USA > Illinois > Adams County > Quincy > Past and present of the city of Quincy and Adams County, Illinois > Part 38
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PAST AND PRESENT OF ADAMS COUNTY.
000 of subscription as shown was expressly given for the purpose of aiding in the con- struction of the road from Camp Point to the Ilinois river. Evidently the Northern Cross during the period embraced in the transactions which we have shown entered into this sub- seription was in a process of disintegration. for in the ordinance of August 4. 1556, the bonds were directed to be delivered upon receiving stock of the Great Western Railroad Company or the company or companies with which the Great Western might be consolidated. The act of January 31. 1857. incorporated the Quincy & Toledo Railroad Company, which absorbed this portion of the Northern Cross, and by May 6. 1857, had assumed the name of the Toledo. Wabash & Western Railroad Company, and it is now known as the Wabash railroad. This second $200.000 of bonds have been commonly called Quiney & Toledo R. R. bonds in con- tradistinction to the first $200.000 which have always been known as Northern Cross bonds. The last issue of $200,000 was dated January 1. 1857, and was made to draw $ per cent in- terest and to mature in 20 years.
QUINCY & PALMYRA R. R. BONDS.
By the act of January 30, 1857. the city of Quincy was given authority to subscribe for the capital stock of the Quincy & Palmyra Railroad Company organized under the laws of the state of Missouri, for the purpose of building a railroad from a point on the west bank of the Mississippi river opposite the city of Quiney, extending to the city of Palmyra in the state of Missouri, in any sum not exceed- ing $100.000. The act provided for the sub- mission of the question as to such subscription to the people of the city at an election to be held for that purpose and authorized the issue of bonds to pay for the subscription and the collection of a special tax for the payment of the interest on the bonds. On March 21. 1857. an election was called for April 4th following for the purpose of a vote on the question of subscribing $100.000 to the capital stock of the company to be paid for in 20-year 8 per cent bonds of the city of Quiney. The election re- sulted in 942 votes being cast in favor of the subscription and eleven votes against the sub- scription. On the 15th day of the following month the ordinance authorizing the issuing and delivering of these bonds was adopted. The bonds were dated July 1. 1857. and made to mature in 20 years.
MISSISSIPPI MISSOURI RIVER AIR LINE R. R. BONDS.
By a resolution of the city council adopted June 9, 1868. an election was called for the
27th day of the same month to vote on the question ot subscribing $100.000 to aid in the construction of a railroad from West Quincy northwesterly, connecting Quincy with the Missouri Air Line railroad. At this election 651 votes were cast for the subscription and 19> votes against the subscription. On the pre- ceding 6th day of April a committee from a citizens' meeting appeared before the city council and presented a resolution in favor of this action which had been adopted at a citi- zens' meeting. and on June 1st following a committee of citizens from Canton and La Grange appeared before the council for the purpose of urging the city to make the pro- posed subscription. The ordinance anthoriz- ing the issuing of the bonds was adopted Ang. 7. 1868. By its terms it directed the mayor to subscribe $100.000 to the capital stock of the Mississippi & Missouri River Air Line railroad to be paid for in 30-year 6 per cent bonds of the city. It was made a condition of the sub- scription that there should be expended $50.000 in grading. bridging and tieing the road, commencing at West Quincy to a dis- tanee not exceeding twenty-five miles and that the bonds be issued to aid in constructing a railroad from West Quincy northwesterly connecting Quincy with the M. & M. Air Line R. R. These bonds were evidently not issued immediately, for on Feb. 15. 1869. we find that Mr. Davis, the president of the road, appeared before the city council and requested that the bonds be prepared for the amount of subserip- tion, and that on the 27th day of the follow- ing month he again appeared before the coun- cil and reported the progress that had been made in the work and again asked that the bonds be issued. At this time a resolution was adopted directing the mayor to have the bonds prepared and that they be held by him to be delivered to the road on its complying with the conditions of the subscription. These con- ditions had not been complied with. and on Oct. 4. 1869, Mr. Bland. the vice-president of the road. made a statement to the city coun- cil in reference to the progress of the work and asked that at least a portion of the bonds be issued to enable them to complete the road from Canton to Quincy during the winter, and promised that if this were done. the road would be completed to Canton by the first of the following January. A special committee of the city council, who had examined into the matter, reported at this meeting that owing to the almost unprecedented high water dur- ing the entire season the work of grading the road from Quincy to Canton had been nu- avoidably retarded. but that. nevertheless. about one-half of the work had been done. A
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PAST AND PRESENT OF ADAMS COUNTY.
resolution was adopted authorizing an issue of $25,000 of the bonds, when in the opinion of the special committee it would be for the best interest of the city. These bonds were delivered during the winter. A resolution was adopted May 18. 1870, authorizing the deliv- ery of an additional $37,500 of the bonds. The remaining $37,500 of the subseription was paid in bonds that were delivered under a resolution of the city council adopted Ang. 16, 1870, being more than two years after the adoption of the ordinance authorizing the issuing of the bonds. At the meeting of the city council of Dee. 5, 1870, an agreement was read, signed by the officers of the road, pledg- ing the company, in consideration of the sub- seription, to make Quincy the southern termi- nus of the road during the existence of its charter. All of these bonds were 30-year 6 per cent bonds and bore date July 1, 1870. The Mississippi & Missouri River Air Line railroad was never built and consequently the money subscribed by Quincy for that road was a total loss.
QUINCY, MISSOURI & PACIFIC R. R. BONDS.
The Quincy, Missouri & Pacific Railroad company was organized on the 24th day of June, 1869, for the purpose of constructing a railroad from a point on the Mississippi River opposite Quiney to a point on the Missouri River opposite Brownsville, Nebraska, the length of the proposed road being about 230 miles. The citizens of Quincy manifested a deep interest in the snecess of the enterprise. They were large stockholders in the company. and when it was organized a majority of its directors and officers were residents of Quincy. To an exceptional extent the whole enterprise was a Quiney enterprise. This fact largely ac- counts for the generous treatment that the road received from the city. The first mention we find in the records of the city of the pro- posed new road is found in the council pro- ceedings of June 21, 1869, which was three days before the road itself was organized. At that meeting a resolution was unanimously adopted, reciting that in the opinion of the city council the proposed railroad running from West Quiney northwesterly to the Mis- souri River, known as the Quiney, Missouri & Nebraska or the Quiney, Missouri Pacifie rail- road, was essential to the future prosperity of the city. In the resolution an issue of $250,- 000 of eity bonds as a subscription to the pro- posed railroad was approved, and the mayor and elerk were authorized to issue $75,000 of the same when that amount should be required for that purpose. On July 12, 1869, Messrs. O.
A. Savage, John Wood, Thomas JJasper. C. H. Bull, George Adams and G. S. King, a commit- tee appointed by the board of directors of the road, appeared before the city council and asked it to submit a proposition to the voters of Quiney to subscribe $500,000 to the stock of the company and to petition the legislature to legalize such issue. A resolution granting the request was adopted and the calling of the election was postponed to a future meeting. The election was called at the meeting of the city council held JJuly 17, 1869. It provided that the subscription of $500,000 to the stock of the company should be made subject to the following conditions: Payment of the sub- seription was to be made in city bonds, dne in twenty years, drawing 6 per cent interest. When the company obtained along the line of the road in Missouri or Nebraska valid. re- sponsible subscriptions to the capital stock of the company to the amount of $800,000, then the city council should issne $250,000 of the bonds at par in payment of an equal amount of the city's subscription. When the company should have obtained along the line of its road valid, responsible subscriptions to its stock to the amount of $1,600,000, then the eity to issue to the company the remaining $250,000 of the bonds in payment of the balance of the subscription. The resolution further provided that the city undertook to apply to the next session of the legislature for legislation legal- izing the subscription. The special election ou the question was held Angust 7, 1869, and the result was 1,949 votes for and 185 votes against the proposed bond issue. As will ap- pear from the foregoing, there was at that time no law in force authorizing the city to become a stockholder in the company or au- thorizing a vote of the people on the question. Issue of the bonds was therefore deferred un- til proper legislation could be had upon the subject. In the meantime, however, before sneh legislation could be had, the constitu- tional convention, which formulated the state constitution of 1870, convened in December of 1869. It adopted a section in the new consti- tution forbidding any city to become a sub- seriber to the capital stock of any railroad or private corporation, or to make donations to or loan its credit in aid of sneh corporation. The promoters of the Q., M. & P. R. R., how- ever, were on the alert and closely watched the proceedings of the convention. Through strong influences brought to hear from the city of Quiney, which were both official and pri- vate in character, the convention was induced to adopt Section 24 of the schedule of the con- stitution, which was in these words: "Noth- ing contained in this constitution shall be so
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PAST AND PRESENT OF ADAMS COUNTY.
construed as to deprive the general assembly of power to authorize the city of Quincy to create any indebtedness for railroad or muni- cipal purposes for which the people of said city have voted, and to which they shall have given, by such vote, their assent. prior to the 13th day of December, A. D. 1869: Provided, that no such indebtedness, so created, shall in any part thereof be paid by the state or from any state revenue, tax or fund; but the same shall be paid, if at all, by the said city of Quincy alone, and by taxes to be levied upon the taxable property thereof: And provided further, that the general assembly shall have no power in the premises that it could not ex- ercise under the present constitution of the state." On January 6. 1871. a resolution was adopted by the city council requesting the gen- eral assembly to authorize the subscription made and the issue of the bonds in payment of the same, and a special committee, consisting of the mayor and two aldermen, was appointed to go to Springfieldl to urge the adoption of an act to that effect. As a result, the act of July 1, 1871, was passed by the legislature, author- izing the subscription to be made and the bonds to be issued. A sworn communication was presented to the city council on July 17. 1871, from Charles A. Savage, president of the Q. M. & P. R. R., showing that the company had obtained valid, responsible subscriptions to the capital stock of the company in the states of Missouri and Nebraska along the line of the road amounting to $1,118,900, being $318,900 more than the sum requisite for the company to obtain $250,000 in the bonds of the city according to the provisions of the original subscription. The communication further showed that thirty miles of the road extending from West Quincy westward had been graded and bridged at that time. At this meeting of the city council a resolution was passed that authorized the mayor to sub- seribe $500,000 to the stock of the company and to issue $250,000 in city bonds in part pay- ment, as a condition entitling the company to that amount had been complied with. These bonds were accordingly issued and dated July 1. 1871.
A considerable interval intervened before the second $250.000 of bonds were delivered to the company. The construction of the work of building the road progressed very slowly, and as the citizens began to fully realize the heavy burden which they had al- ready assumed, publie sentiment for the time being was against delivering any further bonds on the subscription. It was contended that the company had not complied with the conditions that wouldl entitle them to the re-
ceipt of the remaining bonds, and the legality of the whole contract was quite generally as- sailed. One ground of objection that was con- stantly urged was that the company had not obtained along the line of its road in Missouri and Nebraska valid, responsible subscriptions to the amount of $1,600,000 which, as we have seen. had been expressly made a condition precedent to the delivery of the remaining Quiney bonds. Isaac N. Morris, who was at that time a prominent resident and property owner of the city, obtained an injunction in the circuit court of Adams county restraining the mayor and aldermen of the city from is- sning this second $250,000 of bonds. In the commeil proceedings of May 15, 1876, we find a resolution which recites the preceding steps that had been taken in the matter and re- ferred to the injunetion obtained by Isaac N. Morris, and stated that an effort was being made to have the injunction dissolved, and to compel the delivery of the remaining bonds claimed under the subscription and that the subscription was believed to have been illegal. By the resolution a committee consisting of the mayor and three aldermen was appointed to protect the rights of the city. On behalf of the company at the council meeting of June 2, 1876. C. I. Bull and Henry Root, directors of the company addressed the city council and requested that the bonds be issued. The com- mittee which had been appointed, reported on July 3, 1876. that they had employed connsel in the pending suit that had been brought by Isaac N. Morris to resist on behalf of the city the dissolution of the injunction to take proceedings to annul the bonds already issued and recommended that nothing be done by the city till the matter could be determined by the supreme court of the state. The company ap- pealed the suit which had been brought by Mr. Morris, and the supreme court rendered its decision in the matter at the January term (1877) of that court, in the case of Q., M. & P. R. R. Co. vs. Morris, 84 HL .. 410. From the opinion in that case it appears that the reasons urged against the issue of the bonds were based on the contention that the consti- tution of 1870 and the enabling act of Inly 1, 1871, did not authorize these subscriptions and that the indebtedness was not one in- eurred for a corporate purpose, since the rail- road was wholly in another state. The su- preme court held both of these objections not tenable and reversed the decree of the lower court and directed that the injunction be dis- solved. No particular point seems to have been made on the question as to whether the condition requiring the company to obtain valid. responsible subscriptions in the states
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PAST AND PRESENT OF ADAMS COUNTY.
of Missouri and Nebraska to the amount of $1,600,000 had been complied with. Mr. King, the secretary of the company, appeared before the city council JJuly 2. 1877. and read a ver- tified copy of a resolution adopted by the board of directors instructing the president to submit to the city council a statement of the subscriptions that the company had obtained and to call upon the city for the payment of the $250,000 remaining due on the subserip- tion, and to deliver to the city in exchange the stock in that smn. The city council ap- pointed a committee consisting of the mayor, three aldermen and three private citizens, none to be interested in the construction of the railroad, which was to inquire into and re- port the full amount of such subscriptions. The committee appointed consisted of Alder- men Smith, Deaderiek and II. Fischer and Messrs. John Diek, Daniel Harris and Tim- othy Rogers. This committee made an elab- orate report to the city conneil July 30, 1877, in which they gave a full statement of all the subscriptions which the company had re- ceived in Missouri. These subscriptions on their face amounted to a considerably larger sm than $1.600,000. The report showed. however, that bonds had up to that time been obtained on the same for only the amount of $286,000, and that grave doubt existed as to the legality of all of these Missouri subserip- tions which made it uncertain whether they could ever be collected. Decisions of the sul- preme court of the United States were recited under which all of these subscriptions would be invalid. The committee stated, however, that the company claimed that under a deci- sion of the supreme court if Missouri, which was not given in the report, the subserip- tions would be valid. From the whole report it is perfectly clear that the committee felt that the conditions entithing the company to the remaining issue of the city bonds as a matter of right had not been complied with. Still the report recommended that the addi- tional bonds be delivered to the company. saying in justification of the recommendation that "the spirit and intent of the said con- traet is the completion of the road." Up to this time, as appears from the conneil proceed- ings. there had been a decided sentiment in the city council against the delivery of the bonds. A change in the public feeling, which was reflected in the council. now took place. A very large amount of Quincy capital had been engaged in the undertaking, and the failure of the project meant financial ruin to many of the city's enterprising and progres- sive citizens. These men, to some extent at
the road and to be active in promoting its construction by motives of local patriotism. There can be no question but that this fact was controlling in indueing the city to waive all legal objections and to aet on the rec- ommendation of the committee according to the spirit and intent of the contract, and not according to its legal effects. As a conse- quence a resolution was presented to the city vouneil August 1. 1877, which authorized the delivery of the additional $250,000 of bonds upon new conditions specified in the resolu- tion. These were that $75,000 was to be de- livered to grade, bridge and tie the first fif- teen miles of the road west of Kirksville. and when this had been done, $50,000 was to be delivered for the purpose of grading, bridg- ing and tieing the next fifteen miles west, and on completion thereof $50,000 to grade, etc., the next fifteen miles west, and on completion thereof. $50,000 to grade, ete., the next fifteen miles west, and on completion thereof, $25,000 to grade, etc., the next eight miles west, being sixty-eight miles in all. The company and its officers were required to give bond that the money would be used for the purposes speci- fied. The consideration of the resolution was postponed to the meeting of the city council of August 8. 1877. at which time the resolu- tion was adopted. Many amendments were offered and a strong fight was made against the adoption, but the final vote was practically unanimous. Ten aldermen voted for the res- olution, and only one against it. These bonds were delivered to the company as it complied with the conditions, $75,000 in the year 1877. $125,000 in the year 1878, and $50,000 in the year 1879. There exists a general impression that the delivery of these bonds was rushed through in one night for fear that legal action would be taken to prevent their delivery. The records, however, as we have seen, show that the greatest deliberation was exercised and that the last of the bonds were not delivered until three years after the adoption of the final resolution of the city council in the mat- ter. The Quiney. Missouri & Pacific railroad is now called the Quincy, Omaha. Kansas City & Eastern and is commonly known as the ".O. K."
DEBT FUNDING BONDS.
These bonds were issued for the purpose of paying off over-due indebtedness of the city. consisting to a great extent of city serip. For many years the city had indulged in the prae- tice of issuing in payment for public work done interest-bearing city serip. As the means for meeting these floating obligations least, had been led to invest their money in were rarely at hand when they matured, they
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PAST AND PRESENT OF ADAMS COUNTY.
invariably were taken at a discount. This discount was figured on when contractors bid for city work, and as a consequence the city paid a much larger price in serip than it would have been obliged to pay in cash. In a report of the mayor found in the council proceedings of January 18. 1869. he states that he had taken np under a resolution which had been adopted in the previous month $23.080 of city serip, and had issued $26,000 in bonds there- for. In this report he said: "Knowing the disadvantages under which we labor on ae- vonnt of the depreciated value of our city serip, it was the intention to have taken up all our floating indebtedness with a view to bring- ing the market value of future issues up to par, or as nearly par as possible. and thus save the city from thirty to forty per cent on most of our appropriations, but a decline in the value of bonds led me to forego that inten- tion." This report also shows that the city was living at that time beyond its income. and that the plans then in hand contemplated publie improvements which would make it necessary to issue large additional amounts of city serip and that these facts had a tendency to further depreciate its value. The city seems not to have kept an accurate record of this floating indebtedness, and old citizens tell of the practice which existed under which the mayor signed in blank warrants of this char- acter and left them in the various eity offices to be filled in when they were used in payment of work done for or for material furnished to the city. The finance committee, which made an attempt to investigate the amount of this outstanding serip. reported on April 5. 1869, that on account of the condition of the city records it was practically impossible to determine accurately the amount ontstand- ing, but that from a thorough examination they arrived at the conclusion that there was then outstanding $66.842 of this serip. Mr. If. Swimmer, who was for many years an alderman of the city. states that he bonght some $30,000 of this serip for Mr. Il. F. J. Ricker at thirty-three cents on the dollar. As the contractors who did city work knew that they would be paid in depreciated enrrency of this character, they naturally in their bids made allowance for this fact and bid corre- spondingly high. So much of this serip as was not paid out of current receipts was from time to time taken up by the issue of bonds. Be- tween the years 1870 and 1873. $140,500 of debt-funding bonds were issued.
REGISTERED BONDS.
These bonds have all been issued under the act of February 13, 1565, and under that aet
as amended by the act of June 4, 1879. These acts provide for the issuing of new bonds in place of maturing bonds or other evidences of the indebtedness of a city and for their registration at the office of the auditor of publie accounts of the state. and require that officer to certify the tax rate necessary in or- der to meet the principal and interest of the bonds as they become due. After these bonds are registered no action on the part of the city is required to raise the tax necessary to be levied for payment of the principal and in- terest. By the act of Feb. 14, 1863. the city's power to tax was expressly limited to a rate of one dollar and three cents on the assessed valuation, of which twenty-eight cents was authorized to be raised for lighting the city, twenty-five cents for maintenance of the schools, and fifty cents for the purpose of paying its debts and meeting its general ex- penses. This rate was found to be wholly in- adequate. The city prior to that time had not been well managed financially and had in many instances defaulted on its interest. In a fiscal statement dated April 15. 1869. pre- pared by Tom JJ. Heirs, city clerk, we find the following: "In previous fiscal statements the accrued interest on outstanding bonds, which in many cases had not been paid for ten years. has not been included in the amount of out- standing indebtedness. During the past year a large number of bonds of various kinds have been funded on which there was dne from two to twelve years' interest, and on some where suit had been brought and judgment rendered against the city for the payment of interest conpons past due, the costs and court expenses of such suits have been added to the principal in funding such bonds, which will account for the apparent increase in the bond- ed debt of the city." On June 9. 1866, the finance committee was anthorized by the city conneil to proceed in the adjustment and com- promise of any portion of the city debt by procuring the surrender and satisfaction of the same by the issue of new registered city bonds. In a communication to the city conneil trom O. C. Skinner, presented May 6, 1867. he says: "U'nder my arrangements with the council. one hundred and fifty-six $1.000 bonds with dne coupons attached. and all conpons for future interest and sixty-four separate past-due coupons amounting on July 1. 1866, in all to $233.235, have been surrendered to the finance committee. For this debt new twenty and thirty-year six per cent annual interest bonds have been issued amounting. including fractions paid in clerk's checks, to $153,036, which sum deducted from aforemen- tioned sum of $233,235 leaves as saved of the
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