USA > Iowa > Louisa County > History of Louisa County, Iowa, from its earliest settlement to 1912, Volume I > Part 26
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AIR LINE RAILROAD BOND NO. 43
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Y
Cafel
FOR VALUE RECEIVED,
framy; by the Board of Directors, haiby guarante' with the intrest ast it falls deve.
The Shilacathy Best Ways, and Hatte Finn Air- Line Parlead Com= Maryment of the within Granly Brand; together
WITNESS hand, and the real of said Company: hordo -first at Hipellas, this 21 day of Becky 1856
Pobres Achencto, Brest.
17
ENDORSEMENT ON BACK OF AAIR LINE RAILROAD BOND NO. 43
١
ATOR IFADA .OF.N F R
225
HISTORY OF LOUISA COUNTY
the citizens of the whole county at some future date and of preliminary meet- ings looking toward securing a full attendance.
About this time the town of Burris, which was to be the starting point of the Air Line railroad on this side of the Mississippi, began to assume some pro- portions. The history of that town will be found elsewhere, as it probably de- serves a small chapter by itself.
On February 28th a meeting was held at Wapello "for the purpose of fur- thering a project of the utmost importance to Wapello, Burris City, the county of Louisa, and the whole country west of Louisa county. Levi Chase, the con- tractor, stated, in response to a request, that the county bonds issued to the company had been taken by him and the money advanced upon them and ex- pended upon the work, and that $100,000 in money, or its equivalent, would en- able him to grade the road and secure its completion from the Mississippi river to a point some five miles west of Wapello. On motion of Dr. Cleaver, a com- mittee of three, including Dr. Cleaver, Jolin Corson and E. Foster, was appointed to wait upon the mayor of Wapello and the council and solicit them to order an election on a proposition to aid the Air Line railroad, and Samuel Townsend, Leonard Sawyer and Ambrose Key were appointed a committee to confer with the citizens of Burris City in regard to obtaining a subscription from them for the same proposition. We find in the Wapello Intelligencer of March 31, 1857, a little item to the effect that the proposition for the city of Wapello to sub- scribe $20,000 stock to the Philadelphia, Fort Wayne & Platte River Air Line railroad had been submitted to a vote of the citizens on the Saturday previous, being the 28th, and that the vote on the question was 124 in favor of the sub- scription and one against it. In the same paper also we find a statement of the financial condition of the Air Line company, which will be of interest in this con- nection, and states a number of facts which we do not find recorded anywhere else. It will be noticed that the private subscription collected in Louisa county at that date is stated at $26,986, and that the "assets for Louisa county" were stated to be $10.335.30, or just $335.30 more than the amount of the ten bonds recently issued by the county judge :
"STOCK ACCOUNT.
"Amount stock subscribed by Louisa county $100,000.00
Amount private stock in Louisa county
42,400.00
Amount by Levi Chase, on contract
25,000.00
Amount Washington county subscription. 50,000.00
Amount private stock in Washington county
25,000.00
Total subscription $242,400.00
AMOUNT OF STOCK COLLECTED.
Of Louisa county, in bonds
$100,000.00
Of Washington county, in bonds. 5,000.00
On private subscription, Washington county 2,000.00
On private subscription, Louisa county 26,986.00
Total amount collected
$133.986.00
Vol. I-15
226
HISTORY OF LOUISA COUNTY
ASSETS.
Amount of unpaid Washington county stock $ 45,000.00
Amount of unpaid Washington private subscription. 23,000.00 Amount of unpaid Louisa county. 15,414.00
Amount Washington county bonds in the hands of R. C. Schenck, the president, to be sold on account 5,000.00 Amount Louisa county bonds in the hands of Levi Chase, to be sold,
to apply on the payment of company's notes, given him for cash. . 29,000.00
Amount Chase's subscription on contract. 25,000.00
Amount Louisa county bonds in hands of S. Townsend, to be sold to pay for money advanced by him. 5,000.00
Total assets $147,414.00
LIABILITIES.
For bills payable to Levi Chase. $30.869.45
For retained percentage . 25,983.64
For bills payable to engineers. 1,275.61
For bills payable on sundry accounts 8,000.00
Total liabilities $69,078.70
AMOUNT OF MONTHLY ESTIMATES TO DECEMBER 1, 1856.
For grading and ties
$110,922.02
For bridging 18,996.20
Total
$129,918.22
Less 20 per cent, retained percentage. 25,983.64
$103,934.58
Amount paid for right of way
2,546.50
Amount paid for engineering
11,999.07
Amount paid for incidental expenses
8,091.30
Total estimates $126,571.35
RECAPITULATION.
Total amount of assets
$147,414.00
Total amount of liabilities
69,078.70
Balance to company's credit $ 78,335.30
Deduct Washington county unpaid stock. 68,000.00
Leaves assets for Louisa county $ 10,335-30
March 31, 1857
IV. C. WILSON, Secretary."
227
HISTORY OF LOUISA COUNTY
It was found, however, that more money would be needed, and steps were taken which resulted in the calling of an election to be held on May 16, 1857, to vote upon the question of the county subscribing $100,000 in addition to the amount subscribed originally.
The petition asking the county court to order this election was signed by 490 taxpayers, which was considerable more than the number required by law. in order to compel the submission of the question. We give below the tables of the vote by townships on the question of this additional $100,000 subscription :
Township
For
Against
Elm Grove
17
15
Eliot
26
7
Columbus City
3I
286
Concord
O
89
Grandview
I3
175
Jefferson
267
4
Marshall
7I
7
Morning Sun
56
48
Oakland
0
53
Port Louisa
20
78
Union
O
63
Wapello
425
6
Total
.926
S31
The records of the county court show that this vote was canvassed by Francis Springer, county judge, and James C. Stirlen and Jacob Mintun, justices of the peace, and that they considered the returns from the townships of Con- cord, Marshall and Wapello to be defective but did not think proper to reject them and that thereupon N. M. Letts and Micajah Reeder, tax payers and voters of the county gave notice that they would contest said election.
Jefferson township cast 271 votes at this election, while at the election held just about one month previous, the highest vote cast on any state or county office was III, and in August following, when the new constitution was sub- mitted, the total vote on that question was 94, being 73 for it and 21 against it. History does not say whether these 150 extra voters came from New Boston or "Bogus Island," or whether they merely failed to come out at previous and subsequent elections.
In accordance with the notice of the contest, a number of the prominent citizens who were opposed to the additional subscription for the Air Line, con- tested the election held on May 16th, employing Henry O'Connor, of Musca- tine, and Charles H. Phelps, of Burlington, and they were successful.
About this time a new railroad project came into vogue, being known as the Iowa Union Railroad Company, which was proposed to run from Iowa City southeasterly through Oakland township, crossing the Iowa about at Todd's Ferry. According to the map which was used at that day, it would seem that this Iowa Union road was to connect with the Keokuk, Mount Pleasant & Muscatine railroad near where Columbus Junction now is. On this map the
228
HISTORY OF LOUISA COUNTY
latter road is shown as extending north and south through Marshall and Colum- bus City townships, running a little west of the old William Helmick farm in Marshall township. It seems that the Air Line advocates and the lowa Union advocates combined forces, for on June 22, 1857, we find that petitions signed by more than one-fourth of the voters of the county were presented to the county judge, asking him to submit at the August election the question whether the county would subscribe $100,000 to the Air Line Railroad Company, and also whether it would subscribe $100.000 to the lowa Union Railroad Com- pany, and in accordance with the provisions of law these two questions were submitted to the people and voted on, on Monday, August 3, 1857. The first proposition carried by 717 to 639. and the second carried by 709 to 592. The same men who had so successfully contested the election of May 16th, also contested the one of August 3d and the following item taken from the Wapello Intelligencer of September 24, 1857, sufficiently states the result of the contest and the points decided: "The injunction upon the issue of the bonds of this county to the Air Line and Union railroads was granted by the supreme court in full bench, on the toth inst. The ground for the injunction was the illegality of issuing county bonds for a greater amount than $50,000 under the new con- stitution. The points held by the court were, first, that although the stock was subscribed, the bonds were not issued prior to the adoption of the new constitu- tion, and a debt of more than the above amount could not be created : second, that the vote in favor of the loans did not create the debt until the issue of the bonds by the county judge, whose official act alone, as agent of the county, made the loans binding."
So far as we have been able to discover, this case was not officially reported : but from a statement in the paper it was probably decided under Section 3, Article 11, of the constitution, which was adopted upon the same day that the subscription was voted. it being the clause that prohibits any county or other political municipal corporation from becoming indebted for an amount exceed- ing five per cent on the amount of taxable property thereof.
We have been unable to find anything which definitely states just how long after this injunction the work was continued on the Air Line road, but it was probably discontinued within a few months thereafter. Mr. Chase, the con- tractor, and John Bird and some others recovered judgments against the Air Line company in May, 1858. These suits were begun in Louisa county and transferred to Des Moines county for trial. Some light is thrown upon the matter by the proceedings of arbitration between Levi Chase and the Air Line company, which were had under an agreement dated September 20. 1859, whereby the railroad company and Levi Chase agreed to submit to Judge Thomas W. Newman, H. H. Hawley and Fritz Henry Warren as arbitrators all matters of difference between them, arising from or growing out of the contracts be- tween them for building a certain portion of the road of said company in Louisa and Washington counties. By a subsequent agreement Judge J. C. Hall was substituted for H. H. Hawley as one of the arbitrators, and on February 23. 1861, the arbitrators filed their decision as follows :
"To the Hon. District Court of Louisa County, State of Iowa:
"The undersigned arbitrators chosen by Levi Chase and the Philadelphia. Fort Wayne & Platte River Air Line Rail Road Company to hear and decide
229
HISTORY OF LOUISA COUNTY
certain disputes and differences existing between said parties growing out of certain contracts for the construction of a portion of a certain Rail Road therein named all of which will more fully appear by the articles of submission hereto attached and marked exhibit A, would respectfully report, that they caused due notice of the time and place of hearing the matters submitted, to be given to said parties, and in accordance therewith the arbitrators and each of the paries (parties) litigant appeared at the office of Hall, Harrington & Ilall in the City of Burlington, Des Moines County, State of Iowa, the said Chase in person and the said R. R. Company by Samuel Townsend, president of said company and Charles H. Phelps and D. N. Sprague, his attorneys, and in the presence of both of said parties the said arbitrators were duly sworn and qualified to perform their duties as arbitrators under said submission.
"Both parties expressing their readiness to proceed to the trial in said canse and no objection appearing we proceeded to hear said matters in dispute, and the same proceeded with the hearing of testimony until the evening of the 20th of February, A. D. 1861, and adjouned until the next morning at 9 o'clock. We met again at the appointed time and place and proceeded with the investiga- tion of the matters and things in dispute from day to day until the 23rd of Feby., 1861, and having heard the testimony submitted, and the argument of parties and their counsel, and fully considered the evidence find the following, to wit, that there was a full settlement of said parties made August 7, 1857, for work, labor, &c, &c., under said contracts in evidence, except as to work done on abandoned line.
"We find that at the time of said settlement and prior thereto there was due said Chase on notes & interest & on labor, &c. performed since said settlement & on percentage reserved by the R. R. Company under the contract. . . $57903.15 Also damages from breach of contract, less work on abandoned line. . 57156.27
Total. amt. due Chase $115.059.42 exculsive (exclusive) of Judgements in District Court.
"We find that said Chase has recvd of the company since settlements made August 7, 1857, as follows :
Sundry collections of stock due the company on Sub & interest on same $5,192.91
Proceeds of 15 Louisa Co. Bonds sold at 45 cts. on $ and interest 8,887.50
2 Louisa Co. Bonds at $1,000 each and interest on same. 2,500.00 Stock of Co'y. recvd on contract 3,500.00
$20.079.51
Net amt. due Chase on general account to date. $94,979.91
"We also find that the R. R. Company is entitled to a credit of $ 9500.00 and interest on same to date of May 6, '58-for County Bonds (19) sold 1305.50
Total
$10,805.50
230
HISTORY OF LOUISA COUNTY
which credit should be applied on Judgement in D Court of Des Moines County, Iowa, in case of J. Bird vs. said Company, for $13,770.54 rendered May 6, 1858, and made as of the date of the judgement leaving due on said jdmt. May 6, '58. balance of $2.965.04, which was then the true amt. due on same.
"We also find that there should be a credit on Judgement of Levi Chase vs. said Company for the sum of amts. of stock, &c. collected for the company & int. on same to May 6, '58, $734.80, which credit is to be on judgement in Des Moines Co. Dist. Court rendered May 6, '58, for $12.703.05-leaving balance due May 6, '58,-to said Chase on same, $11,968.25.
"From which finding we hereby make and report the following award, to wit, that said Philadelphia, Fort Wayne & Platte River Air Line Rail Road Company is justly owing and indebted to Levi Chase from the evidence seen & heard the sum of Ninety-four thousand Nine hundred and seventy-nine Dollars and ninety-one cents ($94.979.91). exculsive (exclusive) of the judgements he has against said Company above referred to, and to draw ten per cent interest from this date. We also award that credits be duly entered on the judgements which said Chase holds against said company according to the aforesaid finding to bear date of May 6, 1858.
"We also award that each of said parties litegant pay one-half of the costs of this arbitration-There being none claimed except our fees for services 4 days at 21$ per day-$84.00, which is the amt. agreed by the parties in the submission, February 23, 1861.
J. C. HALL, T. W. NEWMAN, FITZ HENRY WARREN, Arbitrators."
So ended the great Air Line railroad project, which was intended to make (and doubtless would had it succeeded) of Wapello one of the leading cities in the state and an important station on a great thoroughfare between Phila- delphia and the Pacific coast. But with the death of the Air Line the $100,000 bonds issued did not die. Their payment, however, became a live question along about 1868, at which time numerous suits were commenced against the county in the federal courts to enforce the payment of the bonds and the coupons. This railroad bond question in which so many of the counties of the state were interested, had already brought about a sharp and decisive conflict between the decisions of the courts of this state and the federal courts, and furnishes one of the most interesting chapters in the legal history of this state. In the early decisions of the supreme court of Iowa on this subject it had been held by a divided court that the counties of the state had a constitutional right to issue bonds in aid of railroad enterprises, but in December, 1859, the court settled the matter so far as this state was concerned by holding the issuance of stich bonds to be beyond the power of the county and declaring the bonds them- selves to be void. Shortly after this latter decision a suit was commenced in the district court of this county to enjoin the supervisors from levying a tax for the purpose of paying these bonds. The court granted the injunction and made it perpetual. Relying upon this injunction for their protection and being backed up by an almost overwhelming sentiment of the people, the board of supervisors refused to pay the judgments rendered in the federal court and in consequence
231
HISTORY OF LOUISA COUNTY
of that refusal the federal court issued a writ of mandamus, ordering the board to levy taxes for the payment of the judgments against the county. Still the board refused and the United States marshal arrested the members of the board for con- tempt in failing to levy the taxes in accordance with the writ of the federal court. Members of the board at that time were Benjamin Jennings, Elm Grove township ; H. C. Blake, Morning Sun : J. Q. Buffington, Columbus City township ; John Deihl, Wapello township: Henry A. Keyes, Oakland township; Richard S. Strong, Jefferson township; Robert Carson, Union township; James R. Letts, Grand- view township; F. F. Kiner, Marshall township; S. A. McDaniel, Concord township ; Levi Stephen, Port Louisa township; and P. D. Bailey, Eliot town- ship. The members of the board were taken to Des Moines and required to give bond in the sum of $500 each for their appearance before the United States court at its October term, 1869. The legislature in 1868 had passed an act intended to provide the way for the counties owing railroad bond debts to settle them, and negotiations were carried on with the attorneys for the bondholders looking toward some sort of a compromise. In November, 1869, the board of supervisors ordered a special election for December 29th following, upon the question "Shall the county of Louisa settle its debts owing on bonds and coupons, issued to aid in the construction of the Philadelphia, Fort Wayne & Platte River Air Line railroad." This was to be done under the act approved April 2, 1868, before referred to. This election brought on a heated controversy which will be fairly understood by reading some of the various communications and editorials found in the newspapers of that time.
Andrew Gamble, who was a member of the board of supervisors in 1869, but not a member at the time the board was placed under arrest, had come to the conclusion, very reluctantly, that there was no way to prevent the payment of these bonds, and he was very anxious that the county should take advantage of the act of the legislature authorizing a settlement by the issuance of new obligations, and he addressed the following communication to the taxpayers and voters of the county: "Fellow Citizens: Doubtless you are all aware that sundry persons have obtained judgment in the Circuit Court of the United States against this county, amounting in the aggregate to about seventy-five thousand dollars. These judgments all draw interest at the rate of seven per cent from the date of their rendition, and were all obtained on the coupons of the bonds issued to the Philadelphia, Fort Wayne & Platte River Air Line Railroad. At the late called session of the Board of Supervisors of the county, a tax of eighteen mills on the dollar of all the taxable property of the county was levied to aid in paying off these judgments. This amount with the previous levy for state, county, school, road, and other purposes, swells the aggregate of your taxes this year to very nearly if not quite four per cent of all your taxable property ! and presents to every taxpayer in the county this serious question : How is this tax to be paid? Can we pay it? There is in my opinion but one answer to these questions, and that is, practice strict economy and re- solve to do it, even if it costs some sacrifice. It were worse than useless for yon or me to indulge in invectives and criminations against the holders of this class of our indebtedness, or those who, by their votes, brought this burden upon us. Suffice it to say we have for years fought these creditors of the county from the lowest to the highest of our state courts, and today it is but
232
HISTORY OF LOUISA COUNTY
poor consolation for them to tell us as they do in the Lee county habeas corpus ease, that, although these bonds were issued contrary to law and are therefore null and void, yet when we get into the United States courts they have no power to help us. This debt is a lien upon every foot of land in Louisa county, and, much as we may dislike to do it, it will have to be paid, and in my humble opinion the sooner this is done the better it will be for us and for the county. I hear some persons say that they will pay all their other taxes but refuse to pay this. A more unwise or impolitic course could not well be devised by the worst enemies of the county. It is the same old song that has been sung over and over again until we are brought to the very brink of ruin, or what is worse. repudiation. When these bonds were first issued we commenced paying the taxes on them, and had we continued to do so, all would have been well ; but in an evil hour we, almost with one accord, refused to pay, under what now proves to be the delusive hope that we could avoid the payment of principal and interest altogether. Now every one regrets that such a course was taken, and realizes how easily he could have paid his proportion yearly. Now a por- tion of the people proposes to remedy the error we then committed by doing the same thing over again. Again, it is well known to everybody that a few years ago we could have bought up our entire indebtedness at less than fifty cents on the dollar, but those in authority refused to do so, and the people backed them in their refusal. In the meantime we have paid the lawyers and the court officers several thousand dollars in fees, that had much better been applied to the extinguishment of the debt, yet today we find ourselves beaten at every point, and judgments against us to a large amount, which some feel unwilling and others unable to pay. I am asked daily on what terms our creditors are willing to compromise. To all such 1 ean only say that whilst we continue to fight we cannot expeet much in the way of compromise. If we propose to pay only at the tail end of an execution, we may as well and had better retain our self respect by asking no favors of any one. No, my friends, we must change our course of policy on this question if we would accomplish anything. We must pay this tax in good faith and the sooner we do it the better it will be for us, as by pursuing such a course we will convince our creditors that the fight is over and that we are willing to submit to the decision of the courts. By pursuing this course we shall also save all further expense of useless litigation and be able successfully to appeal to our creditors for an extension of time, should that be desirable. In conclusion, fellow citizens, I beg your pardon for volunteering to you this advice, but I could do no less under all the circumstances. Over sixteen years ago I counseled you through this same medium not to issue these bonds, but you disregarded my advice. You have a perfect right to do so again when I advise you to pay them.'
And we find in some of the newspapers of that day vehement editorials against voting to settle the indebtedness. We take a few sentences from an article in the Wapello Republican of December 25, 1860: "We shall vote no, because we are unwilling to pay the whole of these railroad bonds and the acerued interest and because we do not wish to take any step that would look as though we were willing to pay them. The laws, justly interpreted, do not compel us, because the bonds were issued without the due sanction of law, and morals do not compel us because the railroads with whom we contracted failed to fulfill their part of the engagement, and because we received no equivalent
F. F. Kiner, Levi Stevens, Robert Carson, P. D. Bailey, H. A. Keyes, J. R. Letts H. C. Blake, Richard Strong. S. A. McDaniel, John Diehl, J. Q. Buffington, Henry Jennings LOUISA COUNTY BOARD OF SUPERVISORS, WHO WERE TAKEN TO DES MOINES IN THE FALL OF 1868 BY THE UNITED STATES MARSHAL IN CON- NECTION WITH THE AIR LINE RAILROAD LITIGATION
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