History of Iowa County, Wisconsin, Part 80

Author:
Publication date: 1881
Publisher: Chicago, Western Historical Company
Number of Pages: 958

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On December 16, 1853, the dual contract was abrogated, and a new agreement was filed with R. & G. L. Schuyler, of New York. This firm agreed to assume all the liabilities of the company, carry out all existing contracts, and complete and equip the road by January 1, 1855, in consideration of the sum of $1,000,000. One-half of the amount was to be paid in first mort- gage bonds. and one-half in the stock of the company, with this modification that all persons who had subscribed for stock, might be at liberty to pay the same at $60 per share of $100. All payments so made should be received in lieu of so many shares in stock. It was also stipulated that the company should loan to the Messrs. Schuyler $150,000 of Iowa County Bonds, which they were at liberty to hypothecate, but not to sell. These bonds were to be returned at the expiration of the contract. The method provided by the contract for raising money to carry on the work, was by drafts drawn by the President of the company, at four months, on R. & G. L. Schuyler, accepted by them, and subsequently discounted at New England or East- ern banks, the proceeds being applied to the construction of the railroad. The work was ener- getically advanced under the terms of this the fourth contract, and the citizens generally were prepossessed with the idea of a completed line, and lent their voluntary aid to further the efforts of the contractors. On January 19, 1854, I. S. Allen resigned the office of Secretary, and was replaced by R. S. Schuyler, son of one of the contractors. When the expectations of the peo- ple were at the zenith, their hopes were doomed to a disheartening relapse occasioned by the financial failure of R. & G. L. Schuyler, Messrs. Schuyler having made an assignment of all their effects for the benefit of their creditors. The company, by negotiating with the assignee, secured an abrogation of this contract. The whole amount of drafts accepted, and upon which the company realized, was $137,000, of which there had been paid by Messrs. Schuyler $67,000, and $10,000 secured by an attachment of their property to be paid by them. Deducting the cash and collateral securities, the company was trammeled with an unpaid debt of $60,000. The company surrendered to the assignee $30,000 of bonds, which the contractors had already appropriated to their own use, namely $30,000 in Iowa County Bonds, and $50,000 in first- mortgage bonds.

The amount of expenditures by the company to this time aggregated $175,000, including engineering, right of way, bridging, grading, masonry, ties and timber, salaries and incidental expenses. Funds to meet these expenditures were provided as follows :

Stock subscriptions, about. $ 23 000

Schuyler's acceptance .. 137 000

Unliquidated floating debt 15 000

Total

-$175 000

The indebtedness of the company at that time was estimated at $75,000, consisting of Schuyler's unpaid acceptances of $60,000, and the balance of domestic debts.

MORE FUNDS RAISED AND ROAD COMPLETED.

As it was contemplated that $80,000 would finish the road ready for the superstructure, the Directors adopted the plan of offering 2,000 shares of preferred stock at $60 per share, giving the existing shareholders the privilege of absorbing them at the designated value, thus realizing a fund of $120,000. Up to this date, there had been subscribed 1,101 shares, for which payments, varying from $5 to $60 per share, had been paid, forming a capital of only $23,275. The issue of preferred stock was an advisable measure, and, as a stroke of financial genius, was commendable. To assist in placing this stock, mass meetings were held in the

529

HISTORY OF IOWA COUNTY.

various towns, and, in recognition of a popular demand, a committee, consisting of Cyrus Wood- man. N. B. Boyden and I. S. Allen, were appointed to examine the books and vouchers of the Railroad Company, and report at a subsequent meeting. In pursuance to a call issued by several citizens of Mineral Point, a meeting was held at the railroad office, on Thursday, Decem- ber 14, 1854. for the purpose of taking some preliminary steps to place the company on such a basis as would restore its credit and secure the completion of the road. Hon. M. M. Cothren was appointed Chairman, and N. B. Boyden was deputed to act as Secretary. The following resolutions, adopted at a meeting of the Railroad Directors, were presented :

Resolved, That for the purpose of increasing the stock subscriptions of the Mineral Point Railroad Company to fifteen hundred shares, of full-paid stock, the individual members of the Board of Directors pledge themselves to subseribe and pay for in the aggregate two hundred and fifty shares, inclusive of the amounts already subscribed and paid for by them ; such subscriptions not to be binding, unless the amount of one thousand shares shall be subscribed and paid in.

Resolved. That all moneys paid on subscriptions to stock in the Mineral Point Railroad Company shall be deposited with the Wisconsin Bank, drawing interest at the rate of six per cent per annum, to the credit of the Treasurer, until ten dollars per share on one thousand shares shall so be deposited, including such shares as said snm has heretofore been paid in ; and that no money so deposited shall be drawn ont until the aforesaid amount shall be paid and deposited as aforesaid, by the first day of February next, the sum so paid, with the acerued interest thereon, shall be paid over to the several persons who shall have paid the same.

Resolved, That as soon as one thousand shares of stock in the Mineral Point Railroad Company shall be sub- seribed for, and ten per cent on each share paid in, that a meeting of the stockholders shall be called to agree upon a Board of Directors, and the present board individually pledge themselves that they, or so many of them as shall not be selected at such meeting, will resign one by one and fill the vacancies thus created, with such persons as shall be agreed upon at such meeting of stockholders.

A form of subscription list was prescribed and adopted, and, on motion of C. Woodman, a committee, consisting of M. M. Cothren, John Bracken, Cyrus Woodman, Thomas Davey, John H. Vivian, Henry Koop, Moses M. Strong and Whitney Smith, was appointed to appeal to the residents of the county for financial support. The requisite 1,000 shares, inclusive of former subscriptions, were subscribed February 7, 1855, and a notice was issued by the Treas- urer, calling in the first installment of 10 per cent, payable on the 15th inst., preparatory to the election of a new Board of Directors. In issuing the call, the President stated in a circular that "responsible parties are willing to enter into contracts to finish and equip the road in all respects, and have it in operation in one year, taking their pay exclusively in stocks and bonds of the company, provided the company will furnish the cash means to pay the outstanding liabili- ties and finish the grading of the road "

The 10 per cent call, although readily responded to, failed to meet the anticipations of the financiers, who, instead of realizing $150,000, only secured 878,850. The void remained as glaring as ever, and again the people were appealed to subscribe for 760 shares of railroad stock, in hope therchy of eventually acquiring sufficient capital to proceed with the enterprise. At the election of 1855, a renewed mark of confidence was placed in the Directors, by their almost unanimous re-election. The new board was composed of Moses M. Strong, Parley Eaton, John M. Keep, James Noble, R. S. Schuyler, Francis Vivian, C. C. Washburn, Henry Koop and M. M. Cothren. On April 25, 1855, a contract was satisfactorily concluded with the Hill- nois Central and Chicago & Galena Railroads, whereby an extension of time was gained for one year, so that a guarantee of 8 per cent income would not be forfeited. Bewildered and per- plexed how to raise money, the Directors' ability was sorely strained to concoct schemes, or to mature plans for the purpose, and only when every other resource had failed. they applied to the towns adjoining their line for substantial encouragement in the form of town bonds. In reply to repeated solicitations, several towns acquiesced in the proposal, and pledged their local- ities respectively as follows : Town of Mineral Point, $60,000; Waldwick, $10,000, and city of Mineral Point, $90,000. In August, 1855, a contract was made tending to the completion of the road, with Messrs. Keep, Fisher and Talcott. This was afterward transferred to Alvin Wilkins, of New York, who used all his influence and persuasive powers to procure the county's and company's bonds, intending to float them on Wall street. He represented himself as an affluent capitalist, but, despite constant pressing, he adroitly managed to evade the terms of his

530

HISTORY OF IOWA COUNTY.

contract, requiring him to begin work immediately. A deadlock ensued, which was only dis- solved by Wilkins investing his brother-in-law, Luther Beecher, with the contract. The change was gladly accepted, as Beecher was a recognized railroad constructor of Detroit, and had gained many encomiums from improvements in Michigan. The specifications of the contract guaran- teed Beecher $1,000,000 in cash, bonds and stock of the company, including all the town and county bonds in possession of the company. Under the direction of Luther Beecher, the deserted road-bed soon teemed with myriads of laborers, and the country again re-echoed the welcome bustle of industry. The grading, fencing and track-laying were accomplished with all expedition compatible with an embarrassing want of the golden lever of creation -- money. With fluctuating success, the line was ultimately completed from Warren to Mineral Point, and both sections of the country were thus united by the iron band that follows the advance of commerce in its progress over the civilized sphere.

THE FIRST TRAIN COMPANY RE-ORGANIZED.

The first train arrived in Mineral Point June 17, 1857. At the depot, an enthusiastic throng had congregated to signalize the event in the manner usual on such occasions. The depot at Mineral Point, a substantial stone building, with some pretensions to architectural beauty, was erected by Messrs. Toay & Allan, who did the mason-work, and Mr. Full, who executed the carpentry and joiner's work. The building measures 30x50 feet, and now, after the lapse of a quarter-century, stands as firm as ever, a monument to the builder's skill. Con- veniently situated is a stone locomotive-house, 33x55 feet, and 22 feet in height. This struct- ure is supplemented by a machine-shop, likewise of stone, one story high, and covering an area of 2,400 square feet.

The troublesome litigation attendant on the bonding of the road, as delineated in another chapter, arrived at a focal point in 1861, when, by a decree of the United States Court, in the Martin and Coman suit, the railroad equipment and plant were advertised and sold at Marshal's sale, on November 6, 1861, to James C. Carter, of New York, for the sum of $75,000. George W. Cobb was appointed receiver. The railroad was afterward re-organized as a corporation under the name of the Mineral Point Railroad (omitting the company). The Directors were Asahel Finch, Luther Beecher, Samuel P. Holmes, James C. Carter and George W. Cobb. The first meeting of the newly organized company was held July 7, 1862, when a report was presented covering the business of the road from November 13, 1861, to date. A cash balance of $5,818.17 was exhibited, without deducting anything for interest. The following Board of Directors was elected: Henry Koop and George W. Cobb, Mineral Point; Luther Beecher, Detroit ; S. P. Holmes and 11. W. Peck, New York. President, Luther Beecher ; Secretary and Superintendent, George W. Cobb A preamble and resolution adopted on that occasion, stated that as the local traffic was insufficient to meet the expenses of the road, and as it was required to be ballasted and refitted with cars and locomotives, that it was necessary to hypothe- cate, or sell all bonds, claims, contracts or property of the company, to raise money for operating expenses, repairs and improvements.

The Directors were authorized to extend the road to the north line of Iowa County, at some point on the Milwaukee & Prairie Du Chien Railroad. In accordance with the "articles of association of the re-organized company," the capital stock was increased to $1,200,000 in shares of $100 each, of which $500,000 was to be issued as preferred stock, first entitled to receive a dividend of 12 per cent. per annum out of the net earnings of the road, payable in August and February of each year, the balance to apply on the other $700,000. Each holder of original stock could, on surrendering his certificate, and by paying $50 per share, be enti- Iled to a preferred share. After October 1, 1862, the President and Directors were empowered to dispose of or hypothecate unsold stock in payment of expenses.

531

HISTORY OF IOWA COUNTY.

In ratio the stock was offered to the following corporations and persons :

Mineral Point, 600 shares

60,000

Waldwick, 100 shares.

10,000

lowa County, 1,500 shares.

150,000

Old stockholders, 300 shares

30,000

Total $250,000

Such was another visionary scheme to involve the public credit in the quagmire of financial distress. This proposition to a people burdened with an onerous taxation, the direct outcome of subsidizing this railroad, could not be contemplated otherwise than with the most pungent sarcasm. The disingenuous proposal was not even entertained by the respective towns or the county, so that the increase of capital stock was only evident in the accumulation of unsalable bonds in the possession of the railroad corporation. The new directorate conducted the road with varying success, to July 1, 1880, when the line was transferred or leased on private terms, to the Chi- cago, Milwaukee & St. Paul Company, which now controls and operates the road. They are now engaged in building the Monroe branch to Gratiot, La Fayette County. Early in 1881, it is believed, through trains will be running to Milwaukee by this route.

The gross earnings of the Mineral Point Railroad, for 1880, were $106,167.77, with operating expenses aggregating $72,530.65. The average rate per passenger per mile was 4 cents ; the average freight rate per ton per mile was equivalent to $3.50 per hundred pounds.

CHAPTER VII.

IOWA COUNTY BONDS.

BUILDING CONTRACTS-COUNTY REPUDIATION OF BOND INDEBTEDNESS-FIRST SUIT-THE ENEMY STORMS MINERAL POINT-THE LEGISLATURE TO THE RESCUE-A COMPROMISE AT- TEMPTED AND OPPOSED-SETTLEMENT, PROCEEDINGS AND FINAL REPORT.

The history of the Iowa County Bonds is so intimately allied with the inception of the Mineral Point Railroad, the financial ramifications of which are illustrated in another division, that it is with difficulty it can be narrated in a single chapter. Realizing that the subject has been fecund of acrimonions discussion and bitter feeling, the historian has carefully culled his information from a variety of sources, the result being given herewith, from an unbiased stand- point, and with the aim of ingenuously recording the truth.

Before launching forth on the question, it is necessary to a faithful understanding that the specific deeds should be premised by a pithy review of the railroad, from the time it was pro- jected. The Mineral Point Railroad was incorporated by an act of Legislature, approved April 17, 1852. Stock subscription books were opened in Mineral Point in June, 1852, and after many weeks of strenuous exertion, the amount of stock essential to organizing was subscribed and the first installment of 10 per cent was paid. A Board of Directors was then elected by the shareholders, and the initiative steps toward constructing the road were inaugurated. During the year 1852, the preliminary surveys and estimates were completed, and additional stock amounting to $130,000 subscribed. By order of the Direetors, an act authorizing the county to issue bonds in aid of the railroad was submitted to the Legislature by Levi Sterling, P. W. Thomas and HI. Madder, and eventually approved. The title of the act was " To authorize the counties and towns through which the Mineral Point Railroad passes to aid in its construction." Through the agency of HI. II. Gray, of Darlington, a proviso was inserted exempting La Fayette County and the towns and villages therein. from participating in any proposed subsidy.

On the passage of this law, a resolution was adopted directing the President to submit a proposition to the County Board of Supervisors for the exchange by the county of $150,000 of county bonds for a corresponding amount of convertible railroad bonds in conformity with the provision of the act. The proposition of the railroad company specified that in return for bonds of the county aggregating $150,000. the principal and interest would be guaranteed, and as security for such payment, the company offered to issue an equitable amount of railroad bonds, convertible into stock, and seeured by a mortgage on the road and all its equipments. The County Clerk, on receiving the proposition, as required by law, convened a meeting of the Board of Supervisors, to take into consideration the offer. The meeting occurred May 25, 1853. John Messersinith was elected Chairman, and the board adjourned to the following day, when every member was present. As anticipated, the expediency of holding an election was fruitful of warm debate.

After an excited and earnest discussion, the voice of the meeting was registered in the affirmative by a vote of ayes 8, nays 3. An analysis of the vote shows the following as having cast their vote in the affirmative: G. M. Ashmore, Arena ; John Messersmith, Dodgeville ; John Covill, Linden ; R. D. Pulford, Mineral Point ; Francis C. Kirkpatrick, Mifflin ; John B. Skinner, Ridgeway ; Samuel Zollinger, Waldwick, and E. L. Geddings, Wyoming-8.

Nays-Nathaniel Butterfield, Clyde; David McFarland, Highland, and F. E. A. IIal- stead, Pulaski-3.

533

HISTORY OF IOWA COUNTY.

The date of election was fixed for June 20, 1853, and a printed notice of the election and implicated interests was distributed broadcast in every section of the county. Appended is a true copy of the election notice :

ELECTION NOTICE.

WHEREAS, The Mineral Point Railroad Company has, in pursuance of an act of the Legislature, approved the 23d day of March, A. D., 1853, submitted to the Board of Supervisors of the county of Iowa, a proposition in writing for the exchange of $150,000 of second mortgage bonds. of said railroad company, bearing 8 per cent interest, paya- ble semi-annually in the city of New York, for One Hundred and Fifty Thousand Dollars of lowa County Bonds, bearing 8 per cent interest, payable semi-annually in the city of New York, both of said issues of bonds redeemable in the year A. D. 1868, the said railroad company binding themselves to meet the interest upon the said county bonds, as the same shall fall due and payable from time to time.

In pursuance of said law, the Board of Supervisors for the county of lowa, hereby give notice to the voters of said county, that an election will be held at the several places of holding elections on Monday, the 20th of June next, when the voters are required to deposit a ballot upon which shall be written or printed the words " For the railroad proposition," or " Against the railroad proposition," which said election shall be held in the same manner and form and under the same laws which govern State and general elections.

By order of the board,

JOHN MESSERSMITH, Chairman.

Attest : JAMES B. GRAY, Clerk.

MINERAL POINT, May 26, 1853.

The appearance of this election notice created much animosity in the northern districts, which at that time, animated by the county seat removal, were allied against all legislation tend- ing to improve Mineral Point. The election was held, and the following returned as the official statement of the canvass :

TOWNS.

FOR.

AGAINST.

Arena

Clyde

Dodgeville

640

llighland

148

Linden

156

Mitlin

Mineral Point ..

1,007

...

Pulaski.

Ridgeway

102

Waldwick

Wyoming

Total

1,345

1,187

Majority for railroad proposition, 158.

Captious critics impugned the legality of the election on the ground that the vote had been obtained by fraudulent practices, and by the exercise of deception. However this may be. the county bonds were issued.

One hundred and fifty bonds for $1,000 each, dated July 26, 1853, payable to Francis Vivian, Treasurer of the railroad company, on July, 1868, with 8 per cent interest, payable the 1st day of January and July of cach year, at the bank of the Manhattan Company, in the city of New York, with coupons for the interest attached.

In exchange for these bonds, the county received from the railroad company, 150 bonds of the railroad, for $1,000 each, bearing the same date and interest as those issued by the county, due at the same time, and payable to Edward H. Janssen, State Treasurer, but without interest coupons being attached.

To secure the county for the payment of its bonds, the railroad company gave a mortgage, dated July 27, 1853. to Edward H. Janssen, then Treasurer of the State, as Trustee, on all its railroad and property ; the same mortgage being intended to also secure $170,000 of other bonds to be afterward issued as the company might need them. This Janssen mortgage was in point of time the first mortgage ever given by the railroad company, but it was specially agreed and provided that it was to be deemed as a second mortgage, subsidiary to another mortgage after- ward to be executed, and to be called a first mortgage. The bonds were floated in New York. Following the appearance on Wall street of the county bonds, two advertisements, purporting

534

HISTORY OF IOWA COUNTY.

to emanate from the Board of Supervisors of Iowa County, appeared, respectively advocating and denouncing the issue of the county bonds.

BUILDING CONTRACTS.

On December 16, 1853, the railroad contracted with Robert & G. L. Schuyler, of New York City, in which the Messrs. Schuyler agreed to build, equip and put the railroad in running order for $1,000,000, all payable in the bonds and stock of the company. The contract pro- vided that $150,000 of Iowa County bonds should be loaned to the Messrs. Schuyler as collat- erals to borrow money on. After the completion of the road, they were to be returned and given up to Iowa County to be canceled.

The contemplated first mortgage was executed January 2, 1854. This mortgage was on al the railroad and property of the company, and was given to G. L. Schuyler to secure the pay- ment of 1,000 of the bonds of the company for $500 each, due January 1, 1874, with interest at 7 per cent, payable on the 1st days of January and July of each year, and having interest . coupons attached.

In the spring of 1854, Messrs. Schuyler proceeded vigorously to fulfill their contract. About March 1, 1854, $500,000 of the Schuyler railroad bonds, and $150.000 of county bonds were deposited in New York, the money used being obtained by the officers of the company drawing on Messrs. Schuyler, in New York, payable four months after date. These drafts would be accepted, and the company discounted them, and procured the money from various banks.

As stated elsewhere, Messrs. Schuyler failed to meet their monetary obligations on July 3, 1854. Up to this date, the company had drawn at four months for $137.000. About $77,000 had become due, and was paid by Messrs. Schuyler, thus leaving $60,000 for which the railroad company was responsible to the banks.

On settling with the assignee of the bankrupt contractors, it was found that they had used $30,000 of the county bonds, and $20,000 of the Schuyler first mortgage bonds. The company obtained the release of the remaining $120,000 of the county bonds, and $45,000 of the Sehuy- ler bonds. By this transaction the railroad was saddled with a debt of $60,000 for the unpaid acceptances of the Messrs. Schuyler, and a home debt of $15,000 for grading, etc.

The debt of the company, about $75,000, was carried with great difficulty, by putting up the Iowa County Bonds, and by using the first mortgage bonds as collateral.

Eventually a contract was signed with Alvin Wilkins, of New York, for the payment of the company's debt and the completion of the road. That gentleman was dissatisfied with the form of the Schuyler bonds, and, at his instigation, a third mortgage, or an alleged new first mortgage, was prepared and executed by the company. This issue was for the sum of $320,000, in $500 bonds, each dated January 1, 1856, due January 1, 1881, with 8 per cent interest, pay- able semi-annually. The new mortgage given to secure these bonds was dated January 1, 1856, and was to D. R. Martin and L. D. Coman as Trustees.

By the cancellation of $50,000, the balance of the Schuyler First Mortgage Bonds, the Janssen Mortgage, by priority, became the first mortgage with the Martin and Coman deed sub- sidiary to it.

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History of Iowa County, Wisconsin, Part 80

Author: Publication date: 1881 Publisher: Chicago, Western Historical Company Number of Pages: 958

Author:
Publication date: 1881
Publisher: Chicago, Western Historical Company
Number of Pages: 958