USA > North Carolina > Western North Carolina; a history, 1730-1913 > Part 44
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in fraud at their inception, but they were nevertheless State bonds on the market in a foreign country, etc." The court held in effect that as the Western Division had adopted the property purchased by an embezzler with its money, its rights were subordinate to those of innocent purchasers of the same class of securities, and were charged with all the liens Swep- son had put upon them. 3
North Carolina afterwards repudiated all of these special tax bonds along with others which had been issued by the carpet-bag government of 1868-70.
NOTES.
"In Galloway 1. Jenkins (63 N. C., p. 147) the Supreme Court had held only a short time before that the State could not contract a debt to build a new railroad except by an affirmative vote of the people, because to do so before the bonds of the State had reached par would violate Art. 5, Sec. 5, of the State Constitution; although it is true that in this case Judges Reade and Settle had dissented.
"Hon. Samuel W. Watts was the Superior court judge who had issued the injunction in June, 1869. Shipp's Fraud Com. Rep., p. 447
$103 U. S. Rep., 327 (13 Otto-118-145).
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of railroads with the proposed Blue Ridge railroad, and so with the Great West, there was passed an act entitled: 'An Act to incorporate the Western North Carolina Railroad Com pany,' ratified February 15, 1855 (Laws of North Caro- lina 1854-55, ch. 228, p. 257), which, after reciting the pur- pose 'of constructing a railroad to effect a communication between the North Carolina railroad and the Valley of the Mississippi,' provided for the organization of a corporation under the style of Western North Carolina Railroad Company, with power 'to construct a railroad, with one or more tracks, from the town of Salisbury on the North Carolina railroad, passing by or as near as practicable to Statesville, in the county of Iredell, to some point on the French Broad river, beyond the Blue Ridge, and if the legislature shall hereafter determine, to such point as it shall designate, at a future session.' Four years later, when the line had been located from Salisbury to the French Broad river at Asheville, the general assembly supplemented this original charter and definitely fixed the route of the proposed line in an act entitled: 'An Act to amend an Act entitled: "An Act to incorporate the Western North Carolina Railroad Company" passed at the session of 1854-55, and also an act amendatory thereof passed at the session of 1856-57' (Ratified February 15, 1859. Private Laws of North Carolina 1858-59, ch. 170, p. 217).' This directed that the survey be continued 'from the point near Asheville to which the survey has already been made, extend- ing west through the valley of the Pigeon and Tuckaseegee rivers, to a point on the line of the Blue Ridge railroad on the Tennessee river, or to the Tennessee line at or near Ducktown, in the county of Cherokee,' and thereby located a line which would connect the North Carolina railroad with the Blue Ridge railroad, an extension which has since been realized, without the Blue Ridge railroad connection, in the existing Murphy branch.
.
"As the legislature was intent, however, on effecting some western connection for the North Carolina system of rail- roads, the Western North Carolina was not limited to an alliance with the Blue Ridge railroad, but it was provided that the extension from Asheville might be 'down the French Broad river, through Madison county, to the line of the State of Tennessee at or near Paint Rock,' which might 'connect
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with any company that has been formed or may be formed to complete the railroad connection with the East Tennessee and Virginia railroad.' " 4
Surveys were accordingly made for both of these proposed lines, and these surveys were duly approved by the legisla- ture at its next session in an act ratified February 18, 1861. (Private Laws of North Carolina 1860-61, ch. 138, p. 154).
"The alternative, or Paint Rock line so authorized, being that of Louisville, Cincinnati, and Charleston, which had been pronounced in the reports of the engineer read at the Knoxville convention in 1836 to be extraordinarily feasible for a railroad, would no doubt have been originally adopted by the Western North Carolina but for the fact that in 1859 the Blue Ridge railroad was still considered certain of construction, while the Cincinnati, Cumberland Gap and Charleston Railroad Company, which held the Tennessee franchise to carry on the old Louisville, Cincinnati and Charleston line from Paint Rock to a connection with the East Tennessee and Virginia railroad at Morristown, was finan- cially weak.
"As the securing of a through trunk line was the principal object for which the construction of the Western North Car- olina was undertaken, the proposed Blue Ridge connection accordingly dictated the adoption of the line from Asheville toward Murphy as the main line of the Western North Caro- lina and it was so considered as late as 1868 when the Con- stitutional convention, then in session, passed an ordinance entitled: 'An ordinance for the completion of the Western North Carolina Railroad,' ratified March 14, 1868 (Ordi- nances of 1868, ch. 50, p. 100), which provided that no part of the subscription of the State to the Western North Carolina should be used in the construction of branch lines, except the line to Paint Rock, until 'the main trunk line of said rail- road shall have been completed to Copper Mine, at or near Ducktown' and furthermore that the General Assembly 'is hereby authorized and directed to make such further appro- priation or subscription to the capital stock of said railroad company as will insure the completion of said road at the earliest practicable day.'
"The Paint Rock line, thus relegated to the status of a branch, was not, however, abandoned, but it was considered that the
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Tennessee enterprise of the Cincinnati, Cumberland Gap and Charleston was primarily interested therein, as is evidenced by the act entitled: 'An Act to amend the Charter of the Western North Carolina Railroad' ratified March 4, 1867. (Public Laws of N. C. 1866-67, ch. 94, p. 152 , which author- ized the Western North Carolina to construct its line from Asheville to Paint Rock upon the 'Tennessee Gauge,' and to so maintain it until the entire line was completed, and the gauge of the North Carolina railroad could be established thereon uniformly. 'It was the realization of the Paint Rock line in 1881, however, that opened the only railroad which has ever been built through the southern ranges of the Appalachian Mountains." 4
ROUTE AND CONNECTIONS. It will be seen from the above how the route was changed from that originally contemplated. 5 It was never purposed to build this railroad by way of Frank- lin; as that town was on the proposed Blue Ridge line from Walhalla, S. C., and it was the intention to connect with that line; but this connection was contemplated at some point west of Franklin, Ducktown, Tennessee, having been consid- ered at one time as the point of junction, due to ignorance of the topography of the western part of the State, as the connection must necessarily have been somewhere on the Little Tennessee, that stream rising in Raburn gap, Ga.
RAPID PROGRESS. The Western North Carolina railroad was chartered by an act which was ratified February 15, 1855, and work was begun and the railroad completed and put into operation to within a few miles east of Morganton by the summer of 1861. A contract had been given to Crockford, Malone & Co., in September, 1860, when Dr. A. M. Powell was president of the railroad company, for the completion of the road from a point near Old Fort to the western portal of the Swannanoa tunnel, for a specified sum, plus 20 per cent for contingencies. These contractors stopped work in the spring of 1861 on account of the war, having done about $27,- 000 worth of work. Soon after the close of the Civil War, while Mr. Caldwell was president and Capt. Samuel Kirkland was chief engineer, the road was completed to Mor- ganton by paying 50 per cent increase on estimates made previous to the war, the increase being due to depreciation of currency. Colonel W. A. Eliason was elected chief engineer in 1868 and
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continued as such till April, 1871. Previous to 1868 Col. Eliason had been assistant engineer. The line had been changed in the winter of 1860-61 for a considerable distance on sections 6, 7, 8, 9 and 10 and this reduced the estimates by $171,293.
LOCATION ON THE BLUE RIDGE CHANGED. The route up the eastern slope of the Blue Ridge was changed after the war to one with longer, safer and lighter grades than those of the original survey. 6
ENGINEERS AND MOUNTAIN WORK. While Col. J. W. Wilson was chief engineer Col. S. W. McD. Tate became president, and in October, 1866, the board of directors ordered the resumption of work west of Morganton, and the precedent of paying 50 per cent advance was followed. In January, 1868, the contract for the work from Old Fort to the western portal of the Swannanoa tunnel was let to John Malone & Co., diminished by the work which had been done by Crock- ford, Malone & Co., plus 50 per cent to the original estimates.
A PROPOSITION was afterwards made to Col. Wilson that, if he would turn over $200,000 of first mortgage bonds of the road, the chief engineer would make out estimates for $701,000 in addition to what he had received, which would be a majority of the $1,400,000 bonds authorized by the act of December 19, 1866. This proposition was made at the Boyden House in Salisbury in December, 1870, and the object was claimed to be to get control of the majority of the bonds and thus prevent a forced foreclosure of the railroad:
"Some time in the fall of 1869 I had conversation with Col. Tate in relation to the condition of the road. 7 . In one of those conversations in Morganton it was suggested that the sale of the road could not be forced unless a majority of the bonds got into the hands of one person. I suggested to Col. Tate that probably the contract with John Malone & Co. could be made useful in preventing the sale; that they claimed compensation for their work according to the old estimates and contract with Crockford and Malone. I thought they were bound by the estimates on the line as changed by me, but that I would sign the estimates according to the old notes, with the understanding that 600 of the bonds were to be delivered to Maj. Wilson, and 200 were to be placed in my hands ; for the whole was to be held so that they would not be put on the
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market and get into the hands of the New York speculators, and thereby endanger the sale of the road. The 800 were to be divided between Maj. Wilson and myself, so that no one was to have a majority of the bonds. 'Col. Wilson declined this proposition,' as it was 'much more than was due me, and I regarded the transaction as corrupt.' " 8
A CHANGE OF OFFICERS. Dr. J. J. Mott succeeded Col. Tate as president of this division of the road, Col. Tate becom- ing financial agent when he secured the State bonds issued on account of the company. The office of financial agent was abolished in 1869. Col. Tate accounted for all these bonds before the Bragg committee, which found his official conduct correct.
JOHN MALONE & Co. The firm of John Malone & Co., was composed of John Malone, J. W. Wilson and Mr. Golds- borough of Maryland. J. W. Wilson had been the chief engineer and superintendent of the road from the summer of 1864 until the provisional governor was appointed in 1865. He was afterwards reappointed by the directors named by Gov. Worth and held the position until the spring of 1867, when he resigned in order to go into business. Up to September, 1871, John Malone & Co., had been paid for their work about $600,- 000, the estimate of the whole contract having been $1,959,- 000, two-thirds of which was to be paid in cash and one-third in stock, leaving $220,000 still due to the contractors. The Swepson and Littlefield frauds brought all work to a stop in 1870. (See Chapter XIX.)
WESTERN DIVISION ABOLISHED. At its session of 1873-74 the legislature repealed the act appointing the Woodfin commis- sion and required the commissioners to turn over all the books and property of the Western Division to the directors of the Western North Carolina railroad, upon whom devolved the former duties of the commissioners; and the legislature of 1876-77 required the president of the railroad to report what property he had acquired from Swepson and Littlefield in his settlement with them. This Western Division consisted of the Murphy and Paint Rock lines. The Eastern Division was the line from Salisbury to Asheville.
EARLY LITIGATION. The Western North Carolina railroad got into trouble with its creditors, and, in 1874-75, we find a joint resolution to ascertain what the claims against the road
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could be bought for, and another joint resolution to appeal to the Supreme Court of the United States from the de- cision of the United States court at Greensboro in the case of Henry Clews, Hiram Sibley and others v. the Western Division of the Western North Carolina railroad, and, finally (Ch. 150) an act to authorize the purchase of the road under the decree for its sale at not more than $850,000, with authority to issue seven per cent bonds to that amount, secured by a mort- gage of the property; and to complete the road to Paint Rock and Murphy, the State to have three-fourths of the stock and the private stockholders the other third.
"By an act ratified March 13, 1875 (laws of North Carolina 1874-75, ch. 150, p. 172), the Governor, Curtis H. Brogden, the president of the senate. R. F. Armfield, and the Speaker of the House, James L. Robinson, were constituted a com- mission with power to purchase the Western North Carolina railroad at the forthcoming sale in the Sibley suit for not exceeding $850,000, the amount which had been adjudged due on the outstanding first mortgage bonds issued by the Eastern Division. In order to force through the negotiations for the purchase of the outstanding claims, this commission was later authorized to prosecute an appeal in the Sibley suit to the Supreme Court of the United States, byresolution adopted March 20, 1875. (Laws of North Carolina 1874-75, p. 405. See also a resolution concerning the expenses of this commis- sion, ratified January 11, 1877, Laws of North Carolina 1876-77, p. 582.)
"This finally resulted in the execution of an agreement under date of April 17, 1875, whereby all the parties in interest, including the East Tennessee, Virginia and Georgia, the North Carolina Railroad Company and McAden, assigned all their claims to the State commission consisting of Messrs. Brog- den, Armfield and Robinson, in consideration of their agree- ment to purchase and reorganize the Western North Caro- lina, and to issue new first mortgage bonds for $850,000 to be ratably distributed among the parties in interest. This agreement was thereupon carried out, and reorganization by the State followed; the new corporation, hereinafter styled Western North Carolina Railroad Company No. 2, taking possession of the property on October 1, 1875." 9
ORGANIZATION. By chapter 105 of the laws of 1876-77 the
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Western North Carolina railroad was organized with a capital stock of $850,000, three-fourths of which belonged to the State and one-fourth to the private stockholders to be appoint- ed according to their several interests. The State also under- took to furnish 500 convicts to work on the road and the governor was authorized to buy iron to lay the track from the then terminus near Old Fort. It was also provided that when the road should have been completed to Asheville the convicts were to be divided equally, one-half to work on the Paint Rock line and the other half on the Murphy division, and that after the line should have been completed to Paint Rock, all the convicts were to be employed on the line to Murphy. Apparently, however, the State became uncertain as to the securities of the Richmond & Danville railroad for its lease of the Western North Carolina Railroad, for on the 23d of January, 1877, a joint resolution was adopted to enquire into the sufficiency of those securities. In 1879 the Western Division was abolished and consolidated with the Eastern Division under the name of the Western North Carolina Railroad Company.
W. J. BEST & Co. A special session of the legislature was called 'and by an act of March 29, 1880, (Ch. 26) the State agreed to sell the Western North Carolina railroad to Wm. J. Best, Wm. R. Grace, James D. Fish and J. Nelson Tappan subject to the mortgage of 1875 for $850,000, on which the purchasers were to pay the interest, etc.
The agreement of April 27, 1880, between Wm. J. Best et al. and the State of North Carolina, among other things, recited:
" The Act of March 29, 1880, and provides in consideration of the delivery of a deed by the Commissioners named in said act to the United Trust Company, to be held in escrow, that the purchasers will :
" 1. Complete the line to Paint Rock on or before July 1, 1881, and to Murphy on or before January 1, 1885.
"2. Repay to the State all moneys expended on the road after March 29, 1880.
"3. Pay to the State $125 per annum rent for each of five hundred able-bodied convicts.
"4. That no bonds will be issued except as provided in the act.
"5. That they will deliver $520,000 of their first mortgage bonds, when issued and $30,000 cash, to make up the aggregate of $550,000, invested by the State in the property, to the State Treasurer.
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"6. That they will pay the interest on the outstanding $850,000 of W. N. C. No. 2 bonds." 10
CLYDE, LOGAN AND BUFORD. "Clyde, Logan and Buford, in 1880, loaned W. J. Best money and he failed to pay same back and forfeited the road, he assigning all his interest to Messrs. Clyde, Logan and Buford on May 28, 1880.'' 10 These men controlled both the Richmond and Danville Railroad Company and the Richmond and West Point Terminal Company. 11
THE RICHMOND AND DANVILLE. The Richmond and Danville Railroad Company at one time owned the Richmond and West Point Terminal Company, and afterwards the Richmond and West Point Terminal Company bought the Richmond and Danville. Under the assignment from Best the Rich- mond Terminal Company came into control of the Western North Carolina and immediately proceeded with the work, issuing two mortgages for this purpose. 1 8
"The Richmond Terminal Company acquired the Western North Carolina in the interest of the expanding R. &. D system to extend its line from a connection at Salisbury with the North Carolina Railroad, which the R. & D. was operating in 1880 under lease.
"For the next five years while the construction of the Western North Carolina was being completed the operation was carried on in the name of Western North Carolina No. 3 as is evidenced by an act entitled :
" 'An Act empowering the Western North Carolina Railroad Company to construct telegraph and telephone lines on its right of way.'
"Ratified March 6, 1885.
"Laws of North Carolina 1885, ch. 294, p. 542, which authorized the company to do a general telegraph business, but in 1886, when the R. & D. was assuming the operation of most of the Richmond Terminal lines in its own name, the following lease was executed :
"Western North Carolina Railroad Co., to Richmond and Danville Railroad Company, lease dated April 30, 1886 : Term Ninety-nine years. Rental : Net earnings above fixed charges. (Abrogated May 5, 1894.)' " 12
RICHMOND TERMINAL. "From this it will be seen that the property was operated as the Western North Carolina but was held by the Richmond Terminal Company up to April 30, 1886, from which time to May 5, 1894, when the Southern Railway purchased the property, it was operated by the Rich- mond & Danville under lease. " 1 2
THE STATE SELLS THE RAILROAD. By an act of 1883 (ch. 241) the State agreed to sell the road to Clyde, Logan and
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Buford, asignees of W. J. Best and associates, provided they should complete it to the mouth of the Nantahala river by September 1, 1884, and should keep at work beyond that point 75 convicts. They were also required to purchase of the State treasurer $520,000 of the coupon bonds of the West- ern North Carolina railroad which they had deposited with the State treasurer under sections 12 and 24 of the act of March 29, 1880. The road was finished into Andrews in the summer of 1889 and to Murphy in 1891. Soon thereafter, to wit, on June 15, 1892, the old Richmond & Danville Rail- road went into the hands of receivers, Fred W. Hidekoper, Reuben Foster, and, later on, Samuel Spencer, and emerged therefrom as the Southern Railway Company, August 22, 1894, when the order was made confirming the sale of the road which had been made by Charles Price, special master, on August 21 at Salisbury, for $500,000.
COMPLETION OF THE RAILROAD. From 1869 and thereafter for several years, passengers were taken from Old Fort, the terminus of the railroad, to Asheville in stage coaches operated by the late Ed. T. Clemmons, contractor. Jack Pence "drove the mountain," as the end of the line nearest Old Fort was called, handling "the ribbons" over six beautiful white horses. The part of the trip down the mountains was always made at night, but there was never an accident. After several years the road was completed to a station called Henry's, where it remained till 1879, when it had been finished to Azalia, 130 miles west of Salisbury. The formidable Blue Ridge had been successfully surmounted at last.
THE ANDREWS GEYSER. A hotel and geyser-like fountain were maintained at Round Knob from about 1885 to about the close of the last century, when the hotel was burned. The fountain had ceased some time before that; but in 1911 George F. Baker of New York, as a testimonial to the ser- vices Col. A. B. Andrews had rendered in the development of Western North Carolina, restored the fountain at his own expense. It throws a stream of water 250 feet into the air.
ARRIVAL AT VARIOUS POINTS. 14 The railroad was completed to Biltmore on Sunday, October 3, 1880; to Alexanders, 10 miles below Asheville on the French Broad, on the 4th day of July, 1881, and to Paint Rock January 25, 1882. The bridge at Marshall was finished June 15, 1882. The Murphy
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branch was completed to Pigeon river, now Canton, January 28, 1882, reaching Waynesville later in the same year.
PROGRESS WEST OF WAYNESVILLE. If the original plan to have a tunnel through the Balsam mountain had been adhered to the terminus of the road must have remained at Waynesville many years; but the road was built over the mountain by a difficult and dangerous grade, and the work which had been done on the tunnel in 1869 and 1870 was abandoned. This Balsam gap is the highest railroad pass east of the Rocky mountains, being about 3,100 feet above sea level. . . The road was completed to Dillsboro in 1883 and to Bryson city in 1884. It reached Jarrett's station, or Nantahala, at the mouth of the Red Marble creek, Novem- ber 23, 1884. Here it stayed a long time, due to the fact that a tunnel had been contemplated through the Red Marble gap of the Valley River Mountain; but after the grading had been completed nearly to the gap it was discovered that the soil would not support the roof and sides of a tunnel, and the whole work had to be done over again and the roadbed placed on a much higher grade. This serious error cost many thou- sands of dollars and long delay. The road was finished to Andrews in the summer of 1889, and its entrance into Mur- phy was celebrated in 1891, on the same day the corner- stone of the fine new court house was laid. The original survey required the road to go by old Valley Town, but it was changed. Several of the convicts who helped to build this road settled in Murphy when their terms expired and are making good citizens
SPARTANBURG AND ASHEVILLE RAILROAD. This road was com- pleted to Saluda, twelve miles east of Hendersonville in 1879, and to Hendersonville about 1882. It was necessary that Buncombe county should contribute to the building of this railroad.
BUNCOMBE'S SUBSCRIPTION. On the 5th of August, 1875, there were 1,944 votes for subscription to $100,000 of the stock of the Spartanburg and Asheville railroad, and only 242 votes against subscription, and the bonds were issued, bearing six per cent interest and due in twenty years. But they were issued only as the grading was completed and amounted at the end to only $98,000 in all. These bonds were refunded at par by new bonds dated July 1, 1895, due in twenty
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years, under Chapter 172, Public Laws 1893. But at the meet- ing of the Republican board of county commissioners on De- cember 27, 1897, they ratified a contract which had been made by the board and Hon. A. C. Avery, Mark W. Brown and Moore & Moore, attorneys, to contest the validity of the bonds in a case entitled the County Commissioners v. W. R. Payne, County Treasurer. This attempted repudiation was used by the Democrats to defeat the Republicans in November, 1898. But the Democrats themselves after- wards employed counsel to carry out the repudiation of these bonds on the ground that the bill had not been read on three separate days in each house. However, certain holders of these bonds soon brought an action in the District court of the United States, which held that the bonds were valid.
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