The state journal. [volume] (Harrisburg, Pa.) 1883-1885, 1884-09-20
Mr.. BLAINE INDICATED.
THE LITTLE ROCK AND FORT SMITH
RAILWAY.
Ex-senator M'DOnald, of Arkansas, Tells
the Story of MIR. Blaine's Connection
Therewith-Complete and Unequiv-
ocal VindIcation of Mr.. Blaine
from Malicious ISLANDERS.

/ the Story of MIR. Blaines Connection
Therewith-Complete and Unequiv-
ocal Vindlcation of Mr.. Blaine
from Malicious ISLANDERS.
New York, Sept Alexander M
Donald, capitalist, residing in this city,
was former United States Senator from
Arkansas. He occupied that position at
the time of the renewal by Congress of
the land grant given to the Little Rock
and Fort Smith railroad, and is thor
oughly familiar with the history of that
legislation. He has given to the public
clear, succinct story Of the now cele-
brated grant. This recital makes more
clear than anything hitherto published
how baseless have been the ISLANDERS
heaped up against Mr Blaine in connec-
ton with the case. Senator M'Donald
made fortune at Fort Scott, Kansas, as
a post trader. After the war the specu-
lators in Arkansas saw in M'Donald a
capitalist near at hand, and so invited
him to come into Arkansas and settle.
They seized upon the lapsed land grant
of the Little Rock and Fort Smith rail-
road as good subject for their first ex-
pertinent.
The grant was originally made four or
five years before the war. 1t was part
of the original land grant scheme of
Stephen A. Doug las, who originated the
giving by Congress of such gifts to rail
roads in order to help the Illinois Central
railroad, which began building in 1856.
A number of the Southern States were
brought into the scheme at that time by
being given these grants. None of them
availed themselves of their privileges be.
fore the war The war and its attendant
events caused them to lapse. The specu-
lators who took up the Fort Smith and
Little Rock scheme found the original
grant was for 100000 acres of land.
They thought there would be no trouble
in getting it restored, particularly if the
Southern States should unite upon the
other grants. The States to which they
were granted were impoverished by the
war, and some sort of aid was needed to
stimulate their depressed commercial in
terests
Creating a Money Interest.
M'Donald was, soon after his removal
to Arkansas, elected to the United States
Senate. The party working up the plan
to revive the Fort Smith grant, although
it had no money. was influential enough
to push the matter into favorable notice.
The Arkansas delegation 10 Congress was
solidly pledged to it, while all the South
ern men were naturally for project
which would help their section. The bill
to renew the grant came up in 1871, two
years after Mr. Blaine was first
elected Speaker. At that time there
was not one dollar invested in
the enterprise The Little Rock
and Fort Smith railroad company was
not organized, and, as matter of course,
not single bond or share of the stock
had been issued. Mr. M'Donald says
that no one ever spoke a word to Mr.
Blaine about the bill. There was no
need. Mr.. Blaine might have been able
to delay it, but he could not have de.
feated it. The bill was passed by both
Houses without any opposition from any
one. Mr.. Blaine's decision upon point
of order raised in connection with the
bill was one that anySpeaker would have
been obliged to make if he followed the
rules.
After the bill was passed its Arkansas
projectors, who were unable to raise any
money in their own State, to avail them
selves Of the land grant, visited Boston
to see what could be done there. In
Boston they met a banker by the name
Of Bates. He was the president Of the
Bank of Commerce, a man of high char
acter and standing. He took charge OF
the enterprise, and brought into it specu-
lators by the name Of Caldwell and Far
rington.
Caldwelrs Management of the Scheme.
Caldwell soon became the master spirit
of the scheme. 1t was he who organ
lied the original company and who
fioated the original bonds and stock.
Caldwell was very extravagant, vision
airy man, ara he bonded the road for
much more than it could have borne if it
had been conducted as a legitimate, ia
stead of a speculative, enterprise.
Caldwell, in pushing about for mar
ket 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 at
Adams that Warren Fisher was put in to
the road. 1t was soon after the organiza-
ton of the company that Caldwell made
Mr.. Blaine the agent for the sale of the
securities of the road for the State of
Maine He promised him a hand
some commission, as usual in such
enterprises. Mr. Caldwell had known
Mr.. Blaine, and knew that ne
had the confidence of the capitalists ofhis
State. Caldwell made such representa-
tions Of the value of the road that Mr..
Blaine was induced to place some of the
bonds, and from this dates all his trou-
bles. In selling these bonds he gave
what is unusual personal pledge of
security Caldwell so over bonded the
road that it was impossible to meet its in
terest, and the first Mr., Blaine knew of
this was the notification from Lot M.
Morrill, that the interest upon his invest
ment was not being paid. Then it was
that Mr.. Blaine put his hand in his own
pocket and began to make good the
losses which were threatened.
MIR. BIaine's Sacrifices.
This drain upon his private resources
to maintain what only the most scrupu-
lous honor could have dictated soon en-
barrassed Mr.. Blaine to an extraordinary
degree. At that time his means were
limited, and this failure on the part of the
road to meet its liabilities meant to him
simply financial ruin. His letters to War
rem Fisher were not therefore to Fisher
as an individual, but to Fisher as the
chief officer of the defaulting road
How much Mr.. Blaine actually lost as
the hands of the spectators who handled
the affairs of this road is not officially
known to Mr.. M'Donald, but he says he
understood the loss to have been in all
in the neighborhood of $4,000 Cald-
we'll afterward made large sums of money
twenty miles of the road and then sold
control of it to Allen & Marquand, of st.
Louis, so as. to clear for himself $3.50, 900.
! IL