USA > Michigan > Washtenaw County > Past and present of Washtenaw County, Michigan > Part 71
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In 1836 the Palmyra and Jacksonburg railroad was chartered, its route lying through Tecumseh, Clinton and Manchester, to Jackson. This road, unlike the other two roads chartered in the same year, was constructed and finally passed into the hands of the Lake Shore, and is now known as the Jackson branch of that road. Its capital stock was $300,000, and the state loaned the company $20,000 towards its construction.
The Detroit, Hillsdale and Indiana road was completed through Washtenaw county in 1870. This also passed into the hands of the Lake Shore, and is known as the Ypsilanti branch of the Lake Shore and runs from Ypsilanti, through Pittsfield, Saline, Bridgewater and Manchester to Hillsdale. For the construction of this road Ypsilanti bonded herself for $50.000. Hillsdale subscribed $10,000
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and all the villages and towns along the route sub- scribed large sums of money. About this time the supreme court of Michigan decided that aid voted by municipal corporations to railroad com- panies was unconstitutional in the celebrated case of the township of Salem, which had voted aid to the Detroit, Howell and Lansing railroad, but which had refused to issue the bonds. After this decision the various municipal corporations along the route of the Detroit, Hillsdale and Ypsilanti Railroad, as the road later became known, re- ceived back the bonds which they had placed in the hands of the railroad, with the exception of the city of Ypsilanti. The road offered to return these bonds on condition that the citizens of the city should take $40,000 'of railroad stock. The sum of $20,000 was raised by the citizens for stock, and as soon as this amount had been paid up the company notified the city that the city's bonds had been sold to a man named Taylor in New York, and that the bonds must be paid in full. The city declined to pay and Taylor brought suit in the United States court. This suit dragged along for some time and finally went to the su- preme court of the United States, which refused to follow the ruling in the Salem case and gave Taylor a judgment for the amount of his bonds, claiming that he was an innocent purchaser for value and should therefore be protected.
The Toledo, Ann Arbor & Northern Railroad was built from Toledo to Ann Arbor in 1878, and shortly afterward from Ann Arbor to South Lyon. Finally it was built to Howell, Owosso, Cadillac and Frankfort, and in a few years the line was straightened and South Lyons left out in the cold. Another straightening of the line left out Emory in this county. For the construc- tion of this road a large amount of money was subscribed along the proposed route and the citi- zens of Ann Arbor were not backward in their contributions.
The Detroit, Howell and Lansing, afterwards the Detroit, Lansing and Northern, and now the Pere Marquette railroad, was built through the northeastern part of the town of Salem in this county in 1870. Salem had voted $20,000 bonds to help this company along but the supreme court of Michigan, as we have seen, decided that this was outside the power of a township to do.
INTERURBAN STREETCAR LINES.
Hon. Junius E. Beal, who was one of the stock- holders in the first interurban line built in Michi- gan, between Ann Arbor and Ypsilanti, read the following history of the interurban lines before the State Pioneer Society January 16, 1906:
As an evolution from the baby railroad running from a saw log in the woods to a mill on the river or harbor, the first interurban street railroad car crawled out of town into another drawn by a puffing steam engine which was built around the boiler so as to disguise it enough to make the rustic horse think it was only a woodshed on wheels, and not let his timid heart take fright.
In the summer of 1800 one of these useful but unpopular promoters dropped off the train at Ypsilanti and began to get a franchise for a street railroad between Ann Arbor and Ypsilanti. He got some people of those towns interested after a lot of urging and what seemed big stories of the traffic to be developed. For instance, he claimed that five hundred people a day would want to ride between the towns. After we had ascertained that the Michigan Central was only carrying forty people a day between Ann Arbor and Ypsilanti it seemed impossible. But he had us telegraph to the eight or ten roads then in operation in the United States to verify his rosy dream. To our surprise we learned they were building up large communication between towns which were near each other when they could offer frequent service and low fares. To our further surprise we after- wards found the promoter's estimate was below the number we daily carried, for over six hundred a day availed themselves of the convenience not long after the road was in operation, instead of the forty who took the Michigan Central. This was mainly because the service was every hour and a half, while the fare one way was ten cents instead of twenty-five on the steam railroad. It was greatly helped by the simple fact that, while Ann Arbor had three thousand boys and not enough girls, Ypsilanti had a thousand girls at the Normal and not enough boys. The street rail- way helped to restore the equilibrium, especially on Friday evenings, Saturdays and Sundays.
The road was to be built the seven and one-half miles from the business portion of Ypsilanti to the
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limits of Ann Arbor for $45,000. To illustrate how it was brought within those low figures the following details may be enumerated :
2,000 ties at $0.50. $10,000
500 tons rails at $38. 19,000
Grading
2,250
Trestles 2,000
Track laying 2,250
Fish plates and spikes 2,000
Equipment
7.500
$45,000
The road having been built in the late fall. sometimes on frozen ground much had to be done later on the road bed, therefore over $20,000 ad- ditional was put on grading, making necessary a second mortgage of $20,000. the first having been for $40,000.
At first it was thought to run the cars with naphtha motors, but the type of Porter enclosed steam motors so successful in the woods was de- termined upon as the safest and most reliable. Consequently the first equipment consisted of one Porter motor for $3.750, and its headlight $50. also its brakes for $275. Then the two cars were $1,000 each. When it got to running the ex- penses were $35 per day. It might be added that there were no salaries for the president, secretary or treasurer.
A local electric street car line operated in Ann Arbor, and as the law at that time would not encourage one road having the right to run on another's tracks the city road kept the motor line out of the city, making them stop at the city limits and deliver their passengers to them. On the other hand, Ypsilanti welcomed the puf- fing, smoking dummy to its streets, and for the next few years the most of the city's growth and new buildings was on those streets where the motor ran.
In the country it ran on the highway, conse- quently horses, cows and chickens were occasion- ally offered up as sacrifices. Whether they were sometimes very old and driven on the track pur- posely or not by the owner, the road never had a suit, but always settled for the live stock. This
kept the good will of the farmers and they would turn out in the night or storm to help boost the motor back on the track.
In 1891, we bought a car twenty-eight feet long which was very large for those primitive days, from the Grand Rapids street railroad which had just equipped its Reed Lake line with electricity. The car cost us $800, and it had such good trucks under it that they are still used under one of the freight cars of the D., Y., A. A. & J. electric road. The total mileage of those trucks must have been enormous by this time, as they have been in constant use for seventeen years.
To illustrate how old-fashioned we were in finance we had the idea that the mortgage bonds when issued should be paid when due, whereas the modern way is that, when due they shall only be refunded, and as much more added as can be sold. But, we innocently provided for a sink- ing fund which would nearly wipe out the loan by the date of its maturity. As that would make the operation of the watering pot too conspicuous our primitive methods have not been followed. However, there is this to be said about the water poured into railroad properties. They have in- creased so rapidly in earnings and values that even when watered heavily they have soon ab- sorbed the liquids and become worth the previous fictitious valuations.
There were some interesting holdups on the company several times. At one time early in its history. the owners of a farm just outside of Ann Arbor wishing to sell it to the street railway began suit and got an injunction out which stopped the cars running. In a lively week of hustling the officials of the road got that farm taken into the city and the tracks moved over to the middle of the road two rods nearer the farm house than before, and the cars merrily rolling passed. Since then that farm has had all the benefits of the city.
Another time, when the owners of the road were holding all bonds themselves and in order to put the earnings into improvements agreed to hold the coupons and wait for their interest, one man thought he would not wait. So he sent his bonds to some Chicago brokers who at once de-
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manded their interests on the bonds. This not being paid, they threatened to put the road into a receiver's hands by a certain date. Believing they would try to carry out the threat the direct- ors applied for a receiver first and had the book keeper of the company appointed. Nothing more was heard from that hold-up.
After the consolidation of the Ann Arbor street railway with the Ann Arbor and Ypsilanti Street Railway the city lines were a drag on the com- pany, especially in the summer time. As an experiment, arrangements were made to sell ten tickets for a quarter, good after 6:30 p. m. This caught the popular fancy for mark-down prices, and the open cars were packed every night with passengers who wanted to cool off before going to sleep. They brought their families and neigh- bors, using up their slips rapidly enough. The officers of the road found it did not cost more to run cars with sixty passengers bringing in $1.50 a trip than three passengers at five cents, bring- ing in fifteen cents. In other words, the cutting in half of the fare made revenues ten times more.
We would commend these results to the Upper Peninsula railroads which keep on charging four cents when they could make more at two cents a mile.
The first electric car to be operated in Michi- gan, and the third one in the United States, was in Port Huron. It ran from the park on Mili- tary street to the bridge about one mile, and it was a Vandepode type of car with the motor and motor-men in the center of the car, leaving enough room at the end for four or five pas- sengers. This was in 1886.
Just before the 4th of July, 1895, the electric road was opened to Mount Clemens. It inaugu- rated the large high-speed car, with heavy dou- ble trucks, and I believe it was the first in the country to do this. The road, it is said, was built hurriedly and cheaply, simply to sell to investors, but its popularity became at once so great that it became from the start a paying investment. Then it had to be entirely rebuilt with larger rails, heavier engines, larger feeders and trolley wires, and cars, all the old equipment having to be thrown away before it got worn smooth. It was too good a thing to sell. Even at that time elec-
tric power could not be transmitted far and twenty miles was regarded as the ultima thule of distance roads could be operated successfully. The transformers were waiting to be planned by the daring which would, without too great a loss, transmit a high voltage 250 miles, as at present.
It is a giant stride in ten years from a road which could only be twenty miles in length by the limitations of transmission and losses so large as to make it commercially unprofitable, up to today when you can go from Bay City to Cin- cinnati or Pittsburg, a distance of 300 miles of well graded electric highways connecting with 3.700 miles of electric railway, representing in- vestments of $110,000,000. It has made such a marvelous jump that even the courts have dif- ficulty at times in keeping in view the fact that electric roads are simply highways. They may come back to the full meaning of it soon when arrangements may be made for individuals to drive their own cars over the tracks as wagons or automobiles go on the dirt roads. Gasoline is quite likely to run many cars in the future.
Detroit was a long time in getting electric cars, for the old horses took the bits in their mouths and stayed on, trudging between the tracks until pushed off. But a little bob-tailed single truck car came as an early inter-urban between Rouge River and Wyandotte in 1893. It was an early forerunner of the system to Toledo, just as the Ann Arbor and Ypsilanti road had been, three years before that time, of the road between De- troit and Jackson.
The great success of electrics has wrought a considerable change in the ideas of investors. For instance, in 1895, one of our officers talked with David Whitney about his buying some of the bonds to be sold for putting electricity on the road and building through to Detroit. This in- vestor, who was one of the wisest in the state, refused to consider it a moment, saying no street railway could succeed unless it could get a large summer business to a lake or river resort. The road from Detroit to Ann Arbor would fail be- cause during the best season for making money the students were away from Ann Arbor and Ypsilanti. Notwithstanding this, the bonds of
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tractions now command premiums and within the next years are likely to be made legal investments for savings banks.
The first official trip of the motor was an eventful one. The members of the common council and newspaper men of the two cities were invited for a ride. They went out on the electric car to the Ann Arbor city limits where transfers were made to the steam motor. Fortunately, it did not jump the track on that excursion trip and it only set fire to one barn. But that was soon put out and the party was safely landed in Ypsilanti. Not wishing to run any more risks they were all returned home on the Michigan Central night train, declaring the road a suc- cess because no one was killed or even maimed for life. Trips were made regularly after that and six hundred passengers a day were carried.
There have been many consolidations. First the Ann Arbor street railway was taken in dur- ing the summer of 1895. Two years later it was sold to the Detroit, Ypsilanti and Ann Arbor Street Railway Company which increased the bonds from $150,000 to $600.000. In February, 1899, by improvements, extensions to Saline and rolling stock, it was bonded for $1,000,000. Then when the Jackson division was built in 1901 the bonds were made $2,600,000.
The road was fortunate in having J. D. Hawks, a former Michigan Central engineer, take it up and build it to Detroit, as his experience and railroad facilities gave him opportunities for pur- chasing rails, ties and equipment of the best and getting them quickly assembled. Much of the subsequent success of the road is due to him, as was much of it due on the start to the optimism and public spirit of Henry P. Glover, of Ypsi- lanti, who not only put in a large amount of money but the most of his time without any salary.
CHAPTER VI.
WILDCAT BANKING.
Washtenaw county in common with the other counties of Michigan, had its experience with
wildcat banks, and the credit of the origin of the scheme under which the wildcat banks were or- ganized has been given to two citizens of Wash- tenaw, Samuel W. Foster and John Holden, both of Scio, millers, who applied to the Bank of Michigan in Detroit for a loan of money to buy wheat. The bank referred them to a broker who loaned them the desired money at a heavy dis- count. In order to save paying this broker heavy interests, on their return home they figured out a plan on which the wildcat banks were established. The legislature was petitioned for the passage of a law, and only four members of the legislature voted against it, two of whom were from Washte- naw, Alpheus Felch and Robert Purdy. These banks were to be banks of issue and the basis for their issue was to be the possession of thirty per cent of their capital stock in specie, and the re- demption of their circulation was to be secured by mortgages on real estate. The effect of this law was that land recently purchased for $1.25 per acre from the government was valued at ten and twenty times that amount. Judge Cooley has described the effect of this law thus :
"Any ten freeholders of the county must be poor indeed if they could not give sufficient secur- ity to answer the purposes of the general banking law. The requirement of the payment of thirty per cent of the capital stock in specie was more difficult to be complied with, but as the payment was to be made to the hank itself the difficulty was gotten over in various ingenious ways which the author of the general banking law could scarcely have anticipated. In some cases stock notes in terms payable in specie, or the certificates of individuals which stated-untruly-that the maker held a specified sum of specie for the bank, were counted as specie itself. In others a small sum of specie was put in and taken out, and the process repeated over and over until the aggre- gate of payments equaled the sum required. In still others specie with which one bank was or- ganized was passed from town to town and made to answer the purposes of several. By the first day of January, 1838, articles of incorporation for twenty-one banks had been filed, making with the banks before in existence, the average of one to less than 5,000 people. Some of them were
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PAST AND PRESENT OF WASHTENAW COUNTY.
absolutely without capital and some were organ- ized by scheming men in New York and else- where, who took the bills away with them to circulate abroad, paying ont none at home. For some, locations as inaccessible as possible were selected that the bills might not come back to plague the makers. The bank commissioners say in their report for 1839 of their journey for in- spection : 'The singular spectacle was presented of the officers of the state seeking for banks in places most inaccessible and remote for trade and finding at every step an increase of labor by dis- covering new and unknown organizations. Be- fore they could be arrested the mischief was done. Large issues were in circulation and no adequate remedy for the evil.' One bank was found housed in a saw-mill, and it was said with par- donable exaggeration in one of the public papers that every village plat with a house or even with- out a house, if it had a hollow stump to serve as a vault, was the site of a bank."
A bank was started at Lowell, a mile below Geddes saw-mill, one at Ypsilanti, one at Saline, one at Manchester, one at Sharon and one at Ann Arbor. The Ann Arbor bank was called The Millers' Bank of Washtenaw, and was situ- ated on the corner of Broadway and Brown streets, and it is believed to have been the only bank of its kind in Michigan which was honestly conducted and paid up its indebtedness in full.
In the Michigan Gazateer of 1838 the banks in Washtenaw were mentioned as follows: The Bank of Washtenaw at Ann Arbor, with $500,- 000 capital ; The Bank of Ypsilanti at Ypsilanti, with a capital of $250,000; the Millers' Bank of Washtenaw at Ann Arbor, with a capital of $50,- 000; The Bank of Saline, with a capital of $100,- 000; The Bank of Manchester, with a capital of $100,000 ; The Farmers' Bank of Sharon, with a capital of $50,000; The Huron River Bank of Ypsilanti, with a capital of $100,000; The Citi- zens' Bank of Michigan at Ann Arbor, with a capital of $100,000; and The Bank of Superior. with $100,000 capital. The aggregate capi- tal of these banks amounted to $1.350,- 000, which, it will be noticed, is much larger than the capital of the banks of Washtenaw to-day. An era of specula- tion ensued. In some cases where the stockhold-
ers of the banks had not sufficient land of their own, land not yet purchased from the general government was mortgaged as a basis for circula- tion. Fortunes were made in a few months. Cities and villages were platted for the purpose of raising the price of land to be mortgaged for the issue of more bank bills. In Washtenaw there were such villages as Boston, Newport, Saratoga, Wyndham and Sharon. The plats of these villages are still on record in the office of the register of deeds, but where are the villages? Men built fine houses and lived sumptuously. The Hon. Alpheus Felch, of Ann Arbor, was ap- pointed bank commissioner in an effort to check these wildcat banks. To circumvent his investi- gation the bank founders attempted sharp prac- tices. Specie boxes were filled with old scrap iron which was covered over with specie, and the commissioner was asked to take the mint number which was marked on the box. The fraud was exposed by dumping the boxes on the floor. An- other trick tried was the procuring of enough specie for any one bank by a number of banks clubbing together; and the commissioner's route was ascertained by inquiries from him at various points, and after he had made an examination of the specie in one bank it was hastily repacked and hurried off to the bank he was next to visit. Soon Bank Commissioner Felch tumbled to this practice so that when he was expected to examine the Farmers' Bank of Sandstone he might sud- denly appear at the Farmers' Bank of Sharon. The community ran wild with speculation. Farm- ers left their fields untilled. Mechanics stopped work. Merchants got out from behind their coun- ters, and everybody embarked in the business of making a fortune. All prices were inflated. Soon the bubble burst and the speculators were left without a dollar and with heavy debts hanging over them. In the meantime, however, distrust of the wildcat bank bills became so general that the bills were taken only at a great discount, with the intention of passing them off immediately. The bills of different banks were taken at a dif- ferent rate of discount. Merchants hired boys tu hurry off to the banks of issue to exchange the bills they took in for bills in which they had more confidence. In 1839 it was estimated that there were over a million dollars of bills of insolvent
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banks in the hands of individuals in Michigan. The Federal bankrupt law of 1841 permitted the speculators and others not speculators but who had been caught with bills of insolvent banks, to blot out their debts and begin once more the sure but slow method of building up a fortune by hon- est toil.
Since the days of the wildcat banks, Washtenaw has been blessed with banks conducted on honest business principles. It has been many long years since there has been a bank failure in Washtenaw county. There are only two national banks in the county which are banks of issue, but the state banks as well as the national banks have been conservatively managed, have answered all the requirements of state inspection and they have offered safety and security to depositors for many years, and in them the people have the greatest confidence. This confidence has been the growth of years of experience in the freedom from specu- lation on the part of the banks. The bank direc- tors have been conservative in their action and judgment and possess the confidence of the com- munity. The amount of deposits in the banks has been growing rapidly in recent years and now amount to many times the amount lost in the old days of wildcat banking speculation. The expe- rience of those old days has led to the passage of rigid laws for the protection of depositors in banks and for the protection of currency ; and the early license may be in some degree responsible for the security now possessed by the people of Washtenaw with regard to their banks. The various banks of the county are referred to in the histories of the different townships in which they are situated. Ann Arbor now has four banks, with a fifth bank just being organized ; Ypsilanti possesses two banks; Chelsea. two; Manchester, two; and Dexter. Milan and Saline one each.
CHAPTER VIL.
THE BENCH AND BAR.
This sketch of the Bench and Bar was written by the much lamented ex-Governor Alpheus Felch in 1880, and is revised only enough to bring
it down to date. As Governor Felch was a promi- nent member of the Washtenaw bar from 1843 to his death in 190-, and had been acquainted with its members before 1843, a sketch from his pen is of more value than one written to-day would be.
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