davidaulloa/AmericanStories huggingface dataset:
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08

I ton, aud I, making the third
judge of the court, diSSented from
their views, holding with the governor
that when the law speaks of first
mortgage bond as a security it.means a
bond having an exclusive first lien.
For the decision and dissenting opinion
see Second Minnesota Reports, page Ii.
However, the governor yielded to the
court and issued these bonds as they
were earned by the various companies
until about 50, 100000 of them were out,
was no hope of ever getting any rail
roads by such means if they should is
sue S40,000.000 of such bonds, and, be-
coming alarmed, they repealed the
amendment to the constitution and
stopped the further issue. The vote on
the repeal was even nearer unanlmlty,
IL remember correctly, than the one
which passed it.
This is only one of many instances
where people has uareaSonablY COM
mtted great financial error when con-
frOnted with trying embarrassmentS.
There was literally nothing behind
these state bonds. The community was
dead broke, the state was undeveloped,
and its future uncertain. Who would
buy such bond?
The mistake made in the repeal of the
amendment was the provision made
not be paid unless upon a vote OF the
people. This placed us under the ban
of reputation for many years.
OF course everything in the way of
railroad building ceased, and we were
bluer than before. The state foreclosed
its mortgage on the Minnesota q Pa
cifc company, and bought it all in on
June %, 1860, for the sum of $1,000,
which was about all it was worth.
The state then. by act of March 8,
1861. regranted the property it had got
by the foreclosure to the same company
on condition that 1T would build and
equip all its lines by time limited in
the act. and the part between st. Paul
and st. Anthony on or before Jan. l,
1862. in default of which the rights and
benefits conferred upon the company
by the act were all to be forfeited to the
state absolutely, and without any act or
ceremony whatever.
The company failed in all respects to
comply, and on the 10th of March, 1862,
the State. by act of its legislature, au-
thOriZed the creation of the ''St. Paul d
Pacific Railroad company" and granted
to that company all the property and
franchises which had formerly be-
longed to the Minnesota & Pacific COM
pany, but on the condition that it should
perform certain work within a given
time. Edmund Rice was made presi-
dent Of this company.
Mr.. Rice and Col. William Crooks
went to England to try and raise some
money to carry on the work, and sue
ceeded to a limited extent. Tradition
says they procured about 5000 At
any rate, the company built the road
from St. Paul to st. Anthony in 1862.
The first locomotive that arrived in
Minnesota was brought on barge. and
was called the 'WilIiam Crooks" in
honor of the colonel. The company
subsequently built as far as Anoka, but
failed to doany more for want of money,
thereby becoming liable to forfeiture.
For the work above st. Anthony the
contractors were the Messrs. Litchtield.
A scheme was conceived by which the
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08

the government lands could not have
been made. The vast expanse of the
West could not be occupied except
along the navigable rivers without
railroads, and capital could not be in
duced to undertake the enterprise of
building them. 1t was both philo5oph-
ical and patriotic to so use the lands,
as means of rendering them habita-
bic, and millions of settlers have found
homes and grown rich on lands in the
West in consequence of this generosity
on the part of the general government,
who would have lived and died in pow
erty, had not this aid been extended to
the railroads. And the country itself
would not have achieved half the gran
deur and power it has, had it been with
held.
On the Sd day of March, 1857, grant
of lands was made by congress to the
territory of Minnesota in aid of rail
roads. which comprehended an extern
sive system covering the whole country.
Among the lines designated as bene-
ficiarieS was one from Saltwater
by the way of st. Paul and st.
Anthony to a point between the
foot Of Big Stone lake and the
mouth of the Sioux Wood river, with
branch from st. Anthony via st. Cloud
and Crow Wing to the navigable waters
of the Red River of the North, at such
point as the legislature of said territory
might determine. Here mark the sa
Sacity of the Trainer of this bill. The
point Oh the navigable waters of the
Red River of the North was not desig-
mated. Had Pembina been named. the
absurdity of a railroad to that distant
point would have defeated the bill.
On the 22d day of May, 1857, the legis-
lature of the territory passed an act to
execute the trust created by the land
grant act of congress. and thereby in
corp0rated the Minnesota & Pacific
Railroad company, which company was
authorized to build road from Stlilwa-
ter, by the way of st. Paul and st. An
thony, via Minneapolis, to the town of
Breckenridge, on the Sioux Wood river.
with branch from st. Anthony. via
Anoka, st. Cloud and Crow Wing, to
St. Vincent, near the mouth of the
Pembina river, making the branch
longer than the main line.
In this line we have the germ of the
Great Northern.
The grant was in alternate sections
six miles wide on each side of the line
Of the road, and by the acts of the terri
torial legislature the land was TO become
the property of the railroad companies
as fast as they completed twenty con-
Becntive miles Of their roads in pursu-
Ance of the land grant act. The gran
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08

| adopted, and had prudently provided
that the credit of the state should never
be extended to any person or corpora
ton. So it looked as if there were no
relief in that direction, and there was
certainly none in the domain of private
capital, as the highest and most fiatter-
Ing inducements could not lure it into
railroad building, and we had no in
ducements to offer of any kind. Moth
ing daunted, the parties interested land
that was everybody decided to amend
the constitution and have the state
issue bonds to the extent OF $5,OO0,0 900 in
aid of the roads. 1t was a desperate
measure, but it was a desperate neces-
sity. 1t was accomplished. and in this
way: On the 9th of March, 1853,
an act of the legislature was
passed proposing an amendment
to the constitution allowing the state
to issue S5,000,000 of its bonds IN aid of
the roads, and on the 18th day of April
it was passed by an almost unanimous
vote OF the people. AS an illustration
OF the intense feeling in favor of the
me asure, there was but one vote cast
against it in Winona, and that was by
Thomas Wilson, still one of our prom
inent and honored citizens; and tradi-
ton relates that so indignant was that
community that 1t was deemed healthy
for Mr.. Wilson to spend a short time in
Wisconsin until the storm blew over
Whether he took the dose or not, 1 do
not affirm.
I Under this amendment. and an act OF
the legislature passed Aug. IL, 1858, en-
titled IAN act concerning land grant
railroads." the state issued to the Min
nesota q Pacific company bonds of the
state to the amount of 5000. 900. and took
in return the securities which the law
prescribed, among which were an equal
tmount of the first mortgage bonds of
he railroad company. being 100000 out
OF the issue before mentioned. These
bonds were issued to this company for
grading sixty miles of it's road, at &c.
600 per mile, that being the scheme of
distribution of the $5,00O,000 of state
bonds among the various roads.
1t will not be out of place to here
state that Gov. Sibley, who was then
the governor of the state, refused TO
issue tue bonds to the company in re-
turn for an equal amount of bonds of
the company taken from the issue of
S23 600, 900, but claimed that the first
mortgage bond" that the law required
of the companies i'll exchange for the
bonds of the state must be an exclu-
sively first bond. and first lien on the
road, and not secured by lien which
was shared by the holders of $4,000, 600
OF similar bonds. The company applied
to the supreme court for inandamuS to
compel the governor to issue the bonds,
the case was argued and a majority of
the court, Judges Emmett aud Atwater,
agreed with the company's construc-
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08

company was to issue certain preferred
and special stock to the Litchfelds, aud
an agreement was to be made with them
under the sanction of the legislature by
which new corporation was to be cut
out of part of the old one, which was
carried out under an act passed in
February, 1864, and the 'First Division
of the st. Paul q Pacific Railroad COM
pany" was created, and this latter COM
pany became possessed Of the lines
from st. Paul by way of st. Anthony
and Minneapolis to Breckenridge, with
that part of the branch line from ST.
Anthony to st. Cloud and Sank Rapids.
George L. Becker was made president
of this new corporation, and it built all
Of the last-named lines.
This arrangement left the st. Paul &
Pacific company in possession of the
unbuilt lines from Sank Rapids to Penn
blna, and some other lines that form no
part OF the Great Northern.
The First Division company operated
Its lines until the spring of 1871, when
1t entered into an agreement with the
st. Paul 81 Pacific company to construct
and equip its road to Pembna, and
operate and maintain it for ninety-nine
years. the money for the purpose to be
raised on the bonds of the First Divis-
ion company to the amount of SI5,O0O,-
600, to be secured by mortgage given
by the st. Paul 81 Pacific company upon
all its lands, franchises and property.
The bonds were issued and the mort
gage made. The First Division COM
pany commenced construction, and
placed its bonds for negotiation in Hol-
land, where several large issues of the
bonds of both companies had been pre-
viously placed. sec lred on their several
lines. The Dutch public bought the
bonds readily under the representation
OF the Amsterdam brokers, until S1O.-
100000 OF the SIS. 100000 had been sold,
and construction progressed upon the
proceeds of the sale until the funds
were exhausted.
1t Is as we'll to say here that the pro-
ceeds of the sale of the $4,000, 900 bonds
did not realize to the company any,
thing like ten millions of dollars: far
from it. By the time the money
reached the treasury of the company it
had been so terribly depleted by the ex-
ofbltant commissions of the brokers
and others through whose hands it had
to pass that its constructing powers
were very much reduced; vet it had:to
be submitted to under the. theory that
"beggarS can not be choosers." 1t was
lucky stroke to get any one to touch
the bonds under any circumstances;
not that they were not III fact good in
veStment, but because the enterprise
was purely experimental, and its sue
cess wholly in the unknown future.
At this point the agents for the Dutch
bondholders declined to do anything
more In the way of placing bonds with
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08

( promise. they had the foresight to
know that railroads would soon take
possession OF the country, and drive out
all other means of transportation; and
it was equally plain to them as soon as
one was constructed through the fertile
valley of the Red river, popula-
ton would swarm in and
.. give ample employment to tine
road. In act.they saw that this system
of railroads was very valuable prop
erty IN the near future to whoever could
secure it. and Mr.. HIPS fertile brain
conceived method to accomplish that
end. 1t was this: Sir Donald Smith
was chief factor or officer of the great
Hudson's Bay company. Mr.. Kittson was
connected with that company and rep
resented Sir Donald Smith in Mime
sofa. George Stephen was president
of the Bank Of Montreal. Here was the
groundwork for syndicate possessing
force and funds. Ii sufficient money
could be procured to buy up these
Dutch bonds at very low figure. the
whole property, which had cost many.
millions, could be secured for a few,
and would in all probability soon be-
come OF enormous value. The scheme
was tempting one, and as rare as the
one opportunity that presents itself to
most men in lifetime, which, il taken
advantage Of, leads on to fortune. Mr.
Hill was equal to the occasion. He
would furnish the brains. Mr.. Kittson
would connect the brains with the
money, and the thing would be done.,
A syndicate of these four gentlemen
was formed, the money provided, the.
bonds bought for very low prices, and
when the roads were sold they became
the purchasers, paid for the property in
the bonds, and were the owners of the
whole system.
This was the bes speculation that
was ever made In the Northwest, and
the best part of it is that it was per-
feetly Legitimate in every particular,
and free from even the suspicion of evil
or faint. While it looks simple enough
now, after Its accomplish ment, it must
be remembered that when the property
was purchased its future was absolutely
involved in doubt, and even had the
whole world been in possession of the
then known facts, it IS very doubtful if
any one would have put the money that
was required into the venture. iii was
the far-reaching judgment of Mr.. Hill,
and his bold conception, that gained the
victory. and to him is due the credit
and full share of the gains.
ALI that renamed to do was to or
game a new company to complete and !
operate these lines of road. This was
done by the creation of the s.St. Paul |
Minneapolis and Manitoba Railway
company" OF this company George
Stephen was made president, and James |
j. Hill general manager.
1t was very bold step, and displayed
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08
its History From the First Conception Down to
the Driving of the Last Spike in the Con-
structiOn on the Cascades.

II was a bold conception, that of
building railroads in Minnesota in 1857.
The country was in the midst of the
most crushing financial crisis that ever
afflicted land, and matters looked so
forIorn that the consensus of opinion
was that no one then resident in Min
nesota would ever live to hear the blast
oflocomctive whistle within her borders.
Notwithstanding all this gloom and de-
spondency, there were minds actively
at work to lay the foundation of great
system OF railroads all over the territory.
Hon. Henry NJ. Rice was our delegate
in congress. Edmund Rice, his brother.
Gen. James Shields and many others
then resident in the territory had
thought the matter out, and decided
that the entering wedge must be govern
ment aid in the way of land
grant. This method of developing
the West was very popular in
those days, and, in my opinion,
a more beneficial disposition of
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08

was subsequently extended to ten Sec
tons to the mile.
The Minnesota & Pacific company was
organized in st. Paul May 25, 1857, with
the following officers: Edmund Rice,
president; r, r. Nelson, vice president;
James w. Taylor, secretary; j. NJ
Stone, treasurer; John B. Brisbin, at
torney.
The company then proceeded to make
a mortgage on all its property, land
and franchises for the sum of S23, 000.-
600. So it will be seen that things were
not done in a small way in those days.
The date of this mortgage was July 81,
1857.
The company proceeded to survey
and locate its lines, and in July 1857,
entered into a contract with Selah
Chamberlain for the construction of its
main line from Saltwater, by the way
of st. Paul, to st. Anthony. and of its
branch line from st. Anthony to Crow
Wing. Work was commenced under
this contract both at st. Paul and st.
Anthony in the following October, but
financial embarraSSments soon compelled
its abandonment.
At this point In the history of the
railroad, matters looked deader than
"Pharaeh's mothers mummy" The
constitution of the state had been
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08
AND coNNEcTloNsl

l.,
| Wis. land thence to DuIuth,::a distance of
! about Seventy-three miles. The Eastern
Railway company also acquired and
| fitted up extensive terminal grounds
and facilities at both West Superior and
Duluth, affording facilities of the most
superior character for the exchange of
traffic between lake and rail. The Man
itoba company owned all the stock of
the Eastern Railway company.
In the years 1887, 1883 and 1889 the
Montana Central Rail way company con-
structed line of road from Great Falls,
Mont, where the Manitoba company'S
main line then terminated, through
Helena to Butte, distance of Ito miles,
with branches to various mining indus
tries, giving it a total mileage of main
track of something over 200 miles. All
the capital stock of this company was
likewise owned by the Manitoba CON-
pany,
ln1SSS-9 the Willmar & Sioux Falls
Railway company constructed line of
road from Willmar, Mimi, on the
Breckenridge line of the Manitoba COM
pany, to Sioux Falls, territory of Dako-
tafnow state of South Dakota), dis
lance of LAG miles. The Manitoba COM
pany also owned all the stock in this
company.
During the same time. the Duluth,
Watertown 81 Pacific Railway company
constructed a line of road from Water
town, territory of Dakota (now state of
South Dakota), to Huron, in the same
territory, distance Of seventy miles.
The Manitoba company also owned all
the stock in this company.
The total mileage thus controlled by
the Manitoba company at the close of
the fiscal year 1890 amounted to nearly
500 miles additional to the 2,775 miles
directly owned by it, SO that the entire
system had then grown to an aggregate
mileage OF about 3,275 miles.
Ii the year 1887 a steamship company
was organized, called the Northern
steamship company, to build, own and
operate line of steamers on the Great
Lakes. During that year. and the next
two years following, it acquired six steel
steamers of the most approved model.
construction and machinery, which have
since been successfully engaged in lake
traffic during each season OF navigation.
The Manitoba company also owned all
the stock of the Northern Steamship
company.
In the fore part of the year 1890, the
basis of operations was brOadened by
the transfer of the control of all these
properties to another corporation created
by special charter Of the state of Min |
nesota, viz, the Great Northern Railway !
company.
s@On Feb. 1. 1890, an instrument was
executed between the two companies.
by which the Manitoba company leased |
TO the Great N orthern Railway company
for the period of 999 years, the railways |
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08

, the Hollanders. Whether they became
frightened or whether they decided to
wreck the company and get the property
for themselves was never clearly
known, but their conduct created a
panic among the bondholders. Of
course the road could not meet its in
terest. and then the panic became
rOut. "a
1t was here that President Becker. of
the First Division company, attempted
to rescue the bondholders from loss.
He had implicit confidence in the out
come of the enterprise, but of courses
knew that to make it success 1t must
be carried out and completed, so as to-
invite immigration into the vast fertile
expanse through which it passed. So,
he went over to Holland and did his ut
most to impress his views upon the
bondholders. He asked them to send a
committee of their number over to I'M
vestigate. Ali he wanted of them was
to understand the situation, have pa.
thence for short time, pass few iG-1
tereSt payments, and furnish enough
more money to complete the work, and
then he promised them glorious har-,
vest; but it was all to no purpose, they
would listen to nothing. Everything
Mr.. Becker attempted was opposed bY1
the broker interest. They even charged
him with being all extravaganza fool for
paying about 100000 for nearly all the
river bottom that lies east of jackson
street, now covered with depots and
tracks, and worth many millions of dol
lars. Suits were commenced all along
the line. The federal and state courts
were resorted to to foreclose the various
mortgages. This litigation was COM
menced in 1878, and was not terminated
until 1879. The trustees took possession
of the First Division company. Jesse
z. Farley, of Iowa, was made receiver
of the st. Paul & Pacific company. The
Litchfields. holding the stock of the
First Division company, made vigOr-
GUS defense. and the fight went merrily
OH. The United States circuit court
issued debentures, which were decreed
to be a first lien On the St Vincent
branch, on the ground that the party
who pays his money to save sinking
ship should have the hrst right to be
paid; and it was necessary to complete
that branch within a certain time to
save the valuable land grant. These
debentures were sold, and the proceeds
applied to- construction, and the grant
saved. This road is the first one ever
built by court, under and through its
officers.
In the year 1879 so little progress had
been made in the litigation that the
bondholders became alarmed. and pro-
posed compromise to the Litchfield in
terest, which was entirely satisfactory
and was accepted. When the fighting
interest of the Litchfelds was removed,
the whole matter was soon closed out
by foreclosure and sale, and the prop
erty was purchased In by the bondhold-
ers. But who were these bondholders at
this time?
For quite a number of years before
the sale of these roads took place, james
j. Hill and Norman w. Kittson had
been engaged in the transportation
business on the Red River Of the North
by means of steamboats,. They
were thoroughly familiar with the
with the whole region north of st. Paul..
and also the British possessions lying
north Of Minnesota, its wants and its
St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-08
COTTON FABRICS.

A late issue of "Harpers' devotes nearly
three columns to Cotton Fabrics All the popular
fabrics mentioned in the article will be found here
in abundance. Not only that-theyll be found at
ye,y popular prices,
Take Scotch Ginghams, for instance The
kind that is sold everywhere at rs cents may be
-ound here for Is cents. The quantities are grow
ing smaller every day. and it's almost certain that
no more can be had at Is cents when these are
gone. Don't put off buying many days.
Reductions have been made on many of the
following:
Printed Dmities Mulls, Nainsooks, Dotted
Swisses, Dotted Scotch Lappets, Embroidered
India Linons, ETC.
Gaatea Suitings for Lake and Outing Cos
tunes Fast in color and very serviceable.