USA > Alabama > History of Alabama and dictionary of Alabama biography, Volume II > Part 83
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The last two years of the war wrought havoc among the railroads, as with other prop- erty in the South. Many of the roads were alternately in possession of the Federals and the Confederates, being destroyed and then partially rebuilt as circumstances demanded. In order to prevent their capture by the Fed- erals, the Confederates themselves often com- pletely destroyed the tracks, bridges, depots, shops and rolling stock; and before abandon- ing a road to the Confederates, the Federals would heat the rails in the middle over fires made of the crossties and twist them about trees and stumps so as to render them utterly useless. The net result of the vicissitudes of the war was the virtual destruction and abandonment of most of the railroads in the state.
The losses sustained by the railroad com- panies, aside from the destruction of their physical property, were considerable, and proved fatal to most of them. The Memphis and Charleston lost in Confederate securities and currency, $1,195,166.79; the Mobile and Ohio, $5,228,562.23; the Alabama and Ten- nessee River Railroad Company, $1,000,000; the Mobile and Great Northern, $401,190.37; the Alabama and Florida, $755,343.21; the Montgomery and West Point, $1,618,243.00.
As the Federal armies occupied the coun- try, they took possession of the railroads and operated them under the supervision of the war department, or the railroad division of the army. Some repairs were made, but the roads were practically useless and worth- less in the summer of 1865. The United States Government retained possession of the roads until their stockholders became "loyal," or until "loyal" boards of directors were appointed. When the stockholders attempted to rebuild their roads, the negroes could not be induced to work. Besides, the companies were bankrupt, having lost their means and their plants during the war. Some of them had ample financial resources according to their books, but they consisted of Confed- erate currency and securities and were with- out value, and the debts due them were pay- ahle in Confederate funds. Some of them during the war had paid debts to State and counties which later had to be paid again. Atogether, the railroads suffered from the war in about the same degree as the rest of the commercial and industrial interests of the South.
Probably the only benefit which the rail- roads of Alabama may be said to have re- ceived from the war was the rise of interest among capitalists of the North and East in the mineral resources of the state, particularly
the iron ore whose remarkable quality, un- known before the war, was brought to their attention by the ordnance manufactured by the Confederacy. The development of the mineral district of North Alabama was the immediate incentive to the remarkable growth of the transportation system of the state since the war, and the history of these two phases of the state's economic life is very closely connected.
As has been shown, the principal incentive to the construction of railroads during the first two decades of their history in the state, was the desire to reach the cotton markets. Later the emphasis was on the connection of the isolated portions of the state with the seaports, but with the same objects in view, i. e., the development of commercial and political intercourse among the people. Dur- ing the war military considerations were para- mount. After the war attention was centered upon the development of the state's mineral resources, which offered about the only in- ducement to an influx of outside capital, so essential to industrial undertakings. Local capital was non-existent, and there was little left upon which capital could be borrowed, so the business men of the state were con- strained, however reluctantly, to try to induce northern and foreign capitalists to undertake the development of the only form of wealth within the state which had not been dissi- pated by the war.
Northern capitalists required little persua- sion to take hold of the work of developing the coal and iron industry in Alabama, but they also proceeded, in some cases, to exploit the state itself for their own profit. Along with the capitalists came many pseudo-capi- talists whose only qualifications for financial undertakings were a colossal audacity and a total lack of conscientious scruples where their own financial or political advantage was involved.
The ores of North Alabama were worthless in the ground and the coal had no value where it could not be used. The first problem was how to provide a way to get their prod- ucts to market, and the construction of rail- roads offered the only practicable solution. Thus it came about that the development of the Birmingham district and of the railroad system of the state have been virtually si- multaneous and, to all intents and purposes, constitute a single phase of the state's econo- mic history.
Land Grants to Railroads .- The genesis of railroads in Alabama in many respects was unique among those of the rest of the coun- try. By the time the steam railroad had demonstrated its efficiency and the people had become convinced of its practicability, its desirability and its permanency in their in- dustrial system, the peculiarities of their economic and political status, brought about by the exigencies of the slavery agitation, had already begun to exert a determining influence in shaping political thought and economic policies. The conviction had taken hold upon men's minds, and they were obsessed and dominated by it, that the inde-
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pendence, the separateness, of the South, and its political dominance in the nation, must be maintained at any cost. Already thinking men had foreseen the "inevitable conflict," and these men realized the absolute neces- sity for economic independence, upon which social exclusiveness and political liberty must inevitably be based.
Thus it came about that when public opinion in Alabama had at last reached a point where it would sustain the more enter- prising and venturesome spirits in their efforts to effectuate the industrial independence, rec- ognized by all as desirable and even essential to the maintenance of the existing social order, by means of the construction of rail- roads to connect the remote and isolated por- tions of the state and bring them into closer commercial, social and political harmony and co-operation, the conviction had been reached that the people of the state must themselves work ont their own salvation; must them- selves build the railroads which would be the instrument of that salvation, uniting and enriching them. Back of this realization of the necessity for railroads to connect the Tennessee Valley with the Gulf of Mexico, if the people of Alabama were to continue to prosper and thrive as individuals and as com- munities, lay the deeper conviction that rail- roads and wagon-roads and factories and mills must be built and operated, and that right speedily, if the state were to recover and maintain her former position in the van of progress and power.
These convictions of reflective men, as well as the mania for speculation among the less thoughtful and far-seeing, explain in large measure the rush to incorporate railroad com- panies and obtain franchise rights which characterized the period from 1850 to the out- break of the war in 1861.
It was attempted to carry forward these schemes for internal improvements with local capital and under the supervision of local talent. Almost without exception the railroad enterprises in Alabama before the war were initiated by her own citizens, financed by local individnal subscriptions to the capital stock, sometimes supplemented by subscrip- tions from counties and towns; and even the work of grading and tracklaying was under- taken by the planters of the communities con- tiguous to the contemplated routes. In many cases the bulk of the capital subscribed was in the shape of labor, of men and teams, ma- terials for construction and supplies for the hands employed. Most of the early charters specifically provided that a certain propor- tion of stock subscriptions, usually determin- able by the boards of directors, should be payable in that manner at the option of the subscribers.
Unfortunately, the promoters of railroads did not always fully realize the magnitude of their undertakings, and were led by their optimism and their enthusiasm to underesti- mate the financial and physical difficulties to be encountered. It is likely, too, that the rank and file of the planters, small farmers, and merchants were not as enterprising as
they might have been, nor as broad in their outlook upon life, nor as liberal in their atti- tude toward the future welfare of the state as they ought to have been. In short, they were pretty much engrossed with their own affairs, in which the bulk of their capital was employed, and were willing to leave to others the labor and the risk of building railroads, although doubtess they were not averse to participating in the benefits to be derived from these improvements when completed. In this respect, they were not unlike their descendants of the present day, in Alabama and elsewhere.
At any rate, after making an enthusiastic beginning, many of the railroad projects soon languished for lack of funds with which to prosecute the work of grading, and most of them never reached the more advanced stage of track-laying and erection of the super- structure. In many cases this financial im- potence was caused by the failure of sub- scribers to pay up their subscriptions for capital stock, upon which the undertaking had been predicated. One of the chief problems of the pioneer officers and directors of rail- roads was how to induce or compel delinquent stockholders to pay promptly the instalments of their subscriptions which they were pre- sumed to have made in good faith. Some of the companies were forced to appeal to the legislature for the passage of laws to assist them in this regard.
It was natural, therefore, almost inevitable, that the minds of these railroad administra- tors, sore perplexed and discouraged by the prospect of failure of their cherished schemes, which they felt would be caused by no fault of their own, but which nevertheless they found themselves powerless to avert, should have turned to the idea of public assistance to their undertakings by means of direct financial aid from the state. They were fully persuaded that the fruition of their plans was of paramount importance to the state itself, and that the construction of "arteries of commercial intercourse" between isolated communities, all of whose citizens were Ala- bamians who ought to be willing to make common cause in the construction of internal improvements which were designed for the benefit of all, could with propriety be fos- tered, if not actually undertaken, by the state.
The thoughts of these early railroad pro- moters, as set forth in the preliminary re- ports upon their projects, in addresses to the people through the public prints, in speeches on the hustings, and before railroad conven- tions held in various parts of the state, seem to have been occupied much more with the benefits to be derived by the inhabitants of the communities the roads would traverse than with the emoluments to accrue to them- selves directly from their operation as busi- ness enterprises.
The difficulty was to unite the whole people of the state in a common undertaking along definite and predetermined lines so as to secure for all the people the maximum benefit in the shortest possible time. The very con- ditions which the railroads were designed to
Vol. 11-29
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overcome militated against the accomplish- ment of this co-ordination and co-operation of effort, which alone offered a prospect of suc- cess. At the outset, the mistake was made of localizing these undertakings, each community striving not only to carry on its own particular enterprise without reference to any general plan, but to secure such advantages and per- quisites as it could, even at the cost and to the detriment of other similar undertakings. On account of this lack of public spirit, the resources of the people were so divided and distributed amongst many independent under-
takings, as to become too attenuated to he . the interior of the west, for the construction effectual.
Soon, however, it began to be perceived that little or nothing could be accomplished in that manner, and out of this realization of the necessity for co-operation, gradually grew the public sentiment, which we have already noticed, in favor of concentration of effort upon the construction of a line of rail- road to connect the northern and central por- tions of the state with the port of Mobile or Pensacola.
At that time, the general government still held the titles to millions of acres of unim- proved lands within the boundaries of the state, and the roads projected in accordance with this general plan would have to be built through them for long distances, where they could not even procure the necessary rights- of-way except by grants from congress. The state had granted rights-of-way through its own lands to the railroad companies, together with additional land needed for sidings, sta- tion-grounds, borrowpits for earth, gravel, and stone, and timber for crossties and bridges; and it was thought that the United States should make at least equal conces- sions. Most of the government's lands were in the less fertile regions of the state and had been open to entry by settlers for many years at extremely low prices without much progress towards sale and settlement. The readiest method of assisting the struggling railroad enterprises seemed to be by securing grants of these lands from congress, not merely for rights-of-way for the roads, but also additional quantities to be sold by the railroad companies and the proceeds used in the construction of the roads. It was believed that the completion of the roads would stimu- late settement of the lands and thus enhance the value of the lands remaining to the gov- ernment sufficiently to make it equal to the original value of the whole. Thus, it was argued, the United States would gain and not lose hy presenting alternating sections, for a width of six sections on either side of the projected routes, to the railroads.
Furthermore, from a political standpoint, there existed a well-defined opposition to the government retaining possession of extensive tracts of unimproved lands within the borders of a state from which the state derived no revenue and her people no benefits. It was considered an affront to the sovereignty of the state to have a large portion of her ter- ritory held by another government. This was the extreme "States' Rights" theory, but
the statesmanship of Alabama at that period belonged to the most extreme wing of that school of political thought.
So, in 1848, the legislature sent a joint memorial to congress, praying for agrant of alternate sections of unsold public lands along the line of a proposed railroad to connect Mobile with "the interior of the west." This was the Mobile and Ohio Railroad (q. v.). The legislature represented to congress that: the citizens of this State are deeply interested in a communication hy railway, between the southern part of this State and
of which a company has been formed and the initiatory steps taken; that the completion of such a road would be of immense advantage to the people of both the western and the southern portion of our common country, in a commercial point of view, by the facility of an interchange of commodities peculiar to the two sections of country, and in a social and political view by the rapid means of com- munication binding the inhabitants together by the strongest of all bonds, a community of interest.
"The proposed improvement would bring the products of the West Indies among the inhabitants of the interior in a short time, and also furnish the inhabitants of the south with a certain and cheap supply of the staple commodities of the western country, com- posed as they are of the great supporters of human life, which in a military point of view, the proposed road would he of inconceivable importance, enabling the Government, at short notice, and at comparatively small cost, in time of war, to transport a large force, to the defense of any assailable point on the Gulf coast. Your Memorialists would there- fore respectfully ask your Honorable bodies, to set apart for the purpose, and in aid of this project, the alternate sections of unsold public lands, on the line of the route.
"A great portion of this country has for a long time been in the market, and remains unsold, for want of bidders and this road when completed, will add largely to the value of public lands, and will increase the value of the unsold and ungranted lands largely above the present value of the whole amount of land on the line of the road. Thinking thus, your Memorialists most heartily join in the application for the grant of the land specified, as prayed for the company and by the corporate authority of the city of Mobile. and most respectfully hope that it may meet the approbation of your Honorable body."
On February 13, 1850, another joint mem- orial to congress upon the subject of rail- roads was prepared, in which grants of gov- ernment lands were requested to aid several other companies besides the Mobile and Ohio in the construction of their roads.
The first grant made by congress to a rail- road company in response to these requests was made to the state in trust for the Mobile and Ohio Railroad Company whose promoters had succeeded in having attached to a bill passed by congress on September 20, 1850, granting to the state of Illinois, to aid in
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building the Illinois Central Railroad and its branches, "every alternate section of land designated hy even numbers, for six sections in width on each side of said road and branches," an amendment making similar grants to the States of Alabama and Missis- sippi for the purpose of aiding "in the con- struction of said Central Railroad from the mouth of the Ohio to the City of Mobile." Under this act, Alabama received in trust for the Mobile and Ohio Railroad Company, 419,528.44 acres of land.
December 1, 1851, the Legislature passed an act accepting his donation of government lands and vesting the title thereto in the "Mobile and Ohio railroad company,
as soon as the said company shall execute and deliver to the governor of the State a suffi- cient bond faithfully to use the said lands for the purposes of its donation, and to abide by and perform the provisions and conditions in the said act contained."
The same legislature prepared the third joint memorial to congress on the subject of railroads and public lands, from which the following extracts are taken: "The joint memorial of the two houses of the general assembly of the State of Alabama respectfully shows: That there are some sixteen millions of acres of unappropriated public lands with- in this state; that these lands have been sub- ject to sale at private entry for a long term of years; owing more to their peculiar locali- ties than to their want of adaptation to the purposes of agriculture, these lands have not been in demand. The citizens residing in the counties covering the larger portions of these public lands are sparsely settled and are not able to construct such works of internal im- provements as will place their particular sec- tions in connection with the more favored portions of the state, without which these lands must for a long series of years yet to come remain unproductive to the government of the United States, and a great detriment to the property of Alabama. Other portions of our citizens have united with the citizens of these remote sections of the state in their efforts to open up such communications, by means of rail and plankroads, as will bring them in connection with the navigable streams of our own state and with the great railway communications of our sister states, the nat- ural tendencies of which will be to create a demand and impart increased value to the public domain through which they pass.
Your memorialists have confidence in the integrity and energies of the several compan- ies organized to effect the great objects indi- cated, and have high hopes of their ultimate success. These improvements traverse large sections of public lands. Your memorialists respectfully ask that congress will grant to each of the. railroad companies and to all plankroad companies chartered and or- ganized in this state, the right of way through the public lands over which they may sever- ally pass, with the privilege of taking there- from any earth, stone, gravel, timber or other material thereon, which may be needed in
the construction of said road or roads, or of any appendage to the same.
Your memorialists further ask, that by way of aiding said rail and plankroad companies in the construction and completion of said roads, congress will grant to each of said rail- road companies and to the several plankroad companies now heing or which shall hereafter be constructed, upon such liberal terms as shall to congress seem just and equitable, every alternate section or half sections of said lands aforesaid, for six miles on each side of said railroads, and for three miles on each side of said plankroads.
"Your memorialists, in making said requests, are influenced by the belief that the govern- ment of the United States is not disposed to have the public domain enhanced hy private enterprise and capital and withhold its reas- onable aid from those who so palpably deserve it. Your memorialists are influenced also by reasons of public policy, for all believe it to be the duty of the general government to extinguish its title to the public domain with- in this state as speedily as possible, in order that our state may the sooner develop its resources and derive revenues from the same, the hetter to enable the said state to afford that aid and encouragement to its citizens in their works of enterprise which it would he a pleasure to do, were the revenues of the state commensurate with the wishes of its people and their anxieties for the success of the enterprises indicated."
Under date of February 13, 1854, a fourth joint memorial was adopted, praying congress to grant government lands in aid of internal improvements within the state and advancing additional arguments in favor of such action, chief among them being the theory that the remaining lands would be so enhanced in value as to make them worth more to the United States than the original value of the whole.
Congress responded to these renewed re- quests by further grants of lands, and on De- cember 19, 1857, the state legislature passed an act accepting a gift in aid of a railroad from Montgomery to the boundary line he- tween Florida and Alabama, in the direction of Pensacola, and vesting the title of the same in the Alabama and Florida Railroad Company. (See Mobile and Montgomery Rail- road Company ), upon terms and conditions similar to those imposed upon the Mobile and Ohio Railroad Company above mentioned.
An act of February 1, 1858, accepted a donation of lands for the henefit of the Ten- nessee and Alabama Central Railroad, and conferred them upon the Girard and Mobile Railroad. (See Mobile and Girard Railroad Company). On the 5th, another act was ap- proved, accepting a congressional grant of lands and conferring them upon the Savannah and Albany Railroad Company. (See Sea- board Air Line Railway).
Up to June 30, 1897, according to the re- port of the secretary of public lands, the State of Alabama had received from the United States Government and conferred upon
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railroad companies, land grants, as follows: Mobile and Ohio, 419,528.44 acres; Alabama and Florida, 399,022.84; Selma, Rome and Dalton, 858,515.98; Alabama and Chatta- nooga, 652,966.66; South and North Alabama, 445,158.78; Mobile and Girard, 302,181.16; total, 3,077,373.86. Besides this, 67,784.96 acres were granted for the Tennessee and Coosa Railroad Company. (See Nashville, Chattanooga and St. Louis Railway Com- pany), but the records do not show that this company ever received the lands and they are supposed to have reverted to the government.
Large quantities of these lands were sold by the railroad companies, but still larger quantities were retained by them to be mort- gaged as security for bonds, the officers of the companies believing that in this way the greatest benefit could be obtained from them. Some of the railroads are still in possession of considerable portions of their land grants.
Genesis of State Regulation .- As we have seen, the state of Alabama has exercised cer- tain regnlative functions in regard to rail- roads from their first existence in its terri- tory. One of these is the control of freight and passenger rates. In the early days of the industry, this control was restricted to the establishment of a general maximum per- centage of profit upon the investment in the property; or, in some cases, the prescription of a maximum permissible charge per hun- dred-weight, or per ton, per mile for freight hauled, and the charge per mile for each pas- senger carried. The railroad companies themselves recognized fully the right of the state, by whose authority the corporation was created and enjoyed its delegated powers, to fix and to alter the rules under which the com- panies should deal with the people of that state; and in conformity to that theory of corporate rights and privileges, they made application to the legislature for amendments to their charters whenever new or enlarged powers were desired, just as the state, on the other hand, through its legislature, cur- tailed or restricted those powers and privil- eges by means of such amendments. There was never any question as to the state's right to regulate, but only as to its inclina- tion to do so in particular cases.
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