Centennial history of the city of Washington, D. C. With full outline of the natural advantages, accounts of the Indian tribes, selection of the site, founding of the city to the present time, Part 32

Author: Crew, Harvey W ed; Webb, William Bensing, 1825-1896; Wooldridge, John
Publication date: 1892
Publisher: Dayton, O., Pub. for H. W. Crew by the United brethren publishing house
Number of Pages: 838


USA > Washington DC > Washington DC > Centennial history of the city of Washington, D. C. With full outline of the natural advantages, accounts of the Indian tribes, selection of the site, founding of the city to the present time > Part 32


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On June 2, 1842, a joint resolution was introduced into the Senate of the United States, recommending that the stock of the United States and a portion of that of the cities of the District of Columbia


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be transferred to the State of Maryland, in order to enable her to complete the canal. This resolution was introduced on the strength. of a report made by the Committee on Roads and Canals, which summarized the history of the subscription to the stock of the com- pany, showing that, up to January, 1842, there had been subscribed the following amounts: By the United States, $1,000,000; by Mary- land, $5,000,000; by Virginia, $250,000; by Washington, $1,000,000; by Georgetown, $250,000; by Alexandria, $250,000; and by sundry indi- viduals, $457,518.36. Of these various sums all had been paid, except $151,881.36, which was due from some of the individual subscribers. The State of Maryland was also credited with $43,280 on account of a debt due that State from the old Potomac Company, which surren- dered its charter to the Chesapeake and Ohio Canal Company, and also with the sum of $120,444.44 on account of 220 shares of stock transferred from the Potomac Company to that State, making $163,- 724.44. The canal company also owed the State $2,000,000, loaned under authority of an act of 1834. The report in which these facts were submitted was very long, and recommended that Congress deal liberally with the State of Maryland, as she would be the greatest sufferer if the canal were not completed, because she was the greatest stockholder, and suggested that the $1,000,000 of stock of the United States, and $750,000 of the $1,500,000 of stock deposited with the Secretary of the Treasury of the United States by the cities of Wash- ington, Georgetown, and Alexandria, be returned to the cities of the District. The favor thus suggested to the three cities was because they had suffered severely by the losses sustained by them in the payment of interest and expenses on the Holland loan, the city of Washington having paid on her portion of the debt $449,650, Georgetown $116,795, and Alexandria $111,715, an aggregate amount of $678,160. The


committee proposed, therefore, by way of indemnity to the cities, the redelivery of the remaining $750,000, deposited with the Secretary of the Treasury under the act of Congress of May 20, 1836,-to the city of Washington, $500,000; and to the other two cities, each $125,000. The question of consent to the joint resolution was sub- mitted to the Boards of Aldermen and Common Council of Washington July 1, 1842, and received their assent. The outcome of this movement will appear later in these pages.


On December 3, 1842, the Hon. M. C. Sprigg, who had been reelected to the presidency of the company in the preceding June, resigned his position, and was succeeded by Major-General William Gibbs McNeill. With reference to the resignation of Colonel Sprigg,


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the Baltimore Patriot said, that the canal could have been completed under him if his political opponents had extended to him the conti- dence and assistance to which his elevated character entitled him; but these were withheld, it believed, merely from party purposes. And it was hoped that the distinguished engineer that succeeded him would not encounter similar opposition.


On January 2, 1843, the Common Council of Washington took up the question of the surrender of its stock, and discussed it more fully than before. Mr. Haliday introduced the following resolution :


" WHEREAS, The Governor of the State of Maryland, in a letter to the President of the United States, which was communicated to Congress January 1, 1840, requesting a surrender to the State of Maryland of the stock of the Chesapeake and Ohio Canal Company belonging to the United States, and to the cities of Washington, Georgetown, and Alexandria; and


" WHEREAS, This corporation, by its committee, on the 11th of March, 1840, presented to both Houses of Congress, a remonstrance against the surrender, so far as related to the stock owned by this corporation; which remonstrance, among the many facts and arguments it contains to show that Maryland is not entitled to any bonus or gratuity, especially at the expense of the people of this city, proves that whatever loss has arisen from delay in the completion of the canal is attributable solely to the legislation of that State. On this subject the remonstrance says: 'The State of Maryland originally embarked in this enterprise, as the corporation did, under the impres- sion that a canal suited to its purposes could be constructed at an expense entirely within the means then estimated. But this was no favorite project with her legislators or with her people. They looked to another avenue and another great outlet for her exhaustless mineral wealth, which should lead directly to her city, Baltimore; and as it early ascertained that no route for a canal to that city could be found except through the District of Columbia, all her energies were directed to the railroad. Her legislation and the political power of the State were equally devoted to this object. She granted a most favorable charter to the railroad company, and the first serious obstacle to the progress of the canal is to be clearly traced to that legislation. The work of the canal was obstructed in most vexations, tedious, and most expensive litigation, producing a train of evils from which the canal company never recovered. But the greatest injury was in the progress of the work itself, and the discouragements produced by the delay. The history of her subsequent legislation


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shows how regardless she was of these injuries, and how pertinaciously she adhered to her original design of diverting all the trade of the Potomac, and all the vast products of the region watered by its tributaries, from its natural channel, and to force it to Baltimore. Year after year, while this corporation was exhausting its means and oppressing its citizens to carry on the canal, Maryland was taxing the ingenuity of her ablest men to defeat the canal, demanding the right. to cut a canal through this city, and in every way seeking to secure to herself every advantage from the investment of this corporation, and never relaxing these efforts until she was well assured that this was the only practicable means of bringing into use the great wealth of her mountains.'


" AND WHEREAS, Congress, satisfied with the justice of the position assumed by the corporation of Washington in the defense of its rights and those of its citizens, and of the injustice of the State of Maryland in asking for a surrender of their property; and


" WHEREAS, A joint resolution having been presented in the Senate of the United States in December, 1841, soliciting the surrender to the State of Maryland of the canal stock owned by this city, as previously required by the Governor of the State, a remonstrance on the part of this corporation was again laid before the Senate by the Mayor of this city, which remonstrance is in the following words:


"' The original subscriptions to the stock of the Chesapeake and Ohio Canal Company, made in 1827 and 1828, were as follows: [These have been previously presented.]


"' In the year 1834, the State of Maryland made a further subscrip- tion of $125,000 to the stock of the company, payable in five per cent. bonds, which yielded the company only $120,000, a loss of $5,000. In 1835, the State made a loan to the company in six per cent. bonds of $2,000,000 on the condition that the State should have the privilege of converting this loan into stock of the company at any time within a year after the canal should be completed; that until that time the books of the company should be closed, and no other subscriptions received; that for the payment of the principal and interest of this loan the whole property of the company should be mortgaged to the State, and that the bonds should be sold at a premium of fifteen per cent., to be paid to the State. The bonds actually sold for more than fifteen per cent., which went into the State treasury, and the six per cent. interest has been paid to her up to the year 1840. In 1836, the State authorized a further subscription to the company of $3,000,000 in


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six per cent. bonds, on the conditions that the Baltimore and Ohio Rail- road Company should be allowed to construct its works where the law had denied it the right to do so; that the bonds should produce twenty per cent. premium to the State, and that the property of the company should be mortgaged to insure and pay her six per cent. interest on the subscription, thus making herself a preferred stockholder, in posi- tive violation of the charter, which provides that all the stockholders should share equally in all profits, according to their respective shares. These bonds, it is to be further observed, could not be made available to the company for three years, and then only yielded $2,464,000, the company losing half a million on them.


"' In 1839, the State made a further subscription of $1,375,000, payable in five per cent. sterling bonds at par, the State taking a further mortgage to secure a dividend of six per cent. on this sub- scription, in violation of the charter, as in the other case, while the sale of the bonds yielded to the company only seventy-seven per cent. on the nominal value, a further loss of $317,000.


"' This subscription, as well as the preceding one, of 83,000,000, was resisted by the corporation of Washington, but it was forced on the company, with its onerous conditions, by the almost solid vote of the State of Maryland herself, which then had a majority of the stock.


"'Coupled with the act authorizing the last subseription was a direction to the Governor to ask of Congress a surrender to the State of the $2,500,000 of stock originally subscribed by the United States, and the corporations of Washington, Georgetown, and Alexandria, and if granted, the State pledged herself to buy out all individual stock- holders at fifty per cent. On the 23d of February, 1841, fifteen days after the Senate of the United States had passed a resolution giving her the said $2,500,000 of stock and had sent it to the House of Representatives for concurrence, and when it was expected that the House also would pass the bill, a bill was introduced into the Senate of Maryland and instantly passed both branches of the legislature, quietly revoking this obligation to which she had pledged herself to Congress, to pay the private individuals fifty per cent. This repealing bill was in the following brief and unostentatious form:


"""A SUPPLEMENT to the Act Passed at the Session of December, 1838, Chapter 396, Entitled, 'An Act Relating to the Chesapeake and Ohio Canal Company':


""" Be it enacted, That the second and third sections of said act be, and the same are hereby, repealed."


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"'Fortunately, the surrender of our stock did not pass the House of Representatives, and this act of the Legislature of Maryland releas- ing the State from her obligation was of no avail. We make no comment on this proceeding.


"' The proposition for this surrender has, however, been renewed, and is now again before the Senate; but if that honorable body will look into the relative exertions, sufferings, and claims of the several classes of partners in the canal company, it is believed that the State of Maryland will be found to possess less title to this great boon than others, and to grant which, while it would be signally unjust to her suffering copartners, would, in fact, not afford her the least aid in com- pleting the canal. The impulse given by the subscriptions, corporate and private, of the District of Columbia, was mainly instrumental in starting the work, and while the corporation of Washington and its citizens subscribed $1,500,000, the State of Maryland took but half a million. The United States, it is true, assumed the principal of the corporation subscriptions, but from borrowing money to pay the annual interest on the subscription before the transfer, a debt of nearly half a million was incurred, and is now established on the city, and while Maryland has been exacting of the company an illegal payment of six per cent. profit on the greater portion of her subscription to the work running through her own State, and for her own peculiar benefit, the poor citizens of Washington have been sinking the interest on their subscriptions for fourteen years, and can never receive one farthing on their stock until the State of Maryland shall have first received six per cent. on her immense investment. Under these circumstances Maryland asks Congress to strip the corporation of Washington of $1,000,000 of stock which it subscribed, leaving the city encumbered with an enormous debt of half a million of dollars as its only reward for giving the first effective impulse to a work of which Maryland herself is ever to reap the chief benefit.


"' In addition to all this, when Maryland was pressing her petition on Congress to grant to her the above $2,500,000 of stock, her legisla- ture passed an act (to wit: at the session of 1840-41) ordering a fore- closure of the mortgage, imposed by her own vote on the company, to secure her preferred dividend of six per cent. on her subscription.


"'In behalf of the Committee of the Corporation of Washington, ""'W. W. SEATON, Chairman.'


" AND WHEREAS, No information has been submitted to this board since January, 1842, tending to show the justice or propriety of making at this


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time the transfer of the city to the State of Maryland, and thereby leav- ing a debt of half a million of dollars, with an annual interest of $30,000, to be borne by the people of the city, with no provision for the payment of the principal or interest but by taxes upon their property; and,


" WHEREAS, On the 1st of July, 1842, the Board of Aldermen passed a resolution and sent it to this board, seeking a concurrence, which resolution is now pending in this board, giving the assent of this corporation to the passage by Congress of a joint resolution before Congress whereby it is proposed to transfer as a gratuity to the State of Maryland $500,000 of the $1,000,000 of the stock subscribed and paid for by the corporation and now held by the United States on certain conditions, and upon which this corporation has paid, besides the $1,000,000, in interest, etc., nearly $700,000; and,


" WHEREAS, on the 2d of June, 1842, a joint committee was ap- pointed by the two boards to attend the meetings of the Chesapeake and Ohio Canal Company and vote on the above-mentioned stock, which committee, since their appointment, have attended several meet- ings of the company, at the last of which it is understood measures were adopted of great interest to the stockholders in general - measures which the committee appointed on the part of this board declared, in a debate in this chamber on the 12th of December last, would render it unnecessary to sacrifice the rights and interests of a part of the stockholders to complete the canal to Cumberland; and


" WHEREAS, It is indispensably necessary to the members of this board, before they can with due regard to the interests of their con- stituents proceed to act on a subject of so great importance as to give away to the State of Maryland without an equivalent the stock of this corporation, on the pretense that it is necessary in order to induce her to complete the canal, to have a full knowledge of all the proceedings referred to; and


" WHEREAS, The Board of Aldermen rejected the joint resolution calling upon the committee for a report of the proceedings of the meetings of the stockholders which they attended as representatives of this corporation; therefore,


"Resolved, That the committee appointed ou the part of this board, who attended said meetings, be requested and is hereby directed to communicate to this board at the earliest convenient moment a state- ment in full of the proceedings of said meetings, embracing the means adopted by the company to complete the canal, and which, in his opinion, will render it unnecessary to sacrifice the interests of a por- tion of the stockholders to complete the object."


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This resolution was then laid on the table by a vote of 12 to 4. In reply, however, to the resolution, Lewis Johnson, who attended the meetings of the canal company on the part of the Board of Common Council, published a statement in which he said that he had not asserted that measures were adopted that would render it unnecessary to sacrifice the interests of a portion of the stockholders in order to complete the canal; but that he had expressed the sanguine hope, which he entertained, that the course adopted by the convention would prove to be the foundation of measures which would lead to the completion of the canal to Cumberland.


Notwithstanding the strong reasons furnished by the above report, which, as has been said, was laid upon the table, the two boards of the city's government assembled at the call of the Mayor for the purpose of taking decided steps in reference to the proposed transfer of stock, and adopted the following ordinance:


" Resolved, By the Aldermen and Common Council of the City of Washington, that the assent of this corporation be, and the same is hereby, given to the transfer of the stock originally subscribed by this city to the Chesapeake and Ohio Canal Company, as proposed by and upon the terms, conditions, and restrictions contained in the joint resolution introduced in the Senate of the United States from the committee on roads and canals, on the 2d day of June, 1842, entitled ' A Joint Resolution Directing the Transfer of the Stock HIeld by the United States in the Chesapeake and Ohio Canal Company to the State of Maryland, and the Cities of Washington, Georgetown, and Alexandria': Provided, It shall be further conditioned, that the State of Maryland shall cancel and abandon all mortgages or liens which the Chesapeake and Ohio Canal Company may have executed to said State, and all claims to priority under said mortgages executed by said company to the said State in the year 1835, for a loan of $2,000,000, and shall agree not at any time to foreclose the last- mentioned mortgage, or any other mortgage or mortgages which may be executed to the State of Maryland by the Chesapeake and Ohio Canal Company, so as to divest the State of Virginia, the said cities, corporations, or individuals, of their respective proportions of stock now held by them, or hereinafter to be held in the manner and under the circumstances mentioned in the said joint resolution."


This ordinance was adopted January 14, 1843, and was signed by all the proper officials. The Senators and Representatives in Con- gress from Maryland agreed to support a joint resolution embodying the above conditions.


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In July, 1843, the president of the canal company, General Wil- liam Gibbs NeNeill, made a contract for the completion of the canal between dam No. 6 and Cumberland, with Thomas W. Letson and John Rutter, which contract having been made on his own sole authority, and not by the directors, or a majority of them, as required by the charter of the company, the contract was disapproved by the directors, and General McNeill resigned his position as president, July 19, 1843, and was succeeded by Colonel James M. Coale. About this time an arrangement was made with the Baltimore and Ohio Railroad Company to carry coal from Cumberland to dam No. 6, whence it was carried to the District of Columbia by the canal. This afforded an excellent opportunity for the introduction of Allegheny coal into this market. Colonel Coale was reelected president of the company, June 4, 1844.


The delay in the work of completing the canal was to some inexplicable, while it was understood by others. William Price, in writing on this subject, quoted from the reports of the Baltimore and Ohio Railroad Company as follows:


"The canal has progressed too far and combines too many interests to warrant the belief that it will not, at an early day, be completed to Cumberland; and if the railroad be permitted to linger for any great length of time at that point, all must see that for the transportation of merchandise and produce to and from the west, the canal must become a formidable rival.


"Reaching Cumberland in wagons across the mountains, a choice must then be made between the canal and the railroad, and in either event commissions for handling and forwarding must be paid. A selection of the cheapest route for the port of exportation may be expected, and therefore, unless the railroad consents to reduce its charges below the point of profit, Baltimore may be deprived of the trade."


The enormous cost of the work thus far was $13,915,469, while according to the estimate of General Barnard it should have cost only $9,195,457. But of this excess $2,616,744 was easily accounted for, and ought to be deducted from the $4,720,012 which had been expended over and above the estimate of General Barnard. The smaller sum mentioned here as easily accounted for, was accounted in the following manner: Almost at the outset, the work was stopped by the injunction of the railroad company at the Point of Rocks for more than three years, and then again, when it reached dam No. 5, it stood still for nearly two years more. Afterwards it was interrupted,


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checked, and partially stopped, the mere appearance of a force being sustained upon the line. Then it was carried on under great difficulty for about three years, and again totally suspended in 1841, remaining in that condition until August, 1844. Then, after the State had subscribed its $3,000,000 and its $1,375,000, the prices of labor unex- pectedly rose fully forty per cent., so that common laborers were paid $1.25 per day. Again, when the laborers could not be paid in full, they formed combinations against the contractors, who were in consequence compelled to abandon their sections. Then the payments of the company, even in its best days, were often made in scrip, which added to the cost. All these and other circumstances were surely sufficient to account for at least a portion of the excess over the estimate of General Barnard.


An act was passed by the Legislature of Maryland, March 11, 1845, for the completion of this canal, which required a guaranty for the annual transportation upon the canal from Cumberland to Georgetown, after its completion, of one hundred and ninety-five thousand tons per year. An ordinance was passed by the corporation of Washington, April 15, 1845, agreeing to indemnify any citizen or citizens of Washington who should become guaranty for the trans- portation of twenty-five thousand tons. The company was also authorized to issue bonds to complete the canal, and in consequence of giving this authority, the two boards of the corporation of Wash- ington, on August 4, 1845, passed a resolution requesting the Mayor to appoint a committee of two citizens from each ward to invite individuals to make investments in the company's bonds. The next day the Mayor appointed the following gentlemen as the committee: First Ward, S. H. Smith and William Easby; Second Ward, Lewis Johnson and John Sessford; Third Ward, G. C. Grammer and J. W. Maury; Fourth Ward, B. B. French and J. P. Ingle; Fifth Ward, J. C. Fitzpatrick and Thomas Blagden; Sixth Ward, A. II. Lawrence and James Tucker.


In consequence of the above-recited action of the Legislature of Maryland and of the popular movements incited thereby, the com- pany was enabled in September, 1845, to make a contract with Walter Gwynn and others, to complete the canal to Cumberland, the work to be done within two years. The work was to be begun within thirty days from September 25. At the time this contract was made there were eighteen and three-tenths miles of the canal to be completed, the contract price for which was $1,625,000.


April 14, 1847, the corporation of Washington passed an act to


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aid the company to complete the canal to Cumberland, by which the proposition was to exchange $50,000 in the stock of the corpora- tion, bearing six per cent. interest, redeemable at the pleasure of the corporation, for $50,000 of the stock of the canal company bearing six per cent. interest, provided that the contractors should show to the satisfaction of the committee appointed to transact the business, that with the aid of this $50,000 sufficient funds had been secured to complete the canal, and that the interest on the bonds would be punctually paid.


On October 10, 1850, after many delays, the canal was opened to Cumberland, and water communication was thus opened from that point to the three cities in the District of Columbia. The ceremonies at Cumberland were of a very interesting nature. William Price delivered the address. The first boat from Cumberland, loaded with coal, reached Georgetown November 1, 1850, "and yet we hail its advent with no rejoicings, and welcome the event with no show of joy," etc. The basin at Georgetown was dry, and everything at the lower end of the canal was out of order. The Chesapeake and Ohio Company not being able to put it in order, the corporation of Washington appropriated $1,500 toward that end on December 5, 1850.




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