USA > Georgia > Fulton County > Atlanta > History of Atlanta, Georgia : with illustrations and biographical sketches of some of its prominent men and pioneers > Part 28
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come so impressed with Mr. Calhoun's ability during this canvass that after its termination he was led to offer him a law partnership, which however was not consummated.
Exposure to the night air during this campaign, and speaking out of doors to large concourses of people, often in inclement and cold weather, coupled with over study, so undermined Mr. Calhoun's health that it became impossi- ble for him to remain longer in St. Louis. In fact, his physician advised him that he was already beyond the hope of recovery. After a short period of nat- ural despondency, however, his courage returned, and he resolved if possible to regain his health. He abandoned St. Louis and went to the home of his elder brother, Mr. John C. Calhoun, who was engaged in cotton planting in Chicot county, Ark. Devoting himself almost exclusively to outdoor pursuits as fast as returning strength permitted the renewal of active life, Mr. Calhoun had so far recovered that in June, 1878, he was able to accept a proposition made by the late Colonel Robert A. Alston, who never having met him, was led to seek Mr. Calhoun as a partner, from the high recommendation of common friends, to come to Atlanta and re enter upon the practice of law as junior member of the firm of Alston & Calhoun.
Mr. Calhoun removed to Atlanta in July, 1878, and entered at once into active practice. His firm did a large business both in and out of Georgia, rep- resenting many important cases before Congress and the courts and departments at Washington. It was suddenly dissolved by the death of Colonel Alston, who was killed in a rencontre with Mr. Edward Cox.
At the trial of Mr. Cox for this homicide Mr. Calhoun appeared as one of the counsel for the prosecution. On the appeal he and Solicitor B. H. Hill, jr., represented the defendant in error in the Supreme Court, and Mr. Calhoun made the main argument for the State, in whose favor the case was finally decided. It has become a leading case on the doctrine of res geste. Judge Bleckley, who announced the decision of the court, and who is noted as a judge, for the rareness of his compliments to counsel, in the opinion delivered, said of the argument: "On both sides the case was argued before us with unusual thoroughness and remarkable ability."
It was during his partnership with Colonel Alston that Mr Calhoun first took part in a movement bearing upon the transportation problems of the country. In December, 1878, a commercial convention composed of delegates from various States was held at New Orleans. The convention was presided over by General Fitzhugh Lee, of Virginia, and among the delegates were many able and prominent men from different parts of the country, Hon. Jeffer- son Davis being one of the delegates from Mississippi The questions of trans- continental transportation, of the improvement of the Mississippi River, of for- eign commerce, etc., were those discussed. Mr. Calhoun was appointed by the governor one of the delegates from Georgia, and attended the convention.
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He participated in the debate on railroad transportation, and in the course of his remarks before the commerce committee, predicted the building of a great through line from the Northwest to the South Atlantic coast, urging it as nec- essary to the development of the South, and illustrating its importance by speaking of it as, when built, constituting "an iron Mississippi," with its branches and tributaries extending into the States along its path, and pouring into the main line the varied freights of the great West and South, to be carried to the sea through the ports of the South Atlantic States.
After Colonel Alston's death Mr. Calhoun continued the practice of law by himself, at Atlanta, until the latter part of 1880, when he formed a partner- ship under the firm name of Van Epps & Calhoun with the Hon. Howard Van Epps, now judge of the city court of Atlanta. In September, 1882, the part- nership was enlarged, Mr. Alex. C. King, of the Atlanta bar entering the firm, which was thereafter known as Van Epps, Calhoun & King. This partnership continued until January, 1885.
About the time he formed this partnership with Mr. Van Epps, Mr. Cal- houn became interested in the organization, on a large scale, of agricultural companies for the cultivation of cotton in the Mississippi Valley. His residence in Arkansas, just before coming to Atlanta, had informed him that the rich plan- tations of that section had so fallen in value, that many of them could be pur- chased at one-seventh or one eighth of the prices which they had commanded in ante bellum days, while the poverty of the planters made the credit and factorage system the universal financial method of the country. Provisions, supplies, stock and implements were bought on credit at high prices ; advances commanded ruinous rates of interest ; while the charges on the bale of cotton, sold through the factor, amounted to about three dollars per bale. Securing options on a large body of rich cotton lands, through his elder brother, Jolin C. Callioun, whose interests lay in planting, and on whose account, mainly, he embarked in the enterprise, Mr. Calhoun went, with his brother, to the North, and succeeded in forming a company, with a capital based on the productive capacity of the lands to be purchased, and with sufficient money, to buy for cash, at wholesale prices, its own provisions, equipment, etc., and to act as its own factor in mar- keting its product. The first of these companies was known as the Calhoun Land Company. Shortly after, a second was formed, known as the Florence Planting Company. They were both potential instruments in breaking up the expensive factorage system which is now rapidly disappearing in the South.
The organization of these companies, and the negotiations leading to their formation, involving, as they did, many nice legal questions, devolved entirely on Mr. Calhoun, and led him to devote much of his time to a thorough exami- nation of the law of corporations.
In the spring of 1883 Mr. Calhoun was invited by the Thursday Evening Club of Boston, a private association of prominent gentlemen of that place,
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who met on Thursday evenings to discuss the important questions of the day, to deliver an address before them. He did so, at the house of Mr. William Everett, son of the famous orator and statesman, Edward Everett.
The subject of his speech was the changed relations into which the South and North had been brought, from an industrial, as well as political standpoint. by the result of the war. He urged that the war had not only overthrown the effort at separate government, but, by abolishing slavery, had destroyed the possibility of that clash of interests between the sections which had produced the conflict, and that this result made the country homogeneous. He predicted the future manufacturing greatness of the South, and stated that, in determin- ing our political future as a part of the Union, the North had raised us into her successful rival, in the near future, for the sale of manufactured products; first the coarser, but finally all classes, in the markets of the West and of the world. He predicted that the South, if left alone, would solve her race problem with safety, justice and honor, and claimed that it was now working its own solu- tion in her hands.
The substance of this speech becoming known, Mr. Calhoun was urged by the New York Herald to furnish it to that paper for publication. He declined, thinking it discourteous to thus publish a speech delivered at a private house ; but at the request of that journal, on his return to New York, he furnished it with an interview repeating therein the important passages of his address. This interview attracted wide and favorable attention from the press through- out the country, as a striking and important discussion of the situation and future relations of the South to the balance of the Union.
In 1885, just after the dissolution of the firm of Van Epps, Calhoun & King, Mr. Calhoun was employed by some of the bondholders of the East Tennes- see, Virginia and Georgia Railroad Company, which had made default on the interest on its bonded debt due Ist of January, 1885, to represent them in a conflict which was apparently imminent. This railroad was placed in the hands of a receiver in Tennessee. The receivership was procured by an agreement between the officers of the railroad company and a class of the bondholders who were in sympathy with them, the general manager and vice-president of the railroad company being appointed receiver. The East Tennessee, Virginia and Georgia Railroad Company had acquired the bulk of its lines in Georgia, by purchase of the charter, property and franchises of the Cincinnati and Geor- gia Railroad Company, a Georgia corporation, which was authorized in fullest terms by its charter to sell itself, its charter, etc. The East Tennessee Cont- pany had always claimed to be, and had been treated by the courts and bar as, a Tennessee corporation, removing all of its litigation, on that ground, to the Federal Court. An examination of the question convinced Mr. Calhoun that this was a mistaken view of the law ; that by its purchase and absorption of the old Cincinnati and Georgia Railroad Company, the East Tennessee Com-
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pany had become a Georgia corporation. Acting on this opinion, which was advanced by Mr. Calhoun for the first time, a bill was filed by himself and as- sociate counsel in the State courts of Georgia against the East Tennessee, Vir- ginia and Georgia Railroad Company, and a receiver was appointed for the Georgia lines. The railroad company sought to remove the case to the Fed- eral Court, on the ground that it was a Tennessee corporation. The Superior Court granted the removal order. An appeal was taken from this judgment to the State Supreme Court, and in the Federal Court a motion to remand the cause was made. The motion to remand was argued by Mr. Calhoun, whio con- tended for the jurisdiction of the courts of Georgia in an argument of great power, so strong that some members of the bar who had previously been pronounced that this railroad company was a Tennessee corporation, stated that their views had been changed by the argument, and the United States Court judge while retaining the case declined to decide that the railroad company was not a Georgia corporation, but put his ruling on other grounds. Later the ques- tion came on in the Supreme Court of Georgia, and that court in an elaborate opinion held that the East Tennessee Railroad Company was a Georgia corpo- ration and could not remove its cases to the Federal Courts. The case attracted great interest throughout the entire State.
During the further progress of this case Mr. Fred Wolffe, of New York, happened to be present while Mr. Calhoun was making an argument. Mr. Wolffe was then in Georgia for the purpose of bidding in the bonds issued by the State in 1885. Impressed with Mr. Calhoun's manner and argument, he at once employed him as his counsel in the bond purchase. Mr. Calhoun took charge of the negotiation and secured the bonds for his client. A number of New York bankers, led by Mr. Henry Clews, who held some of the fraudulent bonds of the reconstruction period, which Georgia had declared void and re- fused to pay, began a vigorous fight on the new State bonds, and sought to discredit them in financial markets. This seriously affected the value of these securities. Mr. Wolffe was anxious to have them classed as a proper in- vestment for the savings banks of New York. A former bank superintendent of that State had, on an ex parte hearing, held that Georgia had wilfully and dis- honestly repudiated her valid obligations, and had attempted to relieve herself of the odium of this transaction by aspersing the character of innocent and honest bankers. He had forbidden the New York savings banks to buy Geor- gia bonds. Mr. Calhoun advised Mr. Wolffe that, under the existing state of feeling, this decision would not be reversed. But the attacks on the credit of the State became so serious, that Mr. Calhoun felt that a full presentation of Georgia's financial history, and a discussion of the propriety of her course was demanded. An application to the Attorney-General of New York for a reversal of the bank examiner's ruling furnished the occasion. Mr. Calhoun having associated IIon. N. J. Hammond, appeared for Mr. Wolffe. Judge O.
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A. Lochrane and others were heard in opposition. The result of the argu- ment was most beneficial to the State, and was a surprise to the financial world. While the Attorney-General held that under the peculiar statutes of New York the savings banks could not invest in these bonds, he stated that in keis opinion the issue of 1885 was a perfectly safe investment, and that the action of Geor- gia in regard to the repudiated bonds was largely justified by the circum- stances surrounding her at the time. Mr. Calhoun's argument is a most ex- haustive statement of the law and facts, and is a masterly defense of Georgia's action. His speech with that of Hon. N. J. Hammond was published in pan)- phlet, and largely circulated in financial eireles. So completely was the finan- cial world convinced, by this discussion, of Georgia's good faith, that the bonds of Mr. Wolffe, thereafter, steadily appreciated in value, and he disposed of them at prices varying from $105 to $107, making a large profit ; and during the present year the Mutual Life Insurance Company of New York purchased from the State, at a premium, her last issue of bonds aggregating about $2,. 000,000, none of Georgia's former opponents questioning the absolute safety of the investment.
On the 4th day of November, 1885, Mr. Calhoun married Miss Sarah Por- ter, eldest daughter of George W.Williams, Esq., president of the Carolina Sav- ings Bank and a prominent citizen of Charleston, S. C. During the rest of that year and until the summer of 1886, he devoted himself exclusively to the prac- tice and study of the law. In this line he was connected with some of the heav- iest litigation in the South, notably the foreclosure suit against the Memphis, Selma and Brunswick Railroad, a like suit against the Southern Telegraph Company, and the intervention of the minority bondholders in the East Ten- nessee Railroad foreclosure suit at Knoxville, Tenn.
In the spring of 1886 Mr. Calhoun took an active part in the gubernatorial contest, in advocacy of the claims of General John B. Gordon, the successful candidate, and was one of the delegation selected to represent Fulton county in the State convention which nominated him.
In the summer of 1886 Mr. Calhoun visited the city of New York and there began that series of movements in Southern railroad matters which have given him his greatest prominence, and which are destined to exert so powerful an effect on the industrial developments of the South. Prior to that time he had frequently discussed the Southern railroad situation, and had advanced the theory that the great railroad system of the Southeastern States as then exist- ing separately, were component parts of one natural transportation system, which could be brought together to the great advantage both of themselves and of the South. He had been contemplating, for some time, inaugurating a railroad movement, particularly with the Central Railroad and Banking Com- pany of Georgia, looking to controlling that property with the ultimate aim of allying it with these, its complementary parts. The matter, however, which first
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demanded his attention, grew out of the fact that his brother, Mr. John C. Cal- houn was interested in the securities of the West Point Terminal Company, and that that property had drifted into such antagonism with the Richmond and Danville Railroad Company, that litigation, and perhaps catastrophe, were threatened to the West Point Terminal.
On reaching New York, Mr. Calhoun found that his brother and his friends were very anxious to begin legal proceedings. Convinced that this would be be financially disastrous if successful, he strongly opposed it, and succeeded by his arguments, in preventing it. The situation presented was briefly this: The Richmond and West Point Terminal Railway and Warehouse Com- pany, usually spoken of as the Terminal Company, had originally owned the stocks of a large number of railroads in the Carolinas and Virginias, which stocks, with the stocks of the Northeastern of Georgia and Georgia Pacific Rail- way Companies, constituted its assets and gave value to its own stock. These securities amounted to about $30,000,000 par value. When the Terminal Company was organized, the Richmond and Danville Railroad Company had subscribed to a majority of the capital stock, and, through this, controlled it and elected its directors. Using such control, it caused leases of all of the roads owned by the Terminal Company, in the Carolinas and Virginias, to be made to itself, and sold to the Terminal Company 25,000 shares of the Terminal Company's own stock for $13,000,000 of the par value of these stocks and bonds. The Richmond and Danville Railroad Company also sold large quantities of the Terminal Company's stock, which it owned, to the public. These sales left it with less than a majority in the Terminal Company's treasury. The Terminal Company owed about $3,200,000, and this sale of its assets to the Richmond and Danville, if allowed to stand, rendered it insolvent. It was directly against the interest of the holders of the Terminal stock, and as equally beneficial to the holders of the Richmond and Danville stock.
General T. M. Logan, who was interested in these properties, was then trying to get control of them, and he employed Mr. Calhoun to counsel him in his contest. Mr. Calhoun accepted on the condition that he could withdraw if at any time General Logan's course became in his judgment against the inter- est of the Terminal stockholders. General Logan's plan was to buy up a ma- jority of the Richmond and Danville Railroad Company's stock, and thus control both companies. Mr. Calhoun did not believe this could be done. He advocated raising enough money to pay off the debt of the Terminal Com- pany, rallying the stockholders against the Richmond and Danville Railroad Company, electing a new board of directors for the Terminal, and then he predicted the Richmond and Danville Company would come to terms before risking litigation over the legality of its conduct, which he pointed out was illegal and could be annulled, and stated his belief that the stock of the Terminal Com- pany. which had been greatly depressed, would go rapidly up. General Logan
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determined to pursue his own plan, but after some months of effort was com- pelled to admit that it could not be carried out, and to agree to Mr. Calhoun's trying his plan. This was in October, 1886. Mr. Calhoun had during the sum- mer months been anticipating this necessity. He had formed the acquaint- ance of, and inspired confidence in, some strong financiers in New York. In a very short time he formed a syndicate, through Mr. Isaac L. Rice, which raised the money necessary to pay the debt of the Terminal Company. The election was called, the Terminal stockholders were quickly rallied against the old man- agement, and General Logan and his allies were elected directors of the Termi- nal Company, Mr. Alfred Sully becoming its president. The Terminal Com- pany's stock which had been as low as twenty-seven dollars per share, within thirty days after Mr. Calhoun opened his campaign, reached seventy-seven dol- lars per share, and the Richmond and Danville Railroad Company came to ternis without the necessity of litigation, the matter being settled by General Logan and his party buying for the Terminal Company'a majority of the stock of the Richmond and Danville Railroad Company, but at a price which Mr. Calhoun deemed too high, and he therefore sold out his stock in the Terminal Company, and advised his friends to do likewise, believing that it would depre- ciate. His judgment was soon vindicated.
During the time this contest was going on in the Terminal, and Richmond and Danville Companies, Mr. Calhoun had never forgotten his purpose of ac- quiring control of the Central Railroad and Banking Company of Georgia. A thorough investigation of this railroad property had assured him it was the most valuable in the South. The persons then in control of it evidently did not appreciate this fact ; its stock was low, selling at about seventy dollars per share, and on the occasion of a slight rise in the spring of 1886, its officers and directors pronounced the rise speculative, and as only done to allow the parties manipulating it to sell out. Convinced that every rise in the stock would be decried by those in power, who would thus keep the market price down, and that such rise would be looked upon as temporary and merely speculative, Mr. Calhoun saw that a large quantity of this stock could be bought at low figures, before any attempt would be made to resist his movement by those then in control.
General E. P. Alexander had a few years before been president of the Cen- tral Railroad Banking Company, and had been only defeated after a close con- test. Mr. Calhoun approached General Alexander and secured his consent to run for the presidency if, before his name was announced, Mr. Calhoun had so far succeeded in purchasing and combining the Central Railroad stock as to reasonably insure victory. During the summer of 1886 Mr. Calhoun suc- ceeded, with the assistance of his brother, Mr. John C. Calhoun, in interesting Mr. H. B. Hollins, a banker of New York, who agreed to furnish the money necessary to buy sufficient stock to control the coming election. Mr. Hollins
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did buy three thousand eight hundred shares, but, later, decided that the mat- ter could not be successfully consummated in time for the ensuing election, and declined proceeding further at that time.
The matter was in this shape when the burden of the Terminal fight being lifted from his shoulders by its successful issue, Mr. Calhoun was enabled to give his entire attention to the Central Railroad contest. The rise in Terminal stock had made money for a number of his friends, who were ready to follow him into new enterprises. Through one of them, Mr. Isaac L. Rice, who had been prominently connected with several important railroad negotiations in New York, Mr. Sully and Mr. Emanuel Lehman of New York, were induced to join this movement. This connection identified with the Central movement Messrs. Rice, Sully and Lehman, who were then leaders in the Terminal di- rectory, and was a step further in the direction of an alliance of the Southern railroads. Mr. Hollins and his business colleagues, encouraged by their ac- cession of strength, agreed to again unite with Mr. Calhoun in the effort to control the Central Railroad. By the middle of November a syndicate was formed which stood ready to buy twenty-five thousand shares of the stock of the Central Railroad and Banking Company, which it did. The burden of making all combinations and raising the money necessary for the success of the movement, was placed on Mr. Calhoun. He also directed every step in the campaign. Its result was the election of General Alexander and the board selected by the syndicate, by a large majority of entire number of shares in the company. Mr. Calhoun and his brother, John, became directors of the com- pany, and shortly thereafter Mr. Calhoun became a director in the Atlanta and West Point and several other railroad companies in the State. The financial results of this movement were to raise the price of Central Railroad stock from $70 per share to $135 per share before the contest was over. The forty thousand shares purchased by the syndicate costing them and bringing to the sellers of this stock, largely residents of Georgia, $4,800,000 or a net profit of about $2,000,000 over what their stock was worth when the contest began. The present value of the remaining thirty-five thousand shares is nearly twice what it was in 1886, before the commencement of the movement which has thus enriched the people of the State by millions of dollars.
On the Ist of January, 1887, Mr. Calhoun formed a partnership with his former partner, Mr. A. C. King and with Mr. Jack J. Spalding, under the firm name of Calhoun, King & Spalding. These two last named gentlemen were in partnership at the time as the law firm of King & Spalding. The firm of Calhoun, King & Spalding is located at Atlanta, Ga., and does a large general business. They are also counsel for a number of railroads in that State, and are interested in most of the important railroad litigation in the courts of Georgia and adjoining States.
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