USA > Iowa > Johnson County > History of Johnson County, Iowa, containing a history of the county, and its townships, cities and villages from 1836 to 1882 > Part 30
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Fifty thousand dollars of stock in the Great Western Railroad were also voted, but no bonds were ever issued, and there is no prospect of any difficulty arising from that direction.
Your committee would state that but little time or opportunity has been afforded them up to the present time, by which to make the neces- sary investigations in this behalf. All of which is respectfully submitted.
ABEL BLACK, G. STEINBERGER, S. H. MCCRORY. Committee.
At the same time the above report was made, the county attorneys, Edmonds & Ransom, made a report, which looked fair enough then, but in the light of later events, it looks very gauzy, and seems to have been really a mere makeshift, to gain time for their own profit as in secret joint interest with the railroad magnates and manipulators of the east. On the same day, at the afternoon session, the following resolution was adopted:
Resolved, That the committee on railroads be instructed to confer with the board of supervisors, or committee thereof appointed for like pur- poses, of the counties of Scott, Muscatine, Washington, Iowa and Powe- shiek, with a view to ascertaining the extent of the actual interest and ownership of said counties in the Mississippi and Missouri railroad, and whether eastern stockholders have paid in their proportion of stock sub- scribed, in accordance with the requirements of the charter and by-laws of said company, and have a legal title to the shares held by them, by which they control the action and policy of said company. Adopted.
On January 10, 1862, this report appears of record:
Your committee on railroads to whom are referred all matters pertain- ing to the railroad interests of the county, respectfully report that they find that there has been no interest paid on the bonds of the Mississippi and Missouri railroad for the past year; there will be due on said bonds on the first of March, $3,500, with the exchange to be added.
Your committee have ascertained that the judgment obtained by Paul B. Ring against the county has been paid.
[This was the judgment on demurrer, for want of coupon seal, that estopped all inquiry into the consideration of these bonds.]
Your committee find that no benefit has accrued to the county by its con- nection with railroad companies. All of which is respectfully submitted. JOHN P. HUSKINS, S. H. HAZZARD, BRADFORD HENYON, J. A. SHUEY, JAMES FAGG.
This report indicates that the county had got heartily tired of paying
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HISTORY OF JOHNSON COUNTY.
this profitless interest; and they shortly afterwards refused to levy for that purpose, in toto.
On June 9, 1864, we have this "report of a special committee on rail- roads:"
Tothe Board :- The special committee to whom was referred the mat- ter of the railroad indebtedness of Johnson county, respectfully report that they took no steps relative to the Lyons Iowa Central railroad bonds, as they were in litigation, and, unless compelled to pay, we felt no desire to pay a cent.
As to the bonds issued to aid in the construction of the first division of the M. & M. R. R., we find that there was due about March 1, 1864, principal and interest, about $61,602.50. As the county held two certifi- cates from the officers of the last named company, purporting to be certif- icates of stock, amounting to $51,300, and a scrip certificate of $43, it was deemed advisable by the committee, as the stock of the M. & M. R. R. Co. was up to 64, to sell, and with the money, compromise with the bondholders, or to compromise by transferring stock in payment of bonds and interest. It was attempted by correspondence to accomplish this re- sult, but it was tedious and uncertain. In April it was deemed expedient for one of the committee to go east and see what could be done. Ac- cordingly in April the chairman went east and met with several parties holding bonds, but nothing could be done with them short of payment of dollar for dollar, in view of the action of the Supreme Court of the United States as to the validity of the bonds. An attempt to sell at .64, .66 and .68 was made, and with fair success, when suddenly the stocks declined to .50 and even lower. This was fortunate for the committee, as it after- wards proved that the county had control of only $1,343 of stock. On a careful examination of the books of the company, it appeared that the cer- tificate of stock of $50,000 was not issued directly to the county, but to one Fagg, as trustee. Beyond this nothing could be there ascertained. The chairman immediately went to the person who was the agent of the coun- ty in the transaction, and there learned that the bonds were held by the trustee in security for the payment of the bonds. This destroyed all hopes of a sale. We are now negotiating a compromise by payment of so much in stock, and to do this requires a united or concerted action of all of the bondholders, which is now being effected. We are in hopes that during the summer, the matter can be closed. The stock now ranges from .40 to .50.
The chairman has been lately informed that a compromise can be made with most of the bondholders, but at what rate they will accept the stock we do not know.
S. H. FAIRALL, E. CARROLL.
January 4, 1865, we have this record :
Resolved, That the County Attorney is hereby authorized to examine the records of the M. & M. R. R. Co., either in Iowa City or Davenport, and report to this board at its next regular meeting what legal impedi- ments there are, if any, which prevents Johnson county from having at her disposal the stock which she owns in said road, and secondly, if the M. & M. R. R. Co. is now, or has been declaring dividends on that sec- tion of the road between Iowa City and Davenport, and if so, what paid
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HISTORY OF JOHNSON COUNTY.
in, and if such pay is in accordance with the charter of said road, granted by the State Legislature.
Sept. 8, 1868, a committee on county indebtedness made report :
That we purchased of Mr. E. E. Lewis two bonds issued to the Lyons Iowa Central Railroad Co., at $750 each, a fraction less than sixty-eight cents on the dollar; raised the money of the Iowa City National Bank, by giving our note to said bank for $1,500, and paid the money to Mr. Lewis, thus saving the county $710. We also purchased one bond from J. W. Birch, for $750, and borrowed the money from the First National Bank, giving our note for the same. Other bonds can be purchased, as per offer in the hands of committee, if thought advisable by the board.
Your committee having received information of the whereabouts of eighteen bonds that could be purchased at reasonable rates, deemed it advisable and to the best interest of the county to send Mr. Paul to New York to attend to the purchase of said bonds, and any others that might be found. He was not successful, the parties owning said eighteen bonds purposing to sue on the same. We gave our note to Iowa City National Bank for $150, to cover expenses of Mr. Paul.
REFUSAL TO LEVY R. R. TAX.
Sept. 10, 1868. Your committee on finance, to whom was referred the petition of citizens of Johnson county, asking the board to refuse to levy a tax to pay railroad bonds, would respectfully recommend the adoption of the accompanying preamble and resolution, in answer to the prayer of the petitioners.
A. H. HUMPHREY, JOHN R. VANFLEET, ELIAS HOWELL, Committee.
WHEREAS, heretofore, to-wit: At divers times, from the first day of May to the first day of September, 1868, peremptory writs of mandamus issued out of the supreme court of the United States, to the board of supervisors of Johnson county, Iowa, commanding said board of supervis- ors to pay certain judgments obtained in the circuit court of the United States for the district of Iowa, in favor of Marcus C. Rigg and George Bliss; and,
WHEREAS, heretofore, to-wit: at the October term, 1864, of the dis- trict court of said Johnson county, a perpetual injunction was granted by said district court, commanding the lawful officers of said Johnson county to forever refrain from levying, or attempting to levy, any tax for the pur- pose of paying the bonds, and interest thereon, of the M. & M. railroad, and the Lyons Iowa Central railroad, on which the above recited judg- ments are based; and
WHEREAS, they are advised that said injunction is still in full force and effect, and that no steps have been taken by said judgment creditors, or others, to have the same removed or vacated, and that the levy of such tax would be in contempt of said injunction. Therefore, be it
Resolved, That in view of the continued and existing force and effect of said injunction, we believe that we are legally disabled from making said levy, as commanded, and therefore decline making a levy at this present time .- Adopted.
This action of the board in "declining to make a levy" was approved
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HISTORY OF JOHNSON COUNTY.
by a public meeting held January 5, 1869, the proceedings of which are given hereafter.
June 9, 1869, it is recorded:
Your committee herewith also submit a statement of the Lyons and Mississippi & Missouri railroad bonds; the original amount thereof; the amount paid as principal, and also the amount of interest paid by the county; which statements are marked respectively "C" and "D."
W. J. HUFF, A. J. BEUTER. JOHN K. VAN FLEET, E. HOWELL, Committee.
The above statements marked "C" and "D" were not recorded, although eight or ten other reports or "statements" made at the same time were duly spread upon the minutes. And after a diligent search of all the original papers of that year filed away, it could not be found.
September 8, 1869, we find this report:
The committee on railroads would beg leave to report, that under the authority vested in them by resolution of the board, passed at the June session, 1869; the committee, assisted by the Hon. Ezekiel Clark and James H. Gower, purchased six bonds of Johnson county, issued to the Mississippi and Missouri Railroad Company, number 31, 32, 33, 34, 35 and 36, with five coupons each, due Sept. 1, 1863, and amounting in the aggregate at the date of purchase, to $10,011, (ten thousand and eleven dollars) for which we paid the sum of $4,800, being forty-eight cents on the dollar. The committee as authorized, borrowed the money to pay for said bonds, of the Iowa City National Bank, and have given a note signed by the committee, for the sum of $4,826.95, exchange and express charges included in the transaction.
PUBLIC MEETINGS TO RESIST THE RAILROAD FRAUDS.
There was a moral certainty that wrong and injustice was being done the people, but just how to prevent or stop it was not so easy to find out. The body taxable was sick. The air was full of proposed remedies; but the doctors differed, and who should decide? On January 5, 1869, a pub- lic meeting was held at the court house in Iowa City, and the following report of its doings was published at the time:
James Remley was called to the chair and N. H. Brainerd appointed Secretary. The call for the meeting being read, Col. John Williams, county attorney, was called on to state the position in which the bond question stands.
He said the Lyons R. R. bonds were issued Dec. 1, 1853, and but little' interest had been paid on them. One judgment had been obtained in favor of Rigg for $25,000 and another for other parties for $5,000, and a writ of mandamus had been issued, ordering levy of taxes to pay these judgments. The M. & M. bonds were also issued in 1853, to run ten years and were, therefore, all long past due. A judgment for $25,000 has been obtained on these, for which a writ has been issued. Other judgments have been obtained, but no more writs. The entire amount of all these bonds, with accumulated interest, was not far from $300,000. The board of supervisors must determine at its coming meeting whether or not it will obey these writs of mandamus and levy the taxes as ordered,
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HISTORY OF JOHNSON COUNTY.
and must make return in October to the United States Circuit Court, at Des Moines. He had learned that Lee, Des Moines, Henry, Louisa and other counties would refuse to levy the taxes.
Legrand Byington was called for and said he had given the subject no thought for years. He had regarded the bonds as null and void for many years, because none of the stipulated consideration had been received, aside from the question of legal authority to issue them. He went into a his- tory of their issue and stated the pledges given by the railroad men.
Capt. Gaston, E. C. Lyon and J. A. Smith were appointed a committee to draft resolutions.
The committee on resolutions here reported as follows:
Resolved, That the Mississippi & Missouri railroad bonds and the Lyons Iowa Central railroad bonds, were obtained fraudulently and without con- sideration from Johnson county, and are in justice and equity null and void, and that their collection of the people of Johnson county is an outrage and a swindle, to be resisted to every possible extent.
Resolved, That the Board of Supervisors of Johnson county should not levy any tax to pay judgments already obtained on said bonds or coupons attached thereto, and even insist upon their resisting to the bitter end, by all legitimate means in their power, the payment of said judgments.
Resolved, That the people of Johnson county will actively and effect- ually support the Board of Supervisors in maintaining their interests by resisting the payment of said judgments.
A discussion arose upon the resolutions. J. B. Edmonds, Esq., made some remarks in reply to what he regarded as personalities from Mr. Byington, and said there was no escape from the payment of the bonds.
Mr. Byington replied and said Mr. Edmonds was not a safe counselor for the county, as he was the regularly paid attorney for the railroad com- pany and for the bondholders.
Mr. Byington offered the following resolution, which was unanimously adopted:
Resolved, As the sense of this meeting, that the Board of Supervisors of Johnson county, as a municipal body, with limited powers, received wholly from State authority, can derive no legal warrant from any federal judge to levy county taxes for any purpose whatever.
The meeting thereupon adjourned.
JAS. REMLEY, Chairman.
N. H. BRAINERD, Secretary.
Thus it will be seen that Johnson county "resolved to resist." .Things went on in this fashion for some months, and in the fall of 1869, a call for a convention of the people of all the resisting counties was made, to be held at Muscatine, on the 15th day of December of that year. To this convention it was determined that Johnson county would send a very strong delegation. Accordingly, on the 4th day of December, a county convention was held at Iowa City, and the following among other pro- ceedings were had thereat, viz:
IOWA CITY, Dec. 4th, 1869.
The meeting was called to order and John Williams, Esq., appointed temporary chairman. On motion Col. S. C. Trowbridge was appointed president of the meeting, and Henry N. Berry, secretary. The follow- ing named were appointed vice-presidents:
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HISTORY OF JOHNSON COUNTY.
J. H. Westenhaven, Graham township.
Robert Hutchinson, Iowa City.
J. F. Struble, Scott township.
J. Switzer, Liberty township.
Charles Gayman, Newport township.
Amos Cherry, Pleasant Valley township.
D. A. Shafer, Penn township.
Chas. H. McCune, Big Grove township.
A committee of five, consisting of Hon. Rush Clark, Capt. Gaston, N. H. Brainerd, Robt Walker and D. A. Shafer, was appointed to draft reso- lutions expressive of the sense of the meeting, and to present names for delegates to the Muscatine convention. During the absence of the com- mittee Mr. Byington addressed the meeting on the subject of railroad bond indebtedness.
The committee appointed to draft resolutions, etc., made the following report:
WHEREAS, The Supreme Court of Iowa has solemnly decided that the bonds issued by Johnson county to the Mississippi and Missouri Railroad Co., and the Lyons Railroad Co., were issued without authority of law, and are wholly void-and that no man can by possibility be an innocent holder of said bonds; and, whereas, the Circuit Court of the United States is now attempting to enforce their collection, upon a judgment ren- dered in open and undisguised violation of repeated precedents made by itself, therefore,
Resolved, That the attempt of the bondholders to enforce the collection by federal authority, through our State and county officers, is the attempted perpetration of a most villainous fraud and swindle upon the people of this county, and determined resistance to its consummation should only end when all remedies known to the law shall have been honestly and earnestly appealed to in vain. And we do solemnly declare that it is no less the privilege than the imperative duty of the people of this county to leave no honest effort unmade which gives promise of foiling the designs of our oppressors.
Resolved, That in this contest, in addition to the right of a tax-payer to hold and own his property, free from illegal and unwarrantable taxation, there is involved a vital principle of public and general interest to the people of the whole State-namely, the principle of right in the citizens of the State, (well settled by judicial precedents throughout the country, and only lately put in question,) to have the ultimate construction of their State constitution by the State court recognized by the Federal court as binding and final.
Resolved, That the attempt to compel the county officers of this or other counties to levy a tax on the individual citizens of the county to pay railroad subscriptions by the county, in face of want of constitutional authority to levy a tax for such purpose, and in defiance of the decisions of the State Supreme Court, is an attempt to enforce by judicial authority a mere act of usurpation.
Resolved, That we approve the call for a meeting of delegates from counties in a like condition with Johnson, to meet at Muscatine on the 15th inst., to confer together as to the best means to be taken to avoid payment of such bonds, and we do hereby appoint the following named gentlemen to represent us in said convention :
S. J. Kirkwood, Rush Clark, W. C. Gaston, D. A. Shafer, L. B. Pat- terson, Jeptha Cowgill, S. C. Trowbridge, E. Clark, E. Shepard, R.
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HISTORY OF JOHNSON COUNTY.
Hutchinson, John Williams, Legrand Byington, M. W. Davis, Jas. Lee, C. W. McCune, C. H. Berryhill, Bryan Dennis, J. Switzer, J. G. Black- well, W. A. Morrison, J. R. VanFleet, N. H. Brainerd, A. B. Cornell, E. C. Lyon, Jas. H. Gower.
The report was adopted unanimously. Mr. Byington offered the fol- lowing resolutions:
Resolved, That the railroad bond tax, which has been forced upon the county levy for 1869, by duress of our county authorities, is illegal and oppressive-and we pledge ourselves, one to the other, not to pay the same, and to countenance no man who will either voluntarily pay it or ad- vise others to do so.
Resolved, That the delegates this day appointed to the Muscatine con- vention are hereby instructed to co-operate with the people of the ten east- ern counties of Iowa, in any effort that may there be inaugurated to resist the payment of said illegal tax, to the last extremity.
Resolutions adopted unanimously.
This sketch of Johnson county's vigorous action would not be com- plete without a report of the Muscatine meeting, at which Ex-Gov. Kirk- wood and Hon. Rush Clark took a prominent part.
MUSCATINE, December 15, 1869.
At 10:30 o'clock the convention was called to order by Attorney Gen- eral O'Connor, who nominated Hon. G. G. Bennett, Senator from Wash- ington county, for temporary chairman.
John Mahin, of Muscatine, and L. B. Patterson, of Johnson county were nominated temporary secretaries.
J. P. Ament, of Muscatine, moved that a committee of one from each county be appointed on permanent organization, to report the number of votes to be cast by each county. Carried.
The following were appointed as said committee:
Gen. H. Scofield, of Washington county.
Hon. E. Clark, of Johnson county.
Hon. Charles Negus, of Jefferson county.
Hon. John A. Parvin, of Muscatine county.
J. H. Lusk, of Lee county.
Robert Gower, of Cedar county.
Hon. J. B. Grinnell, of Poweshiek county.
Col. W. W. Garner, of Louisa county.
On motion of Hon. Samuel McNutt, of Muscatine, a committee of one from each county was appointed on resolutions.
The members of the committee were suggested by delegates and ap- pointed as follows:
Ex-Gov. S. J. Kirkwood, of Johnson.
A. L. Courtwright, of Lee.
Hon. S. McNutt, of Muscatine.
A. W. Chilcote, of Washington.
T. P. Ketchum, of Iowa.
Hon. J. B. Grinnell, of Poweshiek.
Charles Negus, of Johnson.
Ira Ford, of Cedar.
Hon. Rush Clark, of Johnson county, was then called on for a speech. He came forward and spoke about half an hour.
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HISTORY OF JOHNSON COUNTY.
On the recommendation of a committee, the permanent officers of the convention were,-President, Hon. J. B. Grinnell; Vice Presidents, Rush Clark, A. L. Courtwright and Wm. Marshall; Secretaries, John Mahin and L. B. Patterson.
At one and one-half o'clock, the committee on resolutions, through Ex-Governor Kirkwood, reported the following resolutions:
WHEREAS, The recent decisions of the Federal courts involving cor- poration railroad bonds in this State seem to us subversive of the authority and dignity of our State courts, and dangerous to the rights and privi- leges of citizens of the States, if not positive and unwarranted encroachments upon the jurisdiction of the State courts; therefore,
Resolved, That we respectfully and earnestly protest against the exer- cise of such authority by the Federal courts, and hereby pledge our sym- pathy and support to the State courts in the maintenance of their rightful authority.
Resolved, That this convention earnestly call upon the General Assem- bly of Iowa to take notice of the late decision of the Federal Supreme Court and apply to congress and the other States to take the necessary steps to protect our citizens against similar encroachments on their rights.
Resolved, That this convention regards the provision enacted by the 12th General Assembly, commonly known as the Doud amendment, as the reservation of the rights of the State to control certain railroad com- panies in regard to their charges for freight and passengers as a most precious and valuable right, and ought to be preserved unimpaired and unrepealed.
Resolved, That the property of railroad corporations in this State should be taxed as our constitution provides, the same as other property, and the General Assembly is earnestly requested to provide by law for such equal taxation.
Resolved, That this convention recommends to the citizens of the several counties and cities interested in this railroad bond question to pay all their taxes except the railroad bond tax, to refuse to pay that until all legal and practical remedies are exhausted.
Resolved, That a committee, consisting of one from each county, be appointed, whose duty it shall be to maintain a correspondence between the several counties, with a view to harmony and unity of action, and that we recommend to the counties here represented not to pay or compromise said indebtedness, nor any part of the same, without general consultation; and that we further recommend that each county keep at Des Moines, during the coming session, one or more competent agents, to furnish infor- mation to members of the General Assembly and to attend to the interests of their respective counties on this question.
Robert Gower moved to amend by adding a resolution that all bonds or securities issued by muncipal corporations be adjudicated on their merits-on the value received therefor.
Mr. Negus explained that section of the law which has been construed to authorize municipalities to aid railroads. He was a member of the leg- islature which enacted it, and bore testimony that no such authority was intended. He also explained the decisions of the courts, and declared that under no circumstances ought we to pay more than the bonds were sold for.
Ex-Governor Kirkwood said all will admit that we have a right to make our State constitution and laws just as we please, provided we do
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HISTORY OF JOHNSON COUNTY.
not trench upon the constitution of the United States. What value is this right if our court cannot interpret the meaning of our constitution and laws? He spoke at some length in explanation of the resolutions, and in favor of their adoption.
At 4 o'clock the question was called on the resolutions, and they were unanimously adopted.
Hon. Rush Clark was again called to the floor to address the meeting. He said there was no opportunity for the tax-payers to test this question till the tax was levid by duress of a mandamus. Our own supreme court must decide that there was no authority to levy the tax. If we can set aside that levy, the federal court can go no further. Our court having original jurisdiction, it must hold its ground. The fight has, therefore, just commenced. We can get no compromise without contesting. It is not a hopeless case. My recommendation is that the levy of tax in each county be contested.
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