The St. Cloud journal. [volume] (St. Cloud, Minn.) 1866-1876, 1875-04-15
chises of the said company pertaining

chises Of the said company pertaining
to the unbuilt portions of said road"
To accomplish this object they made
. trade with the First Division Com
pany to build the road, and lease it Of
the St. Paul & Pacific for a long term
Of years, the evident object Of this
trade being that, in due course of
events, the First Division Company
would come in and by other trades
become the owner of the said extern
sion, lines.
In carrying this trade into effect,
the same parties in Amsterdam, Hol-
land, who had furnished the money
on the bonds to build the lines from
St. Anthony to Breckenridge, under
took to do the same on these extern
sion lines, and for the purpose of
fully informing themselves as to every
detail and particular of the undertake
ing which they were to engage in,
the banking house of Lipman, Rosen-
thai Il Co., of Amsterdam, sent Mr..
Leon Willmar, Of London, England,
to this country as their agent, so as to
know from their own man all about
how affairs were running and man
aged over here before they invested
any money in the enterprise. Right
here, I desire to call tn particular at
tention Of your readers to what I call
one "nigger in the wood-pile," and
how the Dutch bankers manipulated
that niger" This man Willmar
reported to his principals that these
extension lines had a magnificent land
grant attached to them; that they
had very important connections with
the Northern Pacific Railroad at
Brainerd and Glyndon, and that the
Canadian people could not do any
thing at settling up the new Province
Of Manitoba unless these roads were
built; that the business which such
settlement would give these lines
would be large, and that the whole
scheme was very favorable one and
opened good chance to make a big
| thing.
From St. Cloud to St. Vincent v;a
Glyndon is 800 miles; from Watab
to Brainerd is 81 miles-a total of
377 miles. On this mileage there is
a land grant of ten sections, or 6,400
acres, of land per mile, making a to-
tai Of 2,412,800 acres of land to
these lines. 1t was estimated that this
land would sell, in Is or 20 years, at an
average Of seven dollars per acre, or
to put it in round numbers at seventee,,
millions Of dollars, and that the road
itself, without the lands, would be
worth in fifteen years, $4,000 per
mile, or $9,425,000. This 377 miles
Of road was estimated to cost, COM
pleted and equipped, $4,000 per mile,
or a total of $7,540,000.
On the above basis of values, as re-
garded both lands and road, the Dutch
bankers, Messrs. Lipman, Rosenthal
& Co., concluded to undertake the job
Of furnishing the money and to do it
as follows: The Railroad Company
to issue fifteen million dollars of bonds,
| which should be first and only
mortgage on all the lands, property,
privileges, and franchises Of the COM
pany, and which bonds, it was calcu-
lated, would be sold at eighty cents
net ; then the said bankers would re-
serve and keep back enough to pay
three years interest at seyen per cent,
or twenty-ene cents on the dollar, Cor
rather twenty-one cents out of each
eighty cents of sales), then take out
five per cent. for selling expenses,
which would leave the amount to pay
over to carry on and complete the
construction. Now stop and figure
this out and you will see how it runs !:
Total issue of bonds, ............ SIS, 900
Sell for eighty cents,........."... 100000
Take out i've per cent for SELL
ing expenses, :................~ 100000
Which leaves..".....~...... s11.4oo, 900
Keep out twenty-one cents to
pay three years interest...... 100000
Which leaves............. $s,sso,ooo
to pay over to build the road with.
Under the above arrangement the
Dutch bankers would make in the
operation all they could get over the
eighty cents for the bonds, would get
the five per cent. for selling the same,
and would get the use of the three
years. interest which would be re-
tanned in their hands from six months
to the full three years, and for which
they would pay nothing. I wish I
was a Dutch banker and could have
all the business l wanted placing rail.
road bonds on that basis.
/ Well, with all this arrangement
perfected by Lipmam, Rosenthal &
Co. and their agent, Mr.. Willmar,
the sale of bonds was commenced, and
contracts were made with VIM. G.
Morehead, aud by him with DeGraA
& Co. for building the extension lines.
These contracts were made in Octo.
Der, 1871, and, as you are aware, went
ahead all right and in full blast until
July, 1872, when the money stopped
coming, although DeGrafP & Co. kept
at work with their own funds and
credit until October, working some
three months on what you might call
their own hook. and in this time laid