Iowa County, Wisconsin - Chapter 6: Mineral I'oixt Hailroad, 1881

Chapter 6: Mineral I'oixt Hailroad

Company Charter, PRciEfTKo Routes - First Contract and Commencement of tmi: R()Ar> - Election Retitrxs - Ciiaxoe of Contractors - More Funds Raised and Road Completed - The First Train Company Re-oroamzed.

Company Charter, Projected Routes

The Mineral Point Railroad Company was incorporated April 17, 18o2. under the general laws of the State of Wisconsin, Chapter 415 The incorporators were Francis Vivian. Parley Eaton, Francis J. Dunn, Cyrus Woodman, John Bracken. A. W. Comfort Henry Koop and John Milton, of Iowa County. Samuel Cole, Charles H. Lamar, John W. Blackstone, H. P. Ladd. Edward H. Gratiot, Charles Dunn, James H. Knowlton and Joseph W. Brewster, of La Fayette County.

The charter authorized the issue of capital stock to the amount of 3aOO,000, divided into 5,000 shares of 3100 each. The route of the projected railroad was optional, subject to a decision of the shareholders, but was specifically to run from Mineral Point in either of the Towns No. 1 north, of the base line and east of the Fourth Principal Meridian in La Fayette or Green Counties. On June 5, 1852, a meeting was held in Mineral Point to decide on the most feasible route for the railroad. Parley Eaton was nominated Chairman, and G. D. Wilber, Secretary. A committee, consisting of the following names, was appointed to consider the question : John Bracken, L S. Allen, James Noble, Cyrus Woodman, George W. Bliss, Theodore Rodolf, Patrick O'Dowd, Francis Vivian, Samuel Jenkins, Jr., H. Van Dusen, Thomas S. Ansley. Peter Toay, James Hutchinson, John H. Vivian, Edward Coade, Levi Sterling, H. M. Billings, Amasa Cobb and George Goldthorp. The meeting then adjourned without taking any further action.

The railroad was projected under a ravishing prospectus, which, in figures of indubitable accuracy, outlined a brilliant futuie for the road. As a means of inter-communication with Interior Wisconsin and the mining regions, the line would, in all probability at no very distant day, assume the dignity and profits of a trunk line, which, after a period of incubation, was to extend from Wisconsin's metropolis - Milwaukee - to the turbid waters of the Mississippi. With a positive El Dorado of wealth opening before them, few citizens of Iowa County heeded the behests of sober consideration, but plunged wildly into the scheme ; not in a rash, speculative frenzy, but in a spirit of honest investment. In two weeks, §40,000 in stock were subscribed, and, in conformity with the charter, the first officers were elected. They were John B. Terry, President; David Morrison and John Loof borrow. Vice Presidents; Josiah B. Chaney, Secretary; and John H. Vivian, Assistant Secretary.

In a letter to this temporary board, Moses M. Strong, a strong adherent of the project, assumed the privilege of advancing a few suggestions affecting the future well-being of the enterprise. He submitted estimates illustrating the feasibility of building and equipping the roa<l for 815,000 per mile, exclusive of stations and depots. The line was necessarily to start at Mineral Point, thence by the Rock Branch of the Pecatoiiica River, to the mouth of Little Otter Creek, down the Pecatonica to the mouth of Wolf's Creek, to the State line.

Another route by Ames" Branch would carry the road on to the division ridge, six or seven miles north of the State line. By any route that would be adopted, it was agreed that so long as the road was in the valleys of the water-courses, a cheaper route with regard to embankment and excavation could not be found in the State, and it was considered probable that by a judicious survey, many bridges and culverts could be avoided.

Allowing for a heavy trail of fifty-eight pounds to the yard, it was estimated that the cost of construction would not exceed $12,000 per mile ; $8,000 was allowed for equipment, computing the distance from Mineral Point to the State line at thirty-two miles; the cost on the original estimate would equal $480,000, exclusive of the cost of a preliminary survey, calculated at $1,000. In payment for construction, it was proposed to grant the contractor $4,000 per mile in cash, $8,000 first-lien bonds, and $3,000 in stock.

The receipts from freight, passengers, etc., were estimated at $58,67;"), based on the theory that the net cost of transporting freight was one cent a ton per mile, and passengers at threefourths of a cent for the same distance.

This would leave an income of 16.6 per cent, based on a paid-up stock of $128,000, and $96,000 in the hands of contractors. The payment of a 7 per cent dividend would leave $22,- 095 as a sinking fund, and this sum applied to the bonds annually, would liquidate the entire amount in eight years. After expunging the bonded indebtedness, the whole income of $58,675 would be available for a dividend of 26^ per cent. As a proof of the sincerity of his convictions, the subscriber to the foregoing flattering prospectus, authorized the temporary Board of Directors to enter his name for forty shares of the railroad company.

Such was the plausible statement presented to the inhabitants of the county, who, untutored in elements essential to a successful railroad, were influenced into accepting unquestioned, the face of the circular. They likewise supposed that the road would be inevitably extended from its northern terminus to Arena, where it would intersect the Milwaukee & Mississippi Railroad, thus placing the isolated Mineral Point line in direct communication with Milwaukee, and securing for it the transit of all business between Galena ami Milwaukee.

On July 1, 1852, 760 shares of $100 each had been subscribed by the inhabitants of Mineral Point, who, at that time, htirdly exceeded twenty-five hundred strong. The first installment, as required by law. was paid up, and on August 28, 1852, the following ofiBcers were elected : President, Cyrus Woodman ; Francis ^^ivian. Treasurer, and Thomas S. Allen, Secretary. Owing to the subsequent resignation of Cyrus Woodman, another election was held October 22, 1852, to fill the vacant office. Moses M. Strong was elected President, and Col. R. B. Mason, of the Illinois Central Railroad, was appointed Chief Engineer. At this election, 1,048 shares were represented by a truly representative body of citizens, whose average apportionment Avas five shares. A census of the vote disclosed the fact that there were present twenty-eight persons of one share each; sixty-one of five shares; one of six shares; one of seven shares; twenty-four of ten shares; one of twelve shares; fifty of two shares ; twenty of three shares ; five of four shares ; tiiree of fifteen sliarcs ; five of twenty shares ; two of twentyfive shares; one of thirty-five shares, and one of forty shares.

First Contract Axd Commencement Of The Road

After the preliminary survey, the Engineer's estimate was produced for $189,000, and propo.sals for the construction of the road were invited tlnough the public press. The tenders for the work were opened on February 15, 1853, when twenty seven bids, including some from New York, and one from Connecticut, were openeil- After comparing the difl'erent bids, and their respective stipulations, the Board of Directors awarded the contract to Messrs. Chamber- Jain & Cook, who had just completed the Milwaukee & Mississippi Railroad to Janesville.

Three months subsequently, the first sod on the line of the Mineral Point Railroad was disturbed by the invading hand of enterprise. The day, May 30, 1853, was a gala day and a festive occasion for the residents of the dominating country, who flocked to Mineral Point to participate in the honor and glory inseparable from such an historic event. It is estimated that there were 800 strangers from the rural districts in the city. Early in the day, the male population of Mineral Point and the country contingents convened at the court house, where a procession was formed under the direction of Charles N. Mumford as Marshall, assisted by T. J. Otis and P. W. Thomas. Headed by the Mineral Point Brass Band, the populace proceeded to Section 2, one mile south of the village, where the tirae-honored ceremony of breaking ground was observed. Col. Abner Nichols, one of the oldest settlers in Iowa County, who assisted in raising some of the first log cabins in Mineral Point, turned the first soil. While accomplishing this feat, the assembled multitude rent the air with cheers and felicitations. Congratulatory speeches were made by N. B. Bayden, G. L. Frost, J. B. Gray, J. G. Messmore and Cyrus Woodman. The oratorical efforts were " interspersed with soul-stirring music by the band." The ranks were re-formed, and the processionists returned to town, inflated with the importance of the new venture.

In the absence of additional shareholders to absorb the balance of the stock, the company became pressed for money to carry out their plans. In this perplexity, a bill was drafted, suitable to the desires of the Board of Directors, who submitted it to the Legislature for approval. The bill was entitled. " An Act to authorize the counties and towns through which the Mineral Point Railroad passes to aid in its construction." Through the exertions of H. li. Gray, of Darlington, a clause was inserted exempting the county of La Fayette from any application of the act. The bill was submitted to the Legislature by Levi Sterling, P. W. Thomas and W. H. Madden, and was eventually approved.

On the strength of this enactment, the railroad company proposed to exchange bonds with the county to the amount of $150,000, the principal and interest of which the company guaranteed to pay, and as security issued to the county their bonds, convertible into stock secured by a mortgage on the road and all its equipments. This scheme was distasteful to the popular palate, and the cool reception accorded the proposition foreshadowed the defeat of the appropriation measure, if exertions were not directed to assuage the public feeling. The press was employed in disseminating friendly views ; eloquent orators and fluent speakers were engaged to address mass meetings of the voters. It was only at this critical juncture that the terms of the contract were divulged by a newspaper communication from the President of the railroad. The contractors were to receive §698,000 to put the road in first-class running condition. The payments were apportioned as follows :

By this contract, the Directors had, without the faintest vestige of authority, a.ssumed the prerogative of bartering the county's credit, and relying on the support of the people to abide by their contract. At this election, every nerve was strained to carry the appropriation ; the tax-payers were conjured in the name of public spirit and enterprise to aid the railroad by voting for the subsidy. The question was submitted to the voters as one of vital interest, and it was even asserted that as the election went so would the continuance of the railroad be decided.

The momentous day eventually arrived, and the railroad was nobly supported by the community, which, by a majority of 157, granted the concession demanded by the company.

Official Returns Of The Election For. Against

By many the legality of the election was doubted, nevertheless, in consonance with the proceeding, 150 bonds of $1,000 each were issued by the county, dated July 26, 1853.

Soon after the contracts for construction were entered into, the President went to New York for the purpose of making sale of the county bonds. Failing to dispose of them at a satisfactory price, he obtained temporary loans from the banks at Hartford, Conn., pledging the bonds as collateral security, by means of which payment was made for work under these contracts during the year 1853.

About the 10th of October, 1853, the President succeeded in making a contract with the Illinois Central Railroad Company and Galena & Chicago Union Railroad Company (now a part of the Chicago & North-Western Company), by which those two companies jointly agreed with the Mineral Point Railroad Company, that if the latter company would complete its road from Mineral point to Warren, and connect at that point with the Illinois Central, and would give its business, so far as was within its power, to the two Illinois companies, they would pay to the Mineral Point company annually, for twenty years after its completion, such sum (if any) as should be requisite to secure to it a net annual income of $56,000 over and above all expenses for operating and maintaining its road.

This was a valuable contract to both parties. The inducement to the Illinois companies was by aiding incidentally the credit of the Wisconsin company, to secure the construction of an important feeder to their roads, and thereby to greatly increase their business. To effect this object, they could well afford, if the exigencies of the contract should require it, to rebate a portion of their net earnings and pay it to the Mineral Point Railroad Company, on business for which they were indebted to that company.

To the Mineral Point Company the contract was of inestimable value, as it was equivalent to a guarantee for twenty years of an income of 7 per cent net on §800,000, which was more than the estimated cost of the road and equipments, and placed the company in such a financial position, that its securities were entitled to command as high a price as any others of the same class.

The validity of town and county bonds issued in aid of railroads, although since frequently sustained by the Supreme Court of the United States, was then an open question, in consequence of which it was found impossible to make sale of the Iowa County bonds at a satisfactory price, and the railroad company consequently retained them, except so far as they were hypothecated as security for loans.

Change Of Contractors

In June, 1853, Chamberlain & Cook surrendered their contract, and arrangements were entered into with other parties at what was announced to be a reduced figure in cash, by which t!ie company effected a saving of $40,000. The new contractors were A. Gates & Co. for the southern half of the road, and John M. Keep for the northern division. The former contractors had just completed some extensive improvements on the Illinois Central Road, and, being experienced engineers, they won the confidence and reliance of the county. Mr. Keep could not advance any salient claims for distinction, save the possession of wealth and influence, he being ostensibly a man of considerable capital.

At the annual meeting, the accompanying Board of Directors was elected : Moses M. Strong, Parley Eaton, Francis Chalvin, John M. Keep, Anthony Nancolas, John Bracken, John Milton, Robert C. Dyer and Jolin Ross.

On December 16, 1853, the dual contract was abrogated, and a new agreement was filed with R. & G. L. Schuyler, of New York. This firm agreed to assume all the liabilities of the company, carry out all existing contracts, and complete and equip the road by January 1,1855, in consideration of the sum of §1,000,000. One-half of the amount was to be paid in first mortgage bonds, and one-half in the stock of the company, with this modification that all persons who had subscribed for stock, might be at liberty to pay the same at $60 per share of §100. All payments so made should be received in lieu of so many shares in stock. It was also stipulated that the company should loan to the Messrs. Schuyler §150,000 of Iowa County Bonds, which they were at liberty to hypothecate, but not to sell. These bonds were to be returned at the expiration of the contract. The method provided by the contract for raising money to carry on the work, was by drafts drawn by the President of the company, at four months, on R. & G. L. Schuyler, accepted by them, and subsequently discounted at New England or Eastern banks, the proceeds being applied to the construction of the railroad. The work was enfergetically advanced under the terms of this the fourth contract, and the citizens generally were prepossessed with the idea of a completed line, and lent their voluntary aid to further the efforts of the contractors. On January 19, 1854, I. S. Allen resigned the office of Secretary, and was replaced by R. S. Schuyler, son of one of the contractors. When the expectations of the people were at the zenith, their hopes were doomed to a disheartening relapse occasioned by the financial failure of R. & G. L. Schuyler, Messrs. Schuyler having made an assignment of all their effects for the benefit of their creditors. The company, by negotiating with the assignee, secured an abrogation of this contract. The whole amount of drafts accepted, and upon which the company realized, was §137,000, of which there had been paid by Messrs. Schuyler §ti7,000, and §10,000 secured by an attachment of their property to be paid by them. Deducting the cash and collateral securities, the company was trammeled with an unpaid debt of §60,000. The company surrendered to the assignee §S0,000 of bonds, which the contractors had already appropriated to their own use, namely §30,000 in Iowa County Bonds, and §50,000 in firstmortgage bonds.

The amount of expenditures by the company to this time aggregated §175,000. including engineering, right of way, bridging, grading, masonry, ties and timber, salaries and incidental expenses. Funds to meet these expenditures were provided as follows :

The indebtedness of the company at that time was estimated at §75,000, consisting of Schuyler's unpaid acceptances of §60,000, and the balance of domestic debts.

More Funds Raised .And Road Completed

As it was contemplated that §80,000 would finish the road ready for the superstructure, the Directors adopted the plan of offering 2,000 shares of preferred stock at §60 per share, giving the existing shareholders the privilege of absorbing them at the designated value, thus realizing a fund of §120,000. Up to this date, there had been subscribed 1,101 shares, for which payments, varying from §5 to §60 per share, had been paid, forming a capital of only §23,275. The issue of preferred stock was an advisable measure, and, as a stroke of financial genius, was commendable. To assist in placing this stock, mass meetings were held in the various towns, and, in recognition of a popular demand, a committee, consisting of Cyrus Woodman. N. B. Boyden and I. S. Allen, were appointed to examine the books and vouchers of the Railroad Company, and report at a subsequent meeting. In pursuance to a call issued by several citizens of Mineral Point, a meeting was held at the railroad office, on Thursday, December 14, 1854, for the purpose of taking some preliminary steps to place the company on such a basis as \vould restore its credit and secure the completion of the road. Hon. M. M. Cothren was appointed Chairman, and N. B. Boyden was deputed to act as Secretary. The following resolutions, adopted at a meeting of the Railroad Directors, were presented :

Rpsoh'fd, That for the purpose of increasing the slock subscriptions of the Mineral Point Railroad Conipiiny to fifteen hundred shares, of full-paid stock, the individual members of the IJoard of Directors pledge themselves to subscribe and pay for in the aggregate two hundred and fifty shares, inclusive of the amounts already subscribed and paid for by them ; such subscriptions not to be binding, unless the amount of one thousand shares shall be subscribed and paid in.

Resolved. That all moneys paid on subscriptions to stock in the Mineral Point Railroad Company shall be deposited with the Wisconsin Bank, drawing interest at the rate of six per cent per annum, to the credit of the Treasurer, until ten dollars per share on one thousand shares shall so be deposited, including such shares as said sum has heretofore been paiii in ; and that no money so deposited shall be drawn out until the aforesaid amount sliall be paid and deposited as aforesaid, by the first day of February next, the sum so paid, with the accrued interest thereon, shall be paid over to the several persons who shall have paid the same.

Resolved, That as soon as one thousand shares of slock in the Mineral Point iiailroad Company shall be subscribed for, and ten per cent on each share paid in, that a meeting of the stockholders shall be called to agree upon a Board of Directors, and the present board individually pledge themselves that they, or so many of them as shall not be selected at such meeting, will resign one by one and fill the vacancies thus created, with such persons as sliall be agreed upon at such meeting of stockholders.

A form of subscription list was prescribed and adopted, and, on motion of C. Woodman, a committee, consisting of M. M. Cothren, John Bracken, Cyrus Woodman, Thomas Davey, John H. Vivian, Henry Koop, Moses M. Strong and Whitney Smith, was appointed to appeal to the residents of the county for financial support. The requisite 1,000 shares, inclusive of former subscriptions, were subscribed February 7, 1855, and a notipe was issued by the Trea-surer, calling in the first installment of 10 per cent, payable on the loth inst., preparatory to the election of a new Board of Directors. In issuing the call, the President stated in a circular that "'responsible parties are willing to enter into contracts to finish and equip the road in all respects, and have it in operation in one year, taking their pay exclusively in stocks and bonds of the company, provided the company will furnish the cash means to pay the outstanding liabilities and finish the grading of the road

The 10 per cent call, although readily responded to, failed to meet the anticipations of the financiers, who, instead of realizing §150,000, only secured $78,850. The void remained as glaring as ever, and again the peojjle were appealed to subscribe for 760 shares of railroadstock, in hope thereby of eventually acquiring sufficient capital to proceed with the enterprise. At the election of 1855, a renewed mark of confidence was placed in the Directors, by their almost unanimous re-election. The new board was coraposeil of Moses M. Strong, Parley Eaton, John M. Keep, James Noble, R. S. Schuyler, Francis Vivian, C. C. Washburn, Henry Knup and M. M. Cothren. On April 25, 1855, a contract was satisfactorily concluded with the Illinois Central and Chicago & Galena Railroads, whereby an extension of time was gained for one year, so that a guarantee of 8 per cent income would not be forfeited. Bewildered and perplexed how to raise money, the Directors' ability was sorely strained to concoct schemes, or to mature plans for the purpose, and only when every other resource had failed, they applied to the towns atljoining their line for substantial encouragement in the form of town bonds. In reply to repeated solicitations, several towns acquiesced in the proposal, and pledged their localities respectively as follows: Town of Mineral Point, $60,000; Waldwick, §10,000, and city of Mineral Point, §'.'0,000. In August, 1855, a contract was made tending to the completion of the road, with Messrs. Keep, Fisher and Talcott. This was afterward transferred to Alvin Wilkins, of New York, who used all his influence and persuasive powers to procure the county's and company's bonds, intending to float them on Wall street. He represented himself as an aflluent capitalist, but, despite constant pressing, he adroitly managed to evade the terms of his contract, requiring him to begin work immediately. A deadlock ensued, which was only dissolved by Wilkins investing his brotherin-law, Luther Beecher, with the contract. The change Was gladly accepted, as Beecher was a recognized railroad constructor of Detroit, and had gained many encomiums from improvements in Michigan. The specifications of the contract guaranteed Beecher §1,000,000 in cash, bonds and stock of the company, including all the town and county bonds in possession of the company. Under the direction of Luther Beecher, the deserted road-bed soon teemed witb myriads of laborers, and the country again re-echoed the welcome bustle of industry. The grading, fencing and track-laying were accomplished with all expedition compatible with an embarrassing want of the golden lever of creation - money. With fluctuating success, the line was ultimately completed from Warren to Mineral Point, and both sections of the country were thus united by the iron band that follows the advance of commerce in its progress over the civilized sphere.

The First Train Company Re-Organized

The first train arrived in Mineral Point June 17, 1857. At the depot, an enthusiastic throng had congregated to signalize the event in the manner usual on such occasions. The depot at Mineral Point, a substantial stone building, with some pretensions to architectural beauty, was erected by Messrs. Toay & Allan, who did the mason-work, and Mr. Full, who executed the carpentry and joiner's work. The building measures 30.x50 feet, and now, after the lapse of a quarter-century, stands as firm as ever, a monument to the builder's skill. Conveniently situated is a stone locomotive-house, 33x55 feet, and 22 feet in height. This structure is supplemented by a machine-shop, likewise of stone, one story high, and covering an area of 2,400 square feet.

The troublesome litigation attendant on the bonding of the road, as delineated in another chapter, arrived at a focal point in 1861, when, by a decree of the United States Court, in the Martin and Coman suit, the railroad equipment and plant were advertised and sold at Marshal's sale, on November 6, 1861, to James C. Carter, of New York, for the sum of $75,000. George W. Cobb was appointed receiver. The railroad was afterward re-organized as a corporation under the name of the Mineral Point Railroad (omitting the company). The Directors were Asahel Finch, Luther Beecher, Samuel P. Holmes, James C. Carter and George W. Cobb. The first meeting of the newly organized company was held July 7, 1862, when a report was presented covering the business of the road from November 13, 1861, to date. A cash balance of ^5,818.17 wa.s exhibited, without deducting anything for interest. The following Board of Directors was elected: Henry Koop and George \V. Cobb, Mineral Point; Luther Beecher, Detroit ; S. P. Holmes and H. W. Peck, New York. President, Luther Beecher ; Secretary and Superintendent, George W. Cobb A preamble and resolution adopted on that occasion, stated that as the local traffic was insufficient to meet the expenses of the road, and as it waa required to be ballasted and refitted with cars and locomotives, that it was necessary to hypothecate, or sell all bonds, claims, contracts or property of the company, to raise money for operating expenses, repairs and improvements.

The Directors were authorized to extend the road to the north line of Iowa County, a*- some point on the Milwaukee & Prairie Du Chien Railroad. In accordance with the "articles of association of the re-organized company," the capital stock was increased to §1, 200, 000 in shares of $100 each, of which §500,000 was to be issued as preferred stock, first entitled to receive a dividend of 12 per cent, per antmm out of the net earnings of the road, payable in August and February of each year, the balance to apply on the other $700,000. Each holder of original stock could, on surrendering his certificate, and by paying $50 per share, be entitled to a preferred share. After October 1, 1862, the President and Directors were empowered to dispose of or hypothecate unsold stock in payment of expenses.

Such was another visionary scheme to involve the public credit in the quagmire of financial distress. This proposition to a people burdened with an onerous taxation, the direct outcome of subsidizing this railroad, could not be contemplated otherwise than with the most pungent sarcasm. The disingenuous proposal was not even entertained by the respective towns or the county, so that the increase of capital stock was only evident in the accumulation of unsalable bonds in the possession of the railroad corporation. The new directorate conducted the road with varying success, to July 1, 1880, when the line was transferred or leased on private terms, to the Chicago, Milwaukee & St. Paul Company, which now controls and operates the road. They are now engaged in building the Monroe branch to Gratiot, La Fayette County. Early in 1881, it is believed, through trains will be running to Milwaukee by this route.

The gross earnings of the Mineral Point Railroad, for 1880, were $106,167.77, with operating expenses aggregating $72,530.65. The average rate per passenger per mile was 4 cents ; the average freight rate per ton per mile was equivalent to $3.50 per hundred pounds.