A charter was approved February 17, 1857, for the building
of a railroad from Roseport, opposite St. Joseph to Palmetto, now Marysville,
in Marshall County, Kansas. The name of the Company was the Palmetto &
Roseport Railroad Company, and the road to be built was intended as an
extension of the Hannibal & St. Joseph Railroad. Governor Stewart,
Jeff Thompson, John Corby, John Severance and John R. Boyd, of Missouri,
and Frank Marshall, of Kansas were the first Board of Directors.
The work of constructing the road was commenced in the summer of 1859,
opposite St. Joseph, and on the 20th of March, 1860, the first bar of railroad
iron ever laid in Kansas was placed on this road, and the track was completed
to Wathena, five miles west of St. Joseph on the 28th of April, 1860.
The projectors of the road had absolutely nothing certain to build a railroad
with, the work of construction being commenced without a dollar in the
treasury of the company.
The individuals who organized this Company believed
that the magnificent country west from St. Joseph ought to be penetrated
by a railroad, and, acting on this idea commenced its construction, trusting
that the city of St. Joseph and the counties and individuals on the line
of the road would assist in its completion. Five miles of the road
from St. Joseph west, was completed by private subscription and on the
28th of April, 1860, the pony engine, "Albany," was placed on the track
and run to Wathena. The war intervening, nothing farther was done
in the construction of this road until 1866. The charter of the company,
however, was kept alive, and on the 17th of April, 1862, the corporate
name of the company was changed to the St. Joseph & Denver City Railroad
Company, and under the general railroad law of Nebraska, the company obtained
the right to maintain a railroad from the border line of Kansas to Ft.
Kearney, in Nebraska.
By the terms of an agreement made on the 11th of August, 1866,
a corporation organized as the Northern Kansas Railroad Company,
was consolidated with the St. Joseph & Denver City Company, and by
this consolidation the right to certain lands granted by the general government
in an act approved July 23, 1866, was vested in the St. Joseph and Denver
City Railroad Company; also this company acquired the title to certain
lands by reason of an act of the legislature of Kansas, approved February,
13th, 1865. Under these two acts the amount of land received was
373,162 acres in Nebraska and 64,672 in Kansas. The company also
received the proceeds of the sale of 125,000 acres of land granted by the
general government to the State of Kansas, to aid in the construction of
railroads in the state. The sale of this land amounted to $164,528.
The company also obtained subscriptions to its capital stock, payable in
city and county bonds as follows: City of St. Joseph, $500,000; Doniphan
County, $200,000. Brown County, $100,000; Nemaha County, $125,000; Marshall
County, $100,000. All the above stock was taken and paid for in bonds
except the $125,000 subscribed by Nemaha County. This county refused
to take its stock and issue its bonds. Assuming the lands granted
to the company to have been worth three dollars per acre and the county
and city bonds to have been worth eighty cents on the dollar and we think
this is a low estimate the amount of aid per mile in the construction of
the road was $9,600, or certainly more than one-half of the actual cost
of the road.
It is not the purpose of this article to discuss
what might have been in building the St. Joseph & Western railroad.
It is true of this road as of all the roads in Kansas, that the general
government and the people on the lines of the roads, furnished more than
one-half of the means necessary to build them; and it is equally true,
that the stock issued by the railroad companies in payment of the money
advanced is worthless. A history of the manner of manipulating railroad
stock will explain this. The primary object to be accomplished in constructing
the St. Joseph & Western railroad as well as all other railroads in
Kansas was the development of the country. That object has been accomplished
and Northern Kansas is beyond all question a much greater country than
it would have been if no railroad had been constructed through it.
About the close of the war the proposition to go
ahead with the construction of the railroad west from St. Joseph was actively
agitated, and in the summer of 1867 negotiations were made with capitalists
in St. Joseph, to borrow $100,00 to complete the road from St. Joseph to
Troy, in Doniphan County, or a distance of fifteen miles. To secure
the payment of this $100,000, a first mortgage was given on all the assets
the company would come in possession of on the completion of this fifteen
miles of road. Col. Severance agreed to complete and did complete
this fifteen miles of road for the $100,000. The completion of the
first division, fifteen miles, gave the company this much of completed
road that could be used in the construction of more road, besides giving
it the possession of a part of St. Joseph and Doniphan County bonds that
were to be issued on the completion of the first division of the road.
Having completed the first division of the road
and secured the land grants and city and county subscriptions before mentioned,
the company was able to negotiate a mortgage on its franchise and all the
property it possessed with parties in New York, for the completion of the
whole road. First mortgage bond on the road were negotiated by Tanner
& Co. and Donald, Lawson & Co., brokers, in New York, and with
money realized from the sale of those bonds, the road was completed from
Troy in Doniphan County to Hastings, in Nebraska, about two hundred and
sixteen miles. The whole road through to Ft. Kearney might have been completed
in this way, but it was found that Donald, Lawson & Co., and Tanner
& Co., were not only brokers for the sale of the securities of the
company, but they were also the contractors, in fact, for the construction
of the road, and parties who were buying these first mortgage bonds found
they were getting a mortgage on property that had cost and was costing
entirely too much money. Donald, Lawson & Co., and Tanner &
Co., were paid for building the road more than double the actual cost of
the work, and when it became clear to the parties who were paying the money,
arrangements were made as soon as possible, for the foreclosure of the
mortgage, and the sale of the road. The sale of the road on mortgage,
of course, wiped out the original stock. The road went into the hands
of Gould & Co., who completed the road, making Grand Island the terminus
instead of Kearney, and changed its name from St. Joseph & Denver City
Railroad, to St. Joseph & Western Railroad.
The local management of the St. Joseph & Western
Railroad will compare favorably with that of any road in the west, but
this road like all other roads in Kansas, was built that the public might
be benefited. Large donations were made by the people to accomplish
this object, and the people have the right to regulate by law the manner
of running these railroads, and the representatives of the people will
fail in their duty if they do not see to it that this is done.
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