The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1884-10-02
lsFAUNToN. VIRGINIA. OCTOBER 2. 1884.



New YORK, Sept. 1S.-The testimony Of
Alexander Mcdonald, q capitalist living
in this city, will form the basis of the de
tense of Mr.. Blaine, which is soon to bf
| published as an answer to the story of the
Mulligan letters. Mr.. Mcdonald is cap
| italist. who originally went from Pensyl-
vania to the west. He is perfectly famil-
lar with the early history of the Little
I Rock and TT. Smith Railway. He was
/ formerly u United States Senator from
Arkansas. ne made a fortune at Fort
Scott, Kan. as q post trader. After the
war the carpet-bag spectators in Arkan-
sas saw in Mcdonald a capitalist near at
! hand and 50 invited him to come into Ar
kansas and SETTLE These spectators were
then casting about for financial ventures.
They seized upon the lapsed land grant of
/ the Little Rock and Fit. Smith Railway as
a good subject for their first, experiment.
/ This grant was originally made four or five
years before the war. 1t was a part of the
4 original land grant scheme of Stephen A.
Douglas. who originated the giving by
| Congress of land grants to railroads in
order to help the Illinois Central Railroad,
(which began building in 1856. A. number
tof the eeatlag4 States were l@onght into
the scheme at that time by having land
grants given to them. They did not any
of them avail themselves Of the land grants
before the war. The war and its attend
ant events caused the grants to lapse.
The spectators who took up the Fort
Smith and Little Rock land grant found
the original grant was for 100000 acres
Of land. They thought there would be no
trouble in getting the land grant restored,
particularly if the Southern States should
unite upon the other grants. The argu-
ment in favor of the restoration of these
land grants was most plausible. The
States to which they were granted were
impoverished by the war, and some sort of
aid was needed to stimulate their depressed
commercial interest. Mcdonald, soon af-
ter his removal to Arkansas, was elected
to the United States Senate. The party
worked up the plan to revise the Fort
Smith land grant, although it had no
money, was influential enough to push the
matter into favorable notice. The Arkan-
sas delegation in Congress was solemnly
pledged to it. while all the Southern men
were naturally for a project which would
help their section.
The bill to renew the grant came up in
1871. two years after Blaine was first
elected Spe alSer. AT that time there was
not one dollarlinvested in the enterprise.
The Little Rock and Fort Smith Railway
Company was not organized, and as a mat
ter of course not single bond or share had
been issued. Mcdonald says that no one
ever spoke word to Blaine about the bill.
There was no need. Mr.. Blaine could not
have defeated the measure if he had SO de-
sired. He might have been able to delay
it, but he could not have defeated it. The
bill was passed by both houses without any
opposition. Mr.. Blaine's decision upon a
point of order raised 10 connection with
the bill was one that any Speaker would
have been obliged to make if he had fol-
lowed the rules. After the bill was passed
its Arkansas projectors, who were unable
to raise money in their own State, in order
to avail themselves of the land grant, Wis
tied Bostoa to see what could be done
there. In Boston they met a banker by
the name of Bates. He was president of
the Bank OF Commerce. man of charac-
ter and standing. He took charge of the
anf and into
by the name Of Caldwell and harrington.
Caldwell soon became the master spirit of
the SCENE. 1t was he who organized the
company and who hoated the original bonds
and stock, Caldwell was a very extrava-
CANT. visionary man and he bonded the
road for much more than it could have
borne if it had been conducted as legiti-
mate instead of a speculative enterprise.
Caldwell, in pushing about for a market
for his bonds, sought the support of
Adams, the founder of the express COM
pany bearing his name Warren Fisher
was then quite intimate with Adams, and
it was for the sole purpose of getting
Adams that Warren Fisher was put
into the road. 1t was soon after the
organization OF the company that Caldwell
made Mr.. Blaine the agent for the sale of
the securitses of the road for the State of
Maine. He promised him handsome
commission. as is usual in such enterprises.
Caldwell had known Mr.. Blaine and knew
that he had the confidence of the capital |
lists of his State. Caldwell made such
representations of the value of the road
that Mr.. Blaine was induced to place some
of the bonds, and, and from this dates all
his troubles. In placing these bonds he
gave what is UNUSUAL personal pledge
Of security.
Caldwell so overloaded the road that it
was impossible to meet the interest, and
the first Mr.. Blaine knew of this was the
notification from Lot NJ. Morrill, that the
interest upon his investment was not be-
ing paid Then it was that Nh. Blaine
put his hand in lis own pocket and began
to make good the losses which were
threatened. This drain upon his private
resources to maintain what only the most
scrupulous honor could have dictated,
soon embarrassed MI. Blaineto an extraor-
binary degree. At that time his means were
limited, and this failure upon the part of
the road to meet it's financial liabilities
meant to him simple financial ruin. His
letters to Fisher therefore were not to
Fisher as q private Individual, but to
Fisher as the chief officer of the default
ing road. How much Mr.. Blaine actually
lost at the hands of the spectators who
handled the affairs of this road is not
officially known to Mr.. Mcdonald, but he
says he understands the loss TO have been
in the neighborhood of $4,000. Caldwell
afterward made q large sum of money out
of the enterprise. He constructed twenty
miles of the road and then sold control of
it to Allen & Marquand, of St. Louis, so
as to clear for himself $75O,OOO Allen &