. Ryan is presi- dent. The Milwaukee is said to get its power for one-half cent per kilowatt hour, probably the low- " is more expensive to produce. ympic peninsula. . Besides great forests of fir, the timber shown in this ontains the continent’s largest supply of spruce, valuable for building John D. Ryan made the spruce supply his excuse for building a new rzilroad line with the government’s- money, which would be valuable as a connecting A line built for one-eig government better, link for the Milwaukee railroad, of which hth of the money would have served the purpose of the because it would have been able to get out spruce before the war ended. PAGE FOUR 2 est rate in the United States, although private users of light and power in Montana pay rates two or three times those in other states, where power In other words, the private users of electricity pay a high rate so that the power can be furnished the Milwaukee at bed- rock prices. v =% RYAN MADE HEAD OF AMERICAN RED CROSS When the United States entered the war John D. Ryan, president of the Anaconda Copper Mining company and of the Montana Power company, was first named head of the American Red Cross and later was put in charge of aircraft production. Meanwhile the Milwaukee railroad had laid am- bitious plans to exploit the Olympic peninsula, which lies between Puget sound and the Pacific ocean. timber, much of which had been grabbed by indi- vidual directors and officials of the Milwaukee, who knew of plans for invading the peninsula. Secretary of War Baker approved plans for a 15-mile railroad, designed to tap big spruce for- ests in the Olympic peninsula. This line could have been built at a cost of $500,000. It is doubtful whether even this would have been necessary, as the congressional investigating committee believes that existing roads could have handled all the spruce that possibly could have been cut. However, the 15-mile road would have been of comparatively little use to the Milwaukee " system. Instead a 56-mile road was built, over the mountains, in another direction, which would serve as an important link in the Mil- waukee system in invading the peninsula. This line cost $4,000,000. The report of the congres- sional investigating committee says: “Milwaukee ‘railroad officials and Milwaukee en- gineers apparently controlled the location and de- termination of the road that has been built. The route is not that approved by the chief signal of- ficer or the secretary of war, and cost eight times as much as the maximum estimate for building a 15-mile road to tidewater at Clallam bay. “John D. Ryan was the government director of aircraft from May to December, 1918, and in a position of supreme authority throughout that period, besides being a member of the board of directors and executive committee of the Mil- waukee railroad. Mr. Ryan was president of the Montana Power company that holds valuable con- < tracts for furnishing electric power with which to operate the western portion of the Milwaukee system.” > Mr. Ryan was also re- sponsible for signing a $25,000,000 spruce pro- duction contract. Of this sum only about $2,000,- 000 had been spent when the armistice was signed, but of this $2,000,000 the government will be able to recover only - about $200,000, the report says. The committee finds specifically that the Olympic peninsula “line was built not to carry spruce logs, but as an extension of the Mil- waukee railroad for com- mercial purposes and as a short cut to Grays Harbor.” It adds: “We would rather see this railroad and mills scrap- ped than to have the gov- ernment sell it to the Chicago, St. Paul railroad for an insignificant , percentage of its cost,” and “Fur- ther “investigation may disclose conditions. upon which a recovery can be -had against Ryan and others responsible for ture of public funds.* It includes thousands of sections of virgin * Milwaukee & - this wasteful expendi- : so e A