154 - HISTORY OF SANDUSKY COUNTY.

CHAPTER XII.

THE OHIO RAILROAD.

Design of the Road—Manner of Building—The Plunder Law—Financial Management—Bankruptcy and Failure.

ALTHOUGH it may at first appear to the reader that a history of improvements should not notice such as were never completed, still the design of building this road was so bold for the time at which it originated, as well as for the then financial condition of the country, and it came so near being a success, that some mention of it seems proper. Besides these reasons, the form of the road, and the manner of constructing it, were novel and ingenious, and the financial methods for obtaining money to pay the expenses, are all so well calculated to illustrate the

spirit of the time and the consequences of bad legislation, that a brief record of the enterprise may be of value to legislators as well as to financiers, and thus justify the mention of it in this work.

The Ohio canal, through the eastern portion of the State, and the Miami canal in the west, had developed an improved condition of business and increased prices for farm products along the lines. Thither capital and enterprise were attracted, and the business and chief markets were found along and near them. But the districts remote from the canals and not fa-

HISTORY OF SANDUSKY COUNTY - 155

vored with a navigable river in their vicinity, were stuck in the mud; with a long haul for the marketable products of their farms and factories. The State had contracted millions on millions of debt in the construction of these canals, and the people remote from them must, of course, give their labor and sweat for tax money to pay the obligations. Under these circumstances what was more natural than for the people to demand of the State her help to make easy transportation to the markets on these canals. Hence arose a clamor for roads, turnpikes, other canals, and railroads to enable the people located away from the canals, to carry their products away. The demand for a more extended and more generally diffused system of internal improvements became imperative. Under this pressure the General Assembly, on the 24th day of March, 1837, passed an "act to authorize a loan of the credit of the State of Ohio to railroad companies, and to authorize subscriptions by the State to the capital stock of turnpike, canal, and slackwater navigation companies." This act provided as to railroad companies substantially as follows: That every railroad company that was then, or thereafter might be duly organized, and to the capital stock of which there shall be subscribed an amount equal to two-thirds of its authorized capital, or an amount equal to two-thirds of the estimated cost of the road and fixtures, shall be entitled to a loan of credit from the State equal to one-third of such authorized capital, or equal to onethird of the estimated cost of such road and fixtures, to be delivered to the company in negotiable scrip or transferrable certificates of stock of the State of Ohio, bearing an annual interest not exceeding six per cent., and redeemable at periods not exceeding twenty years, and the State should then receive certificates of stock in the company for the amount so paid. The provisions of this law as to turnpike companies were in substance like those as to railroad companies, with this difference, that on showing the plan of the proposed work, the amount of stock subscribed, and that one-fourth of the stock subscribed had been paid in cash to the treasurer of the company, the Governor should subscribe to the stock of such company for an amount equal to that subscribed by private persons, which was to be paid in installments out of the treasury of the State. In like manner the act provided that the Governor should subscribe to the capital stock of canal and slackwater companies an amount equal to onehalf that subscribed by private persons.

A Solomon or a Solon might have suspected that such a law would soon exhaust the treasury and seriously impair the credit of the State; they might have suspected that companies would soon be very numerous, and that some utopian enterprise would be undertaken, and that sham subscriptions and false statements of stock paid in would be resorted to in some instances for the purpose of drawing money from the State. But if Solomon and Solon had been out in the wilderness and stuck in the mud, where their wisdom and glory could not be known of men, and the laws promised them a way out into the world to bless it, they perhaps would not have cried their condemnation of the law in a very loud voice. Whatever may be said about the wisdom of such a law, practically it served one good purpose, and that was to stimulate all over the State enterprises to improve the means of transportation of her products, and facilitate travel and intercourse among the people.

The Ohio Railroad Company was one of the enterprises brought into life by the patronage offered in this statute. It was chartered by act of March 8, 1836, and

156 - HISTORY OF SANDUSKY COUNTY.

empowered to build a railroad with single or double track, from the east line of the State at some suitable point in Ashtabula county, westwardly through the counties of Ashtabula, Geauga, Cuyahoga, Lorain, Huron, Sandusky, Wood, and Lucas, to the Maumee River, and thence to some point on the Wabash and Erie Canal. The act of incorporation carefully provided that if such road passed below the lower rapids of rivers it crossed it should not obstruct navigation. The capital stock of the company was four million dollars, divided into shares of one hundred dollars each, and the charter named influential men in each of the counties through which the road was to pass, as commissioners to open books and receive subscriptions to the capital stock. The commissioners named for Sandusky county were, Jesse S. Olmstead, Jacques Hulburd, and Sardis Birchard, all of whom, at that time, were prominent and leading citizens of Lower Sandusky, especially in all matters of finance and public improvement.

The act of incorporation further provided that the money of the company should be paid out of the treasury thereof, on orders drawn on the treasurer, in such manner as should be pointed out by the bylaws of the organization. The reader will see, as the progress of the work went on, that this very reasonable and innocent looking provision for orders on the treasury was made to play a very important part in the financial management of the road.

The commissioners to open books and receive subscriptions for stock were empowered to call the stockholders together, to elect directors, and the directors thus elected to organize the company, by electing president, secretary, and treasurer, etc., so soon as one thousand shares, or one hundred thousand dollars, should be subscribed to the capital stock. The exactdate of the organization of the company is not conveniently ascertainable, and in fact is not deemed material to the purpose for which this sketch is written. But, sure it is, Nehemiah Allen was chosen president and Samuel Wilson treasurer. It is also true that surveys had been made, the line of the road established, and that rights of way were secured as early as January 19, 1838, perhaps earlier.

FORM OF THE ROAD.

The form of this railroad is peculiar, and deserves mention in this history, and whatever merits there may be in the plan, and whoever was the author of it (though President Allen is by some supposed to be that person), succeeding railroad engineers appear not to have adopted it as a general form for the construction of railroads. The base or foundation of this road was to be on piles, or sharpened trunks of white oak or buroak trees, about fifteen inches, more or less, driven into the ground by a machine called a pile-driver. This pile-driver was worked by steam (a wag might here interpose and say, so was the whole concern); this same pile-driver worked a horizontal buzz-saw which cut off the piles when thoroughly pounded down, to correspond with the engineer's line for the grade of the road. This pile-driver and sawing-machine was trundled along on rails laid as occasion required, on the top of the piles as they were cut off. These pile-drivers were set to work, one somewhere near Cleveland, and another at the Maumee River opposite Manhattan, which place being then the terminus of the Miami canal, was to be the great future city of northwestern Ohio, which Toledo now is. Timber was plenty and cheap in those forests through which the line of the road passed. The pile-drivers went merrily on, booming, puffing, screaming, and pounding through

HISTORY OF SANDUSKY COUNTY - 157

the woods, leaving behind them a clear track with two lines of piles cut level and ready for cross ties. The ties were to be laid from pile to pile; on these cross ties were to be laid timbers about eight inches square, an auger hole two inches in diameter was then bored through the square timbers or rails, down through the ties and into the pile; into this hole was firmly driven a red cedar bolt or pin about two feet in length, to hold the structure firmly together. On the square timbers thus fastened, were to be laid and spiked down the strap rail of iron on which the cars were to be propelled.

Riverius Bidwell, then owner of the water power and mill site in the city, contracted to furnish the cedar pins. Machinery, with a turning lathe, was erected and attached to his water power; large contracts were made in Canada and elsewhere for red cedar timber, and Mr. Bidwell manufactured and had ready for delivery great piles of the fragrant cedar pins to fasten the superstructure together. Meantime a superb trestle work of solid oak timber was erected across the valley of the Sandusky River, from hill top to hill top on either Fide. Huge and substantial limestone abutments and piers rose out of the waters of the, river to receive the woodwork of the bridge, which was located about half way between the Maumee and Western Reserve road bridge, and the southern extremity of the island next below; being near one hundred rods below the present iron bridge.

The work of driving the piles was begun at Brooklyn, on the west side of the Cuyahoga River, to work toward the west; also at the Maumee River, opposite Manhattan, now Northern Toledo, to work eastward.

THE FINANCIERING.

The financial management of the cornpany deserves particular notice. After the first hundred thousand dollars of stock was subscribed and the company organized, the State, as bound by the act of March 24, 1837, issued in scrip or negotiable obligations to the company thirty-three and one-third thousand dollars. This scrip could be converted into ready cash, or hypothecated to local banks with the agreement that the bank should redeem or pay the orders of the company to an equal amount of the deposits. The orders of the company on the treasury were nicely engraved and printed in the similitude of bank bills, in various denominations, and largely in fractions of a dollar. The contractors and laborers on the road were paid off periodically with these orders, which were promptly paid in currency at the treasury, or taken at bank as cash. Soon merchants and traders of all kinds, finding the Ohio Railroad money as good as any other currency then used, began to accept it in payment of debts, or for any thing they had to sell. Thus the means were obtained to start the building of the road. After the line was established and the work absolutely begun, men along the line whose lands were to be greatly benefited, began to subscribe, quite liberally, believing the stock would be worth its face, and that they would make great gains in the increased value of their property. One man in Lower Sandusky subscribed for twenty-five thousand dollars of the stock, although good judges thought at the time his whole property of all kinds was not worth twenty-five hundred dollars, but subscriptions drew one-third of this amount from the State treasury in an an available form, and this is but a single example of what was extensively practiced all along the line. Ohio Railroad money became the general circulating medium, and for a time was considered as good as our local bank paper, which at the time

158 - HISTORY OF SANDUSKY COUNTY.

was our chief medium of exchange and payment of debts. The Auditor of State, John Brough, in his annual report to the General Assembly for the year 1839, gave the amount for which the State had subscribed and paid stock to turnpike, canal, and slackwater navigation companies, but the amount of scrip or obligations of the State issued to aid in the construction of railroads, does not appear in the report of that year. He, however, informed the Assembly that the State debt was rapidly increasing, and that the revenues of the State were not sufficient to pay the interest on her debt. This report, doubtless, drew the attention of legislators to the financial condition of Ohio, and awakened public attention to consider the outcome and results of the then existing policy. Here it should be said that, although under this very liberal policy many useless schemes were organized, and, no doubt, much swindling of the State treasury had been accomplished in various ways under pretended compliance with the law, still many works were begun, and accomplished, which were of great value to the State, and served to hasten the development of her resources.

The pile-drivers, meantime, were working towards each other. It was expected they would meet somewhere near Huron. The one from the east had neared that place, and that from the west was somewhere between Castalia and Venice, when the bubble burst, the machines stopped, and the people had the worthless Ohio Railroad money in their pockets. This crash came about 1840. Auditor Brough, in his report of 1840, complained again that the State had been compelled to issue its obligations to raise money to pay interest on her debt, and in one brief line stated the amount of scrip issued to railroad companies to be three hundred and fifty-eight thousand dollars, most of which was probably issued to aid in building the Ohio Railroad. Judge Nehemiah Allen bore the reputation of an honest and honorable man, who was sincerely engaged in accomplishing what he considered a great work for the State, and especially the north part of it, and the collapse left him poor in his old age. Samuel Wilson, the treasurer, was said to be poor at the beginning of the work, but at the bursting up of the concern was rich, and had bought land and built a splendid mansion on it, but the title to his property was found to be in his wife.

The amount of Ohio Railroad orders _ outstanding at the time they became worthless, is not known, but almost every man in this part of the State had some of it, and many had large amounts.

Mr. Charles O. Tillotson, who left a charge on the Maumee and Western Reserve Turnpike to assist in the construction of this railroad, and was in the employ of the company when the failure occurred, remarked to the writer a few days ago, that if this railroad had been completed, this county would have been fifty years in advance of what it now is in the development of its resources and in wealth.

About forty years have passed since this enterprise closed in ruinous insolvency. President Allen and Treasurer Wilson have passed away; all the bright anticipations of those who designed and gave their money in support of the work. are vanished, and the magnificent trestle was long ago taken down, and the superb timbers were converted into the third bridge for the Maumee and Western Reserve road, under the engineer, Cyrus Williams. Even the solid stone piers and abutments have been taken down. The ties and timbers prepared for the superstructure are gone, the more than three hundred thousand d )Ilan contributed by the State are

HISTORY OF SANDUSKY COUNTY - 159

gone, the money paid by its stockholders is gone, and the only visible remains of the work are the broken lines of decaying piles, to be yet seen in sections where the march of improvement has not taken them away. These still stand, silent, but fast disappearing witnesses of the great failure

"The best laid schemes of mice and men Gang aft a glee."

The people, in 1839, had come to believe that the act of 1837 was ruining the State credit, and would soon result in bringing her hopelessly in debt. This belief became so general that it resulted in the repeal of the act, which had come to be popularly designated as the plunder law, by repealing the act passed March 17, 1840. And when the consequences of this plunder law became fully understood, so strong became the feeling against the principle in legislation, that in framing the new constitution such legislation is strictly forbidden, in the plainest and most unmistakable language.

If " history is philosophy, teaching by example," then this mention of the Ohio Railroad may not be in vain.