to elapse before the workers were to realize that they must organize
and vote with the same political solidarity that they long had been
developing in industrial matters. With political power in their hands
the capitalists could, and did, use its whole weight with terrific
effect to beat down the working class, and nullify most of the few
concessions and laws obtained by the workers after the severest and
most self-sacrificing struggles.

One of the first memorable battles between the two hostile forces
came about in 1877. In their rate wars the railroad magnates had cut
incisively into one another's profits. The permanent gainers were
such incipient, or fairly well developed, trusts or combinations as
the Standard Oil Company. Now the magnates set about asserting the
old capitalist principle of recouping themselves by forcing the
workers to make up their losses.

But these deficits were merely relative. Practically every railroad
had issued vast amounts of bonds and watered stock, on which fixed
charges and dividends had to be paid. Judged by the extent of this
inflated stock, the profits of the railroads had certainly decreased.
Despite, however, the prevailing cutthroat competition, and the slump
in general business following the panic of 1873, the railroads were
making large sums on their actual investment, so-called. Most of this
investment, it will be recalled, was not private money but was public
funds, which were later stolen by corrupt legislation. It was shown
before the Hepburn Committee in 1879, as we have noted, that from
1869 the New York Central Railroad had been making sixteen, and
perhaps more than twenty per cent., on the actual cost of the road.

Moreover, apart from the profits from ordinary traffic, the railroads