USA > Illinois > Champaign County > A Standard history of Champaign County Illinois : an authentic narrative of the past, with particular attention to the modern era in the commercial, industrial, civic and social development : a chronicle of the people, with family lineage and memoirs, Volume I > Part 33
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The settlers had always been accustomed to poor roads; they were settled near the Ohio, the Mississippi and the Illinois; and the number of people of the state was still small. However, the enormous growth of population from 1830 on-the increase was from 150,000 in the for- mer year to 800,000 in 1850-made necessary the solution of problems which before had been borne as an unavoidable accompaniment of fron- tier life.
This was particularly true of the central counties. In 1830 a few thousand log huts scattered over the heart of the state were the only signs of civilization. But every succeeding year witnessed an increase in the number of homestead entries, the thickening of settlements and the rapid extension of cultivated land. The settlers were no longer shiftless, easy-going trappers or their hardly less shiftless companions on the clearings; in their place were energetic and progressive new- comers from New York, New England, and even Ireland, Germany and old England. As population and wealth grew and the disadvantages of the isolated economic conditions became more burdensome, greater and greater attention was given to the question of local and through trans- portation which could do away with the unbearable frontier life. The demands of the interior counties for a closer economic connection with the remainder of the state found a natural expression in the political field, and for some fifteen years, from 1835 to 1851, the solution of this problem was the subject of political debate, legislative action and popular vote. The center of the field was occupied by plans for some form of a central railroad, and it is the political aspects of this project that forms the theme of the remainder of this paper.
VITAL QUESTION, GREAT CENTRAL HIGHWAY
A great central highway connecting the northern and southern coun- ties of Illinois had always been a favorite project with the legislatures and executives of the state. As early as 1830, Governor Coles suggested that Lake Michigan might easily be tapped and the water taken by canals, not only into Illinois, but on the dividing line between that river and the Wabash down through the center of the state. Only two years later, Lieutenant-Governor A. M. Jenkins proposed in the Senate that a survey be made for a central railroad from Cairo to Peru, and though somewhat premature, the proposal created considerable discus- sion, both in and out of the Legislature. By 1835, the building of the "Central" had become one of the important issues in state politics. The project was ably advocated by such newspapers as the Sangamon Journal, and also a number of leading citizens, prominent among them being Sidney Breese, whose fifteen years of service in promoting the
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undertaking entitles him to be called the "Father of the Illinois Central Railroad."
ILLINOIS CENTRAL INCORPORATED (1836)
With such support it was not long before definite measures were undertaken, and on January 18, 1836, the Illinois Legislature incor- porated the (Illinois) Central Railroad Company to construct a rail- road from "the mouth of the Ohio" to a point on the Illinois River at or near the termination of the Illinois-Michigan canal. Darius B. Holbrook, a New York speculator and promoter who had lately come to the west, was the leading spirit in the company and with him were associated Governor Reynolds, Lieutenant-Governors A. M. Jenkins and Pierre Menard, Judge Sidney Breese and Alfred K. Snyder; besides fifty-three others of less note. These gentlemen constituted the first board of directors, and a capital of $2,500,000 was authorized. From the first this road was regarded as a peculiar state institution and, lest its policy should be dominated by a foreign monopoly, provision was made that no person could subscribe to more than five shares of stock, and that at least one-fifth of the capital should be offered for sale in the state. Provision was also made that whenever the company earned more than twelve per cent on the cost of construction for a period of ten years, the Legislature could so reduce earnings and tolls for the next ten years that the earnings would not exceed that amount ; reports being made to the state to show cost of construction and gross and net receipts. In return for this restriction on the powers of the company the Legislature inserted a clause in the charter agreeing not to incor- porate any competitive railroad for a period of fifty years.
While not a direct issue in state politics, the incorporation of the Central Company shows the strong hold the project had upon the minds of the people. The incorporators were leading politicians and men of affairs of the community and the company itself enjoyed many privileges not usually granted to a "foreign" company. At the same time, like most western corporations, it was without financial backing, and its incorporation is only an evidence of popular interest.
STATE SYSTEM OF INTERNAL IMPROVEMENTS
Hardly was the company organized when it was swept aside by a movement of far greater general interest. So long as canals were the only artificial means of cheap land transportation, their prohibitive cost prevented the people of the western states from making any attempt to create a general system of internal improvements. The introduction of the locomotive into England and soon after into the eastern states pro- vided a cheap yet efficient means of inland communication. As if an accompaniment of this invention, there took place in the United States a period of unprecedented financial prosperity, while the speculative spirit among the state legislatures was fostered by the Treasury Dis- tribution act of 1837, and other fiscal measures of the national govern-
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ment. Thus the financial and technical difficulties in the way of an extensive system of internal improvements were apparently removed.
Like one of her own prairie fires, the demand for state construction of an extensive system of internal improvements spread over the State of Illinois. Mass meetings, conventions, parades, etc., were held in all parts of the state; the newspapers took up the movement and their col- umns were filled with editorials and contributed articles; finally, the politicians seized it as a means of personal and party popularity, and the Legislature passed the celebrated Internal Improvement Act of 1837. The political "deals," log rollings and tricks adopted to secure the pas- sage of the measure, even by such men as Douglas, Logan and Lincoln, are familiar to every reader and need not be repeated. It is interesting to note, however, that it was the influence of the central portions of the state, i. e., the portions most in need of railroads, which finally secured the passage of the measure.
The system of the internal improvements provided for by the act extended to all parts of the state, and was a worthy conception of the strongest General Assembly ever held in Illinois. The backbone of the system was a central railroad from Cairo northward via Vandalia, Shelbyville, Decatur, Bloomington and Savannah to Galena, at the time the most important city in the state. In addition, there were several cross lines extending from the main stem to the important cities on the eastern or western boundaries. The entire system amounted to about 1,200 miles, but the estimates as to cost of construction were surpris- ingly low. Three and a half million dollars was regarded as sufficient to build the 450 miles of the main line, while the Shelbyville and Alton branches were to cost $650,000 and $600,000, respectively, or from $7,000 to $10,000 per mile; less than one-fourth what it cost the pres- ent company fifteen years later. A loan, based on the credit of the state, was to provide the funds, while a board of seven commissioners was appointed to manage the enterprise during the construction and after completion.
NARROW STATE POLICY
From the political viewpoint the internal improvement plan is inter- esting as the first and fullest expression of the celebrated Illinois "state policy." With a narrow state loyalty, almost inconceivable now, the central and northern parts of the state insisted that every railroad pass- ing through the territory of Illinois should terminate at an Illinois city. In other words, outside or "foreign" centers should not be built up at the expense of local towns with a deep-seated ambition to be the London or New York of the west. The internal improvement system was the ideal of these narrow sectionalists ; and Galena, Quincy, Alton, Cairo and Carroll were made the termini of the railroads, and were established as the commercial centers of the state, in so far as the Leg- islature could do so by enactment.
Despite the enthusiasm of the populace; despite the reckless gener- osity of the Legislature-with other people's money; despite the strict adherence to the Illinois state policy, the project was doomed to failure.
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Immediately after the passage of the act, the commissioners commenced work, and for a while it seemed as if this colossal undertaking might be finished. Grading was commenced at Cairo, Galena and intermediate points ; tens of thousands of dollars was expended on the dikes and levees at Cairo; large quantities of rail were purchased; about forty miles of embankment north of Cairo completed ; and, altogether, some- thing like $1,000,000 was expended on the central route and branches, although certainly not in the most effectual manner. But the task was entirely beyond the ability of the state; financial difficulties prevented the floating of the necessary bonds, while extravagance, graft and mis- management exhausted the money already procured, and 100 miles of grading and a few thousand tons of iron were the only tangible results of this second attempt to construct a railroad through the center of Illinois.
THE GREAT WESTERN RAILWAY ( HOLBROOK) COMPANY
Even this failure did not deter the state or its citizens from endeav- oring to complete the project, and on March 6, 1843, only six years after the passage of the Internal Improvement Act, the Legislature incorporated the Great Western Railway Company, better known as the Holbrook Company. To understand this act it is necessary to go back six years, to March 4, 1837.
On that date the Cairo City & Canal Company was incorporated with power to hold real estate in Alexander County, especially the tract of land now included in the corporate limits of Cairo, and to carry on general industrial enterprises. Mr. Darius P. Holbrook of New York, the promoter of the company of 1836, was elected president, and for twenty years the enterprise was dominated by his masterful personality until the two became synonymous. During the prosperous period just before the panic the company borrowed between $2,000,000 and $3,000- 000, largely from English capitalists ; purchased several acres of land at the mouth of the Ohio River ; established industries of all kinds; laid out an extensive city at what is now Cairo; protected it by embank- ments and levees ; carried on a general mercantile business, and enacted ordinances for the government of the citizens of Cairo. However, the resources of the company were not equal to the demands made upon it and the failure of the internal improvement policy in 1840, follow- ing closely after the severe panic of 1837, forced the enterprise into bankruptcy. English investors refused further financial support, and the stoppage of work on the state railroad destroyed the undeveloped industries of Cairo. The directors neglected the undertaking ; tlfe prop- erty in and near the city was abandoned, and for a time the place was occupied only by squatters and disreputable characters from the river boats.
The extreme depression existing in Illinois after the panic of 1837 and the failure of the state policy prevented Mr. Holbrook from doing anything with the Cairo City and Canal Company until 1843. Realiz- ing the possibilities of the "Central" Railroad, he induced the Legis-
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lature to pass the Great Western Railway Act of that year. According to the charter, the president and directors of the Cairo City and Canal Company were incorporated as the Great Western Railway Company, and were given authority to construct a railway from Cairo to the Illi- nois-Michigan Canal. In many ways this act was quite favorable to the state. The otherwise worthless grading done in 1837 and 1840 was to be purchased at a fair valuation; twenty-five per cent of the net receipts from operation, after a twelve per cent dividend had been paid on the stock, were to go to the state; and the Legislature could alter the charter of both the Great Western and Cairo City and Canal com- panies after all the indebtedness of the former was paid. But for half a dozen years the Cairo Company had been known as a flagrant example of speculative and corrupt corporate management, and to turn over to such a company without reasonable compensation, or even adequate safe- guards as to the completion of the work, the most important industrial enterprise within the state was, to say the least, a short-sighted policy. Moreover, a clause was inserted in the closing section of the act sur- rendering to the company any public lands which might come into the possession of the State of Illinois during the life of the charter. Not even a guarantee was demanded that such lands should be used for the construction of the railroad. This legislation shows the wretched finan- cial condition the state was in in 1843, and illustrates the lack of fore- sight characteristic of the General Assemblies during the period.
For a time it seemed as if the company was seriously determined to proceed with the "Central" Railroad. Large sums were borrowed and expended in finishing the original state surveys and completing the grading. Numerous buildings were erected at Cairo, and an extensive system of levees was planned and partially constructed. But conditions were not favorable, and the company could not obtain capital to con- tinue the work. Several millions had already been expended by the Cairo company without dividend-paying results ; all Illinois credit, both state and private, was under suspiciou on account of the partial repudia- tion of the state debt, and eastern and European capitalists refused to risk further investments in Illinois. Lack of funds stopped all con- struction within a few months after the charter was secured and the directors finally gave up in despair. On March 3, 1845, with the con- sent of the company, the charter was repealed by special act of the Legislature; all work done by the company reverted to the state, and the third and most promising attempt to construct the "Central" Rail- road ended with heavy loss to the promoters and no profit to the state.
GREAT WESTERN REINCORPORATED (1849)
For six years after the incorporation of the Great Western no fur- ther attempt was made to build the railroad, and the energies of the supporters of the project were spent in various attempts to secure aid from the national government, but without success. However, it seemed reasonably certain that the difficulties would be removed and a definite grant of land made in some session of the Thirtieth or Thirty-first Con-
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gress. Any measure would undoubtedly be of considerable value to the State of Illinois or to private parties who might build the road, and the Cairo City and Canal Company determined to make use of the apparently favorable conditions. Accordingly, after the failure of the Land Grant Bill in the first session of the Thirtieth Congress the Cairo City and Canal Company petitioned the Legislature for a renewal of their previous rights, which had been lost by the act of March 3, 1845. Although the Holbrook companies were disliked throughout the state, they represented the wealthiest aggregation of capital in Illinois, and apparently were the best able to complete the Illinois Central Railroad. In recognition of this fact the Legislature, on February 10, 1849, rein- corporated the Great Western Railway Company, with all its former privileges, including the obnoxious clause surrendering to the company whatever lands the federal government should grant the state. More- over, this was done without any restriction of importance being placed on the disposal of these lands.
Such action by the Illinois Legislature was almost fatal to any fed- eral land grant, and Senator Douglas at once attempted to have the charter repealed. With the assistance of his colleagues at Washington and prominent citizens of the state, he was able to induce the president and the directors of the Cairo City and Canal Company to execute a release of the Great Western charter. However, the surrender was con- ditional upon the acceptance of the release by the Legislature at its next session, and the incorporation of another company to carry on the project.
At the following session of Congress the Illinois delegation secured a grant of land to the State of Illinois to assist in the construction of the railroad, the total amount of land thus given varying from 2,500,000 to 3,000,000 acres. The mere passage of the Federal Land Grant Act was the least difficult of the many problems confronting the friends of the Illinois Central. For some years the questions connected with this railroad had been before the Legislature and the citizens of the state, and now that success was probable, all the previous conflicts were renewed with additional strength. The most troublesome of these con- flicts involved the method of construction and the route.
WAYS OF UTILIZING LAND GRANT
There were four possible ways of utilizing the land grant, each of which had its vigorous adherents: State construction of the railroad by means of the grant, along the line of the internal improvement plan of 1837; surrender of the grant to the bondholders and construction by them on terms similar to those made by the holders of canal bonds in 1840; completion by the Great Western Railway Company under its charter of 1849, including the retention of all state lands; creation of an entirely new private corporation and the transfer to it of the land grant under certain restrictions and with certain payments to the state.
To many citizens state construction was still a feasible project. From 1831 to 1843 the various plans for the railroad depended on gov-
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ernment support, and despite the collapse of the internal improvement plan of 1837, there was considerable talk of direct construction by the Legislature. The cost of building the road was underestimated, while the value of the land was overestimated. It was thought possible to build the road without recourse to bond issues, and the profit from operation would then quickly retire the old state debt. But the panic of 1840 and the depressing influence of the debt was still vivid in the minds of the citizens of Illinois and they generally condemned any fur- ther work by the state.
Another form of semi-legislative management was contained in the so-called "bondholders" plan, which was submitted to the Legislature in January, 1851. For instance, Mr. J. S. Wright of Chicago pub- lished a pamphlet in which he took the ground that the grant, being of such immense value, the state should hold the lands and again attempt the construction of the road.
As a result of the internal improvement legislation, a debt of some $15,000,000 had been accumulated and the state was unable to meet the full interest charges. In fact, bankruptcy or repudiation had been barely escaped and the creditors supposed there would be difficulty in attracting capital for the construction of the road. Under the circum- stances, certain eastern bondholders suggested an arrangement some- what similar to the one under which the Illinois-Michigan Canal was built. A company, composed largely of bondholders, was to be char- tered and given power to construct the railroad; $4 of stock or $3 of bonds entitled, "New Internal Improvement Stock," was to be given for each $1 of cash paid in. The state was to receive stock of a par value equal to the value of the land sold, and in addition pay all expenses of survey, etc. The stock belonging to the state must be set apart to retire the state debt. The stock of the new company, in addition, could be made the basis for state banking. On the whole, the terms were about as onerous as could be imposed on a bankrupt state, and are in striking contrast to the Illinois Central charter. The project never received serious attention from either the newspapers or the Legisla- ture.
Construction by the Great Western was of much greater importance. The charter of 1849 was evidently obtained with the distinct object of securing the federal land grant and no work was done on the railroad until it was almost certain Congress would pass the act. Then con- struction work was started and it was stated that large quantities of rail were purchased in England. At the same time active efforts were made to defeat any bill repealing the charter. It is uncertain whether this company intended to carry on the work, or, as Senator Douglas alleged, merely sell the charter in Europe. At any rate the opposition to the Great Western, especially in the southern part of the state, was bitter and deep seated.
The last plan was to turn the grant over to a private corporation, other than the Cairo City and Canal Company, under proper restric- tions. The memorial of the Boston capitalists (they later built the road) was the first direct proposition of the kind, but it is probable
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that the memorialists had suggested to the leading legislators of the state a plan along the lines of their memorial. In all probability, other capitalists were also deeply interested in the railroad. However, there was no definite project of the kind before the people during November and December, 1850.
Congress passed the land grant act in September, 1850, and the Legislature was elected the following November. On account of the release of the Great Western charter it was necessary to settle the matter at the first session of the General Assembly and the selection of proper representatives and senators was of vital importance. As soon as it became evident that the federal Congress would act favorably on the Illinois Central bill the advocates of state construction and the friends and opponents of the Cairo City and Canal Company com- menced an active campaign to secure a majority of the members of the Legislature. Other state issues were consigned to the background and the question of the land grant and the acceptance of the Great Western release were the important factors in the election of members to the Fifteenth General Assembly. The newspapers of the state had numer- ous editorials and contributed articles defending or opposing the respective plants, or else emphasizing the importance of one route over another. Mass meetings and conventions were held at various points along the line of the proposed railroad and the excitement often was at fever heat. By November the controversy had become bitter and personal. Individual motives were impugned; the character of some of the leading newspaper editors, of Mr. Holbrook, Senator Douglas, Judge Breese and others, was maligned, and charges of bribery and fraud were frequent. By the time the Legislature convened in Janu- ary the whole discussion had degenerated into a typical Illinois political fight .. On the whole, the opponents of both state ownership and the Holbrook company had much the better of the argument. Only a few newspapers, such as the Benton Standard and the Cairo Times, and a few politicians, the most prominent of them being Sidney Breese, openly defended the Cairo City and Canal Company, or its subsidiary company, the Great Western. However, the latter company was already in possession of the desired charter and, conditionally, of the land grant. Thus, inaction on the part of the Legislature meant success for the Holbrook party and the Cairo City and Canal Company exerted every effort to block legislation and prevent the incorporation of a rival company. On account of the many minor fights it was not at such a disadvantage as indicated by newspaper editorials.
Many of the plans had been thoroughly discussed during the cam- paign and when the Legislature met the first day of January, 1851, its members were well acquainted with the main points at issue. In the organization of the house the Holbrook faction secured a temporary advantage by the election of Judge Breese as speaker and during the first two weeks of the session they were strong enough to prevent radical action. Bills were presented in both houses repealing the charter of the Great Western but both were strongly opposed. The Senate passed a bill in regard to the Illinois Central, though it did not
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