The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-05-11
A VERY COSTLY RAILROAD.
ONE HrNDRED WILES LONG AND
INDTNG Ar NOUHERE.
w.o,ro vni,ca suite, paia A. 900. 900 and

Bingham II. Nichols. and others, WINS begun YES
terry at 'ruoon IN the Supreme Court, before
Judge Larrenore. Mr.. Mount opened for the
plaintiff. In 1895 Samuel G. Pomerov, Senator
from Kansas, and wills GAYLORD, his trother-
in-law, owned charter TO build a railroad In
Kansas. Senator Potncroy obi lined grant
from Congress 70 the Hannibal and 81. Joseph
Railroad OF Missouri Of subsidy and lands
under the Pacific ilroad acts. Pomeroy was
Mt the time very Influential IN the direction OF
the Hannibal and ST. Joseph the grant was sl0,-
do0 In United state bonds Tor every milo and al
tornate sections OF twenty miles on each side OF
the road. Pomeroy procured an assignment Of
this grant TO his proposed railroad In Kansas,
the Atchson and Pixies Peak.
The grants and subsidy were very valuable, the
United States bonds for ono hundred miles OF
road amounting TO $l,GOl 900, and the land grants
being valued at si1j1,Oo0. Besides this. It was
proposed to issue $i6U,OO0 Of mrs. mortgage
bonds. Pomeroy's ain was TO connect VITA the
Kansas Pacific. the original route OF W Itch ran
In northerly direction, abont ono hundred
miles west of Atchison. Pomeroy and Gaylord
agreed with the Hon. James wadsworth OF this
CITY to give him So ono Of nrst mortgage bonds
and 5000 or 1900 acres OF lind II he would form
a company Of capitalists to build the ro ID Pom
eroy and GAYLORD to hive an interest In the
company, and to be allowed one. eighth and a
stock, and large percentage of the proceeds OF
land. Dat Of this allowance Gaylord nrItosed
TO pay Wadsworth the <S0O aud also to dis.
char-e some existing oblisati1ns incurred in
procuring the passage Of the subsidy act.
THE COMPANY.
Mr.. wadsworth associated with himself EiIing-
hmm II. Nichols, a lawyer Of this city, Chaunccy
viohard, v Titan A. wetmorc, y New York
LAWYER. and the following Boston parties: Geo.
5. Hale. Z. -. Pnillips, Ralph NJ romerov, *.
Tvitcht II, Samuel c. PomerOy and Ills Gay
lord also IL aiming an interest.
William OSBORN, lend Of Senator pumeroy
ana Of GAYLORD, ana Richard \. Park. son-in-
law Of osborn. were taken into the arrange
ment. the interest was divided np into frnc.
Ralph NJ. Pomeroy owned m eighth toee her,
one-sixteenth each; w lis Gaylord. two-cigntns;
Nicnols, Oue.cghih and VIM. G. W,tmore,
Chauucey Whoa d, David A. Butterned, ana
Rich I'd a. Park, onc-six eenth each. Gcnery
Twilcnell, VIM. Clatin, George s. Hall. ana Il.
Il Phillips owned the remaining fraction.
President Wits tia"inrd' Wee Presdcnt wv NJ
james Wadsworth. Secretary. snd entered into
an agreement with VIM. Osoorn, under which
TO be uaid $4,000 in money. Sl.,sD.tN1 in nrsf
mortgage bonds, sl6eO.CO0 IN SUBSIDY bonds If
the United states. and was to have the proc. eds
OF all tue lands not gwen to Gaylord.
osBoRN's ASSIGNMENT.
Osborn and the company executed this con.
tract. and then Osborn ass gn,d his interest in
the contract to the parties 10 the contract. so
that all would share IN the profits according 10
tner interest in the company. The parties also
agreed that one-cighth ana ope-qu after Of one
per cent. OF the bonds, both United States aud
nrst mortgage, shall be paid BY the Executive
Committee Of these contractors to Willis Cav
lord rs they shall be received, in discharge OF
existing OOligation-.' Aud the; further agreed
that one eighth part OF the STOCK To be- issued
should he assigned to Gaylord in DISCHARGE Of
existing obligations, 10 bclng und rrst Iod that
y lid stock shall not be entitled TO any interest
10 any OF the pronts or assets to be acquired I'M
der the contract"
II was further agreed that the land. should
remain noninaliy III tive possession Of the COM
panv, and that deeds TO purcn sers should be
made city by the COMPANY, because our
ohasers would cont act VITA the company in
Of the lands should he turned over oy the COM
plny 10 the parties to the contract.
A power Of attorney was also executed by
winch the pirties agreed to be bound 10y "a ma
j0rity In interest.
4. was estimated by engineers that the road
would cost S2.i0l000. which would leave about
$4,000 OF profit besides the iends At the
completion OF the FIRST twenty miles the COM
pany would tie entitled to one-fifth OF the Cow
eminent subsidy, s6iO.o0O which would be sum.
clent - bulld the second SECTION Of twenty
miles, when they would be ent.led to another
on--hith. and build the next and 80 on. 10
raise the money for building the Arst twenty
me, miles s.s snnsg ope19ed stock subscriptions
quired to take stock in proportion to his
isterest in the contract. person having an
eighth interest In the contract took nne-eieath,
or 100000 Of the stock. But the first twenty
mites cost sG0D.OD. aud the additional $4,000
h id to be raised by assessmrnts Nor was a
ready market found for the bonds. The com
pany therefore appointed one Wheeler az agent
TO go TO Europe aud dis2ose Of the bonds.
agreeing to give him 100000 for SIX months
services. provided he should succeed in selling
the securities. 1ney also issued half a million
more stock which they Entrusted to Wheeler,
for hin 10 place IL where II would do the most
good Wheeler failed TO negoti TO the bonds,
ana on hiS return refused TO surrender them.
He was thrown into prison In Boston aud COM
pened 10 give up the bonds.
THE MORTGAGE BONDS.
The parties to the contract then individually
subscribed for the 1rst mortgage Uonds at 70 per
Get o-e 81 them has siuc: wlttea lettc.
la th.t he placed his boLds bJu.at Il - pr
n,r cent
Some proceeds were received from the sale Of
lands, and these. with the $6DJ,0D raised at Hrst,
ihe United states subsidy, aud some temporary
loans. sutlced To u. LID the hundred miles Of
rl-d wnlin was comnIeted IN the sprn- 81 1868
Iue 1ad cost S2,9l61G. Osborn dem indei an
iWn ~ ,.1, division Of tne pTonls. Meantime
al interest IN the company. and with Nichols
aud II oh NJ. Pomeroy formed the Executive
The artes found to their disappointment
thlt their road ended In wilderness. Had the
Atcnisoi. and Pixies Peak would nave joined il
a. the terminus Of the latter; but the Kansas
"a Tic had taken southe,ly route, direct u
Denver, and Pomeroy's railroad ran through
and ended IN uninhabite plains.
PomeIoS' 5 company thought that they had an
eqlity right TO additional subsidies aud lands
untll their railroad would strike somewhere.
Iley succeeded IN inducing Pres ideut Grant to
utll tntN, ana lhe lrc~ident put us signature
10 map Of their road, t. he Med, the effect of
which would have been to WITHDRAW certain
lands from settlement as part Of their grant.
The President. after further d-hnerdJiOn, with
held the map, and II was not died.
MONEY SPENT IN WASHINGTON.
The company labored vigorously to procure an
additional subsidy. and Mr.. Iroadweil, VINO had
purchased an Interest in the contract, claims
mt hundreds Of thousands Of dollars were
spent IN Washington. In the winter Of ls13 MIR.
lreadwell consul ed counsel, ana was ADVISED
MAJ under the law the company had no right u
additional subsidies lie then demanded AN
lhin. i'ate division Of the profits, which were
supposed 10 be In the control Of the Executive
Committee Messrs. Ralph N. Pomeroy, Nicnols,
and Day.
Meantime Osborn had been bought out by the
other parties To the contract, senator Pomeruy
mao retired, at least ~ nhue, though Ills Gay
loid appears Ia the list Us owner fur himself and
a. trustee Tor somebody, ana much Of the inter-
IS, had changed hauds, some o. II at AS nigh as
Twice the par value.
No settlement having been made as offered
MI lreadwell began suit for an account M
thr ayment Of the debts, and a division Of the
pron's' lie thinks that S2,0OO,OOO Of land con
Hhl- ana money ought TO Ue accounted Tor.
LIE RAJ will probably OCCUPY several DAYS