USA > Connecticut > History of Connecticut, Volume I > Part 43
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Interest in the construction of canals in Connecticut centered in
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New Haven and was evident in each of the towns located along the pro- posed route of the canal. A water route into upper Connecticut, would not only attract the trade of that region, but would also provide the
(Courtesy Conn. State Lib.)
FARMINGTON-THREE OF PIERS WHERE FARMINGTON CANAL CROSSED THE FARMINGTON RIVER. THE FLOOD OF AUGUST 19, 1955, TOOK DOWN TWO OF THEM
potential lever to enable New Haven to compete with Hartford. Repre- sentatives of seventeen towns met in Farmington on January 22, 1822, to prepare a petition to the General Assembly requesting permission to construct a canal from New Haven to Southwick.84 The charter was granted by the Connecticut Assembly the following May, but action was delayed until the Massachusetts Company secured its charter in Febru- ary, 1823, for the construction of the northern portion of the proposed canal. Subscription to the Connecticut Company was opened in mid-
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July and the company was formally organized by the end of the month. Benjamin Wright, who had been Chief Engineer of the Erie Canal and who had made the initial survey of the route of the Farmington canal, was retained to prepare estimates of the cost of the road. The construc- tion cost, not including land damages, from New Haven to Massachu- setts was estimated at $420,696, with an additional $101,773 for the sixteen and one-half miles long cut-off which was to extend from Farm- ington to Colebrook, Connecticut.85
The project was in financial difficulty almost from the start. The state granted its customary tax exemption, and there was an initial flurry of subscriptions. As this subsided, funds came in very slowly. In May, 1824, the Directors applied to the legislature for the privilege of incorporating the Mechanics Bank, with a capital of $500,000. Of this, $100,000 was to be subscribed to the stock of the canal company as soon as it had attained a subscription of $400,000 and had expended $50,000 for construction. It was provided, in addition, that another $100,000 was to be made available if the directors of the canal judged it to be necessary. In May, 1825, the company called for the payment of the first installment of $12.50 on the subscribed stock. When the first con- tract was signed in August, 1825, a request was made for the payment of the second installment. Many could not meet this second request. By July 1827, when the canal had been completed from Massachusetts to Simsbury, all but $40,000 of the $200,000 maximum which the Mechanics Bank was permitted to subscribe to the project had been used. Also, a ninth installment on the stock had been requested. By 1828, the company was deeply in debt. The following year, however, New Haven subscribed to $100,000 of new stock to clean up this in- debtedness, and the company viewed 1830 with optimism even though expenses had been greater than had been anticipated. As conditions worsened in fact, the construction of the Farmington-New Hartford cut-off was postponed, and an extension of time for its completion was obtained from the legislature. Because of the delays derived from the stringent financial circumstances, reconstruction and repair had to be begun before the canal was completed.86
The defects in construction were everywhere visible. The skimp- ing on the fills and floodways resulted in washout after washout. Freshets
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were a continual menace. In June, 1828, when water was turned on in Cheshire, it was discovered that the sandy soil absorbed the water to a degree that none reached New Haven until the leaky section had been puddled with clay. As an economy, the earlier locks had been con- structed with dry masonry walls and a timber lining. The timbers soon rotted and had to be replaced with masonry laid in cement secured from the new cement mills in Southington. The failure of the company to pay the damages assessed against it resulted in ill feeling on the part of those whose properties had been condemned, and it was charged that they perpetrated many revengeful, malicious acts, such as cutting the fill in several places and setting adrift a floating bridge which spanned a pond crossed by the canal.87
Despite the difficulties, the canal eventually was in use: the Con- necticut portion of the project was completed in October, 1828. Im- mediately, businesses began to advertise their accessibility to the canal, and, by 1830, the canal had become an important factor in the business activities of the region. By 1835, the canal was open from New Haven to Northampton. At the height of the traffic, the collector at New Haven reported that 106 boats cleared to go up the canal carrying almost four million pounds of merchandise. Just at the time that it seemed that the canal might prosper, it faced financial ruin because of maintenance ex- penses and new competition. The necessary financial reorganization re- sulted in the formation of a new company called the New Haven and Northampton, which issued stock in the amount of $300,000, and, in an attempt to attract the small investor, offered the stock at $25 a share. The reorganization had little effect in offsetting difficulties. In the four years 1836-1840, the company expended $181,000 and collected $39,000 in receipts. The impossibility of continuing operations was made ob- vious by the coming of the railroad.
The effectiveness of rail transportation had been proved before consent was secured for the construction of railroads in Connecticut. When the first rail route in the state was opened for travel, there were already two thousand miles of track in use along the Atlantic seaboard.88 Those interested in turnpikes and canals were justly concerned with the effect of the railroad on their investment. It was said that the construc- tion of the New Haven and Hartford railroad would completely destroy
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four turnpike companies and great concern was expressed for the widows and orphans who were dependent upon these companies. Local jealousies were coupled with the vested interests. Hartford was not con- vinced that a road to New York would be of benefit and feared that their business would be diverted to New Haven. Interest motivations were sometimes obscured by expression of such idyllic sentiments as that the railroad would destroy the existent relationships between coun- try and town. The citizens of Newington begged that their quiet not be interrupted by steam cars and the influx of strangers. The proponents of the railroad cited experiences in England in support of the conten- tion that the railroad would entrain a great expansion of wealth, jobs, and benefits to the back country. The first legislation authorizing the construction of railroads was permissive and regulatory.89
The lack of capital was a burden for the early railroad builders. In general, stock was subscribed to and paid for in installments as the money was needed. If the subscriber defaulted, the stock could be sold at public auction, with the subscriber receiving a pro rata credit for his equity. Private loans and appeals to the legislature for assistance were resorted to frequently, but the Connecticut General Assembly was not swayed by the practice of other states and consistently refused to render any assistance except the customary abatement of taxes until the roads paid dividends of six or, occasionally, of ten percent. Some cities subscribed to stock in the proposed railroad and gave the company city bonds to be paid for in installments as the work progressed. Frequently, early enthusiasm waned as in the case of Bridgeport, which was deter- mined that the southern terminus of the Housatonic would be located in their city. Bridgeport subscribed to stocks in the amount of $50,000 and gave the company another $150,000 in city bonds. At the time of the panic of 1837, the tax was considered burdensome. To avoid the tax, some moved from the city amidst popular demands to repudiate the pledge. The courts held the contract valid and the city was forced to pay.90 The lack of capital was reflected not only in the construction of new roads, but also in the tardiness with which technical advances were adopted.
The earliest roads were necessarily of minimal construction. The grading was occasionally done for two tracks, but all roads were initially
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built as single track roads with track rails of flat wrought iron bars secured to the top of wooden timbers. When finances permitted, bridges of stone arches were provided, but more frequently streams were
(Courtesy Conn. State Lib.)
NEW HARTFORD-GORGE AT SATAN'S KINGDOM, 1902. TWO RAILROAD LINES CAME THOUGH HERE, BUT BOTH ARE NOW GONE
spanned with wooden trusses. Smoke stacks were especially equipped with screens to catch the sparks from the wood-stoked boilers. The American type locomotive was to be recognized wending its way through the Connecticut valleys by the four wheeled guiding truck and the two driving wheels. In the forties, a bell and a cow catcher were added, and, in the next decade, a headlight was provided. The early cars were essentially stage coach bodies mounted upon flanged wheels, and
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safety devices, such as couplings and brakes, were quite primitive. Un- til well after the Civil War, the trains were stopped by the brakeman upon a signal for brakes. Although appointments remained extremely modest, the Norwich and Worcester Road in 1840 advertised ladies' apartments which were carpeted and which contained "wide and con- venient sofas, dressing table, washstand, and other arrangements for the comfort of passengers."91
The basis for Connecticut's railroad systems had been achieved by the American Civil War. Although the consolidation of these various lines for the most part occurred during the latter part of the century, the component parts of the New York and New England, the Shore Line, and the New York, New Haven, and Hartford were completed by 1859. The first signs of a system emerged with the completion of the New York and New Haven line in 1848. A group of New York and Connecticut financiers had become interested in the line. A charter for the road in Connecticut was readily secured in 1844, but the request was held up in the New York legislature through the efforts of the New York and Harlem Railroad and the Westchester turnpike. This opposi- tion exacted heavy damages before the objections were withdrawn. The expenses of construction apparently exceeded the estimates. To miti- gate this, shortcuts were adopted which made reconstruction almost immediate and increased the financial difficulties.92 When the road was completed, connections were made with three roads running inland from the Sound and with a fourth which was nearing completion.93 These lines extended south to north from the Sound to Massachusetts.
The Housatonic was designed to serve the iron mines of Salisbury, the forges of Litchfield County, and the marble and granite quarries and the lime business along its route. This road was completed from Bridgeport to New Milford in 1840, and to Stockbridge, Massachusetts, in 1842. The Naugatuck, extending from Devon on the New York and New Haven line through the industrially rich Naugatuck Valley. and through Waterbury to Winsted, was completed in 1849. The first of the railroads to be operated solely within Connecticut was the Hartford and New Haven, which reached Meriden in December, 1838, Hart- ford in 1839, and Springfield at the state border in 1844. The success of the railroads resulted in the demise of the never very flourishing
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Farmington Canal. The Directors, hoping to protect their remaining assets, bought up New York stock, secured a charter from the Connect- icut legislature, and went into the railroad business. Amid the plaudits of Yale's faculty and student body and the congratulations of the press, this road was opened from New Haven to Plainville in 1848. An imme- diate objective was connection with Springfield, and then extension to Pittsfield and Northampton. Potentially, there were connections at Pittsfield with Canada and the West. The company's finances, however, were exhausted when the first section of the road was completed, and the road was leased immediately for a period of twenty years to the New York and New Haven line for about $40,000 a year, with a provi- sion that the road was to be completed either to Springfield or North- ampton.94 This lease placed the New York and New Haven line in direct competition with the New Haven and Hartford company and touched off one of the early fights for the control of traffic.
Although working arrangements were established, the two rail- roads were seldom at peace with each other in the next two decades. The Hartford and New Haven had little choice other than to com- promise with its competitor. If the New York line were extended to Springfield, it would rob the Hartford line of the through business to New York. The Hartford and New Haven line, on the other hand, was interested in protecting its lucrative traffic by boat from New Haven to New York. This line, then, agreed to run all its trains, except the boat train, to the New York and New Haven stations, to discontinue its "Day Line" by boat, and to charge not more than fifty cents less for the trip by night boat than by train. In return, New York and New Haven gave station accommodations and track rights and agreed to pay $10,000 a year for five years to both the Hartford-New Haven line and the Connecticut River Steamboat Company. The New York-New Haven line continued to press the Hartford-New Haven line until the former virtually controlled the traffic of the area. The road, however, was on an unsound financial basis. Apparently it never made money out of its earnings, but rather on construction. In fact, the road never really earned the dividends it paid and in one quarter, it was charged, never anything over its expenses and interest. This obvious mismanagement was possible as a result of the fraudulent issue of stock by the road's
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President, Robert Schuyler. When his operations were finally discovered, he fled the country in dishonor, leaving his company two million dol- lars' indebtedness and the distrust and dislike of the Hartford-New Haven company. The departure of Schuyler did not end the aggressive tactics of the New York-New Haven company. By the end of the decade, the Hartford and New Haven was disenchanted and brought suit to recover the money it had given to the New York and New Haven under its contracts. By the time a decision was reached after the Civil War, the process of consolidation was about to begin.95
Supplementary lines, extending from east to west, which later were to be incorporated into the New York-New England system, were estab- lished concurrently with the development of the north-south lines. The first section of the Hartford, Providence, and Fishkill road, as the road was first known, was completed between Hartford and Willimantic in 1849 and from Hartford to Bristol in 1850. The eastern end of the road was extended to Providence in 1854 and the western end to Waterbury in 1855. The road was not extended to the New York line until 1881, but inasmuch as it intersected the Hartford and New Haven, the New York and New Haven, and the Naugatuck, the road provided the route to New York City. When the road was completed, the Norwich and Wooster road had been in operation since 1840. The New London, Willimantic, and Palmer, although it never became a part of the New England system, provided additional facilities in the eastern part of the state. It had been in operation since 1850 when the shore road was finally completed.96
The shore line, with the aid of ferries across the Connecticut and the Thames River, was completed by 1858. A line was completed from New Haven to New London in 1852 and from Groton to Stonington in 1858 where it joined the pioneer in railroad construction in Connect- icut, the Providence and Stonington, which had been opened in 1837. The construction of the road had been delayed because of the difficulties of crossing the river. The optimistic reports of the state legislature ap- parently could not convince the public of the convenience of the fa- cilities, because the road soon passed into the hands of the receivers. After the road was reorganized under the name of the Shore Line, it was leased to the New York and New Haven company.97 By the beginning
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of the American Civil War there were six roads extending from the Sound inland towards Massachusetts, four of which extended from the Sound to the border. In addition, it was possible to travel directly from Providence to New York by utilizing the combined facilities of
(Courtesy Conn. State Lib.)
CHESTER FERRY
the Shore Line and the New York and New Haven. An additional con- necting link was provided between the north-south roads by the Hart- ford, Providence, and Fishkill roads.
Despite the comparatively extensive network of railroads, imme- diately they had only a comparatively slight effect on Connecticut life. The cost of construction was such that profits were seldom returned be- fore a line had been in operation at least ten years. Only three com- panies had been able to pay dividends by 1855, and it might be doubted
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if these were paid out of earnings any more than was true of the New York-New Haven Road. Generally, the roads were routed through al- ready established towns. Therefore, they did not open commercial op- portunities to new towns. There remained large numbers of towns which were not served by rail transportation. The disparity between the isolated agricultural towns and those with access to market routes became more pronounced. In some areas, as in Winchester, the rail- roads stimulated an improvement of public highways. The extension of the railroads was accompanied by the rise of industrialism, but the significance of this was to be measured in the latter part of the nine- teenth century.98
The industrial growth within the state and the expansion of in- ternal improvements created a demand for additional credit facilities. The number of commercial banks in the state grew from ten to forty- three in the period from 1818 to 1853 and they had a capital stock of more than ten million dollars. In addition, there were fifteen savings banks and five insurance companies.99 Connecticut weathered the panic of 1819 comparatively well, due, in part, perhaps, to the stability and the fluidity derived from the willingness of the Suffolk Bank of Boston to redeem the notes of country banks, including those in Connecticut, provided they would keep $5,000 and later $2,000 on deposit with the Massachusetts bank.
The commercial banks were supplemented by the establishment of savings banks intended primarily for the benefit of the wage earner. The commercial banks at this time had few depositors and made their profits primarily from their own capital and from the discount business. The capitalist of the time measured his wealth more in terms of tangible possessions than in securities or in money. An employee class was emerging, however, which was being paid in money rather than in goods. The Society for Savings was organized in Hartford in June, 1819. The expansion of the bank was steady, but not rapid. In 1824, its deposits amounted to $72,000. It was provided that when an account reached one hundred dollars the bank could require the depositor to accept his withdrawal in bank stocks or in cash at the bank's option. Withdrawals were only permitted quarterly and then only with due notice. Savings banks in Norwich (1824), in Middletown (1825), and in
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(Courtesy Conn. State Lib.)
SOUTH GLASTONBURY FERRY
New London (1827) were patterned after the Hartford bank. To avoid a single family's domination of the bank and to prevent an individual from depositing funds to avoid payment of taxes, a limitation on deposits was fixed by a number of banks. The average deposit in 1843 was only $143. Yet the limitation on deposits stimulated the organiza- tion of saving and building associations which were permitted to receive deposits in the form of stated payments and to lend to members on real or personal security at a stated rate of interest plus a bonus on which
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the parties would agree. Apparently, these organizations quickly ex- ceeded their prerogatives, and, in 1858, these institutions were re- quested to cease operations.
Connecticut banks rode the crest of economic optimism and suc- cessfully foiled the full effects of the periods of panic. In the years im- mediately following 1825, seven banks were chartered and when Jack- son successfully opposed the second bank of the United States, the predominantly Democratic General Assembly chartered ten additional banks in 1833 and 1834. Land speculation had declined in Connecticut by the time Jackson's specie circular was issued so that its effect on the state was slight. It is true that all but four of the banks in the state, the City Bank of New Haven, the Union Bank of New London, and the Mystic and Stonington banks, suspended payment of specie. However, no banks failed during this period, and, when specie payment was re- sumed in May, 1838, the immediate resources of the banks amounted to more than half of their liabilities and the specie on hand equalled twenty-seven per cent of that in circulation.100
Subsequently, the bank controversies and the collapse of the Eagle Bank of New Haven and the Derby bank brought about regulatory legislation. Because of decreasing profits, the Directors of the latter bank closed its doors in 1825. Unfortunately, the vacated charter fell into the hands of a group of swindlers who issued $80,000 of fraudulent notes which the lawful managers of the bank could not liquidate. In the case of the Eagle Bank, the President had extended to borrowers a credit of over a million dollars which was about twice the bank's capital. Payments were stopped in September, 1825. Although the charters did not contain a provision authorizing an investigation, the legislature sus- pended the charter of the Eagle Bank and revoked that of the Derby. The institution of a general banking policy was postponed until the investigation was complete.101 One found guilty of intent to defraud, or of appropriating to himself company funds, or of making a false entry on the company books was liable to a prison term of from one to fourteen years according to an act of 1829. In 1835, banks were forbid- den to retain as surplus earning a sum greater than five per cent of their capital stock. Cashiers were required to make their returns on standard forms after 1836. Branch banking was prohibited in 1837, and, in 1842,
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all banks were placed under the supervision of three commissioners ap- pointed annually by the state legislature.102
The increase in the number of banks was matched by the increase of insurance companies. The number had increased from five to twenty- eight from 1818 to 1850 and the capitalization had increased to over $4,600,000. The largest were the Hartford County Mutual and the Connecticut Life. This increase is explained, partially, at least, by the rise of public confidence after the Hartford Fire Insurance Company and the Aetna Insurance Company strained their resources to pay the claims resulting from fires in New York in 1834 and 1845.103 The in- crease in the number of insurance companies and their accumulation of capital serves as an index to the improved financial condition of the state and its ability to finance an expanding economy.
The blueprints for economic development had been sketched by 1850. Many products, which seemed to become synonymous with their Connecticut imprint, such as hardware, firearms, and brass, were al- ready well established. Others, such as silverware and rubber, were sufficiently established to augur well for their continuance. As the fac- tory system emerged, transportation and finance kept pace, and agricul- ture, which was beginning to show specialization, was adjusting to the demands of an urban industrial civilization. Meanwhile, the urge for reform, stemming in part from the industrial development in Europe, and in part from the conditions of this development in the United States, motivated men to improve society by means of political action and even armed conflict. The American Civil War had an uncertain effect on the transformation of Connecticut into an industrial state. That it was responsible for some endeavors is unquestioned. There is, however, no exact measurement possible of the extent to which the con- test interrupted or altered what would have been the peacetime de- velopment. In the twenty years from 1850 to 1870, Connecticut was involved with the issues of reform, particularly as they related to the slavery imbroglio.
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