USA > Delaware > Historical and biographical encyclopaedia of Delaware. V 1 > Part 27
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The Delaware Railroad, when the charter was revived in 1849, was designed to carry out the old project of connecting two Steamboat lines by rail,as formerly by post-coaches, from Dona to Seaford, making a through route for passengers from Philadelphia to Norfolk. The distance by this route was estimated at two- hundred and fifty miles and the time at six- teen hours. Hon. Samuel M. Harrington, the late distinguished Chancellor of Delaware, may be justly regarded as the leader of this project,and chief among the enterprising men who conceived the plan and undertook its execution; first, by obtaining from the Legis- lature of 1849 a modification of the charter of 1836, which, as has been shown, was exceed- ingly liberal in its terms, and by amendment, was easily adapted to the purposes of this im- provement; which formed the connecting link between the Delaware and Chesapeake bays in the projected line of travel. By the terms of the amended charter, the Com- missioners were required to open subscrip- tion books, and on obtaining subscriptions to stock to the amount of five thousand shares at $25, par value, the subscribers, their successors, and assigns were declared to be incorporated by the name and title of "The Delaware Railroad Company." But little progress was made for several years in obtaining stock subscriptions, and it was not until the act of February 20th, 1852, was passed, authorizing a conditional subscrip- tion on behalf of the State, that an organiza- tion of the Company was effected. By this "act" the Commissioners were directed to re- open the books, and on obtaining subscriptions to the amount of seventy-five thousand dol- lars, the State Treasurer was authorized and directed to subscribe "for such number of shares at their par value, as would amount, with the subscriptions of others, to the five thousand shares" requisite to enable the
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HISTORY OF DELAWARE.
Company to organize. The State's subscrip- tion was based upon the annual payment of certain sums of money into the treasury by the New Castle and French Town T. & R. R. Company, in consideration of an act of the Legislature designed to protect that Company from rival or competitive lines within certain limits. The appropriation to be applied to the State's subscription from this source amounted to $6,500 per annum ; the Dela- ware Railroad Company, would realize $130,- 000, in the twenty years to which the "act" was limited. To make this sum available, the company was authorized by the "act" to issue its bonds from time to time, and the State Treasurer was directed to endorse the same. The bonds to be made payable only out of the aforesaid fund as the same should accrue, and not to exceed the amount at any time subscribed by the State .- The Legisla- ture at this session resorted to the pernicious expedient of raising money by a lottery grant, and from the revenue thus to be derived, the Company was promised $50,000 payable in in- stalments of from $8,000 to $10,000 per annum in a series of years, beginning with 1854. After this favorable legislation, the friends of the enterprise called public meetings in many of the villages on the proposed line of road. The people were earnestly solicited to subscribe to the stock,and addresses were de- livered, printed and extensively circulated, setting forth the character and object of the work and its importance to the Peninsula. Judge Harrington wrote with great facility and every sentence proved his entire faith in this enterprise. His public addresses were earnest and impressive, and his enthusiastic devotion to the work inspired his associates with confidence in its ultimate success, and by their energetic efforts, in a few weeks the amount subscribed by individuals was sufficient to secure the State's subscription, and a meet- ing of the share-holders was called at Dover, May 22nd, 1852, when the company was or- ganized. Judge Harrington waselected Presi- dent ; Ex-Governor William Tharp, Treasurer; and Thomas B. Bradford, Henry Ridgely, Alexander Johnson, Charles Wright, William Cannon, Wm. O. Redden and Beniah Tharp, Directors. The Board proceeded at once to employ engineers to make the preliminary surveys for the location of the road. Mr. Hor-
ace Bliss, the engineer, entered on this work the 24th of June, 1852, and had completed the surveys, and presented to the Board his re- port of the cost of the road on the first of the following October. By his estimates the grading of the located line from Dona to Sea- ford forty-three miles, with a branch to Mil- ford of eight miles,in addition, would cost but little over $40,000. The entire cost of the whole work, including grading, track, bridges, turnouts, depots, and other structures, includ- ing also the equipments of the railroad was stated at less than $380,000 for the Main Line, and $57,000 for the Milford branch, which was considered an essential part of the work, as opening the way for its extension to Lewes. Proposals for letting the work were issued and the road was put under contract,in November, 1852, and Mccullough and Lentz, the con- tractors, commenced work on that part of the line between Dona Landing and Dover.
About this time the attention of President Felton of the Philadelphia, Wilmington & Baltimore Railroad Co. was directed to the progress of this new enterprise, and he quickly perceived the importance of seeking a connec- tion with a railroad, which would not only by means of Branch Roads command all the in- land transportation of the Peninsula south of Dover, but would open the most direct com- munication with the South,and might possibly become part of a rival line of travel between New York and Norfolk. As the extension of the Delaware Railroad northwardly from Dover had been long contemplated, President Harrington, and the Board of Directors were prepared to receive propositions, looking to a connection with the upper Companies, and it was an easy matter to begin negotiations where the mutual interests were so apparent: though some grave questions as to the terms of an agreement, stood in the way of an immediate arrangement.
The Board had rigidly adhered to an eco- nomical expenditure of the Company's funds. In the employment of agents, and in their con- tracts for materials and labor, they had experienced great trouble and inconvenience in obtaining sufficient means to prosecute the work, and at the Ist annual meeting of stock- holders, January 10, 1853, the Treasurer's report shows only $12,683 as the amount received from stockholders, including two pay-
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HISTORY OF DELAWARE.
ments by the State Treasurer of $3,250 each | NEGOTIATIONS BETWEEN THE DELAWARE on the State's subscription. An instalment of AND PHILADELPHIA, WILMINGTON AND BALTIMORE RAILROAD. $3 per share had been called and many of the shareholders, still incredulous as to the suc- The negotiations between the Companies involved propositions for aid and assistance from the Philadelphia, Wilmington and Balti- more Company, to secure the building of the Delaware Railroad, of a character that required deliberate consideration ; and though frequent conferences were held by the committees, it was not until March 4th, 1853 that a formal communication was received from President Felton, by the hands of Edward W. Gilpin and A Campbell. Esqs., (the last, Treasurer of the Philadelphia, Wilmington and Baltimore Railroad Company,) submitting in brief "that if one-half the stock required to build the Delaware Railroad as extended should be first subscribed, and the Company would discourage and prevent as far as possible the building of any rival line between Philadelphia and Balti- more, the Philadelphia, Wilmington and Bal- timore Company, would agree to guarantee the bonds of the Delaware Railroad Company to an amount sufficient to build the other half and, if desired, would equip and run the road when completed." Or if the Delaware Rail- road Company should conclude to equip the road on its own account, the Philadelphia, Wil- mington and Baltimore Company "would guarantee three-fifths of the amount necessary to build and equip the road." cess of the road, delayed the payment of this small assessment. The Legislature of 1852 having, as before stated, consented to invest a part of the "bonus" derived from the N. & F. T. Co. assumed the ground that the State had contributed her share towards an improve- ment from which only a part of its territory was to be benefited. Conflicting personal in- terests seriously interfered with the selection of a line from Dover to Seaford ; surveys had been made with a view to reconcile these differences, but it was found to be a difficult matter to effect a compromise, and at the same time to locate and establish the best line at- tainable between the places mentioned. The Board was obliged to confront many unforeseen difficulties and needed the help of a stronger organization ; and this opportunity offered at a seasonable time. Anticipating an agreement and union between the Companies, the Board had applied to the Legislature of 1853 for a supplement to the Charter, and after a long and excited session, in which the representa- tives of every public or local interest, either claimed some special favor as a condition of support, or assumed to exercise a watchful care lest the State should be involved, or lose some advantage by granting railroad privi- leges, the "Act" was finally passed (Feb- ruary 4th, 1853) authorizing the Company to extend the Delaware Railroad northwardly and connect it with the N. C. & F. T. Railroad. At this session another bill of equal impor- tance was enacted making it lawful for either the N. C. & F. T. or the Philadelphia, Wil- mington & Baltimore Railroad companies to "guarantee the bonds of the Delaware Rail- road Company, and to hold stock in - said company," and also "to contract and agree for the construction, equipment and mainte- nance of the road."
In the mean time, resolutions were passed at a meeting of the Board, (on the 26th of January,) appointing President Harrington and Charles Wright, Esq., a committee to negoti- ate with the Philadelphia, Wilmington & Bal- timore Railroad Company, the terms of an extension of the road to the New Castle and Frenchtown Railroad.
This proposition was favorably received and the Directors of the two Companies with An- drew C. Gray, Esq., President of the New Cas- tle and Wilmington Railroad, met at Wilming- ton, April IIth, 1853, when the terms of a union of the three railroads were fully dis- cussed and the agreement (modified by fixing the amount of the additional subscription to the stock at $200,000 as a condition for the guarantee of the company's bonds) was signed by the Presidents of the two Companies, Messrs. Harrington and Felton, with the understanding that it should be submitted to their stockhold- ers respectively for ratification. This was subse- quently done and the agreement was ratified. The first article provided that a plank road would be substituted for " iron rails" from Do- ver to Dona Landing, the road to be under the management and control of the Delaware Railroad Company. The abandonment of Dona as one of the termini of the railroad had
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HISTORY OF DELAWARE.
long stood in the way of a settlement. and the | question being thus disposed of, it seemed to be understood that the discontinuance of a steam- boat line would unquestionably follow the opening of the road for travel between Wil- mington and Dover. It will be seen that such was in fact the result. The Delaware Railroad Company became the purchaser of the prop- erty of the two "Steamboat Transportation Companies," and as there was no further need of a plank road it was never constructed.
As soon as arrangements with the Philadel- phia, Wilmington and Baltimore Company were concluded, vigorous measures were taken to carry out the provisions of the agreement for extending the road, and to place it upon a surer and firmer financial basis.
The supplement to the Charter (Act of Feb- ruary 24th, 1853) had been ratified by the stockholders, and under its provisions the board of Directors, now to consist of 13 mem- bers, was re-organized on the 8th day of June, 1853, and Messrs. Samuel M. Felton and Ed- ward C. Dale, of Philadelphia, Edward W. Gilpin and Charles I. DuPont, of Wilmington' and Andrew C. Gray, of New Castle, were added to the old Board of which Hon. Samuel Harrington was President, and Dr. Henry Ridgely and Thomas B. Bradford, of Dover, Col. Henry B. Fiddeman, and Alexander John- son, of Milford, Charles Wright, of Seaford, and William Cannon, of Bridgeville, were the members. James F. Allee was elected Secre- tary and Treasurer, ex-Gov. William Tharp having resigned the latter office.
Immediately after the new organization of the Board, subscription books were re-opened and placed in the hands of agents to canvass the State ; a corps of engineers under Major Isaac Trimble was soon in the field, and as fast as the line was definitely located and the right of way obtained, it was put under contract. Work was commenced at its junction with the N. C. & F. T. R. R., to render the road avail- able and productive as it progressed.
The work advanced rapidly and the expen- ses were consequently largely increased. It was found necessary to obtain by a loan suffi- cient means to meet the increased demands on the treasury ; a mortgage of the road and other property of the Company, bearing date the 6th of November, 1854, was made to Trus- tees to secure the payment of bonds to the
amount of $500,000 -- endorsed by the Phila- delphia, Wilmington and Baltimore Railroad Company, payable in twenty years, and bear- ing six per cent. interest per annum, payable semi-annually. These bonds ranked with the best railroad securities in the market, but owing to the depression caused by financial embarrassments and failures throughout the country at that time, they could only be sold at a sacrifice, and the Board declined any sales, as the Montour Iron Company had agreed to accept them at their par value for railroad iron needed to construct the road.
The condition of the Company and of their road, as well as the narrow views entertained by some of the landholders on its line, in the beginning of the year 1855 will be best de- scribed by giving a few extracts from Presi- dent Harrington's Annual Report to the Stockholders. After referring to the agree- ment by which a practical union had been formed with all the railroads of the State hav- ing a common interest with the Delaware Railroad, the President says :
" The Company had a right to expect that "this extension of their labors, involving as "it does almost a duplicate of cost, would "have been met by a local subscription of "stock, and by liberal concessions of the right "of way, similar to what was obtained on the " road, as originally contemplated, and com- " mensurate with the interests of the several "sections; but in both these the Board has "been disappointed; very little stock has been " taken on the line above Dover, except in the "city of Wilmington; and in regard to the "right of way the same spirit of speculation "practiced on other companies has been ap- "plied to the extension of ours without regard "to its different character, and has resulted in "the same imposition of onerous burdens. "There are several honorable exceptions to "this remark; but on the whole the right of "way through a part of New Castle county, " which will receive the same general benefits "from this improvement, will cost the com- "pany many times the amount of subscriptions "made by that section towards building the " road."
Messrs. Gray, DuPont and Sharpe, had been appointed a committee to obtain releases of the right of way in New Castle county. In many instances the land owners were unrea-
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HISTORY OF DELAWARE.
sonable and exacting in their demands, to | State six per cent. on its cost." The Stock- which the committee were obliged to submit or settle the claims by compromise,in order to avoid the delay attending a resort to juries: moreover, in several cases where appeals had been taken, the landholders had been sus- tained by the verdicts of juries; and as the Company could not well afford to be involved in law suits, the committee proceeded to settle the claims by the aid of commissioners on the best terms practicable.
The expenses thus incurred at the outset, and the delinquencies of many of the stock- holders, hampered the Company, and but for the liberality and credit of the Philadelphia, Wilmington & Baltimore Company its finan- cial condition would have been seriously if not fatally embarrassed.
President Felton had by his intercourse with Judge Harrington, Charles I. DuPont, Esq., and other members of the Board, become bet- ter acquainted with the Delaware Peninsula ; the fertility of the soil, and the extent and value of its forests and fisheries as well of the State as of the adjacent counties of Maryland. By hislong experience in railroad management lie could readily estimate the value of the business which would pass over the road, when the re- sources of the country to be opened by it should become fully developed, and he was convinced that its early completion would add materially to the revenues of the Philadelphia, Wilmington and Baltimore Railroad, over which the travel and trade must pass to reach Philadelphia and other Northern cities. To avoid delay his Company had set aside the condition of the agreement, requiring the Delaware Railroad Company to obtain sub- scription to their stock to the amount of $200,000, before guaranteeing their bonds, and his Company had also liberally subscribed on their own behalf, $50,000 to the capital stock of the Delaware Railroad Company. With this important aid the Board applied itself to the work with renewed energy, and in a short time the whole line was put under contract The State's loan was authorized, with a per- fect understanding that the lease should be made at an annual rent, sufficient to insure the payment of six per cent. interest thereon. and one-fourth part of it graded. Cross ties and iron for the track had been purchased and a part delivered. The President, moreover, stated in his annual report of January, 1855, The act further provided-"That to enable the Delaware Railroad Company to comply with its engagements in this behalf, and to "That the Company could at any time lease the road permanently when finished, "on terms guaranteeing to Stockholders and to the | insure the completion of the road," the State
holders were greatly encouraged, and at their meeting on the same day, resolutions were passed authorizing the Board to make the lease upon the guarantees proposed and "upon such terms, stipulations and conditions as should be agreed upon." It was further re- solved, "That a committee be appointed to present to the Legislature a memorial for aid to finish the road in the shortest time practi- cable, and that the board be directed to re- open the subscription books and solicit further subscriptions of stock based on the ample guarantees which it was now in the power of the Company to give, of the certain payment of interest."
The Legislature in answer to the memorial of the Stockholder's committee. passed an act February 28th, 1855 setting forth-"That as the State subscription of $130,000 would be unproductive until the road is finished, and the Company has the ability to secure by leasing the road at a certain rent, a sufficient amount from the interest on the fund now unproductive, in less than twenty years to pay the additional subscription now to be made, and through which the said unproductive fund will be made available : Therefore to aid the Company by a loan of the State's credit, the State Treasurer be authorized and required, to issue and deliver to the company the bonds of . the State to an amount not exceeding $170,- 000."The bonds were made payable in twenty- one years with interest, at 6 per cent. per annum. To secure the payment of the bonds at maturity and the interest thereon, the Company was required to deposit with the State Treasurer a certificate for 6,800 shares of their capital stock assigned to the State, and also the bonds of the Company to the amount of $200,000, guaranteed by the Phila- delphia Wilmington & Baltimore Railroad Company ; and further, to execute and deliver to the State Treasurer, a second mortgage on all the property and estate of the Company.
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HISTORY OF DELAWARE.
released for a period of twenty-one years, all ! interest, income, and dividends upon the capi- tal stock of the company before subscribed for by the State ; "it being distinctly understood that the Delaware Railroad Company, shall not directly or indirectly ask the State for any other pecuniary aid within the said period of twenty-one years." The Company was thankful for this boon, though ungraciously be- stowed, and when it is considered that the "loan of the State's credit" was amply se- cured, and that it was in fact a preferred debt to be paid at maturity by a sinking fund, to be derived from the earnings of another Rail- road Company, in payment of interest on the State's subscription, we can not but wonder at the extreme caution that inspired the last restrictive clause of the "act" quoted.
At this session the Charter was amended so as to authorize the Company to borrow money to an amount not exceeding one million dollars. The original act had limited the amount to half a million. The question of "leasing the Delaware Railroad" was virtually decided by the company's acceptance of the act of February 28th, which required it as a condition on which the State's loan was author- ized, but other considerations also led to this result.
President Harrington, though recently ap- pointed to the highest judicial office in the State, continued to perform the duties of Presi- dent, with a resolution and perseverance which seemed never to tire. He had accomplished much by his personal influence and labors, but his experience in the construction of public works was confined to that of the Delaware Railroad : he had none whatever in their equip- ment or after management : his associates of the old Board labored under the same disadvanta- ges ; being selected for their ability and business capacity in the different occupations in which they were engaged. They were often compelled to neglect their private affairs, to attend to the urgent calls which seemed to threaten the suc- cess of the enterprise.
At length they saw before them the way opened for its early completion and subse- quent management, and felt that in placing the Road in skillful and practiced hands, they would not only relieve themselves from a great responsibility, but should be serving the Stock- holders best, by securing to them the highest
rate of interest allowed by law on their in- investment.
These views were concurred in by the mem- bers of the Board elected after the passage of the supplement to the charter in 1853, viz. Messrs. DuPont, Gilpin, Gray and Sharpe. They represented the northern part of the State and were in frequent consultation with Mr. Felton, who, as President of the Philadelphia, Wilmington & Baltimore Railroad Company, had indicated to the Board the terms upon which a lease of the Road would be taken by that Company. Some of these gentlemen were officers in other Railroad organizations, and all had large experience in financial transactions and extensive business concerns, which emin- ently fitted them for the directorship ; their opinions were entitled to great weight, and at the next meeting of the board the policy of the Company was determined. Messrs. Gil- pin, Gray and President Harrington, were ap- pointed a committee to confer with a like com- mittee of the Board of the Philadelphia, Wil- mington & Baltimore Railroad Company upon the conditions proposed for leasing the Road to that Company. At a subsequent meeting, held May 4th, 1855, the President submitted to the Board a draft of the lease as agreed upon by the two committees, which, after a full discussion, was adopted; and the President was authorized and directed to execute and deliver a copy of it to the Philadelphia, Wil- mington & Baltimore Railroad Company.
LEASE.
The lease of the Delaware Railroad was made for a term of 21 years, with the right of renewal, on one year's notice being previously given by the Lessee, for 21 years longer. In terms-"It granted and demised the railroad extending from the Nanticoke river near Sea- ford, to the New Castle and French Town Railroad with such branches and appendages as may be built within the time aforesaid, the Lessee paying therefor as the yearly rent, a sum equal to six per cent. per annum on the capital stock paid in, and on all bonds, debts or liabilities of the Company bearing interest, including the State bonds loaned to said Com- pany amounting to $170,000-till the same shall be paid, and also one half of any surplus over six per cent. of the net earnings and prof- its arising to said party from operating said road, after deducting the expenses of so oper-
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