New-York tribune., 1874-01-01
HOW RAILROADS ARE BUILT
A REPRESENTATIVE CASE.
THE ST. JOSEPH AND DENVER CITY RAILROA
HOW To CRKATY RAIIRoAn trpos q

REPRESENTATIVE CASE.
THE ST. JOSEPH AND DENVER CITY RAILROAD CO.
HOW To CREATE A RAILROAD yPoE Sl.40O
Mr.. William Bond, not very long sincs
elected President Of the St. Joseph aud D,nyer City
Railroad Co.. after making careful investigation into
the Company's Affairs. mado q report 10 the Board Of
Directors which Is remarkable and peculiar
In that IL doubtless gives truthful history OF the con-
struction OF the road and those the report
will perhaps be Ghtened they build railroads
ahe West and why many Of thesesenterprses which
look very well on paper fail.
1t appears from this report that the original charles
granted by the Territorial Legislature Of Kansas f2s
created corporation by the OF the Marysyillo
Palmetto and RoscpU: Railroad Company. with o oap
ital Of SOOOO0O with power to construct railroad from
Marysyille TO Roseport Kansas as TO with
the Hannibal and st. Joseph Railroad. In ssl the
OF the Company changed to tho present st. Jo
seph and Denver City Railroad Company. ana
authority obtained from Nebraska to build road
from the border line OF Kansas TO Fort Kearney tho
Union Pacific Road In 1866 the Northern Kansas Rail
road Company, having q land grant. consolidated
with or swallowed up by the st. Joseph and Denver
City Railroad Company and by the terms Of this agre
ment the capital stock of the Company increased
to sooOooo The legality of the organization and sub
seQient proceedings relating thereto tho report.
are not called in question.
After this organic ltion the individuals controlling ths
Company subscribed and paid in cash for capital stock
amounting TO fourteen hundred dollars and obtained
corporate subscriptions to the stock OF hc2joo pays
BILE in corporate bonds making total subscription OF
81 06AOO The Company also obtained grant from the
proceeds Of the sale Of certain lands.
amounting Sl52s for which stock Issued Stock
was exchanged for township bonds to the amount
of 10000.
In August, ls7O the Board OF Directors contracted
with Abram Nave and associates for building and
yI. .f.nlf
to Fort Kearney. In May. 1871, the agreement with
Nave and associates Cancelled, and new contract
entered into with Messrs Tanner Co.. ban1ers OF this
city, for the sale OF the unsold mortgage bonds OF the
Division and for the entire Of the Westers
Division; also. for the construction and equipment OF
Under this contract the road constructed
to Hastings 22T miles west from the Missouri Riyor.
where 1t with the Burlington aud Missouri
River Railroad in Nebraska, by which rold IL con
meets with the Union Pac.1c at Kearney junction Tho
road completed but not operated short distance Ds
yond Hastings, and is graded some 80 miles further "a
the south bank of tho Platte River, about seven mss
from Kearney Junction.
The land grant OF the Company. which is covered by
the Western Division 0j6)o0oW mortgage, aas beea
says the report of misre presentiton
Most people will think 80, since the advertisements.
offering the bonds to creduous public. stated ths
quantity at 10000 acres. more or ess a, they say IN
title deeds, and it turns out more than ooOOO acres
"less" the actual lands TO which the Company arc On
titled being less than 500, 900 acres.
The capital stock OF the Company anallys dieter
mined and issued by the Board Of Directors Is OOo.
OF which amount appears from the books OF the Eom
many that fourteen 500 Issued for ca,b sub
scriptions to original subscribers IL also appears that
shares been issued to counties and municipal
corporations in exchange for corporate bonds and ~
for the land grant OF the State of Kansas
1t further appears that pOOo shares were issued to A.
Nave aud others, contractors, part payment under
their contract and that the remainder Of the stock,
II 42 shares issued bonus with the bonds aud
in payment Tanner Co. and their associates or upon
their order under aud by virtue OF certain eoutraets
and agreements made with the Company relating
thereto. The Eastern Division, extending from tho
City Of Ewood (Which is tho west approsoh
to the Missouri Bridge Immediately opposite
the City OF ST. Joseph. MOI to Marysville.
Kansas IS covered by a mortgage OF N.5oO.o0o The
Western Division. extending from Marysyille to Koar
ney, together with its lands and other property. IL
mortgaged to secure tho payment Of IN issue OF
s55COOoO OF bonds known the First Mortgage Sinking
Fund Land Grant Bonds. Western Division" TIE
OF the Eastern Division is ct the rate OF s25 50
per mile and the Western at the rate OF sS453 per milo
Oh the completed road from Marysyie to Hastings.
and at the rate Of $s5s3 81 the whole line OF road
irom Marysvile to Kearney. The funded debt OF the
road therefore, amounts TO N.Ooo0oo but OF tina
amount s245OOo have rot been sold but hypothe
Gated These bonds promise per cent gold interest
and interest amounting to $i6s.7S2 81 paid up u
August 1884, out of the proceeds OF the sale OF bonds
since which time the Company has been IN default.
IL having rs Mr. Bond gravey remarks no resource~
either from earnings or sale OF lands or proceeds Oh s
sale Of bonds TO apply TO this purpose"
The statement In the report Is very interesting
The OF cash received by the managers of th,
Company purposes OF construction from the time
OF It's organization and the sources whence received
follows:
Cash subscribed capital
stock a. shares. ....... N.400 % realized Tto "
Bonds ST. JOSEF ph City,. S00O0J realized $3.50 S5
Bonds Of Doniphan
Brown. and Marshall -
Counties ............ 400 900 ~ realized 2i 30 ~
Donation by Kansas. lG4,5l8 05 realized 1898 NJ
Bonds Eastern Division. 800 90 realized So5bs3 w
Bonds Eastern Division. 5l2500 % realized 42lioi %
Bonds Western Division 3279OOo % realized 2jn,sS ~
Bonds Western Division $1,000 10 realized 3O,UO -
Bonds Western Division 10000 " realized 55.OO "
Bonds Western Division l,5260o0 90 realized $1,000 "
Town bonds ............ 29,OOO 10 realized 1920
Total ......... 81 ,g2s C5 realized S5.i49630 TT
Cost Of converting bonds, &c, lnLo cash, fSo' VI
fraction over 30i per cent.
1t appears that the managers commenceu oprra1lns
the road, or much Of 1t completed, on te isS
OF April 1871 and that from that time OCT l. lo'J' 80
gross earnings $64s,s79 Sc. and the ekG.nsf-.
SJs0I5 showing loss or 3li126 33 the taxes psid