USA > Colorado > History of the State of Colorado, Volume III > Part 10
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The more interesting events in the early history of this railway have been set forth in the preceding volumes. We will now take up the new order and trace it by regular stages to the present, wherein we shall discover still further evidence of the wise forecasts of the original chief, as also those of his successors who are completing the details.
Our previous account closed-(Vol. II. page 391), with the cancel- lation of the lease and the adjustment of its principal difficulties with the Atchison, Topeka & Santa Fe. There remained in the courts, how- ever, certain legal matters to be disposed of. On the Ist of April, 1880, the Supreme Court at Washington issued its final decree upon the matters before it, which eventuated in the complete transfer of the property to Palmer and his company. On the 4th Receiver Ellsworth surrendered his office, turned over the road, General Palmer resumed control as president, and D. C. Dodge as general manager, when there began a series of improvements and extensions necessary to place the system in communication with the more important points not yet con- nected, whose resources had meanwhile been developed. The short branch of six miles from the main trunk at Colorado Springs to Man- itou was completed July 26th, 1880, and the extension from Durango to Silverton July 11th, 1882. Certain other connections were made, and affairs moved on without material conflict until some time in 1883, when threatening contentions arose between the directors and the officers of the railroad company and the Colorado Coal & Iron Company. During the period of its greatest embarrassment, associated with its battle against the Santa Fé, Jay Gould and others put forth strenuous efforts to secure control of the property, but failing through the
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watchful activity of Palmer, they wrought even more earnestly to ruin its credit by breaking down its securities and wrecking its reputation in the money markets, in which, though more successful, they again failed to obtain control of the road. Nevertheless, as a part of the consequences, bitter antagonisms were created in the company, and, in due course, the faction opposed to Palmer being the stronger, forced him out. In August, 1883, he resigned the presidency and was suc- ceeded by Frederick Lovejoy, whereupon Palmer turned his attention to the completion of the lines he had laid in Mexico. In January, 1884, Edward O. Wolcott (now United States Senator) was appointed general counsel for the company, vice Lyman K. Bass resigned.
The change of presidents, and the change of policy instituted by Lovejoy, soon gave rise to discord in the Colorado management. Mr. Dodge could not, or would not, adjust himself to some of the measures proposed by the new head, therefore on the Ist of April, 1884, Lovejoy issued an order peremptorily removing Dodge from his office of gen- eral manager, not only of the Rio Grande but of the Rio Grande Western in Utah also (then under lease to the former), and appointing Mr. R. E. Ricker general superintendent. In the same order Mr. B. F. Woodward, superintendent of the telegraph service, and J. A. Mc- Murtrie, chief engineer, were displaced. Mr. Andrew S. Hughes, who had held the position of general freight agent, was promoted to that of general traffic manager.
But Dodge was not a man calculated to submit meekly and grace- fully to such an order. Mr. Lovejoy might manage the Rio Grande proper as he pleased under the authority given him, but could not be permitted the same license in directing the affairs of the Rio Grande Western, since by the stipulations of the lease, it was expressly provided that Mr. Dodge should be manager of that road. Therefore, on the 4th of April the latter published an order to the officers and employes of the Western which sharply apprised them of the fact that he was in control, and proposed to maintain it, and instructing them to pay no heed whatever to Lovejoy's manifestoes. Here then, was an explicit
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declaration of war, which, combined with other causes, ultimately brought disastrous consequences to both roads.
On the 15th General Palmer obtained from one of the courts of Utah, a writ of injunction restraining the Denver & Rio Grande Com- pany from interfering with Mr. Dodge as manager. A legal contest ensued, which resulted in the confirmation of Dodge's right to exercise the powers given him by the lease. There was no man in the company for whom Palmer entertained more profound regard, or in whom he reposed greater confidence than Mr. Dodge. He was a faithful, keen- sighted and thoroughly trusted agent, to whom all things were made known, and into whose hands the administration of government was placed. He was devotedly loyal to his chief at all times and under all circumstances, watched every movement, anticipated every need, and supervised the detail work of management and construction. The amount of labor he performed was enormous, and to his work the com- pany and the country are indebted for a large share of the success then achieved. In former times it was freely circulated that Palmer, Dodge, Hunt, Weitbrec, McMurtrie, Wagner and others immediately associated with the building, derived large gains from construction contracts, but the facts are against that assumption. I have it from an officer of the present company, Mr. J. W. Gilluly, its treasurer, who, perhaps more than any other is intimately conversant with the expenditures made from 1872 to 1890, having received and disbursed the funds, that such state- ments are not true. Hunt, as we know, came out literally impoverished and suffered his home, with all his valuable property in Denver, to be sold under mortgage because he was unable to pay his creditors. The greater part of all that Dodge, Weitbrec, Wagner and McMurtrie have acquired in the way of money or property to-day, is largely the result of fortunate ventures in enterprises disconnected with the Rio Grande Road. But for the advance in price of the railway securities held by him I am assured that Palmer would have derived no very important pecu- niary benefit from this enterprise. Those who retained their original holdings through all the vicissitudes of litigation and misfortune, have
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realized satisfactory rewards for their faith in the ultimate issue. The speculators in the common stock suffered of course by the frequent. sudden, and sharp depreciations. When Palmer built, the cost of iron and other material was at a high stage, and to secure money for this new and somewhat hazardous venture, the stocks and bonds had to be sold for what they would bring, a large bonus in stock being given as an inducement to the purchase of bonds.
By the displacement of Dodge and the appointment of Mr. Hughes as traffic manager, the more onerous duties and responsibilities of man- agement fell to the latter. His primary lessons in the conduct of freight transportation began with the overland stage and express business in 1861. In July, 1874, he was made station agent of the Denver & South Park Railway, and later general freight and passenger agent of the same road, combining with these duties for a time that of general super- intendent. When the road passed into the hands of the Union Pacific, and thus became a part of its Colorado system, he was made general claim agent of the latter company in Colorado, which he held until April of that year, when he was appointed assistant general freight agent of the Denver & Rio Grande under D. C. Dodge; was promoted to general freight agent in February, 1882, and to general traffic man- ager by Lovejoy in 1884, which post he has retained to the present (1890), and in the discharge of its duties has justly earned the credit universally accorded him of being one of the most industrious and con- scientious officers in the service, devoted to the best interests alike of his employers and their patrons.
At the annual meeting of the stockholders, held in Denver, April 7th, 1884, Lovejoy was present, and voted a majority of the stock. The vacancy in the directorate caused by the withdrawal of Mr. Dodge, was filled by the election of David H. Moffat. In May, Col. S. K. Hooper, a gentleman of large experience in railroading, was appointed general passenger agent, vice F. C. Nims resigned. Here again, as in the case of Mr. Hughes, the road secured a valuable acquisition. Not the com- pany alone, but the entire State has been materially benefited by the
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system of well devised and extensive advertising then instituted, and to this time maintained by Col. Hooper. It is not extravagant to say, that this has been an important agency in attracting the attention of people in other States and in foreign lands to the sublimity of our rare scenic possessions and to the State at large, whereby great numbers have been persuaded to settle here, and others to invest their capital in our local enterprises. The amount of interesting and well illustrated literature he has published and scattered broadcast over the world, and the facts set forth, have been potential in promoting the later development of the country. The rapid multiplication of his ingenious devices for the in- crease of patronage to his road, and the success attending them, com- pelled the agents of other roads to employ similar methods, and as a result the State that had never before been so widely proclaimed, nor so invitingly set forth in print, began to experience a marked revival of interest from all sides, and some at least of the remarkable changes that have taken place in the past six years may be ascribed to this departure. For two years after the Rio Grande Western was built from Grand Junction to Salt Lake and Ogden, and the present line took its tre- mendous leap across the Continental Divide and united with it, thus opening a competing line with the Union Pacific to California, it was but little patronized by the traveling public, for the reason, chiefly, that its advantages were not sufficiently known, hence more than ordinary effort was required to effect a diversion of travel from a rather monotonous and for the most part unattractive route-the Union Pacific-to this the most inviting of scenic lines. To consummate this aim, Hooper poured out reams of beautifully illustrated literature. Every point worthy of mention was graphically described, every old legend of Indian and trap- pers' lore reproduced, to rivet the attention of the reader. Between Hooper and his competitors who were likewise engaged, within two years it became known of all mankind that no tour of Western America should be contemplated without including a trip to Denver and the Rocky Mountains over these marvelous railways.
While it is true that other influences have borne their part toward
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inducing immigration and tourist travel to take this direction, this little band of industrious workers are justly entitled to a liberal share of the credit ; they have also been influential in causing all the railways that have come to us from the Missouri River since 1884 to extend their lines across the plains, and it is a question worth considering, whether or not the standing of our city to-day as the terminal point for the ex- change of business between the Rocky Mountains and the Pacific coast, and the constant deflection of commerce to and through Denver from the East and West is not in some degree attributable to the same agency. In traveling, whether for business or pleasure, people like to be entertained, and it is very widely conceded that no railways offer more delightful entertainment than ours. The Rio Grande, moreover, is the only road that crosses the grand chain of the Rocky Mountains from east to west. The transcontinental traffic brought to Colorado by the Burlington & Missouri River Road, the Omaha Short Line of the Union Pacific, the Kansas Pacific, Missouri Pacific, the Chicago & Rock Island and the Denver & Fort Worth, is delivered to that road, making this city the center of arrival and departure, affording it greater prestige and patronage than any other single line to the Pacific. Its competitors on the north are the Union Pacific main line, the Canadian Pacific and the Northern Pacific, and on the south the Atchison, Topeka & Santa Fé, and the Texas Pacific.
During 1884, beginning with heavy snow falls in the mountains and entailing misfortunes all through the spring and summer from destructive washouts, the Rio Grande suffered great damage. Being in close finan- cial straits before these disasters befell,seriously crippled by its prolonged and expensive contest with the Santa Fé; involved by the enormous cost of some of its extensions ; its credit fiercely assailed in New York and elsewhere, it seemed as if the constantly increasing weight must soon bring about another crisis in its affairs. And it was not long in coming.
On the Ist of July its interest coupons were defaulted. This result had been predicted. There was no doubt of its having overbuilt.
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It had also done much costly engineering and grading upon lines that could not be ironed nor operated for years, but calculated to hold those points against the time when they might be needed. Avalanches plunged down upon certain divisions, burying them beyond recovery for months. At last the blow which could no longer be averted, fell. On the 2d of July the Denver & Rio Grande Western filed in the United States Court of Utah a petition asking for the appointment of a receiver for the Denver & Rio Grande Company, alleging non-pay- ment of its indebtedness to the petitioners ; that the company had been sued for supplies of coal furnished it, and was more than two months in arrears of payment to its employes ; that the earnings of the road had been misappropriated, etc., etc. Soon afterward, connection between the two roads was broken by Lovejoy's orders to tear up the track between the borders of Colorado and Utah, an act which subsequently threw the Rio Grande Western into the hands of a Receiver, and brought both companies to a judicial determination.
On the 7th of July, in the United States Circuit Court at Denver, application was filed for the appointment of a Receiver, by the holders of the consolidated mortgage. The complaint was voluminous, setting forth all the facts on which it was based. At this time the company was operating 1,317 miles of road. For years it had been laboring under severe financial stress, and compelled to borrow money to meet its expenses. The rolling stock in use had been purchased on conditional contracts, and the company had no title to such stock. Its value was $5,400,000, on which only $2,000,000 had been paid. The contract pro- vided that if the payments were not made when due, the rolling stock would revert to the makers. It was not deemed advisable, however, to foreclose the mortgage, but rather to appoint a Receiver, and give him an opportunity to redeem its credit under the direction of the court which was asked to make such provision as would enable the Receiver to procure funds for the repair of damages, to cancel floating indebted- ness, and meet existing contracts.
At first the application was contested, though not very strenuously,
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by C. J. Hughes and Hugh Butler, each representing some of the larger bondholders, but finally was made the subject of agreement by all concerned, and as the major part of the creditors favored the selec- tion of Mr. W. S. Jackson, he was recommended to the court for the position. He was, moreover, the personal choice of the court itself, therefore on the 9th of July Judge Hallett granted the application and named Mr. Jackson as the Receiver, observing as he did so, that he was an old resident of the State, connected with the road as treasurer from 1871 to 1876, and entirely familiar with the country it traversed. " A gentleman of recognized ability and integrity, no doubt exists of his capacity to manage the property in a manner satisfactory to its patrons and owners, and as he is also the choice of a majority in interest of the creditors of the company, I am inclined to accept their judgment."
The appointment was received with general gratification as the presage of a cautious and conservative management, the payment of its debts, and the settlement of strife between contending factions. Mr. Jackson having accepted the onerous duty of reducing disorder to order, filed his bond in the sum of $500,000 and immediately set about reconstructing the badly damaged lines. He was given full control and directed by the court to make examination and report upon the property. He assumed charge July 12th, 1884. His first steps were to make needed repairs, pay off the employes, replenish the well nigh exhausted supplies and relay the track destroyed by Lovejoy, thereby restoring connection with the Denver & Rio Grande Western. During the entire period of his management Mr. Jackson did not issue a Receiver's receipt, but borrowed sufficient funds on his own account as Receiver to meet the pressing demands of the workmen, and afterward liquidated the other indebtedness as rapidly as the earnings would per- mit. He cooperated with the officers of his road and with those of the Rio Grande Western for the best interests of the company and the public, and very soon a change for the better appeared in augmented and more profitable traffic.
Matters proceeded without material friction for a year. On the
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25th of February, 1885, at a meeting of the directors in New York Mr. Lovejoy resigned and David H. Moffat was elected to the presi- dency. Renowned for his great success as banker and financier, identi- fied with every railway thus far constructed in Northern Colorado, hav- ing taken part in all these projects, but more conspicuously in the adjustment of their monetary difficulties, he was well equipped for the new duties thus devolved upon him by unanimous vote of the Board. At his suggestion Mr. W. S. Cheesman was chosen a director in place of Lovejoy. The chief responsibility which confronted him at the beginning was the formulation of a project that should be efficacious in rescuing the property through some well digested and acceptable plan of reorganization, just and equitable to all its creditors, restore its van- ishing prestige, place it upon a footing calculated to meet its heavy obli- gations, and in time pay reasonable dividends on its capital stock. This movement gave the practical direction of the road into the hands of Colorado men. It was the beginning of a well ordered plan for a happy issue out of its embarrassments and the enlargement of its useful- ness to the country.
A majority of its bonds were held by English and Dutch capitalists. Representatives of both interests had made personal inspection of the road, taking elaborate notes of its condition and prospects, and a full report had been rendered to their associates. Of course a transaction of such magnitude, involving millions of money and manifold interests, required ample time for negotiation.
Mr. Moffat returned to Denver from New York, March 10th, 1885. The bondholders were to meet in April, when plans for reorganization would be submitted ; at this meeting a committee was appointed to con- sider and perfect an equitable scheme. The road was doing well under the Receiver, and confidence in its future had been measurably restored and strengthened. In the meantime, as no extensions could be built by the company while its affairs were in charge of the court, and as the great mining district of Aspen had been discovered, and the miners were loudly demanding a railway for the conveyance of their valuable ores to
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market, an organization, called the "Denver, Aspen & Grand River Railway Company," was created (April 30th, 1885) with a capital stock of $5,000,000 to build from Rock Creek near Red Cliff, down the Eagle and Grand to Glenwood Springs, thence up the Roaring Fork to Aspen, and from Glenwood to Grand Junction. The road was not constructed by this corporation, however, but by another subsequently formed.
No incident of importance occurred until the early part of May, when a formidable strike among the employes in the machine shops at Burnham station was precipitated by the introduction of two or three non-union mechanics, against whose presence the union men protested. The affair taking a turbulent and highly sensational turn, much alarm was created, and some damage inflicted upon the company's property by the use of dynamite, employed by the leaders in a spirit of revenge for the non-acceptance of their demands. Large bodies of men paraded the streets, making boisterous and threatening demonstrations. Mr. Jackson, assured of the support of the United States authorities, was not seriously disturbed by these noisy ebullitions. He proceeded to fill the places of the malcontents with new men, and in a short time the works resumed their wonted activity. By the prompt action of Mayor Bates, and the wise orders issued by Judge Hallett to the United States Marshal, more serious damage was prevented. Bates armed the police with rifles, caused them to be publicly drilled in military tactics on the streets, and by his outspoken determination to suppress riotous acts at all hazards, held the strikers well in hand, yet under cover of darkness they succeeded in wrecking one or two passenger cars by placing nitro- glycerine upon the tracks. Fortunately however, their aims at the des- truction of life were frustrated, though plans had been laid to blow up one or more of the outgoing or incoming trains. Thus a feeling of terror prevailed for some time, but as the purposes of the more violent failed of accomplishment, the spirit died out. As only a few of the old employes were taken back into the shops, several hundreds, some of whom had families and had built homes in and near Burnham, were compelled to sacrifice everything and seek employment elsewhere.
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On the 27th of May, President Moffat, ex-senator J. B. Chaffee and others with Colonel L. H. Eicholtz as advisory engineer, began a preliminary survey of the proposed railway from Red Cliff to Aspen. The winter of 1884-85 was marked by many serious blockades of the mountain railways, and the spring and summer of 1885 by heavy rains and freshets, that proved exceedingly destructive to parts of those thoroughfares. The most disastrous flood that ever visited the people of Black Hawk and Central City occurred on the 30th of June, in that year, whereby both towns and their tributary gulches were inundated. The Colorado Central and the Rio Grande roads were torn and wrecked, their grades and bridges swept away by resistless torrents. On the night of July 26th there was another great food in the channel of Cherry Creek, and had it been obstructed as it was in 1864, even more disastrous results than befellthe residents of West Denver on that occasion, must have ensued. As it was, all temporary bridges were carried away, the permanent structures undermined, and the substructure of the City Hall threatened with demolition. Colorado Springs and vicinity suffered from like visitations.
During the year the board of directors of the Rio Grande and its committees made some progress toward reorganization. Mr. Jackson's management gave satisfactory proof that the road, when placed upon a proper basis, would be a profitable investment. He had accomplished much under trying circumstances, the net earnings for the first year, after deducting $286,293 expended in betterments, amount d to $1,480,000, a sum equal to the interest on the first mortgage bonds, on the car trust certificates, and four per cent. on the consolidated mort- gage bonds. The floating debt had been wholly extinguished, the road put in good order. The business paralysis that characterized the last half of 1884, and the first of 1885, superinduced by the failure of Grant & Ward and other firms, had passed, and a new epoch of progress began. In the last half of 1885 there was a marked increase of activity in all lines of business, which has been continuous for five years.
In July, 1886, nothing beyond the preliminary surveys having been
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done upon the proposed road to Aspen, still another company, called the Grand River Railroad, was organized at the suggestion of the Receiver by Andrew S. Hughes, Joseph W. Gilluly, William Hastings, R. F. Weitbrec, and Daniel Selover, with a capital stock of $2,500,000, upon plans similar to those of its immediate predecessor, but also contem- plating several branches, and under rights acquired from this corpo- ration, the Denver & Rio Grande Company, after its reorganization, constructed the extension from a point about five miles below Rock Creek to Glenwood Springs. The five miles named were constructed by the Receiver as the only concession the court would grant, and January 7th, 1887, he put the entire distance of sixty miles under contract.
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