Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1883-02-01
. I'D TOR4ILROADs.

In view of the pending agitation in our
legislature on the subject of granting bo-
muses. to railroads by municipal corpora
tons, the history of the city CT Watertown,
Wis, may serve as an illustration of how
much harm may come from the system of
loaning credit to corporations. In the
early days of railroad enterprises in Wis
consin the people of Watertown became
imbued with the idea that that city was
destined to become a great metropolis.
1t was beautifully situated on Rock river,
had splendid water power, and the hum
of several Touring mills and several other
manufactures had begun to gladden. the
ears of the property owners. All that was
needed, it was thought was railroad to
carry the products of the manufactures to
the great lakes. Several companies vol
unteered to build a road if the city would
grant them aid. This was done, the
amount of the bonds issued amounting to
to about quarter of a million of dollars.
The railroad was built, but it did not bring
the prosperity expected. AS years passed
and property did not increase largely in
value, and as the city became merely way
station on through line from Lake
Michigan to the Mississippi, the
people became weary of paying
the interest, and at the time of the panic
of 1857 default was made, and the interest
has not been paid since that time. The
legality of the issue of the bonds was ques-
fIOTo6 and focfo1 4brorc.H oil L.
being finally affirmed by the United States
supreme court ten or twelve years ago. The
interest has accumulated to such an ex-
tent, however. that the people are unable
to pay the amount due, and if the entire
property of the city was forced to sale at
this time it would not bring enough to
satisfy the judgments against the city. A
few years ago the creditors of the city en-
deavored to force settlement by suing
out an execution, but this was defeated by
the resignation of all the officers of the
city, from the mayor down. The city was
left absolutely without municipal gov
eminent for several months.
We observe that the creditors of the city
are now applying to the state legislature
for an enactment by which they will be
able to collect the amounts due on the old
railroad bonds. At the same time the peo-
pie of Watertown are applying to the
legislature for an act which shall give them
relief from their burdens. They propose to
abandon their city government entirely,
allywing the municipality to be absorbed
by the two townships in which it is located,
leaving the bondholders no
municipal organization to Sue
and consequently no property on which to
levy. The property in the city is at pre-
sent of little value, as people will not buy
in place so heavily burdened. Business
is dull and all enterprise driven to other
more favored localities.
The experience of Watertown should be
warning to other municipalities that
may be tempted to tie their own hands for
all time to come for the benefit of railroad
companies or other corporations. The
pr actice is most pernicious one. It is
seldom that all the benefits promised from
the construction of railroads accrue to
town, and it is self-evident fact that if
site offers promise of future prosperity the
railroads will seek it without the induce
ment of bonus. There are hundreds of
towns in the northwest that have been
bankrupted by laoning their credit to rail
roads, far more than there are of those
that owe their present prosperity to the
business the railroads bring them.