The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1873-12-06
STEALING RAILROADS.

3 In lSjl-2-3 and along, when the Rock Island
and some other Illinois roads were built, il
, was deemed sharp thing to have the towns
, along the line of the road raise money enough
by private subscription or by voting town
, bonds to grade and tie the road, and then TO
pay some heavy eastern capitalist double
, price in stock to iron and equipit Thus the
money was raised to grade and tie the Rock
Island road, and then the contract let to
Henry Farnam at, we believe $32 900 mile,
then about double price to build and equip 1t,
the contractor agreeing to take all the rest of
=, his pay in stock. Mr. Farnam, after advanc.
ing the money TO build the road, sold his
: stock at from so to rs cts. on the dollar and
made q good thing Of it, while such towns or
private subscribers as could hold on to their
stock long enough, nearly got back It's first
cost
Wouldn't modern credit mobilcr railroad
IcOntracter shake his sides to hear Henry
Farnam boast Of the sharp dodge by which
he made modest little fortune building the
Rock Island road? Some idea of the extent
of the innocence and simplicity of the Farm
ans and Litchfelds of those days may be
formed from a brief contemplation of the
facts recently brought to the surface before
Judge Upton of the Mclean circuit court,
in a suit involving the construction of the
! Gilman, Springfield and Clinton railroad
| The facts connected with that road are so
| precisely like those involved in the conStruc
| ton Of the Fox River Valley road that we
briefly rchearsc them as u matter of local
interest. The road is about 100 miles long,
extending from Gilman, IrGquois county, via
| Clinton, Dewitt county, on a bee line to
Springfield Towns and individuals along
the line of the road subscribed about 5000.
600 stock towards building the road, The
company consisted of eleven directors, prob
aDy named in the charter, and these out of
tha; own number elected the President, Secra
tary, sc. This board of directors let the con-
tract to build the road to n PHILADELPHIA
company known as the Morgan Improve
ment company" the directors themselves, or
portion of them, being let into the company
IS partners in the job The price was as
follows; $4,000 per mile in local subscrip-
tons equal to cash. S25,0 per mile in ten
per cent, bonds Of the company; and $4,000
per mile in the cOmpaDys stock, or about
$4,000 per mile, The contractors were to
have the privilege of leasing the road, when
DONE for 90 years 10 the Pennsylvania Central
railroad company, and an additional mort
gage on the road of $40 900 mile, or 81 900
900, was given tic Com Scott, or the Pa. Cent
raj, for equippirg the road There was also
in the contract q side agreement with the
Vermilion-no, we mean the Barclay coal
company owned by the directors, by which
the railroad was bound TO purchase all its |
coal Of them and carry their coal at special |
-atcs As in the case of the Fox River Valley |
the money to build the: road was really
advanced by the G. B. & @, 50 in this case
all the money was advanced BY the Pcnnsyl- !
vania Central, except the local subscriptions, !
When the road was finished, in this as in the |
other case, the lease was made to The big |
monopoly for 80 years, and all the stock and
turned over to it IN such a way that
the Pa. Central, or Tom Scott could any day
shut down on the mortgage and thus kick out
all the local stockholders
In the case of the Gilman road, the local
stockholders resisted the robbery by com.
menclng a suit before Judge Upton, and on
the above facts being made to,appear Judge
T. decided substantially as follows:
AZ nd bn 10, ,rT
are highways, and the directors arc simply
trustees charged with the faithful and honest
of them.
:. That if the directors mismanagc their
trust by making fraudulent contracts or by
the property or earnings of the
road, they may be Invested of their trust and
a receiver appointed to act under and report
to the court.
3 That the town and county bonds issued
in aid of railroad are valid lien on it
which cannot be destroyed or set aside by
other liens of fictitious character; and that
when the railroad company frauducntly de.
prives towns and counties of their rights and
interests by outside sale, lease or contract,
the injured towns and counties may recover
at common law.
The Judge therefore proceeded 10 appoint
receiver to whom he turned over the road
and who is TO run 1t until such an honest
settlement Of It's affairs can be made as will
give ,he local stakeholder, their due share of
the property
The case will possess a special interest for
the citizens of Ottawa only in the event that
the suit on the Ottawa bonds voted to the
Fox River road recently commenced in the
|. ). court at Chicago is decided against this
town. In that event, the next step for Ottawa
would be to proceed by the road pointed out
in the Upton decision TO get back the worth
OF its money. Meantime, however, Ottawa
tiatterS herself she stands on better ground.
To Andrew Lynch, Esq, our supervisor, and
ID. +. Jones, ESD the attorney he employed
in behalf OF the town, our people arc indebted
for the discovery pf u shorter road out Of the
That discovery was that the SUP