As Ayn Rand pointed out, there were always capitalists who sought government favors. Says: the Pacific Mail Steamship Company used the rugged terrain out to California as an excuse to lobby the U.S. government for a subsidy to transport passengers on large steamships from the east coast all the way to California (with a railroad jaunt through Panama). - The U.S. government did not bid out the contracts, but gave them to the favored few, and the Pacific Mail Steamship Company won a lavish $500,000 annual federal subsidy to ship passengers, who also had to pay $600 fares to the steamship company to get to gold country. Huge profits poured in, but the subsidy and high fares remained. The miners sought gold in the California hills near Sutter’s Mill, but the monopolists at the Pacific Mail Steamship Company sought their gold in the halls of Congress near the U.S. Treasury. - Protests of price-gouging wafted over the fruited plain, but they came to nothing–until Cornelius Vanderbilt became disgusted and decided to offer the same service to California for only $150, with no federal subsidy. - burtfolsom/?p=2774
Posted on: Fri, 07 Mar 2014 14:38:51 +0000
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