USA > Missouri > Henry County > History of Henry County, Missouri > Part 19
Note: The text from this book was generated using artificial intelligence so there may be some errors. The full pages can be found on Archive.org (link on the Part 1 page).
Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12 | Part 13 | Part 14 | Part 15 | Part 16 | Part 17 | Part 18 | Part 19 | Part 20 | Part 21 | Part 22 | Part 23 | Part 24 | Part 25 | Part 26 | Part 27 | Part 28 | Part 29 | Part 30 | Part 31 | Part 32 | Part 33 | Part 34 | Part 35 | Part 36 | Part 37 | Part 38 | Part 39 | Part 40 | Part 41 | Part 42 | Part 43 | Part 44 | Part 45 | Part 46 | Part 47 | Part 48 | Part 49 | Part 50 | Part 51 | Part 52 | Part 53 | Part 54 | Part 55 | Part 56 | Part 57 | Part 58 | Part 59 | Part 60 | Part 61 | Part 62 | Part 63 | Part 64 | Part 65 | Part 66 | Part 67 | Part 68 | Part 69 | Part 70 | Part 71 | Part 72 | Part 73 | Part 74 | Part 75 | Part 76 | Part 77 | Part 78 | Part 79 | Part 80 | Part 81
255
HENRY COUNTY HISTORY
Ladue be requested to prepare form for said bond with coupons attached and ascertain the expense of lithographing the same, and report to the court at the next February term thereof."
This is, therefore, the first issue of bonds by the county; however, it is not the first project which had been suggested to the people of Henry County and for which they have been asked to subscribe for stock; for in the year 1851, the people at the August election subscribed $10,000 to the stock of the Pacific railroad; we find no record that this stock was ever taken by Henry County. A year later, the County Court at a meeting held on the 25th day of August, 1852, made the following record of a vote held at the election in August of that same year:
"Under the direction of a majority of the people in this county, it is ordered by the court that $50,000 worth of stock be subscribed to the Pacific railroad on the part of the county, provided, that said road is located on the route surveyed on the dividing of the Missouri and Osage Rivers, known as the Kirkwood Survey, passing by the high point of Tebo, or through the county. The county bonds for which stock to be issued whenever the railroad is under contract to the county line, or north of it, and upon the further condition that the Legislature of this State hereafter legalizes the action of this court."
Six months passed, until in February, 1853, the court appointed James M. Gatewood as the agent to subscribe stock to the amount above named, or $50,000 for and in behalf of the county. The court also appointed William Wall, Joseph Davis and Asa C. Marvin, as agents to attend the meeting of the directors of this proposed Pacific railroad and vote its stock. In 1854, at the February term of the court, ten per cent of the subscrip- tion, or $1,100, was ordered paid over; in order to get this money, it was necessary to borrow from the road and canal fund $3,860; from Will- iam M. Hall, the county borrowed $500 and paid him in lieu of the cash, $914 worth of swamped land bonds. In addition to this, the court ordered a warrant for $800 drawn in favor of Joseph Davis on the money to be paid on the call made by the Pacific Railroad Company. The receipt for this $5,000, or ten per cent of the subscription, was presented at the May term of the court by Asa C. Marvin, who was the financial agent of the county in railway matters. It was signed by George R. Smith, the agent of the Pacific Railway Company.
The tax levied for the purpose of paying interest and cost on stock in this Pacific Railroad Company, was resisted by one J. Davis, who got
256
HENRY COUNTY HISTORY
out an injunction restraining the sheriff, or ex-officio collector, from col- lecting the taxes; as a result of this injunction, the sheriff at the Febru- ary term, 1857, was ordered to pay back the railroad tax to parties who had already paid it and await the result of the injunction proceedings. In May, Robert Allen, was appointed commissioner with full power to act on behalf of Henry County in all railroad matters. He was requested to give a bond in the sum of $20,000. At the October term of the fol- lowing year, 1858, the commissioner was ordered to turn over all the money he had collected by taxation into the county treasury, while at the November term, the sheriff, Dewitt C. Stone, reported that he had at that time in his hands funds amounting to nearly $1,800, arising from the railroad tax. This money also, was ordered placed in the county treasury by the County Court. Nothing further appears on the records as to the Pacific railroad matters, other than the payment of $400 for attorney fees, to Russell Hicks, in the year 1861 until June 12, 1863, when the treasurer was ordered to invest all the railroad funds in the county treasury in county warrants, the same to be held for the use of the rail- road tax fund. This order of the court seems to be the last chapter in the Pacific Railroad Company. However, in 1866, there was some corre- spondence with a view to transfer the stock held by the county to the new Tebo and Neosho Railroad Company; as a result of this, in August, 1866, an order was made for an election to be held as above stated, on September 26, 1866, to determine whether or not the people of the county would vote $150,000 in stock to the Tebo and Neosho railroad; the ques- tion was carried and the $150,000 was subscribed to the railroad stock. As a result of this election, the following order was made by the County Court in session January 5, 1867:
"In response to said resolution and in compliance with the vote of the county at a special election held on the 26th day of September, 1866, it is considered and ordered by the court: That the County of Henry, in the State of Missouri, take and subscribe to the capital stock of the Tebo and Neosho Railroad Company, fifteen hundred shares of one hundred dollars each, amounting to the sum of one hundred and fifty thousand dollars, and that Royal L. Burge, be, and he is hereby appointed, the agent of said county, to subscribe said shares to the capital stock of said company, with full power and authority to represent said county and transact all business of the same pertaining to said stock. It is further ordered that a single bond of said county for the sum of one
257
HENRY COUNTY HISTORY
hundred and fifty thousand dollars, bearing date of the first day of Janu- ary, 1867, payable ten years after date, with interest at the rate of seven per centum per annum, payable semi-annually, and both principal and interest payable in the City of New York, be issued and delivered to said company for its immediate use; and it is further ordered that upon the return of said bond, to said county, that one hundred and fifty bonds of said county for one thousand dollars each, payable ten years after date, bearing seven per cent interest per annum, with suitable coupons attached, be issued in lieu of said bond, and delivered to said company in payment of the subscription aforesaid. It is ordered by the court that Peter A. Ladue be requested to prepare a form for said bond with coupons attached, and ascertain the expense of lithographing the same, and report to the court at the next February term thereof."
These bonds were to be signed by the president of the County Court and countersigned by the county clerk, when issued. On July 17, 1867, the first of the single series were signed and ten of them were turned over to the county treasurer. Additional bonds were issued and placed in the hands of Roy L. Burge, the agent of the county, until 107 had been issued. After that, upon order of the court held October 8, 1868, the later bonds were turned over to the treasurer of the Tebo and Neosho railroad.
"The second issue of $250,000 was issued on January 1, 1870, by the County Court (one of its members spreading his protest on the record). This issue bore ten per cent compound interest. This issue was made without an election."
(This issue was authorized in May, 1869, and was to be in coupon bonds of $1,000 each. The principal condition was that the road should run diagonally across the county in the direction of Ft. Scott and that $150,000 of it should not be paid to the road until the cars were running as far as Clinton. On these bonds, the principal and interest were pay- able to the Park Bank, New York City; the bonds were drawing ten per cent interest, the interest payable semi-annually. William Jennings, a member of the court, was made county agent to subscribe the stock to the railroad.)
"These two issues of bonds, aggregating $400,000, were for stock in what was then known as the Tebo and Neosho railroad, which was built and is now a part of that great system which accords to Missouri a place in its corporate name, the Missouri, Kansas & Texas railway. The third
258
HENRY COUNTY HISTORY
and last issue was for the aggregate sum of two hundred thousand dol- lars in two blocks of bonds, one for $150,000, and the other for $50,000, both issued on January 1, 1871, and bearing ten per cent compound interest. This issue was made by the County Court without an election. (One mem- ber, Judge Jared Stevenson, protested as in the case of the second issue. As a matter of private history, this protest was written by my father for Judge Stephenson, at his request.)
"This $200,000 bond issue was for the branch line through the coun- ties of Jackson, Cass, Henry and St. Clair, which was never built. The issuing of bonds for this branch resulted in the killing by enraged tax- payers of Cass County of a promoter and county judge of that county in the litigation in Henry County and in the troubles in our neighboring county of St. Clair. It is the hope of the people and the speaker that our neighbor may escape the clutches of the speculators in that fraudu- lent issue and we express our admiration for the courage of her people and their valiant fight to protect hearth and home.
"These bonds were issued for stock under the provisions of the law as it then stood and is now found in section 17, page 338, General Statutes of 1865, which provided that County Courts could subscribe for stock to build railroads and issue bonds for same with the provisions that the same should be authorized by a two-thirds vote of the qualified voters voting on the proposition.
"Many of the citizens of this county fought the issuance of all these bonds in the election mentioned and in the county court. Most of them have passed over to that realm where it may be said 'the bondholders cease from troubling and the taxpayers are at rest.' Among those who opposed the creation of the debt were James Mason Avery, A. P. Frowein, Judge James Parks and many others whose names memory and time do not permit the mention of. Such opposition of men of that charac- ter, then criticised as "mossback" and "lacking in progress" was unavailing and the debt was created by the issuance of the bonds as stated."
The $200,000 in bonds, above referred to, were issued as subscrip- tions to what was known to be a branch of the Tebo and Neosho railroad, to be called the Clinton-Memphis railroad. This railroad was run in the direction of Memphis and certainly was to extend to Osceola, in St. Clair County. This proposition was made at the August, 1870, term of the County Court. At the same time, the Clinton and Kansas City branch of the Tebo and Neosho railroad was proposed and $50,000 was the sub-
259
HENRY COUNTY HISTORY
scription to be authorized for it. Both of these stock subscriptions were made without a vote of the people and by a vote of two to one in the County Court. The presiding judge of the County Court, William Jen- nings, entered his protest on the record against the last of these bonds:
"First. The court is prohibited by the seventeenth section of chap- ter 63, of the General Statutes of Missouri, from taking the stock it subscribed, or to lend its credit to said proposed railroad, without having first ordered an election at which two-thirds of the qualified voters of Henry County should give their assent to said subscription. There hav- ing been no such election, the subscription is illegal and void.
"These bonds were issued for stock under the provisions of the law as it then stood and is now found in section 17, page 338, General Statutes of 1865, which provided that county courts could subscribe for stock to build railroads and issue bonds for same with the provisions that the same should be authorized by a two-thirds vote of the qualified voters voting on the proposition.
"Second. Because there is no legal corporation organized under any law of this state by the name of the Clinton and Memphis Branch of the Tebo and Neosho railroad, nor any lawfully organized corporation by the name of the Clinton and Kansas City Branch of the Tebo and Neosho railroad.
"Third. Because the County Court has no right to do indirectly what she is prohibited from doing directly by the statutes before cited, namely, to vote money and aid to a railroad organized since the adoption of the new constitution of Missouri, without the preliminary steps of an election at which two-thirds of the qualified voters of the county should vote in favor of the subscription.
"Fourth. Because by the order of the County Court of last term the subscription was agreed to be voted by the majority of the court, upon a petition of a majority of the taxpayers of Henry County, and there has been no legal or sufficient evidence produced to the court that said majority have been so petitioned.
"Fifth. Because in view of the burdensome taxation already im- posed on the citizens of Henry County, I consider this new tax ruinous in its tendencies and inexpedient at this time.
"WILLIAM JENNINGS, President.
"(Signed) August 4, 1870."
260
HENRY COUNTY HISTORY
In November, 1870, the court ordered $150,000 in bonds to be deliv- ered to the committee on construction .. In 1871, the court turned over $50,000 in bonds to the chairman of the construction committee of the Clinton and Kansas City branch of the Tebo and Neosho railroad. The order to turn these over was protested by Jared Stevenson, as recited by Mr. Parks above. The following is the protest entered by Judge Stevenson :
"To the above action of Judges Munson and Hillegus in appointing an agent to cast the vote of Henry County, I enter my protest, for the following reasons:
"First. Because the said Clinton and Kansas City branch and Clin- ton and Memphis branch of the Tebo and Neosho railroad have no ex- istence in law, and any subscription of stock to said branch roads by the County of Henry for the construction of said branch roads is void.
"Second. Because the pretended subscription made by the County Court to aid in the construction of said branch roads was made in vio- lation of law and against the interest and wish of the tax-paying citi- zens of this county.
"Third. Because the bonds of said Henry County, issued in payment of said subscription to said branch roads are illegal and utterly void. "JARED STEVENSON.
"(Signed) August 15, 1871."
(The stockholders of the Clinton and Memphis branch and of the Clinton-Kansas City branch of the Tebo and Neosho railroad, held a meet- ing on the 13th of August, 1871, at which time they voted the franchise to a new company known as the Kansas City-Memphis and Mobile Rail- road Company. The County Court accepted 2,000 shares of a par value of $100 each in the new company in lieu of its interest in the branch roads above set out. For the $200,000 bonds, the county has never received any fund. By the two issues of bonds totaling $400,000 the county was enabled to aid in the building of the present Missouri, Kansas and Texas railroad.
Some of these bonds passed into the hands of what the Supreme Court of the United States afterward declared to be "innocent purchas- ers." The County Court refusing to pay, led to the period of litigation described by Mr. Parks in his address as follows:)
"A period of eleven years, from 1871 to 1882, was devoted to the
261
HENRY COUNTY HISTORY
resistance of the debt. The test case of Nicolay vs. Henry County was commenced in April, 1873 or 1874."
The case referred to is the case of A. H. Nicolay against Henry County ; the plaintiff secured a judgment of $25,000 and mandamus was issued compelling the county to pay. In order to do so, a levy of fifteen cents on the one hundred dollar assessed valuation was made, in May, 1878. Other suits followed and it soon became necessary to levy a tax to pay the judgments and buy all the bonds that could be bought at forty cents on the dollar.)
"The county was defended by Judge Phillips, who will deliver the leading address this afternoon, and by our distinguished fellow-townsman, Judge James B. Gantt. The county lost in the trial court and appealed to the Supreme Court of the United States, where this test case was decided against the county on the ground that the bondholder was an innocent purchaser. Under this judgment thus affirmed, an execution was issued and the lands of the sureties on the appeal bond, which in- cluded A. P. Frowein, J. A. Avery and James Parks, were advertised for sale by the United States marshal of this district.
"The county protected its securities by making a levy in 1878 to pay the judgment, and through the taxes collected, the Nicolay judgment as well as the Church judgment, a similar case pending at the same time, were with all costs of litigation paid. Other bondholders reduced their bonds to judgment, and the payment of the debt was thus fastened on the county either for its compromise or for a long continued fight as has been pursued by other counties in this State.
"During this period there sat upon the County Court one of the lead- ing business men of Clinton, Judge E. Allison, one of its leading farmers, Judge Lewis P. Beaty, both longheaded men of rugged integrity, common sense and natural ability, who, with others, foresaw that in the long run it would be more profitable to compromise than to continue for years a warfare with the bondholders. While Judge Beaty was a member of the County Court, the county still owned its stock in the Tebo and Neosho, or as reorganized in the Missouri, Kansas & Texas. Such stock could have been levied on and sold under the judgment. In other counties, this was done and the bondholders bought in the county stock for a song. The County Court with the assistance of Major Salmon and Judge Gantt sold this stock for over $85,000, and with that sum bought in bonds, coupons and judgments for over $183,000,000."
262
HENRY COUNTY HISTORY
Judge Gantt's report is as follows:
"To the County Court of Henry County, Missouri: I have the honor to report that in compliance with the order of this court, made and en- tered of record at the August term, 1879, and on the twelfth day of Au- gust, 1879, appointing me the agent of Henry County to exchange the 4,000 shares of stock held by Henry County in the Tebo and Neosho Railway Company, for a like number of shares of the stock of the Mis- 'souri, Kansas & Texas Railway Company, and to sell the same for the use of said county, and in pursuance of the verbal instructions of the court, that I should associate with myself Major H. W. Salmon to assist and co-operate with me in effecting the exchange and sale of the Missouri, Kansas & Texas railway stock. We proceeded to New York City, reach- ing there on Saturday, the fourth day of October, 1879. We succeeded in effecting the exchange of the old stock, and the issuance of the new stock in the name of H. W. Salmon, on the eighth day of October, 1879, and sold said new stock on that day, and the day following, through the firm of S. F. Johnson & Company, No. 2 Nassau street, New York City, whose statement of the sale and accounting for the proceeds thereof, are herewith filed and made a part of this report, and is marked 'Exhibit A.'
From these statements it will be observed they account to Major H. W. Salmon for the proceeds of 7,000 shares, instead of 4,000 shares, the amount of Henry County's stock. This excess of 3,000 shares is the stock of Vernon County, Missouri, whose agent, Judge Paul F. Thorn- ton, accompanied us and transferred the stock of Vernon County to Major H. W. Salmon, also, in order to accomplish for Vernon County the same purpose we had in view, and in accounting Vernon County had three- seventh and Henry County four-seventh of the net proceeds. That is to say, the whole amount received by Major H. W. Salmon of S. F. John- son & Company was $151,525, of which amount I received of Major Sal- mon four-sevenths, or $86,585.71, and Judge Paul F. Thornton for Vernon County three-seventh, or $64,939.29; so that I have had in my hands the said sum of $86,585.71, which sum, after deducting the amount of our expenses incurred in this behalf-that is, for traveling expenses, hotel bills and other expenditures on this account, which were both for Major Salmon and myself, $600-left in my hands for investment $85,985.71. You will further notice that the stock was sold at from $21 per share to $221/8 per share, thus averaging the highest price that Missouri, Kansas & Texas stock had ever commanded in the stock market, as can readily
263
HENRY COUNTY HISTORY
be seen by the 'Stock Report' compiled from the record of the New York Stock Exchange covering a period of twenty years from 1860 to 1880, which shows in tabulated form the highest and lowest prices this stock brought during each month since it was placed on the stock board of the New York Stock Exchange, which said report I also file herewith as a part of this report of mine, making it 'Exhibit B.'
It may be proper for me to state in this connection that this Mis- souri, Kansas & Texas stock declined and advanced for several weeks after this sale, going as low as $20 per share in November following our sale in October and afterwards advancing in the late winter and spring until some of the counties, viz .: Pettis County, sold for $30 per share. While on the one hand it may be a subject of regret that we did not hold this stock and obtain the highest price therefor, yet it will and must be remembered that the order of the court was made under peculiar cir- cumstances. For years the stock had been considered utterly valueless, and even in January, 1879, was quoted at three and five-eights dollars per share, so great was the mortgage debt of the railroad and the con- tinued default of the company to pay interest on its first mortgage bonds. When your honors determined to sell the stock you had a two-fold object in view, namely: To prevent a levy and sale of this stock in favor of some of the numerous judgments, creditors of Henry County, who had obtained their judgments in the United States courts prior to your order, as had been done in a number of cases against other counties, notably Schuyler and Callaway Counties, and they entirely sacrificed the stock and at the same time paid out its proceeds at dollar for dollar on these judgments. Your order prevented this sacrifice and saved thousands of dollars to the county. Your other object as to obtain from this stock a fund with which you could purchase in the outstanding railroad indebted- ness of the county while they were at a large discount. This you have accomplished in a large measure and whatever the result has been, no one can question the motives of the court, and considering the advance in securities of all kinds the past year there is still no doubt you sold at the proper time. In carrying out the verbal instructions of the court and furthering its purpose to invest the money received from the sale of this stock in buying in the outstanding indebtedness of the county consisting of its railroad bonds together with the interest thereon and the judgments obtained on the same against the county, I have with the aid and assistance of Major H. W. Salmon, whom I called to my assistance
264
HENRY COUNTY HISTORY
as desired by the court, bought Henry County bonds, judgments against the county, interest coupons and interest thereon amounting in the ag- gregate to $183,301.77, buying the same as rapidly as I could under the circumstances, avoiding at the same time making any purchase that was in our opinion calculated to advance the price of the bonds of the county and thus increasing our indebtedness, and, as your honors are aware, consulting in almost every instance with the court, prior to making an investment.
By reference to a detailed statement herewith filed, marked 'Exhibit C,' you will find that I have purchased with the funds aforesaid fifty-one bonds of $1,000 each of tens of 1870; fifty-four bonds of $1,000 each of tens of the C. & M. Branch Tebo and Neosho railroad of 1871, and twelve bonds, tens of 1871, of $1,000 each of the Clinton and Kansas City Branch of the Tebo and Neosho railroad, with interest coupons thereto attached as per statement; also judgment against the county on railroad bonds and coupons and a small amount of extra detached coupons from bonds. The total expenditures on account of the purchases made as stated above together with the expenses of H. W. Salmon, myself and W. D. Tylor, incurred in traveling expenses, telegrams and express charges, etc., amounts to $84,666.57, leaving in my hands $1,319.14, which sum I now here hand to the court. Concerning the prices paid for these bonds, I will say that the bonds of Henry County, as well as the bonds of other counties, and all other securities have advanced since this business was undertaken, caused, as all are aware, in a large measure by the easy money market, and the general prosperity of the country.
He Bears Testimony.
Before closing this report I desire now and here to bear testimony to the skill and fidelity to Henry Couny shown by Major H. W. Salmon throughout this whole business. I do not desire to arrogate to myself the credit of having made the purchase of these bonds, and managing the negotiations with the various persons with whom we had to deal, as I have relied in a great measure on his large experience and extensive acquaintance with such matters.
Need help finding more records? Try our genealogical records directory which has more than 1 million sources to help you more easily locate the available records.