The true northerner., 1873-11-14
California and Texas Construction
Company.

The California and Texas Construc-
ton Company, which lately collapsed,
was the offspring of the Texas Pacific
railway. When that enterprise was be-
gun the State of Texas offered subsidy
of every alternate section of land on the
route. Besides this, towns and turn
pixies along the proposed route offered
subsidies amounting to many millions of
dollars, provided the road should be
completed to Fort Worth, Texas, by
July, 1874. In order 10 press forward
construction and comply with the terms
of the subsidy it was deemed advisable
to let the construction to some construc-
tion company. A syndicate consisting
of Col. Thomas A. Scott, j. Edgar
Thompson, Matthew Baird, S. nj. Eel
ton, w. A. Wallace, and other heavy
constituted the company. Its capital
was originally fixed at $40, 900, 900, but
only $9,000,000 was subscribed. OF this
65 per cent. or So, 800, 600 was called in,
f, but only $4, 900, 600 was actually paid in,
which amount represented the working
capital of the company. 1t was thought
that that amount would be enough to
build the first hundred miles, when the
railroad conn., any could issue them $3,-
500, 900 first mortgage bonds in payment.
| Such was the eagerness with which
| bonds were sought for investment at that
time that no doubt was felt that gold
bond of road through such country
as the Texas Pacific traversed would find
rcsdy market. The first hundred miles
was completed according to expectation,
the bonds issued in payment, and every
thing found as anticipated except the
market for the bonds. Public confidence
in railway securities was wanting, and
after some months endeavor to negoti-
ate them in this country, Mr.. III. G.
Stebbins was sent to Europe to try the
market. The security for the bonds was
believed to be so entirely sufficient that
the holders refused many offers to dis
count, and Mr.. Stebbins returned at last
without having sold bond.
Meanwhile the construction OF the
road was being pressed forward as ex-
peditiously as possible. When funds
were exhausted the Endorsement of the
wealthy stockholders gave the company s
notes as much currency as money. In
this way the road was completed and in
operation as far as Dallas, $50 miles,
and was graded, bridged, and ready for
the rails nearly half the remaining $50
miles to Fort Worth. Col. Scott, early
in the summer, went to Europe to try to
negotiate the bonds. He made satisfac-
tory progress, and actually made con-
tract at six per cent. more than was Of
fered to Mr.. Stebbins. All that was
needed to complete the transaction was
the formal signing of the contract, which
was deferred for few days. Col. Scott
improved this opportunity to make a
short tour on the continent, but was
taken ill, and lay for several weeks un-
able to travel, in Switzerland. The day
for completing the contract thus passed,
and before he was able to go to London
the news of Jay Cookies failure put an
end to the negotiation. Even then the
condition of the construction company
was not considered hopeless. They still
had nearly five millions of unpaid capital
stock. 1t was called for, but two of the
subscribing bankers Zone of whom was
Mr.. Henry Clews) failed, and none OF
the rest responded. Notes were matur.
ing, and that for $500, 900 vas protested
which precipitated the failure of the
company.