USA > Colorado > History of the State of Colorado, Volume II > Part 32
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After two or three days spent in the examination of witnesses, the cause was continued to the first week in August. On the 23d of that month Judge Hallett rendered a decision, which granted the Cañon City & San Juan company the right to go forward and construct its line as surveyed. He found that under the act of Congress of March 3d, 1878, with which that company had complied, that it was entitled to priority of right of way through the cañon over its line of twenty miles, as surveyed,
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located and platted. The Denver & Rio Grande company were there- fore restrained from any interference, and from constructing a line for themselves, but might proceed, if they could without interference, to construct another line, and if it became necessary, might, on application to the court, be allowed to use the track of the other company. But the Cañon City & San Juan was cautioned not to construct its line in such a manner as to make it more difficult or expensive for the Rio Grande to construct, and either party in case it considered itself aggrieved or wronged by the other, might apply to the court for protection.
This was a decided repulse to the Palmer forces, but they resolved not to stop there. They appealed to the Supreme Court of the United States, and pending decision there, decided to construct their undisputed line above the twenty miles covered by the Canon City & San Juan.
On the 12th of September, the Atchison company consolidated with the Pueblo & Arkansas Valley, and the Canon City & San Juan. Its lines were in operation from the east line of the State to Pueblo, and from La Junta to Trinidad. Its consolidated capital stock was $6,000,- 000. It proposed to build under the arrangement, from Pueblo to Cañon City, thence through the Grand Cañon to Leadville, through Gunnison Pass, and to Park and Summit counties, with a number of branches covering all the Rio Grande territory, including Colorado Springs and Denver.
About the ist of May, 1872, Col. D. C. Dodge was made general freight and passenger agent of the Rio Grande lines. He was thor- oughly familiar with every detail of the business through long connection with the Chicago & Northwestern Railroad and the Kansas Pacific. In the wars of the narrow gauge with its persistent rival, he took a prom- inent part and proved an admirable manager.
On the 8th of October, 1878, rumors of a lease of all the narrow gauge lines to the Santa Fé company began to appear. On the 11th they were confirmed. On the 15th there came a dispatch from Cañon City saying the matters in controversy had been adjusted, that both companies' would continue their extensions southward, the Santa Fé
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abandoning the Arkansas cañon to Palmer. The papers were executed in New York, October 19th, 1878, and provided for the transfer December 2d. By the terms of the lease the Santa Fé agreed not to build, operate or encourage any road, directly or indirectly, not already constructed, that is parallel to, or competing with, the Denver & Rio Grande's then constructed lines ; further, that the Santa Fé company should not change the gauge nor lay a third rail without widening the gauge or laying an additional rail over all the lines, except those between Pueblo and the coal mines east of Canon City ; and any lines that might be built from any terminus of the Denver & Rio Grande road or in extension thereof, should be of three-foot gauge. The Santa Fé bound itself not to discriminate in freight or other charges in any manner to the injury of the Denver & Rio Grande, and when traffic could be carried at the election of the lessee, it should be transported by the shorter line. The rental was to be paid monthly, and when the Santa Fé took possession it was to pay for fuel, material and other railway supplies on hand, a sum to be agreed upon by two persons to be appointed by the pres- ident of each road; the sum so paid to be applied by the Denver company to the payment of its debts, exclusive of stock in excess of $22,664 per mile. No provision of the lease was to be abrogated or modified without the formal written consent of the trustees of the existing mortgages of the Denver & Rio Grande. All litigation between the two companies was to be abandoned, the narrow gauge road to be extended to the San Juan mines and through the Grand Canon of the Arkansas. The usual conditions of such instruments as to keeping the leased road in good repair, etc., etc., were included.
At the annual meeting of the Rio Grande stockholders, held at Colorado Springs, November 29th, Gen. Palmer presided, and most of the stock was represented. The proposition of the Santa Fé to lease the road was fully discussed, after which Dr. W. A. Bell introduced a resolution to the effect, that the proposed lease of the present constructed lines "be and the same is hereby ratified and confirmed ; provided, however, that inasmuch as certain acts are first required to be done, and
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the lessee company is first required by said lease to deposit a certain sum for supplies and property, to be ascertained as therein stipulated, possession shall not be given until the President shall so direct." The resolution was adopted. The lease was to run thirty years; rental for the first year, forty-three per cent. of the gross earnings, with a reduction of one per cent. for each succeeding year to the seventh, after which to the fourteenth inclusive, it was to be thirty-seven per cent., and for the remainder, thirty-six per cent.
The stockholders re-elected the old board of directors,-Palmer, Bell, Risley, Wagner and Hunt. The officers chosen by the Board were: Palmer, President ; Dr. Bell, Vice-President; Wm. Wagner, Secretary ; R. F. Weitbrec, Treasurer ; H. A. Risley, Solicitor, and D. C. Dodge, General Manager. Although the lease had been virtually ratified, ill feeling cropped out from time to time, and it was clearly apparent that the arrangement was far from being amicable. But the Rio Grande was in hard lines just then. Had Palmer been able to move his financial affairs successfully, no such compromise could have been effected.
The Santa Fé in its progress southward, crossed the southern boundary of Colorado into New Mexico November 30th, 1878, by a temporary switchback over the Raton Range, to give passage to its trains while the mountain was being tunneled. The grading had been completed nearly to Las Vegas, 113 miles in advance.
The formal transfer of the narrow gauge road took place at mid- night of December 13th, 1878, all disagreements having been recon- ciled. D. C. Dodge continued for a short time as general manager, and W. W. Borst permanently as superintendent.
It was not long, however, before it began to appear that Mr. Strong's plan was to sacrifice Denver in the interest of his main line, and, in the advancement of that purpose, to divert the wholesale and jobbing trade of the State to Pueblo, making that the commercial center, and using the leased lines as feeders and distributors of traffic from the base at Kansas City. He was at war with the Kansas Pacific
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and Union Pacific, though he subsequently pooled with them when it became apparent that his principal scheme would fail. The apprehen- sion grew among the wholesale and jobbing merchants of Denver as the . evidence accumulated, that they were to be restricted to such trade as might be open to them in the northern division of the State. The Santa Fé signalized its possession of the narrow gauge lines by immedi- ately raising the rates on consignments to the south, which was a con- clusive indication of Mr. Strong's ultimate design.
Matters proceeded in this manner until March, 1879, when the great struggle which began in the Grand Cañon was resumed with renewed vigor. The Santa Fé company demanded that they be allowed to examine the books kept by Palmer's officers, which the latter refused. On or about the 20th of that month rumblings of another tempest became distinctly audible. The rancor between the belligerents, though smothered for a time, had never been wholly quieted. Now it threatened to become more wicked, turbulent and irreconcilable than before. A prolonged and bloody trial of con- clusions was foreshadowed, and it soon manifested itself in violent action. Armed parties began to re-enter the cañon, preparatory to the soon expected decision of the United States Supreme court on the question of prior right of way. Each party was sanguine that it would be in its favor, and each resolved to be on hand at the moment when it should be announced, so as to lose no advantage through neglect of opportunities. Early in April the Rio Grande people, exasperated to the fighting point by the movements of their hated adversary, began preparations to retake and hold at the muzzles of rifles and shotguns, if necessary, the entire system of roads which they had built, and which it was claimed was being operated in violation of some of the principal conditions of the lease. General Manager Dodge, who keenly watched every movement, declared that the lease had been virtually broken by the Santa Fé within the first twenty-four hours of its possession, and so notified Manager Strong. Palmer, with his exhaustless energy, had
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meanwhile, succeeded in making arrangements for ample funds to extend his line to Leadville and to the San Juan.
The apprehension of an attack upon, and the seizure of Rio Grande trains, stations and other property, became so alarming as to induce W. W. Borst, Superintendent of the Atchison interest, to issue a printed circular addressed to all the employes of the road, reciting the events which led to its transfer, and stating that he had been informed from trustworthy sources that Palmer & Co., regardless of existing contracts, would attempt, by arresting the employes "on trumped up charges," and by forcible means, to obtain possession of their property. He cautioned them not to obey any orders save those of the regularly constituted authorities of the road.
A show of violence occurred at Colorado Springs, in which a few men undertook to break open the baggage room of the station at that point, but they were fired upon by the guard and frightened away.
About the 10th of April Mr. Strong arrived in Denver to begin preparations for a war which he knew to be inevitable, not in the Grand Cañon alone, but in the courts also. Palmer and his officers openly asserted that the Santa Fè had mismanaged the road, diverted trade from it, and was endeavoring to wreck it. On the other hand, Strong asserted that the books had been spirited away out of the State by Secretary Wagner.
When negotiations for the lease began in 1878, Denver & Rio Grande bonds were quoted at forty to .forty-five cents. In 1879 they were worth ninety cents on the dollar. The stock was then practically worthless, but had since risen to sixteen and seventeen cents. One of the evidences of bad faith shown by Palmer was demonstrated by an arrangement that had been entered into between the Santa Fé and the Denver & South Park roads, whereby the latter was to be assisted with funds to complete its road to Leadville, but that, owing to the refusal of the trustees of the Rio Grande bondholders, it had to be abandoned.
On the 21st of April, 1879, the Supreme court rendered its decision
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upon the prior right of way in the canon through Justice Harlan (Chief- Justice Waite dissenting), that both roads were entitled to joint occupancy of the narrow gorge, but giving the Rio Grande the prior right. The Santa Fé was allowed to share the privilege under rules to be fixed by the Circuit court, upon grounds of equity and public policy. It was then definitely determined that no single company of railway builders could pre-empt, occupy, and hold against all comers, the narrow gorges of the mountains. The opinion, reduced to brief terms, declared : First, that the Rio Grande was entitled to the prior right ; second, that the injunction against it must be dissolved; third, joint occupancy under rules to be fixed by the court ; fourth, that the court below erred in not recognizing the prior right and in enjoining it from proceeding with the construction of its road.
Victory came to the Rio Grande at last, but its fruits were not to be enjoyed until after the termination of another mighty battle with its powerful antagonist.
Next came up for determination, the vital questions involved in the motion to cancel the lease, and this with others of no less importance, occupied the attention of the court for some time. The Rio Grande, though granted its right of way, was estopped from occupying the north, or advantageous side of the cañon, until it should have paid the Santa Fé the cost of constructing its roadbed thereon. While these intri- cate problems were before Judge Hallett, the Attorney General of the State, Mr. Charles W. Wright, interjected a new element of confusion by entering suit to enjoin the Santa Fé from operating railroads in the State of Colorado. The hearing was had before District Judge Thomas M. Bowen, in the small town of San Luis in Costilla County. He had previously obtained a writ of quo warranto, intended to force the Santa Fé to show cause why it, a foreign corporation, presumed to operate railways in this State. Bowen heard the argument first at San Luis, and later at Alamosa, when the Santa Fé promptly applied for a change of venue to another district, its attorney, Mr. Willard Teller, presenting some rather caustic reasons therefor, among others alleging
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that Bowen was strongly prejudiced against his clients and they could not hope to obtain justice in his court. Those who comprehend how cuttingly severe Mr. Willard Teller can be when fully aroused to the expression of his deepest sarcasm, can well appreciate the penetrating effect of his words on this occasion. It is sufficient to say that he went to the uttermost depths in the arraignment and, naturally enough, met a prompt denial of the motion. At Alamosa the court led the pro- ceedings in a breezy rejoinder to Teller's attack upon him. The papers took up the cause and sent the sensational tidings broadcast, thereby intensifying the popular excitement.
On the 9th of June, 1879, alarming reports filled the land over the announcement that the Rio Grande fighting force organized for the occasion, had attacked and driven the Santa Fé employes out of their stations at Colorado Springs and Labran (Cañon City coal mines), and that armed bodies were marching on South Pueblo, to capture the property there. Up to this time Governor Pitkin had remained neutral, though repeatedly importuned to interfere, but he now began to realize that serious trouble was imminent, and therefore issued orders to the sheriffs of the counties threatened, to call out the State troops if unable to suppress disorders by ordinary posses. There were reports of seizures of property at Colorado Springs, and other points. Things began to look ugly, and as if the military power would have to be brought into action. But the reports were found to be grossly exaggerated. The telegraph lines had been cut by Santa Fé men. The Rio Grande manager, Dodge, sent some of his men to repair them, but they were prevented. The disturbance at Labran was with the Colorado Coal and Iron Company, and not with the narrow gauge employes.
Again it was stated that a day had been fixed for a simultaneous uprising to seize the entire system by force. The Santa Fé company reported the matter to Governor Pitkin and implored him to send troops. Other hostile demonstrations which, as a matter of fact amounted to very little beyond bluster, occurred at Colorado Springs.
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Pitkin telegraphed the sheriffs of El Paso and Pueblo Counties to preserve the peace at all hazards, and at the same time ordered the troops in Denver to repair to the general armory and hold themselves in readiness for marching orders.
The writ issued by Judge Bowen, enjoined the Santa Fé and all its officers, agents and employes from operating the Rio Grande road or any part thereof, and from exercising in any manner corporate rights, franchises or privileges within the State of Colorado, and in brief, turned the entire property over to Palmer and his company.
Acting upon this authority, the Rio Grande forces soon precipitated a conflict between the State and Federal courts, greatly disparaging their case in the latter, where alone the points at issue could be deter- mined. But in the extremity of their wrathful desperation, Palmer and his lieutenants, with ex-Governor A. C. Hunt, that whirlwind of energy and indiscretion in the lead, took measures to carry out their aims. They felt that the lease had been, and was being continually employed as an instrument for the commission of wrongs upon them through culpable mismanagement of their estate; that if continued as they were likely to be, would inevitably effect its ruin, not only through the far reaching schemes projected by Mr. Strong for cutting it off from its rightful trade territory, permitting it to run down, neglect of repairs and the assistance his company were rendering to the South Park line, but in his ulterior purpose of using it merely as a means of advancing the Santa Fé interest, to the exclusion of every other policy in conflict there- with. They saw many things which the general public did not see.
Notwithstanding the pressure brought to bear upon Governor Pitkin by the Santa Fé for the employment of State troops in the re- pression of disorders immediate and impending, he persistently refused to interfere with the civil authorities, except in the event of an actual outbreak, and then only through the sheriffs, leaving it to their dis- cretion as to whether or not the military power should be invoked.
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CHAPTER XVIII.
GENERAL PALMER'S CIRCULAR-CAUSES OF THE COLLISION-THE RIO GRANDE SEIZES THE ROAD-GREAT EXCITEMENT-GOVERNOR HUNT'S TRIUMPHAL MARCH-BLOOD- SHED AND CONFUSION-JUDGE HALLETT ORDERS RESTITUTION OF THE PROPERTY -FIGHTING AT PUEBLO-DE REMER'S FORTS IN THE GRAND CANON-COL. ELLS- WORTH APPOINTED RECEIVER-THE LEASE CANCELED AND PEACE RESTORED- THE UNION PACIFIC AND KANSAS PACIFIC PRO-RATE WAR-A SHORT HISTORY OF THE KANSAS PACIFIC ROAD-JAY GOULD'S INGENIOUS OPERATIONS-CHAFFEE'S SPEECH IN THE SENATE-CONSOLIDATION OF THE PACIFIC ROADS-HOW GOULD TERRORIZED THE BOSTON MEN-ABSORPTION OF THE DENVER PACIFIC.
The next development in this interesting drama was an open circular from Gen. Palmer, setting forth the reasons that had impelled his company to take aggressive action against the lessees. . Among them were declarations that they had assisted the South Park company to build its shorter line to Leadville, notwithstanding the refusal of the trustees of the Rio Grande bondholders to sanction a proposed contract to that effect; that individual members of the Santa Fe company had loaned the South Park money, and given it other evidences of encour- agement ; that the agreements of the lease had been frequently violated ; that the road had not been kept in good repair ; that rival companies had been organized ; that a pooling arrangement had been made with the Union Pacific ; that payments of rent had been irregular and various outrages had been committed.
Then came the actual collision and a crisis. Bowen, by his writs had directed the sheriffs of the several counties to take possession of the Rio Grande property, and they began to serve writs upon the officers and agents all along the line. From East Denver an organized posse marched to the general office on the West side, at an early hour in the
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morning. Finding it locked and unoccupied, the doors were broken open and Rio Grande men placed in charge. Next, the round houses were seized. A passenger train was made up under the new auspices and sent southward. Postmaster Byers, in view of the alarming con- dition refused to send out the mails, telegraphed the Postmaster General for instructions, and was directed to send them by the usual means of conveyance, regardless of the parties in charge.
Meanwhile, Mr. Willard Teller appeared in the federal court and moved to quash Bowen's injunction. Many distinguished lawyers were present,-Judge Beckwith of Chicago, Judge Usher of St. Louis, G. B. Reed of Denver, and others eminent in the profession. It had become the most extraordinary cause ever brought into our courts, and one in which the masses of the people were interested. The excitement was unparalleled ; war and rumors of war prevailed on every side. C. W. Wright, Attorney General, after argument upon Mr. Teller's motion, asked for a postponement, which was granted,-till next morning. Telegrams poured over the wires to the Governor's office. One from the sheriff at Pueblo was to the effect that an armed mob had seized the Denver & Rio Grande property there and resisted his efforts to dis- lodge them; he had exhausted peaceable means to that end, and felt that he must resort to force, but asked for instructions. The Governor responded that he must act within the strict commands of the court. It was not for him (Pitkin) to construe the legal effect of writs in the hands of sheriffs ; they must act upon their own responsibility. Thrown upon his own resources, later in the day the sheriff, with a large posse, forced the doors of the train dispatcher's office. A number of shots were fired, but no one injured. About dark the same evening, ex-Gov- ernor Hunt arrived on the scene from the south, with a force of two hundred men. They had captured all the small stations on the line, bringing the agents away with them on a captured train. It was stated that two employes of the Santa Fé had been killed and a like number wounded. At Pueblo all was excitement and confusion, where Hunt swept everything before him. Having made things secure for the Rio
an Royerz
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Grande at this point, he advanced upon Cañon City. The telegraph lines and offices had been taken and Rio Grande operators installed at the instruments. The Santa Fé was practically helpless. The situation hourly became more and more critical.
At Colorado Springs Sheriff Becker took possession of the depot and turned it over to Palmer. A company of State cavalry there, preserved order.
On the 12th of June,-the events just narrated having occurred on the 11th,-Judge Hallett gave his decision. The application by the Santa Fé to transfer the injunctions by Bowen to the federal court was granted, and the writs virtually declared null and void. As to denying the right of the Santa Fé or any other foreign corporation to do busi- ness in Colorado upon proper compliance with its laws, such action could not be sustained. The State might inhibit a foreign corporation from doing business within its limits, but if such corporation came within the State, and acquired movable property therein, the State could not con- fiscate the same, whether it were a horse or a railroad. Judge Hallett was recklessly assailed by certain of the public journals, upon the ground of his prejudice against the Rio Grande; accused of ruling steadily against it in favor of its rival. But in the then heated condition of the public mind, the magnitude of the contest, the violence employed, the shedding of blood, the marching and turbulence of armed men, the thousand wild rumors floating about, and the intense hostility of the contending factions, the adherents of each party made unscrupulous use of every pretext, real or imaginary, that offered in support of its own cause, and in condemnation of the other, and the court did not escape.
On the 14th of June, Judge Bowen issued a decree placing the Rio Grande in the hands of a receiver, and appointed Mr. H. A. Risley of Colorado Springs, to execute the trust. The decision expected from Judge Hallett upon the later questions brought before him, was post- poned for a few days until the papers in the case could be filed in the office of the District court at Del Norte.
On the 18th a report was sent up from Pueblo, that the Denver & 25 II.
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Rio Grande forces had erected a series of timber forts about the depot at that place, and garrisoned them with armed men. It was alleged also, that a reign of terror existed there; that the streets were filled with fighting men, and no one dared utter a word in favor of the Santa Fé without danger of being assaulted. Guards patroled the mesa, and held all the outlets. Similar reports came from Trinidad and El Moro.
On the 23d the Federal court opened in Denver with Justices Miller and Hallett on the bench, ready for a decision in the matter of restoring the leased lines to the lessee. The opinion was by Hallett, Miller concurring. The decree was, that the property which had been unlawfully taken should be immediately restored, when, if the Rio Grande desired, it might institute proceedings for cancellation of the lease. In view of possible resistance to the order, Judge Miller took pains to announce with considerable emphasis, that the order of restitution must be obeyed, and that any attempt at resistance would prove disastrous to the parties engaged in it.
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