THE CONCEPTION AND GROWTH OF A KANSAS RAILROAD.
Written for the Kansas State Historical Society by OTTO PHILIP BYERS 1 of Hutchinson.
IN THE EARLY DAYS of railroading, to buy a railroad without paying money for it was almost an every-day affair, but for a few men, untrained in the science of railroad organization, financing or construction, and without even a local reputation for extraordinary business sagacity, actually to build a railroad without a dollar of money, as was accomplished in southern Kansas in 1889, is probably unparalleled in railroad history. These men, with nothing but prospective subsidies and a franchise which was given them, did build eighty-two miles of standard construction, and when it was completed they owned their own bonds.
Hon. J. P. Usher,2 of Lawrence, Kan., the last surviving member of President Lincoln's cabinet, and for several years prior to the time of this incident general attorney for the Union Pacific in Kansas, was the father o the movement. He conceived the idea of extending a branch of that road then in operation from Salina to McPherson, Kan., southward across Indian territory and ultimately to the Gulf of Mexico.
It was clear to his far-sighted vision, even in that early days that western products would eventually have to seek the Gulf ports for export; also that Indian Territory would some day be opened to settlement and become a state. It was well known that in richness of resources the vast undeveloped country to be crossed by this new road was unsurpassed by any other section of our country, Furthermore, the Santa Fe and the Rock Island were building toward the Gulf, and self-protection made it appeal necessary for the Union Pacific to do the same.
Congress was at that time giving away franchises and rights of way across the Indian country, to be had for the asking, whereas later on any land acquired for railroad building would be costly. This vast item of expense removed, together with the possibility of securing large tracts of land for town-site and speculative purposes, in addition to leases of valuable mineral lands owned by the Indians, made Indian Territory the mecca of all railroad-building schemes.
Before Mr. Usher could put his project into execution death removed him, but not until it had been determined to build the road. Agitation of the subject along the proposed line in Kansas began in 1885. A survey was made the following year and a charter obtained.
The original incorporators, organized under the name of the McPherson, Texas & Gulf Railroad Company, were as follows: A. L. Williams, H. P. Dillon, Charles Monroe and N. H. Loomis, of Topeka, Kan.; G. A. A. Deane, Lincoln, Kan.; W. H. Clark and George D, Thompson, Harper, Kan.; W. P. Olmstead and I. B. Forbes, Anthony, Kan. The first board of directors consisted of A. L. Williams' H. P. Dillon, Charles Monroe, N. H. Loomis and G. A. A. Deane, A.L. Williams was elected the first president, and the organization was conducted entirely in the interests of the Union Pacific Railroad.
Col. A. W. Jenkins. right-of-way and tax agent for the Union pacific, did the active work, and succeeded in carrying the elections from McPherson to the city of Kingman. Under the terms of these elections the road had to be completed within twenty months from the date of the elections, which occurred in August and September, 1887.
About this time the Rock Island was building its E1 Paso line southwest across Kansas and over a portion of the very route selected for the McPherson, Texas & Gulf. Bonds were voted by McPherson and Reno counties for the Rock Island also. The wild scramble for railroads all over the Central West made the voting of subsidies at that time a mere matter of form.
A few months later the famous Omaha bridge contract, afterward litigated through all the courts, was executed, whereby the Union Pacific and the Rock Island each granted the other trackage rights, including the right of the Union Pacific to use the Rock Island tracks, which had been constructed between McPherson and Hutchinson, making it unnecessary for the Union Pacific to construct its proposed McPherson, Texas & Gulf road between these points. Train service was inaugurated by the Union Pacific between McPherson and Hutchinson in May, 1890, and continued several months.
A complete change of management in the Union Pacific resulted in a denial by that road of the validity of the joint-track agreement, all train service was withdrawn and the contract attacked in the courts. Pending the decision of the supreme court, the Reno and Kingman county subsidies from Hutchinson to the city of Kingman were expiring by limitation. The new Union Pacific regime knew nothing of the project and took no interest in it.
A local real-estate man of Hutchinson seized upon the idea of building this portion of the road by individuals, and induced three Chicago men, one a high officer of a western railroad and another a near relative of a famous Union army general,3 to join him. The new management of the Union Pacific, glad to rid itself of this franchise, gave it to these men outright, with the stipulation that any construction should be under another corporate name. Accordingly, the Hutchinson, Oklahoma & Gulf railroad was incorporated on March 7, 1889. The following men composed the new board of directors: H. A. Christy, E. E. Wise and E. St. John, Chicago; Charles Collins and G. A. Walkup, Hutchinson, Kan. Officers were elected as follows: H. A. Christy, president; E. E. Wise, general manager, and O. P. Byers, superintendent. The McPherson, Texas & Gulf and the Hutchinson, Oklahoma & Gulf then were consolidated under the name of the Hutchinson & Southern, and the articles of incorporation were filed with the secretary of state on October 7, 1889.
Because of their location being remote from railroads, farmers were induced to donate right of way across their farms for the convenience they would enjoy in having transportation facilities close at hand and the in creased value it would give their land. If necessary, lifetime passes were offered. Wherever a farmer refused the road was built around his farm. Since it was being built for sale and for the subsidies voted upon constructive mileage, the curvature of the track and the extra distance around the domain of the obdurate farmer were unimportant items. At any rate, nothing was to be paid beyond promises, for the very good reason that the promoters had nothing to pay with.
Grading and tracklaying contracts were all to be paid in subsidy bonds. No trouble was experienced in purchasing material on credit upon this showing of right-of-way deeds, grading and tracklaying contracts, together with subsidies of $4000 a mile voted by the county and $20,000 terminal bonds voted by the city of South Hutchinson. All railroad-supply concerns approached accepted with alacrity the orders for material. Engines and cars were leased for construction purposes. The payment of freight charges on material was the one item which appeared to cloud the horizon. Competition for the traffic, however, settled that, and the material was delivered to the new road, to be paid when the proceeds of the bonds were received. Thus equipped, construction proceeded.
Less than sixty days, however, remained to build the twenty-three miles of road to the south line of Reno county before the expiration of the bonds. All the material had to be transported several hundred miles. Weather conditions became very bad. Everyone realized that if the bonds were not earned all was lost. Heavy rains fell every night for more than a week, but the sun shone bright and clear each morning. Tracklaying in the mud proceeded at the rate of almost a mile a day. Finally the end of the track reached a point within a mile of the county line the day before the bonds expired. It was then discovered that all the material possessed or on hand had been used. Nothing was left but to take up sidings and complete the mile of main line, which was done. The road was accepted by the county commissioners and the bonds were issued.
The time limit of the bonds in Kingman county as far as the town of Kingman was much greater, allowing ample time for building that portion, which was accomplished without incident, and the bonds were duly issued. The title thereupon became the Hutchinson & Southern Railway.
But their troubles were not yet over. A purchaser for the bonds was the next thing. Several years of crop failures had impoverished the state, and the enormous corn crop of that year was selling at eight cents a bushel on the farms. Repudiation of boom-day mortgages was in full progress. Worst of all, Populism, which had been budding for several years, bloomed into a flower, scented with radicalism and almost revolution. Investors everywhere looked askance upon any security tainted with the name "Kansas," and refused to bid even for municipal or county bonds. Finally the railroad bonds were sold to the State School-fund Commission at a discount, which was the only possible means of disposing of them.
The local real-estate man and the high railroad official having been eliminated early in the proceedings, the two remaining Chicago men then found themselves the possessors of thirty-two miles of railroad unbonded and otherwise unencumbered, the subsidies having built it, owing to the cheapness of material and of labor, together with the fact that it was built over a level prairie, averaging less than fifty feet of openings to the mile.
During this period of construction a second change of management had occurred on the Union Pacific. The desire to push on south with the road, stimulated by the success of the first venture, which had attracted attention, caused the Omaha, Hutchinson & Gulf to be organized by the admission of a sufficient number of local men for charter purposes.
A survey was made from the city of Kingman to the north line of Indian Territory, through Harper county. Elections were held and bonds were voted in every township but one in both counties. A survey promptly was made around this township and through another that did vote the bonds.
The maximum subsidy allowed by law having been reduced to $2,000 a mile, terminal bonds to the amount of $20,000 each were voted by the cities of Kingman, Harper and Anthony. Thus fortified, the proposition was presented to the new management of the Union Pacific, with the proviso that the fifty miles be built, all subsidies to be the property of the promoters and the entire eighty-two miles to be bonded at the rate of $12,500 per mile, the Union Pacific to advance 75 per cent of the par value of the bonds when the road was built and in operation from Hutchinson to the Indian Territory line, the Union Pacific having the privilege of taking over the road at any time thereafter upon payment of the remaining 25 per cent of the face value of the bonds. The proposition was accepted and a contract entered into, and on June 2, 1890, the road was completed, and the entire line became the Hutchinson & Southern.
New equipment of the very best was purchased, the road was placed in operation and excellent service was provided, which continued for several years. Not a complaint ever was filed with the State Railroad Commission against the road, nor had it ever had a wreck.
The Union Pacific promptly paid over the amount, which was $768,500. The bonds thus hypothecated were not sold, and were the property of the builders. The stock, however, was in escrow, which, nominally at least, meant passing from the owners, of course carrying with it control of the property.
The net profits of almost a quarter of a million dollars in building the line already constructed, together with every prospect of the Union Pacific fulfilling its contract to continue advancing money to build across Indian Territory to Denison, Tex., made this one of the most desirable railroad projects of the time.
Oklahoma Territory had been created and opened to settlement. Town sites were available wherever desired upon the proposed route of this new railroad, and promised vast returns to the builders, who, of course, absolutely controlled all such situations. Contracts with the Indians for very valuable lands were in prospect.
Preliminary lines had been run, a prospectus issued, and application made to Congress for a charter and a right of way across the Indian Territory portion of the route, when a third change of management in the Union Pacific unexpectedly occurred. The latest management was antagonistic to the proposition and promptly repudiated the contract, refusing at the same time to take possession of the road, and leaving it in the hands of its builders.
When it became apparent no further aid from the foster parent could be hoped for, every effort was made to obtain the necessary money elsewhere, ever to the extent of sending an emissary to England.
With one exception, every western trunk line was in the hands of receivers or had recently passed through a receivership. The free-silver craze was at its height, crop failures continued, business was stagnated and railroad earnings at low ebb.
The little road battled bravely for existence, all the time affording its patrons better service than the larger lines in the same territory, hoping for a turn in the tide. After struggling several years it met the receiver- ship fate and passed to the Santa Fe on December 20, 1899. It is now a part of that magnificent system, serving a populous and wealthy district and forming one of its best feeders.
A strange fatality overtook the little band of energetic builders mentioned in the preceding story. They all long since have passed to the great beyond, with the exception of the writer. It is rather remarkable, too, that, though each of them had made a fortune in the building and bonding of the road, this profit soon disappeared and each of them died a poor man.
NOTE 1.---See p. 99, note 2, this volume.
NOTE 2.--JOHN PALMER USHER was born the town of Brookfield, Madison county, New York, January 19, 1816, and died in hospital in Philadelphia April 13, 1889. He was admitted to the bar of New York in 1839, and soon after removed to Terre Haute, Ind., where he at once began to be known both as an able lawyer and as a political speaker. He took a prominent part in the politics of the state, and in 1861 was appointed attorney-general of Indiana, which office he held until he was made Assistant Secretary of the Interior, in 1862. The next year President Lincoln appointed him Secretary of the Interior. He had met Mr. Lincoln in courts of law in his own state and in Illinois, and it is said that in his own country he was reputed as great a lawyer as Lincoln himself. Lincoln trusted him and honored him with a closer intimacy than he showed toward any other member of his cabinet. After the assassination of the President Judge Usher became general solicitor for the Kansas Pacific Railroad, removing to Kansas some time in 1866 and settling in Lawrence, where he resided until his death. At the time of his death he was general attorney and general counsel for the Union Pacific Railroad.
NOTE 3.--These two men were Everitte St. John, general manager of the Chicago, Rock Island & Pacific Railway, and E. E. Wise, a brother-in-law of Major General Schofield.
This article was originally published by the
Kansas State Historical Society
in Kansas Historical Collections, Volume XI, 1911-1912
December 13, 2000 /
Bob Walter /
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