The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-09-20
THOSE LITTLE ROCK BONDS.
Ex-senator Macdonald Explains Mr.. Blaine's
Connection with Their Sale.
tGath'so New York Letter.

senator's from Arkansas who revived and passed
the lapsed land grant of the Fort Smith and
Little Rock railroad, and is entirely familiar
with all the subject / shall endeavor to report
his conversation, though l may make some mis-
takes, not being familiar with all the subjects in
controversy, and Macdonald himself is not al
ways a perspicuous ~relator:
II called. said Mr.. Macdonald, 'to see you,
because II know that injustice is being done to
Mr.. Blaine, and l would be a poor friend and a
false man if l did not bear this testimony. You
will recollect that before the civil war I had
been quite a prominent business man in Kansas
and the Indian Territory. With my brother I
conducted very large stores both at Fort Scott
and in the Indian country. 1 was a native of
Lock Haven, Pa, and had been brought up to
the mercantile business, and when Arkansas was
settled l went out there. l had pretty much all
the money and the banks in that region. We
were all Democrats in my family, and my
brother was a delegate from Kansas to the last
Democratic national convention, The Kansas
Jayhawkers under Jennison and Montgomery
raided our town and tried to kill me. / knew
John Brown very we'll.
when the Southern States seeded I made
up my mind to be a Union man, and have been
pretty much every since a Republican. The
government employed me to feed the refugees
coming out of the rebellion, the Unionists,
friendly Indians and others, and consequently /
had a claim for money spent and provisions sup
piled, and that brought me to Washington City.
| was there induced to enter Arkansas and go
into the scheme of re~constructing it. When the
Republicans took possession of the State Leg
islature | was elected the first senator. My
colleague was Mr.. Alexander Rice. The Repub-
llcans no sooner took possession of the State
than they looked around them to see what as
sets they had and what point of public policy
they were to advocate.
Several years before the war Congress had
given large land grants to two railroad compa-
MES In Arkansas. The first of these grants
was to the Cairo & Fulton railroad, now called
the Iron Mountain. 1t had received 1870, 900
acres. The second grant was to a railroad from
Little Rock to Fort Smith, which is ON the
border Of the Indian Territory. This
road is about $50 miles long. The land grant
was about 1000, 900 acres. Public policy com
PEELED us to revise these grants in order that we
might have the support of the people. Besides,
these Immigrants were, to a certain extent, party
patronage. The entire delegation in both the
House and Senate favored renewals, and MI
Blaine never had it in his power, If he wanted
to, to prevent the passage of these acts. There
fore, it is absolutely false to say that we needed
him, or ever gave him anything.
1T is true that he was Speaker of Congress- at
the time, and he did say in one of his letters that
he saw an opportunity to help us. But when
Ex-Governor Carney, of Kansas, is quoted, as
find him here, saying that we issued bonds and
went to Washington, Rice and myself, and used
those bonds to get help from Blaine, or ANYBODY
else, he either tells what is false or is falsely re-
ported. The simple fact is, we had no bonds at
that time. How could there be any bonds of a
railroad whose grant had lapsed, and which was
matter was to get what the other States were
getting, help to put those impoverished States
on their feet, and to connect them by railroads.
Said l: How was the road organized after
thatlp
Why, after the land grant was revived Logan
ID. Roots, Mr.. Hodges, DR.. Wicks, Josiah Cald-
we'll, of Boston; ]. p. Robinson, Dewitt c.
Wheeler, of New York, and MI. Dankley, a ma
tive OF Arkansas, with Others, formed a com
pany. I suppose that their chief object was to
get something for the charter They sold the
charter to Josiah Caldwell, who commenced to
build the road. He sold it afterward to Allen &
Marquand, Of St Louis, and they sold it to Jay
Gould.
Now said Mr.. Macdonald. "you must I'M
derstand that it was about 1871 when these
grants were revived. The Union Pacific rail
road had been finished a year or more previous
~, and the big railroad boom was sweeping over
the country. All the new States and border
States like Iowa, Minnesota, Missouri and Kan
sas, too, were getting land grants and selling
them to railroad builders and corporations.
You look at Iowa, and you will find men
like Senator Grimes, Senator Allison,
and Senator Jim Wilson, all making
Att-@ r. 4AN AttAA1 LNth CJCENLh udJDlditY
brought members of Congress and senator's into
a personal knowledge of these new railroads.
When they were to revive a grant they would
m AXE inquiries about the value of the land, and
whetheri it was proper to give it away. Conse-
quently the members of Congress and senators.
when they would go home to their different
States, would be in position to give information
about the country adjacent to these roads. The
members OF Congress from the border and re-
constructed States would entreat the prominent
members from the older and moneyed States to
find them purchasers and capital. In that way
Blaine no doubt became acquainted with the
Boston capitalists who bought the Little Rock
and Fort Smith road
"Who were these capitalists2s
sThey were Benjamin Bates, president of the
Bank of Commerce of Boston, who was known
to everybody in New England for the long
financial standing of the house. 1t is one of
the Oldest banking houses in the United States,
| understand. Bates's father or grandfather was
brought up by William r.. Gray, the great Bos-
ton merchant, and he founded the house of
Bates & Barring. In short, the Earrings were to
extent established by the Bates family.
With BENJAMIN Bates was a Mr.: harrington and
Josiah Caldwell. These three men were emf
nently and respectfully known. The Bateses
were to furnish the money by seilingthe bonds
of the road, and Caldwell was to build it. Cald-
well and Bates offered commissions to PEG
pie who would sell these bonds.
'Mr. Blaine, not being alawyer, having given
up his newspaper business. and having strictly
no other business than that Of d member Of Con
gress, had to do something for his family, and
with his large general acquaintance he probably
took a commission from these persons To sell
of the bonds in Maine wherever he had
friends. That it was not wrong to do anything
of this sort is shown by the fact that Lot Nor
rill, the senator from Maine and subsequent
Secretary Of the Treasury, bought from Mr..
Blaine So, GOO worth Of these bonds as an invest
ment for his family.
1.-THE panic Of 1873, however, was close Al