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CHAPTER XIX.

Railroads - Personal Work- Central Railroad of Iowa-Receivership and Superintendence — Malicious Litigation— Vindication.

A LABOR strike, obstructing travel and trade for a week, first directed my attention to the value of railroads. Celerity, safety in travel, and power to move the world's produce cheaply, is the province of our railways.

Memory carries me back to the day when there was but one New England railway that employed in freighting granite from quarry to dock, at Quincy, Mass.; and my first ride on a railroad was given me by a showman in a ball-room on a miniature locomotive.

A Vermonter laughed at the predictions that eventually we should ride on an iron rail at the rate of ten miles an hour. That prophet saw with a dim eye in the misty valley, not on the mount of far vision. He was in advance, however, of the Massachusetts committee of the state legislature, that reported in favor of a railroad survey from Boston west to Newton, that town being as far west as the road would probably ever go. Rocky hills, mountains, deep valleys and streams, were the barriers of nature, and tavern keepers, raisers of horses and grain had no welcome at an early day for steam "to make their occupations and farms worthless". Now, one hundred and eighty thousand miles of railroad is not only the greatest material fact of the century, but one of the solutions of our mysterious progress, to which the capital and genius. of countries boasting of the oldest civilization are awakening.

The iron rail has achieved far more for the new West than for the older states. It has invited refined society where before pastoral life was only congenial to a people with nomadic habits. It has rendered that expanse which before had only the value of a clear sky, the home of contented and prospered millions. It has determined the value of farms by proximity to a depot, and pro

moted the social unity of the people, who have found easy and swift ways of travel. In the facilitation of exchanges of products and speed of locomotion, human life at every locality distant from seaboard, or crowded city, has been lengthened one half. The accomplishments at fifty years by the fathers are easier attained by their children at forty years.

Land grants to aid in the construction of railroads through new states and territories, have furnished a prolific theme for shallow demagoguery. No party alone can have the blame or credit of a policy of which Stephen A. Douglas, a democratic idol, was the early champion. It was statesmanship to give treeless prairies value, and place a double price on alternate sections held for sale by the government. Roads by tens of thousands of miles were secured early by aid of the land where this policy secured their construction. The alleged great gains of the companies with a land donation are, as a rule, mythical. They anticipated business and waited years for population and profits. Local trade, and not long hauls through sparse settlements, furnished the secret of good dividends. Thus the lands became a necessity to secure an investment, and there came a consideration and an approval of a device in high statesmanship rather than reprobation by pessimists. Government doubled the price, and one half was of value, where before all was worthless as a home.

PERSONAL RELATIONS,

I went to the New West in anticipation of railroads, to enjoy their benefits, but was caught in the fervor of a pioneer, and later in the currents of enterprise in construction. Between my home and Davenport, one hundred and twenty miles, and Iowa City, sixty-five miles, the nearest terminus, I wasted years and vitality by nearly a hundred stage and hack trips to bring the Rock Island west. I made great efforts, and by Henry Farnam, the builder, was made a director, involving responsibility and trips to New York without pay. On going to Washington I resigned my place, but was never a party to passing our stock over to the Chicago Trunk Line at sixteen cents on the dollar; and I kept the certificates, which I would not place in the pool, costing me par, but now only valuable for a picture of the Mississippi river bridge and the autographs of two great men- A. C. Flogg, treasurer, and Gen.

John A. Dix, president, whose successors are also able railway managers. The policy of a thousand miles in extensions on the frontier invites discussion by the owners and managers, but is foreign to my personal narrative. Our county gave aid in the sum of one hundred thousand dollars voted, and the stock could have once been sold for a good sum; and but for a knowing attorney, now deceased, our debt could have been compromised so as to save over sixty thousand dollars. The voting aid was not then bad policy, but a wise act to secure the road, greatly enhancing the value of farms and building up towns.

In 1870 I ventured what money I had, and used my credit to its limit, in building a road from Albia to Knoxville, near to the great coal fields of Marion county. Later, by a breach of faith as to a tax at Albia, I changed my plan from Oskaloosa west in connection with the Chicago, Clinton, Iowa City and South-western — a rational, grand pioneer scheme which was set back by the financial reverses of those who had invested their money previous to the Chicago fire of 1871. For five years I was the owner of miles of grading, piling and bridging, until I made a sale to Ex-Governor Merrill, who, after the road was built, conveyed all to the C. B. & Q. Railway Co. Even after the sale, my loss was many thousand dollars under a contract with a Chicago capitalist. My judgment in court against him on account and for franchise was $47,000, which I never sought to enforce by execution, his losses by the great fire were so great; and I took off a burden which made it possible for him to rise. He did rise, but never to lessen my loss by the Chicago fire at near $50,000.

By solicitation, I was engaged in securing a road from Clinton, down the Mississippi river to Muscatine, for the West. After spending money and time, want of local aid led to its abandonment, to be resumed later by a strong company.

I hold the first share of stock issued to me as president of the Iowa City and English Valley Railroad. It was a scheme to reach the What Cheer coal mines, and, aided by Hon. Ezekiel Clarke, was full of promise, but it was clouded by a stringent money market, and I gave way, in want of courageous friends, to the B. C. R. & N. Railway, since completed to Montezuma.

The Grinnell and Montezuma Railroad, of which I was president, was built under my contract. It kept the county-seat where the people were mainly liberal, and, despite the bad faith of a few,

did not bring the predicted losses. The sale was to the Iowa Central, which finds it a good feeder and not a local foe to its business.

The Grinnell and State Center Railroad I secured by franchise, pecuniary aid and right of way, then passing all over to Ex-Governor Merrill and his brother, Mr. J. H. Merrill of Des Moines. It was a good local enterprise, of value to the people and a natural feeder to the Central, to which it was sold by the Merrill brothers, and brought gain rather than loss to all the parties.

These five enterprises were of less concern, great as were their drafts on my credit and years of time, than

THE CENTRAL IOWA RAILROAD.

Few, if any, railroads in the country have had so checkered a history on the stock board, in the frictions which befell its management, and in the sharp personalities of which it was the prolific occasion. It is my purpose to give its origin, mention its utility and management, omitting a vindication of my official service. That may be done by another, if at all, after a submission of facts is given. The inception of the road came by a demand for good coal found in southern Iowa, and for lumber cheap at the great market of Minneapolis. Central Iowa had little timber and as little coal, which now costs two dollars and a half a ton; then costing from five to six dollars. Lumber rates were high, there being no competition, and building material was a necessity.

As early as 1858 I was elected president of the chartered company, to construct a line from Albia on the south to Mitchell near the Minnesota line, two hundred miles, in promise of connections with a line to St. Louis and to St. Paul. Oskaloosa, Grinnell and Toledo were among the points. This line was direct, natural and without deflection in its line; on its merits it was a scheme that would have been not only a credit, but a source of profit to the builders. But the poor money of that time, low prices of farm products followed by the war, left the dirt grading to be overgrown by weeds. Under a new combination by Charles C. Gilman of Eldora, Iowa, the building of a road to reach the coal banks at Steamboat Rock from Ackley, there came to be a road via Marshalltown and Eldora, taking up the old project to reach the Oskaloosa coal banks. It was here that I could only count up the money used in surveys and time given for the old line, and I was

left to accept the place of a director, and to be one of a construction company for the new project, under a bold leader and with capitalists as allies. The towns were liberal and enterprising, and, without depreciating any points, Grinnell gave all that was asked, some $80,000, for which stock was to be issued.

My subscription was work in grading two miles of road, or cash $5,000. Then I paid in cash $7,500 for construction stock that would have brought a good premium while work was going on. Iron was $70 a ton, against $30 now. Labor was high, and this, after the Chicago fire and the depression of 1873 and '74, was my personal financial relation in 1875:

Cash paid out, $12,500; interest, $6,000. Market value of stock $1,500; leaving my loss at $17,000.

The road had defaulted in its interest, and there were sharp recriminations and frictions, with legal devices for the control of the property, and the road, under a foreign superintendent, had lost in business and was reputed unsafe for transit, if the accidents and public rumor were any indication. Rival roads and coal companies and localities were fertile in expedients and loud in complaint before the United States Court, held by Judges John F. Dillon and J. M. Love.

With neither of the judges had I ever held conversation as to the road, nor had we ever had any business relations to induce the selection of myself as receiver-leading, I regret to say, to an experience of the bitter and disgraceful attacks on the part of certain owners and employers, foiled in their schemes for personal aggrandizement, and resulting in the obstruction of a great trust, representing in stock and bonds from ten to twelve millions of dollars.

It was at this stage that I received this telegram from Edward R. Mason, clerk of the United States Court: "Judge Dillon wishes to see you officially at Des Moines, if you will come up to-day." I did not dream of his desire until in his presence, never having a thought but of my losses, and not of the management of the railroad property. What follows would be without interest only as a key to my action, and related to the most bitter assaults and basest methods in regard to the court, trustee of bondholders, and myself as receiver.

The following is the order and basis for large discretion exercised:

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