II

EARLY AMERICAN CONDITIONS 1

WHAT happened in Michigan was typical of the whole

western situation. In the early days of its statehood it had planned and partly built two lines of railroad across its lower peninsula, from east to west. So severely, however, was the state shaken by the panic that in spite of its heroic efforts to meet its obligations the word Michigan became a scarecrow to eastern capital. As the years went on and there proved to be no possibility of completing the roads or even of procuring the money necessary to keep them in repair, it grew plain that the state must get rid of them. One, the Michigan Central, one hundred and forty-five miles long, ran from Detroit to Kalamazoo. The other, the Michigan Southern, also ran nowhere, but achieved the same result with less effort, being only seventy-five miles long. The roads together had cost $3,500,000. Accordingly, placing its dilapidated property on the bargain-counter, the state waited for customers.

At last, in 1845, the railroads attracted the attention of two young men, both easterners who had gone West, and both persuaded not only that the day of prosperity for the West was about to dawn, but that, if the right means were taken, eastern capital could be brought to look upon a western road with favor. One of the men was James F. Joy, a graduate of Dartmouth College and the Harvard Law School, who had come to Detroit and was waiting for his practice to grow. The other was John W. Brooks, the superintendent of the Auburn and Roches'ter Railroad in New York. They believed that if the Michigan Central could be rehabilitated and completed for the remaining third of the distance to Lake Michigan, it would prove a profitable investment. It would open up the rich farming land of

1 From An American Railroad Builder: John Murray Forbes, by Henry G. Pearson, Boston, 1911. By permission.

Michigan; better still, it would constitute a link in the shortest route from the East to Chicago and the Mississippi Valley. At that time the traveller left the cars at Buffalo, where he took a steamer which conveyed him, by the roundabout way of Lake Huron and the Straits of Mackinaw, to the head of Lake Michigan. If he had good luck, his boat reached Chicago in four days and a half; not infrequently six days were needed. With the railroad completed across Michigan, the time from Buffalo could be reduced to thirty-six hours. Of course, Brooks reasoned, it was conceivable that as years went on a railroad might be built along the southern shore of Lake Erie to Toledo, and from there to Chicago; but the cost of such an undertaking would be so stupendous and the returns so uncertain that he dismissed the possibility from his calculations. The Michigan Central was, it is true, a railroad in the wilderness; nevertheless its strategic position was such that it could hold its own against the circuitous water route. With eastern capital and eastern control, it was practically certain to succeed. Filled with this conviction Brooks, then twenty-six years old, set forth in the winter of 1845-46 to make the acquaintance of men of means in Boston and New York in the hope of interesting them in his scheme.

Good luck led Brooks, in the course of his labors, to the counting-room of John M. Forbes. Forbes had already made experiments, most of them financially unsuccessful, in the application of steam to ocean transportation; 1 but he was ready to listen to possibilities more promising in connection with steam transportation on land. In those days, of course, there was nowhere any expert knowledge of railroading; yet, judged even by the standards of that time, his notions of the problems of railroad management were, as he took delight in recalling in later years, naïvely rudimentary. He reasoned, for example,

1 For the most part the vessels used steam only as auxiliary power, having hinged propeller-shafts, by means of which, in good sailing weather, the propeller could be turned up out of harm's way. The Midas, built and owned by the Forbes brothers, was the first steamer to navigate Chinese waters; the Massachusetts was one of the earliest ocean steamers on the Atlantic. The Iron Witch, an iron paddle-wheel steamer, designed for fast service on the Hudson, was an expensive failure.

that in all probability the presidency of a railroad company was like that of an insurance company, a dignified office which, at that time, was given to "honest and reliable though unsuccessful merchants," the work being done by a secretary. Such a position he wished to find for his elder brother Bennet, whose daring and brilliant career as a sea captain had not proved the best preparation for success in mercantile affairs.

Drawn on partly by this fraternal motive and partly by the fascination of the enterprise itself, Forbes went so far as to employ Daniel Webster to draft a charter embodying the wisdom that had been gleaned from eastern railroad experience, and to send Brooks back to Michigan to secure the passage of the charter by the legislature.

The discussion of this bill, with its momentous consequences to the exhausted treasury of Michigan, was naturally the chief event of the legislative session of 1846. But so ignorant were both the public at large and the legislators themselves concerning railroad charters that the point on which local interest centred was the danger that the pagan capitalists of the East should attempt to run trains "on the Sabbath"; and every day petitions bearing on this point were presented. When, however, the time came for voting on this section, amendments were offered requiring that the corporation should observe the other nine commandments also, and that the directors should attend church at least twice every Sunday, and the section was laughed to defeat. The true guardian of the state's interests proved to be the governor, Alpheus Felch, an able and honest executive, who more than once during this session had to restrain the legislature from giving away to corporations the property of the people. Thus the charter as passed retained for the state a measure of legislative supervision and control. Yet even so, Brooks and

1 Journal of the Senate of Michigan, 1846, pp. 274, 275.

2 By the act of incorporation (Laws of Michigan, 1846, pp. 37-64) the Michigan Central Railroad was granted the property of the road forever; but the state might repurchase it after a lapse of twenty years, and after thirty years the legislature might alter, amend, or repeal the charter. For the first four years the road was to pay a tax of one-half of one per cent, after that, of three-fourths of one per cent on the capital stock and loans for construction

Joy knew that, with the price of the road fixed at $2,000,000, they had not the worst of the bargain.

Everything now depended on the skill and force of the man who took hold of the financiering. Boston capital, which had been principally invested in the China trade, was now beginning to be put into mills in Massachusetts and New Hampshire and into short lines of railroad along the Atlantic coast. In New Bedford, owing to the decline in profits from the whaling industry, there was also a considerable amount of capital that might be drawn into new projects. Through family connections in these two cities Forbes could make a good beginning, and in New York he got a large measure of help from his former partner in China, John C. Green. Moreover, he was sure of aid from the forlorn holders of Michigan bonds and internal-improvement warrants, who were only too glad to jump from their present fire into the frying-pan of railroad stocks. As one person after another looked into the facts about this worn-out railroad in the wilderness, it became plain that it was, indeed, a bargain. Brooks's report showed that there had been an increase of one hundred per cent in the receipts within the past year, and there was every prospect of even more satisfactory returns when the road should

purposes. Its annual report to the secretary of the state was to contain tables showing its financial condition, its physical condition, and the amount and character of its business. The amount of the capital stock was set at five million dollars, with permission to increase it to eight million.

The rates existing under state management were to continue in force until July 1, 1848, from which time a reduction of twenty-five per cent was to be made on flour and grain; the tariff for no article was to be higher than the average of the tariffs charged for that article on the Boston and Lowell, the Boston and Providence, and the Boston and Worcester railroads, during September and October of 1845. An exception might be made if the secretary of state of Michigan, the auditor, and the attorney-general gave their consent. There was provision for a commission to determine what was the average rate on the New England railroads, and in case of disagreement a final decision was to be rendered by the court of chancery. Furthermore, not oftener than once in ten years the legislature might require such a commission to review all the rates of the road. The road was required to "transport merchandise and property... without showing partiality or favor, and with all practical despatch." The maximum passenger tariff was fixed at three cents per mile. No publication of rates was required; nevertheless, for eight years, from 1850 to 1857 inclusive, these schedules were given in the annual report of the railroad.

be built across the state and properly equipped. Finally, there was the assurance that it was to be controlled by eastern capitalists of proved honesty and ability. Advantages such as these did not suffer when presented by a man like Forbes, who had vision, will, and above all the faculty of "pitching in "; and as the six months allowed for the formation of the company drew to an end, his tense and tireless efforts brought success. “I shall, I hope," he wrote when it was all over, "have cause to look back upon this September as one of the best spent months of my life." He had, indeed, opened the door upon his true career.

On September 23, 1846, the Michigan Central Railroad took possession of its property. Forbes was president, having consented to take the office only because he found that otherwise the necessary capital could not be secured; but he arranged to put the burden of his work on the treasurer, George B. Upton, to whom he made over his salary. John W. Brooks, at Detroit, was to have charge of the running of the road.

Promising as were the prospects of the Michigan Central, the road itself, as Brooks's report made clear, was a shabby piece of property. The one hundred and forty-five miles of track from Detroit to Kalamazoo were in bad condition, and fifty-six miles more were needed to complete the line to the nearest point on Lake Michigan. There were only four passenger "depots" along the line, and at Detroit nothing but a small freight depot and an engine-house, both inconveniently situated at some distance from the water front. The value of the rolling stock was $68,000, the largest single item being $4000 for a locomotive of twelve tons.

The track, like that of all early railroads, consisted of beams of wood six inches square, to which were fastened strips of iron half an inch thick by two and a quarter inches wide. The beams were fastened to cross-ties laid three feet apart, which in turn were laid upon under-sills, "the whole being supported upon short blocks of different lengths, varying according to the distance between the bottom of the under-sills and a firm foundation." On the first thirty miles out of Detroit the wooden part

1 Brooks's Report upon the Merits of the Michigan Central Railroad as an Investment for Eastern Capitalists, p. 4.