History of Ramsey County and the city of St. Paul, including the Explorers and pioneers of Minnesota, Part 59

Author: Warner, George E; Foote, Charles M., joint author; Neill, Edward D. (Edward Duffield), 1823-1893. Explorers and pioneers of Minnesota. 1n; Williams, J. Fletcher (John Fletcher), 1834-1895. Outlines of the history of Minnesota
Publication date: 1881
Publisher: Minneapolis, North Star Pub. Co.
Number of Pages: 684

USA > Minnesota > Ramsey County > St Paul > History of Ramsey County and the city of St. Paul, including the Explorers and pioneers of Minnesota > Part 59

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These carts have now faded from the vision before the progress of civilization. The iron horse now occupies the land where erstwhile travelled their rude caravans. The vocation of the bois brule has ended as the guide of a string of ox carts, the expense of transport has been lessened, and time economised by the introduc- tion of railroads. Over the very route traversed

by these caravans, from St. Paul to Pembina, now run the trains of the St. Paul, Minneapolis and Manitoba Railroad Company. Sic transit gloria mundi; the new takes the place of the old dispensation, and the railroad, with its stir of life and energy, brings a new world into exis- tence. A higher type is evolved; the wild para- dise becomes the well ordered garden, bringing forth wealth and sustenance for a prosperous people.

The extraordinary development of the railroad system of Minnesota, which has St. Paul as its central point, has extended the means of trans- portation over nearly the whole productive area of the state, so much so, in fact, that it is difli- cult to find anywhere within its limits a tract of fertile country which is more than twenty miles away from the iron-bound road. The first mile of railroad in the state was not built until 1862. Now over three thousand miles of track traverse the state in every direction.

The multiplication of railroads is the great need of ourindustrial economy. We have a wide territory, with bulky products far from the great markets. The railroad laws of the state and their administration have tended to promote railroad expansion, and this expansion has been one of the greatest factors in the sum total of causes that have produced such a prosperous community. In no state have such munificent land grants been made to railroad corporations as in Minnesota.

After deducting all deficiencies they have either received, or will receive, on the completion of their roads, 12,222,780 acres of land in this state, an area larger than the whole of Massachusetts, Rhode Island, Connecticut and one-half of New Hampshire, embracing some of the finest wheat lands in America. These lands received by the railroad corporations are, by their amended char- ters, exempt from taxation until they are sold or contracted to be sold. Under the stimulus af- forded by these grants, preparations were made, in the earliest days of the territorial government, for the construction of an immense system of railways. The sanguine expectations excited by these preparations were suddenly cut short by the financial collapse of 1857. In this emergency the railroads appealed to the state for aid. After discussion a constitutional amendment was sub- mitted to the people authorizing the loan of state

342

HISTORY OF RAMSEY COUNTY.

credit to the land grant railroads. April 15th, 1858, the amendment was ratified by a large pop- ular majority. This constitutional amendment allowed the state, for the purpose of expediting the construction of the land grant system of roads in Minnesota, to make a special issue of bonds bearing interest at seven per cent. per an- num, payable semi-annually in New York, and maturing on the first day of October, 1883, twenty-five years from the date of their is- sue. The amount issued to each company could not exceed $1,250,000, and the total issue was limited to an aggregate amount of $5,000,000. These bonds were to be issued to the companies as construction advanced, at the rate of $10,000 per mile of road completed for the superstruc- ture, in sections of ten miles, and of $10,000 for every mile completed and in operation by each company. As a condition of the loan the compa- nies were obliged, under penalty of forfeiting their lands, to complete certain lengths of road within a specified time, namely, the first of Jan- uary, 1866. In pursuance of this law, $2,275,000 in state bonds were issued to the different com- panies, which bonds were secured upon the assets and franchises of the companies.

The success of this expedient did not fulfil the promises of the railroad financiers, nor the expec- tations of the public. The banking law permit- ted these bonds to be received by the auditor as a basis of banking, and a considerable amount of currency was issued thereon. Partly by this means, and partly by enormous discounts to con- tractors, they were made available for limited amounts of construction. But the palpable in- sufficiency of the guarantees for the prompt pay- ment of the interest of the bonds, hai made them from the first unacceptable to the financial public. As time passed, the bonds depreciated, until at last, bank stock, based on these bonds, was sold by the auditor for seventeen cents on the dollar.

Under these circumstances, construction was suspended upon all the roads, and default was made by all the companies except the Southern Minnesota, in the stipulated payment of interest. Their roads, lands, franchises and other assets, were therefore confiscated to thé state.

With the revival of trade, which was accom- panied by growth of population. the need of rail- roads became more and more urgent, and in order

to facilitate the construction of roads, the state re-granted these forfeited franchises, lands, etc., to various companies. With new life infused into the dead enterprises, by this means, con- struction once more commenced; this time in carnest, and has progressed steadily ever since, interrupted only by the financial crisis of 1873, which intermission was but of short, comparative, duration.

Less than nineteen years ago, the first locomo- tive came into the state by boat; now, the fire- horse is to be seen in all parts of the state. Count- ing the trunk lines and branches, there are now in Minnesota, twenty-nine railroads, of which twenty-one belong to the system which centres at St. Paul and Minneapolis, the remainder being in close connection therewith. Minnesota was the first state to resume railroad construction after the financial revulsion of 1873. In 1878, more miles of road were opened than in any other state. In 1879, the record of 1878 was surpassed by about twenty-five per cent. The increase of con- struction of new roads, however, shows a falling off in 1880. This is accounted for by the fact that the long trunk lines that had been progress- ing for years, were all finished by the close of 1879. The first era of railroad development was thus completed with the system of trunk lines.

The year 1880 marks the beginning of the second era of railroad development ; the construction of branch and intermediate lines. The last report of the railroad commissioner shows a sound finan- cial position. The total stock of the lines of rail- road in Minnesota is reported at $51,178,144. The total debt is $48,391,388, The average stock and debt per mile of road, is $33,532. The gross earnings of all the roads for the year ending June 30, 1879, were $8,047,834 ; operating expenses, $5,106,422 ; net earnings, $2,941,412. For year ending June 30, 1880, the gross earnings were $10,774,826 ; the operating expenses, $6,604,400; the net earnings, $4,170,425. The movement of freight of all kinds in 1880, was 3,934,380 tons, against 2,893,940 tons reported for the year 1879; . showing an increase of traffic of nearly one-third. The grain carried in reported year, 1880, was 1 056,859 tons. The passengers carried in the year ending June 30, 1880, were 1,934,406, against the number of 1,809,380 in the corresponding year 1879.

343

SAINT PAUL-RAILROADS.

The following exhibit shows at a glance the progress made in construction since the first ten miles of road were built in 1862, from St. Paul to St. Anthony.

No. miles built

Aggregate

mileage. each year.

1862

1863

563

464

1864

100

43}

1865

210

110

1866

315

105

1867

429

114

1868

560

131

1869

766

206

1870

1,092

3263

1871

1,550}

458

1872

1,900

3493

1873

1,9071

1874

1,9473

40}

1875

1,957}

1876

1,987

293

1877

2,199

212

1878

2,549}

3503

1879

2,986

4363

1880

3,099}

113}

There were in addition, graded and partly ironed, but not operated in 1880, forty-seven miles. From the date of the last report until the present, very many more miles have been con- structed.

The subjoined history of the several large cor- porations now centering in St. Paul, collectively presents an accurately descriptive picture of the progress of the various railroad enterprises per- taining to Ramsey county, and will be found to cover the whole period of time devoted to the planning, constructing, operating and perfecting of the great north-western system.

ST. PAUL, MINNEAPOLIS AND MANITOBA RAIL- WAY COMPANY.

This company is the successor of the St. Paul and Pacific railroad, the oldest road in the state, and one that has been the subject of a vast amount of litigation. It is distinctively a St. Paul enterprise, and its interests are all in con- nection with St. Paul. The St. Paul and Pacific railroad succeeded to the franchises of the Min- nesota Pacific railroad in 1862, the latter forfeit- ing its charter to the state under the Constituti-

onal Loan Amendment. The first officers of the St. Paul and Pacific were, Edmund Rice, presi- dent; Judge R. R. Nelson, vice-president; Henry Acker, secretary; Col. William Crooks, chief en- gineer. The old Minnesota Pacific Railroad Company received its charter from the territorial . legislature on May 22d, 1857, receiving at the same time a portion of the lands granted by act of congress, approved March 3d, 1857, for the purpose of aiding in the construction of railroads. At the first meeting of the directors, Edmund Rice was elected president; R. R. Nelson, vice- president; James W. Taylor, secretary; Jesse M. Stone, treasurer, and D. C. Shepard was after- wards elected to the office of chief engineer. Be- fore the winter set in, one thousand five hundred miles of trial lines had been run, and routes from St. Paul to Stillwater, St. Anthony, Anoka, St. Cloud and Crow Wing were located-(one hun- dred and forty-five miles in all), and from St. Anthony and Minneapolis to Breckenridge, two hundred and six miles were located. A contract was made in the fall of 1857, with Selah Cham- berlain, of Cleveland, Ohio, to construct the road from St. Paul to Crow Wing. During 1858 and 1859, sixty-two and one-half miles were graded, including the distance between St. Paul and St. Anthony. At the same time Mr. Frink, of Phil- adelphia, was commmissioned to grade the road from St. Paul to Stillwater. This work, however, was soon suspended and became the property of some Stillwater people, and afterwards it became part of the St. Paul, Stillwater and Taylor's Falls railroad.

The Minnesota Pacific Railroad Company started off under good auspices, in 1857, having received $40,000 in cash, in stock subscriptions, and the financial support of a number of promi- nent men in Milwaukee, who conceived the idea of connecting these lines with the land grant lines in Wisconsin. But the financial craslı that came later in this same year, caused their withdrawal. When the $5,000,000 loan bill was passed by the legislature, this company received $525,000 of the state bonds. The contractor, Chamberlain, being unable to negotiate them, he was forced to suspend operations, and the work came to a stop. Failing to comply with the leg- islative requirements on account of lack of funds, the charter became forfeited, as previously stated,

341

HISTORY OF RAMSEY COUNTY.

and the St. Paul and Pacific Railroad Com- pany succeeded and continued the work. At this time the old company had less than two miles of iron laid. Work was rapidly pushed by the new corporation; and on July 2d, 1862, the first ten miles of railroad in the state were thrown open for trafic, -- the ten miles being from St. Paul to St. Anthony. By the end of 1863 the road was opened as far as Anoka.

In March, 1864, the company was divided into two corporations, the St. Paul and Pacific proper, and the First Division of the St. Paul and Pacific Railroad Company. The First Division Com- pany controlled the property from St. Paul to Big Stone lake, and from St. Paul to Sauk Rapids; the old St. Paul and Pacific retained all the other property. That portion from St. Paul to Winona subsequently became transferred to the St. Paul and Chicago railway. Mr. Rice was president, and Mr. Nelson vice-president, of the old com- pany; George L. Becker, president; William B. Litchfield, vice-president; S. S. Breed, secretary; and Horace Thompson, treasurer: were the offi- cers elected to the First Division Company. In 1866 the First Division Company completed the road as far as St. Cloud; and by 1868, 150 miles of road were completed on the Big Stone Lake Di- vision. For some time after this no more work was done.

In 1869 the Northern Pacific came in and bought the franchises of the First Division Com- pany and completed the line to Big Stone lake.

In 1871. by authority of act of congress, the old St. Paul and Pacific Company re-located its lines, so as to reach the British Possessions at St. Vincent, direct from St. Cloud, instead of by the way of Crow Wing.

At the same time a contract was entered into with the First Division company to lease to the latter the St. Vincent and Brainerd lines in per- petuity. Under this contract the First Division company issued its bonds to the extent of fifteen millions of dollars, secured by mortgage on the lines and land grants. A market was found in Holland for these bonds, some ten millions of dollars being obtained there. Some time after, the First Division company defaulted in paying interest on these bonds, and the foreign bond- holders commenced proceedings in the United States courts, and obtained the appointment of

J. P. Farley as receiver of the St. Vincent ex- tension lines to take charge of the property and land grants. At the same time default was made on the bonds secured by mortgages on the lines from St. Paul to Sauk Rapids, and St. Anthony to Breckenridge.

Under the terms of the trust, Messrs. Edmund Rice, Horace Thompson and Samuel J. Tilden, the trustees, were required to foreclose the mort- gages, and action looking towards that end was commenced in the courts. Previous to a decision being arrived at, Mr. Tilden withdrew from the trusteeship, and Mr. John S. Kennedy took his place.

Possession was obtained of the First Division lines and offices by Messrs. Rice, Thompson and Kennedy in October, 1876, and the road operated by them until the St. Paul, Minneapolis and Man- itoba Railway Company became the owner of the property.

During all this time litigation was in progress and the prospects of settlement seemed to be in the far distant future, as it was a general fight all along the line, in which was involved the two St. Paul and Pacific companies, the contractors, DeGraff and Co., the Northern Pacific Company, the Dutch bondholders and many other creditors. While this war in the courts was proceeding, the Red River and Manitoba Railroad Company, un- der the auspices of Mr. Farley, and finances fur- nished by the Dutch bondholders, built a line from Breckinridge to Barnesville to connect there with the line from Glyndon to Crookston. At the latter point there was already a line, built by the Red River Valley Railroad Company, running to Fisher's Landing on Red Lake river, connect- ing with Messrs. Kittson and Hill's line of steam- ers plying the waters of the Red River of the North.

Finally, by mutual concessions and amicable. arrangements, all these conflicting interests were harmonized. The Northern Pacific obtained the incomplete road between Sauk Rapids and Brain- erd. The Dutch bondholders transferred all their interests to a party of Canadian and Minne- sotian gentlemen, composed of George Stevens, D. A. Smith, and Messrs. Kittson and Hill. Money was obtained and the road extended from Melrose to Alexandria and from Crookston to the British line. Later on, the portion unfinished

3 45

SAINT PAUL-RAILROADS.

between Alexandria and Barnesville was com- pleted. The re-organization of the St. Paul and Pacific Railroad Company, as the St. Paul, Minne- apolis and Manitoba Railway Company was ef- fected in June, 1879. The present executive offi- cers of the company are George Stephen, presi- dent; R. B. Angus, vice-president; Edward Saw- yer, secretary and treasurer; James J. Hill, general manager; Allen Manvel, assistant general manager; C. C. Smith, chief engineer; W. S. Alexander, general freiglit and passenger agent; S. S. Breed, auditor; C. E. Furness, land com- missioner.

During the present year the company has been engaged in making many improvements in its St. Paul property, increasing its shop room and re- pairing and manufacturing facilities. Its total force of men employed numbers over 3.500, of whom some 300 are mechanics; all of the latter live in the city. The monthly pay roll averages about $200,000. The management and operation of the St. Paul, Minneapolis and Manitoba has been characterized by great liberality and a de- termined intention to carry improvement of road bed,equipment and general accommodation to the utmost. The terminal facilities have been re- cently much increased, and the rolling stock made equal to all demands likely to be made upon it. Many new branch lines are in course of construc- tion, or are contemplated at an early day, and Dakota Territory extensions will soon connect the best portions of that fertile country with St. Paul. During the past year the company acquired by purchase and consolidation, the St. Cloud and Lake Traverse railway, from Morris to Brown's Valley, a distance of forty-seven miles; and the Moorehead and Barnesville railway, from Barnes- ville to Moorehead, a distance of twenty-two miles. It has also built of its Dakota extension from Breckenridge to Durbin, forty-eight miles; from Moorehead and Fargo to Grand Forks, six- teen and one half miles; and from East Grand Forks to Ojata, eleven and one-lialf miles. It has also built from Wayzata to the west end of Lake Minnetonka, six miles; making of new lines acquired by purchase and construction during the year ending June 30th, 1881, 211 miles, of whichi seventy-five miles are in Minnesota. In addition to the foregoing tlie company is building and ex- pects to finish during the present year, 200 miles

more of the Dakota extension; also a branch north-east from Carlisle up the Pelican Valley of eigliteen miles.

The company has also acquired the charter of the Minneapolis and St. Cloud Railway Company, to which is attached a land grant of ten sections per mile, and intends to proceed with tlie con- struction of the line from St. Cloud to a point on the St. Paul and Duluth railroad in the autumn. The road bed of the old main line has this year undergone material improvement; most of tlie bridges and culverts have been rebuilt. At the close of the year there will have been laid in the track four hundred and seventy miles of steelfrails. The equipment of the company has been increased during the past year by the addition of twenty- four locomotives and one thousand one hundred and seven cars of various descriptions. Its equip- ment now consists of eighty-nine locomotives, seven sleeping cars, seventy-four passenger and baggage cars, and two thousand seven hundred and eiglit other cars. The last report of the com- pany, for the year ending June 30th, 1881, shows that the railway earnings for the year were $3,- 700,851, against $2,933,108 for 1880, and the oper- ating expenses $1,746,095, against $1,300,512 for 1880, enabling the road to declare a dividend o three per cent. to the stockholders. The total number of miles of road constructed and com_ pleted by the company is eight hundred and sixty- one, of which two hundred and eleven have been built during the current year.

ST. PAUL AND DULUTHI RAILROAD.

The future of this road will undoubtedly be a good one from the position it holds with regard to St. Paul and the lake transportation interests. It was one of the earliest railroad enterprises to be talked of in the state, although, for long, lit- tle was done with regard to its construction. Its charter was granted in 1857, incorporation being effected under the name of tlie Nebraska and Lake Superior railroad. For years it existed as a mere name, and the only work done was to change its corporate name to the Lake Superior and Mississippi Railroad Company, whichi was done by act of legislature in 1861. Its franchises were very valuable the land grants from bothı national and state legislatures being about one million seven hundred thousand acres. Most of

346

HISTORY OF RAMSEY COUNTY.

this land was heavily timbered, hard woods pre- dominating, yet much was good meadow land. It was highly important to the interests of St. Paul that communication should be had with the lake system, and, feeling the need of this outlet, Captain William L. Banning, Lyman Dayton, James Smith, Jr., William Branch, Dr. Stewart, Robert A. Smith, Parker Paine, and some others, interested themselves in the scheme and sought to put the enterprise through to completion. Some money was raised and thirty miles of road were graded, and there the project stopped for some time. At the death of Lyman Dayton, the president of the road, Captain Banning succeeded him. He tried to get some life into the road and worked hard to induce capitalists to undertake the furnishing of funds to build and stock the road. Some success attended his efforts as he got some Philadelphia parties to come forward and invest their means.

Mr. Gates A. Johnson was the chief engineer under whose direction the surveys were made and construction effected. The work was one of no easy fulfillment, and the expense of construction was quite heavy. After much hard work the iron reached Duluth in 1870, the road being thrown open for traffic in August of that year. During the same year a branch to Stillwater was com pleted. From 1870 to 1873, Frank H. Clarke was president of the road ; and from that time until the last election, J. P. Ilsley . has occupied the office.

The Lake Superior and Mississippi railroad has been a greater friend to St. Paul than the latter to the former. The completion of the road forced freight from the East to take a downward ten- dency, which was a great benefit to the trade of St. Paul. The road, however, did not secure the amount of through freight that was expected, chiefly owing to the fact that it could not make yearly contracts with shippers, for the reason that connections at its northern terminus were only capable of being effected during the summer. Before the great number of eastern connections had been made with St. Paul, this road enjoyed a much greater prominence than at present. How- ever, its future is a good one, and its traffic is nearing profitable proportions. Its local business is steadily growing, as settlement increases along its lines, and there are prospects of its getting a

largely increased share in the through shipments of grain to the East. The distance from its lake terminus to the East, via the lakes, is no greater than that from Chicago, by water ; and this will have an important influence in the future on the fortunes of the road. The company received from the city of St. Paul and the county of St. Louis, the sums respectively of $200,000 and $350,000, in aid of the construction of the road. The ori- ginal cost of road and equipment, as represent- ed by stock and bonds of company in 1871, was $7,081,985. On November 1st, 1870, the company leased the Stillwater and St. Paul railroad, which road had been constructed by the latter company. The lease was for a period of 999 years from the first of January, 1871. The rental was $28,000 per annum, payable in gold, so as to meet the inter- est on the bonds of the St. Paul and Stillwater Railroad Company, and $1,000 in currency, to- gether with all United States and other taxes. The Lake Superior and Mississippi Railroad Company also recently leased the Minneapolis and Duluth railroad, which had 15 miles of road in operation, from Minneapolis to White Bear Lake. This had been opened for traffic August 15th, 1871, its cost of construction being $400,- 000. The rental paid for this, occording to the terms of the lease, was to be $28,000 in gold per annum, so as to meet the interest on the bonds of the leased road, and $3,000 in currency, payable semi-annually, from, and after, November 1st, 1873, for a period not exceeding 37 years, making a sinking fund for the payment of the bonds; also the payment of all United States and other taxes. Of the capital stock originally subscribed, a per centum, amounting to $321,410, was paid. Further assessments being made and not paid, a portion of the stock was forfeited. Full paid stock to an amount equal to assessments actually paid, was issued and exchanged. The entire capital stock consisted of 50,000 shares, of $100 each, with power to increase. In 1871 the num- ber of shares held in Minnesota was 4,260. In 1876 the common stock issued (there was no pre- ferred) was $5,125,000. At this time the bonded debt was $7,692,000, represented by $4,492,000 first mortgage bonds due January 1st, 1896, bear- ing seven per cent. gold, and $3,200,000 income bonds, due October 17th, 1902, bearing interest at ten per cent. Besides these there was a float-

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