CHAPTER TWENTY-ONE

P. 228  ADMINISTRATION OF AUGUSTUS C. FRENCH

THE MEXICAN WAR—THE MORMONS—CONSTITUTION OF 1848—

THE ILLINOIS CENTRAL RAILROAD—A NEW BANKING SYSTEM.

       As early as February, 1846, the Democratic convention nominated Augustus C. French as the candidate of that party for governor. J. B. Wells was nominated for lieutenant governor. The Whigs were hopelessly in the minority and could not persuade themselves to enter the race till late in the month of June, when a convention, assembled in Peoria, nominated Thomas M. Kilpatrick for governor and Gen. Nathaniel G. Wilcox for the second place. The election was the first Tuesday in August and the new governor took his seat early in December. The canvass was in progress during the eventful days of the Mormon trouble and in the early days of the Mexican war.

THE MEXICAN WAR

       There was not much of an issue in the canvass. The Democrats were in favor of the Mexican war, while the Whigs were opposed to it. This made the Whigs unpopular. The Whigs charged French with being entangled in the internal improvement schemes which to some people was a sure sign of corruption or of weakness. French was elected by a large majority.

       Governor French entered upon the duties of his office in December, 1846. He inherited from the previous administrations some unfinished problems in statecraft. These were the Mormon problem, the internal improvement problem, the new constitution problem, and the Mexican war problem. Some of these had been in process of solution for several years, while others were comparatively new.

THE MORMONS

       The Mormon question was by no means wholly settled at the outgoing of Governor Ford. From the death of Smith the 27th of June, 1844, to December, 1846, when Governor Ford retired, there was more or less disorder and violence in the region of Hancock county.

       The Mormons in the fall and winter of 1845-6, were making preparation to remove from Nauvoo. The anti-Mormon sentiment was very strong in all the region of Nauvoo, and efforts were made to have their leaders arrested on the charge of counterfeiting. But Governor Ford refused on the ground that a sort of armistice had been entered P 229 into. Word was noised abroad that United States troops were coming in the spring of ‘46, and the exodus was begun and continued through that summer. Their property was purchased by Gentiles and by the time French came in as governor the Mormons had in the main left Nauvoo, but there was still a very unsettled state of the public mind and for many years the effects of the “Mormon wars” were felt in the northwestern part of the state.

       The internal improvement problem was in process of solution. The incomes of the state were not sufficient to pay the current expenses though the deficits were decreasing from year to year. Governor French recommended to the legislature that all the debts of the state, including bonds, scrip, and interest, be funded and that the new bonds be registered. In this way the people would know just exactly how much they owed and who held the bonds, and counterfeiting, which had come to be a very common thing, would be prevented. As a means of increasing taxes the state petitioned congress to abrogate the clause in the enabling act by which the state promised to exempt from taxation for five years after sale, all government land. Congress having complied with the request, the legislature provided for the taxation of all lands. This greatly aided in meeting the current expenses, especially as considerable land was bought in Illinois following the Mexican war.

       Texas was admitted into the Union in the summer of 1845. Mexico immediately broke off diplomatic relations with the United States. Gen. Zachary Taylor was ordered to Corpus Christi, near the territory that was in dispute between Texas and Mexico, The winter of ‘45 and ‘46 was consumed in diplomatic maneuvering with barren results. General Taylor moved to the Rio Grande in March, 1846. War was declared to exist between the United States and Mexico in the early part of May. The President of the United States was authorized to call for fifty thousand volunteers, and $10,000,000 were appropriated to carry on the war. The pay was about $15.00 per month. Under the first call for troops, Illinois was to have three regiments of infantry.

       There was at that time a militia organization, at least on paper, In the state, and the governor raised the three regiments through the officers of that organization. The order was issued for these troops May 25, 1846, and in twenty days a thousand more men had enlisted than were asked for. Alton, on account of river transportation southward, was named as the place of rendezvous. James Shields, a native of Ireland, who had come to Kaskaskia in 1826, at the age of sixteen, and had held many places of trust in Illinois, was made a brigadier general to command the Illinois troops.

It was the plan to allow companies to organize by electing the company officers, and when ten companies offered their services, the regimental organization should occur. The First regiment was recruited in the counties west of Springfield. Col, John H. Hardin, of Jacksonville, was given command of this regiment. The Second regiment was a Southern Illinois regiment and the organization was as follows:
 
Colonel, William H. Bissell St. Clair county
Lieutenant Colonel, J. L. D. Morrison St. Clair county
Major, H. T. Trail Monroe county
Adjutant, A. Whiteside Monroe county
Sutler, Lewis J. Clawson, P 230  

Captains:
 
Peter Goff Madison county
Erastus Wheeler Madison county
A.   Dodge Madison county
E. C.  Coffee Washington county
John S. Hacker Union county
L. G. Jones Perry county
H. L. Webb Pulaski county
Julius Raith  
Joseph Lemon  
Madison Miller  

Total men in at muster

892

The Third regiment was in the main an Egyptian organization. Its officers at muster were as follows:
Colonel, Ferris Foreman, .

Fayette county
Lieutenant Colonel, W. W. Wiley Bond county
Major, Samuel D. Marshall Gallatin county
Adjutant, J. T. B. Stapp  
Captains:

 
J. C. McAdams Bond county
M. K. Lawler Gallatin county
Theodore McGinnis Pope county
J. A. Campbell Wayne county
W.  W. Bishop Coles county
S. G. Hicks, Jefferson county
James Freeman Shelby county
J.  P. Hardy Hamilton county
Philip Stout  
S. Sellers  

The regiment numbered nine hundred and six men. Colonel Churchill, of the United States army, inspected and mustered in the men.

 

       Hon. E. D. Baker, at that time a member of congress, obtained permission from the secretary of war to organize the fourth regiment in Illinois. The regiment was accepted by the government. Nine of the companies were recruited beyond the limits of Southern Illinois—only the tenth company, that of Captain Murphy, of Perry county, being from the south end of the state.

       The First and Second regiments left Alton under the direction of General Wool July 17 to 19, 1846, and landed at Matagorda bay July 29, and by August 23, they were encamped at San Antonio, Texas. They left here September 26, 1846, crossed the Rio ·Grande at San Juan. Thence by the Grove of the Angels to San Fernando, a city of four thousand, beautifully built and luxuriantly surrounded by running water. On the march to Monclova and thence to Parras, a city of six thousand. This last named city was reached the twenty-fifth of December. Here word came to our little army that Santa Anna was collecting a large army at San Luis Potosi, presumably for the reconquest of all the ground thus far gained by General Taylor. General Wool and General Taylor united their forces in a narrow pass on the great road from Potosi northward, a sort of Thermopylac, a short distance from the village of Buena Vista, and there fought the deciding battle of the war in the north of Mexico. P 231

       The Second Illinois regiment, Colonel Bissell commanding, played an honorable part in the battle. The report of the battle by General Taylor was highly complimentary to the First and Second Illinois regiments. Special mention is made of the services of Lieutenant Colonel Morrison, Major Trail, and Adjutant Whitesides of the Second regiment. In the battle Col. John J. Hardin of the First Illinois regiment and Colonel McKee and Lieutenant Colonel Clay of Kentucky were killed, and the burden for a period during the hottest of the fight fell upon Colonel Bissell. Captain William Woodward of Company K, Second regiment and Lieut. Edward Fletcher, John Bartleson, Rodney Ferguson, Aaron Atherton, Lauriston Robins, Allan B. Roundtree, William Price, Timothy Kelley and James C. Steel were all killed in this battle.

       The Third regiment with Colonel Foreman in command was attached to the army of General Scott, and played an honorable part in the siege of Vera Cruz, and in the march to Mexico, Colonel Foreman being especially commended in the report by General Scott.

       The Fifth and Sixth regiments which contained few Southern Illinois people did not see any service in battle but were subjected to some severe trials in marching, and in garrison duty.

       Among the Southern Illinois soldiers in the Mexican war who became prominent in the Civil war were John A. Logan, Michael K. Lawler, William R. Morrison, and Stephen G. Hicks.

John A. Logan became a prominent lawyer of Southern Illinois, a noted Democratic politician, a member of the lower branch of congress and at the outbreak of the war raised the Thirty-first regiment and was commissioned its colonel. He rose rapidly in command and finished the war as a major general of volunteers. Michael K. Lawler was born in Ireland in 1814. Came to Gallatin county in 1819. After returning from the Mexican war engaged in farming a few miles from Equality, and when the Civil war broke out he raised the Eighteenth regiment and for meritorious services was brevetted a brigadier general. He died on his farm in 1882. William R. Morrison belonged to a noted family in Southern Illinois. He served as a private in the Mexican war, returned home and studied law, held several political offices and when the Civil war began raised the Forty-ninth regiment. He engaged in the battle of Fort Donelson where he was severely wounded. He resigned to serve in congress. He was a prominent member of that body serving as chairman of the ways and means committee. He was honored by appointments at the hands of both Cleveland and Harrison. He died at the age of about eighty-three at his home in Waterloo, Monroe county. Stephen G. Hicks, a native of Georgia, came to Illinois in time to engage in the Black Hawk war. He raised a company in the Third regiment in the Mexican war and was promoted finally to be lieutenant colonel of the Sixth regiment. He was colonel of the Fortieth regiment in the Civil war and was dangerously wounded in the battle of Shiloh. He eventually returned to his command and served with distinction till the close of the war. He died in Salem in 1869. Nathaniel Niles was a native of the state of New York, coming to Belleville in 1842. He was first lieutenant in Colonel Bissell's regiment. At the battle of Buena Vista he won distinction and was promoted to a captaincy by General Wool. When the Civil war came on he was commissioned colonel of the Fifty-fourth P 232 regiment, he was later made colonel of the One Hundred and Thirtieth. He held many positions of honor and trust following the return of peace in 1865.

       In the spring of 1847 following the return of the First and Second regiments from their victories, two more regiments were organized, the Fifth and the Sixth. The officers were as follows:
 
Colonel, E. W. B. Newby Brown county
Lieutenant colonel, Henderson Boyakin, Marion county
Major, J. B. Donaldson, Pike county  
Captains:
Company A, Thomas Bond, Clinton county
Company B, J. M. Cunningham, Williamson county
Company C, Vantrunk Turner, Marion county
Company D, John C. Moses, Brown county
Company E, G. W. Hook, St. Clair county
Company F, Thomas B. Kinney, Cook county
Company G, Henry J. Reed, La Salle county
Company H, James Hampton, Williamson county
Company I, R. Madison, Shelby county
Company K, W. Kinman, Pike county

 

       This regiment proceeded to the front by way of Fort Leavenworth and thence to Santa Fe. Here they did garrison duty and to while away the time organized the first Masonic lodge in that far away city.

       The Sixth regiment was organized in Alton in May 1847. More companies had offered their services when the Fifth was enlisted than could be accepted and it was hoped another regiment would be taken by the government. The secretary of war wrote Governor French as follows: “Yielding to the earnest solicitations of the patriotic citizens of your state, the president has instructed me to request that your excellency will cause to be raised and rendezvoused at Alton another regiment of volunteer infantry.” The officers were:
 
Colonel, Collins Jo Daviess county
Lieutenant colonel, Hicks Jefferson county
Major, Livington Jefferson county
Adjutant Fitch Greene county
Captains:
Company A, Franklin Niles Madison county
Company B, Edward W. Dill Madison county
Company C, Harvey Lee Fayette county
Company D, John Bristow Greene county
Company E, Burrell Tetrick Macoupin county
Company F, James R. Hugunin Cook county
Company G, William Shepherd Boone county
Company H, G. Jenkins Will county
Company I, James Bowman Jefferson county
Company K, C. L. Wright Jo Daviess county

 

       This regiment proceeded to New Orleans and thence one-half to Vera Cruz and the other half to Tampico. Little real military service P 233 was seen by this regiment, but the officers and men suffered from change in climate and water, and much sickness prevailed. Many deaths occurred before the regiment returned.

       It is an old saying that military fame is a passport to political preferment. This was certainly true in Illinois after the war. Nearly every man who won any distinction in the war was honored by election to some political position in either state or nation.

THE CONSTITUTION OF 1848

       The constitution of 1818, made when our statesmen were gathered from among the farmers, doctors, lawyers, traders, and woodsmen, had never been remodeled. It was compiled largely from the fundamental laws from other states, the framers not knowing from experience nor from history what was the vital and essential things which ought to be incorporated in a state constitution. The struggle of 1824 was not made on the ground that the constitution needed revision, although the slavery interests made a pretense of such need. The contest was a square fight for and against making Illinois a slave state, on the same footing, and in the same class as the Carolinas or Tennessee. Amendments had been talked of, but none ever added.

       After the defeat of the convention in 1824 nothing was done toward revising or amending till 1840-1. In the legislature of that year a resolution was adopted calling on the voters to express themselves relative to a convention at the coming state election in August. The Democrats favored such a convention, but when a bill passed the legislature abolishing the circuit court judges and creating five new judgeships on the supreme bench, all of which places were filled by Democrats, the need of a convention was not so apparent.

       The Democrats now controlled the legislature, the executive, and the courts. When the election was held in August the Democrats generally voted against the proposition to hold a convention, while the Whigs voted for it, but the proposition failed to carry. In 1845 the legislature passed another act calling on the people to vote on the question of a convention at the general election in August, 1846. The proposition was strongly urged upon the people by the Democratic press and it was not very generally opposed, so at the election in August, 1846, the question carried.

       The next step was to pass an act to provide for the convention. This act determined the number of delegates which should sit in the constitutional convention, the date of the election, which was fixed for the third Monday in April, 1847, and the date of the meeting of the delegates in the convention, the first Monday in June, 1847. There was no special argument against a convention while several were brought forward in its favor. Some desirable changes were as follows:

       1. To abolish life tenure or long tenure of office.

       2. To prohibit the legislature from involving the state in the bank­ing business.

       3. To limit the power of the state to borrow money.

       4. To give the governor the veto power.

       5.    To increase the length of residence for the elective franchise.

       6. To take the power of electing state officers from the legislature and give it to the people. P 234

       7. To fix minimum ages for members of the legislature, and for state officers.

       8.    To abolish eligibility to several offices at the same time.

       There were a number of other changes which were considered during the canvass preceding the election in April. When the members came together June 7, 1847, it was found that the Whigs and Democrats were about evenly divided. The convention organized by electing Newton Cloud president, and Henry W. Moore secretary. There were one hundred sixty-two delegates in this body. Among these men, prominent on the Democratic side, were Zadoc Casey, John Dement, John M. Palmer, Anthony Thornton, Walter E. Scates, Willis Allen,  L. B. Knowlton, and Thompson Campbell. The leading Whigs were Archibald Williams, James W. Singleton, Henry E. Dummer, Jesse O. Norton, Stephen A. Hurlbut, David Davis, Cyrus Edwards, Samuel D. Lockwood, Stephen T. Logan, and Abner C. Harding. The session lasted from June 7 to August 31, 1847.

       The constitution made in the summer of 1847 differed from the one of 1818 in several points. There was a preamble in the constitution of 1848 similar to the one in the constitution of the United States. Article II put stress upon the distinct separation of the three departments of government.

       In the legislative department the following features may be noted:

       No member of the general assembly shall be elected to any other office during his term as a legislator. The senate shall consist of twenty-five members and the house of seventy-five men. Then till the state shall contain a million people. After that an addition of five in each house shall be made for every increase of half million till there shall be fifty senators and one hundred representatives, when the number shall remain stationary. Members of the general assembly were to receive $2 per day for the first forty-two days, and $1 per day for each additional day, together with mileage each way at 10 cents per mile. The general assembly could not grant divorces, and must prohibit the sale of lottery tickets in the state. The state could not borrow more than $60,000 to carry on the government, except in case of war, rebellion, or invasion. The credit of the state could not be used to advance the interests of any individual, association, or corporation.

       In the executive department these changes may be found:

       The governor must be a citizen of the United States and thirty-five years of age, and shall be a citizen of the United States fourteen years and have resided in the state ten years. The governor must reside at the seat of government. He shall have the veto power. His salary was $1,500—no more. The secretary of state, auditor, and treasurer shall be elected at the same time as the governor and lieutenant governor are chosen. The governor shall issue all commissions.

        The judiciary department shall consist of a supreme court, circuit courts, county courts, and justice courts. The supreme court shall consist of three judges elected from three judicial circuits. The term of office was nine years and the one whose commission bears the earliest date is to be chief justice. Salary $1,200—no more. Circuit judges. $1,000—no more. The legislature may provide for election of district prosecuting attorneys or county prosecuting attorneys. All judges are to be elected by the qualified voters.

       Some miscellaneous provisions were new. The legislature shall pass P 235 a general law for township organization. The legislature may pass a law raising revenue by a capitation tax of not less than 50 cents nor over $1 on all electors between twenty-one and sixty years of age. No state bank shall hereafter be created. All stockholders of banking asso­ciations issuing bank notes, are liable for all debts of the company. Article XIII is a declaration of rights; there are twenty-six distinct personal rights enumerated. A tax of two mills on each dollar of as­sessed valuation was authorized to constitute a fund for the liquidation of the state’s indebtedness.

       It was further provided that if this constitution shall be ratified by the people, the governor, secretary of state, etc., shall be elected on Tuesday after the first Monday in November, 1848. The governor shall take his office the second Monday in January following the election and serve four years.

       The constitution was completed on August 31, 1847. On March 6, 1848, it was submitted to the people for ratification. The vote on the constitution stood nearly sixty thousand for, and nearly sixteen thousand against. It was declared in force April 1, 1848. By the terms of the document itself an election should be held on Tuesday after the first Monday in November, 1848, for governor and other executive officers, as well as for members of the legislature. In compliance therewith an election was held on Tuesday after the first Monday in November, 1848, at which election Governor French was reelected governor for four years from January 1, 1849.

       The new constitution authorized the legislature to provide for township organization in pursuance thereof a law was passed in 1849 which allowed counties, when authorized by a vote of the people, to organize under this new system. This new system of county organization is distinctly a New England product, and was therefore championed by the northern counties, which had been largely settled by immigrants from New England and the middle states. The legislature on February 12, 1849, passed a general law governing all counties under township organization. This first law was somewhat imperfect, and has therefore been subject to amendments up till the present time. The general provisions may be briefly stated as follows:

       The three commissioners under the county system have been superseded by a board of supervisors — usually one from each township— more properly town.

       Each town elects its own assessor, collector, supervisor, highway commissioners, justices, constables, poundmaster, and clerk. These officers perform such services for the town as similar officers do for the county under county organization. The board of supervisors has charge of the public property of the county, fixes salaries, and audits the books and reports of all county officers.

       The legal voters of each town elect their town officers in April of each year, and while assembled to perform this duty they hold what is known as the “town meeting.” In this town meeting they constitute a pure democracy and may enact such legislation as is within the scope of their authority as determined by the statutes.

       An important law which was enacted in Governor French’s term was known as the “Homestead Exemption Law.” The principle involved in this act is very old in English law. It was declared in Magna Charta, section 20, that in case of amercement, the punishment shall not P 236 extend to the deprivation of the debtor of his necessary means of making a living. That is, the drayman by occupation must not be deprived of his horse and dray, for then he and his family would become a public charge. The demands of society at large are paramount to those of the individual. Up to 1851 the only exemption was on personal property, and then only to the extent of $60. The debtor who might be permitted by this law to hold a yoke of oxen against a creditor might have no land to till and his oxen might be a burden to him. But the exemption law of 1851 provides that a householder may hold land to the value of $1,000 against the creditor, besides $400 worth of personal property. Such laws are still on our statute books and are seen to be very much to the advantage of the poor man who has unfortunately become involved and cannot pay his debts.

       Among all the matters of general interest in Governor French’s administration nothing was more unfortunate than what came to be called the “State Policy.” The reader will recall that under the constitution of 1818 the credit of the state might be used to foster great public enterprises such as banks, railroads, and canals. The constitution of 1848, Article X, section 3, says: “No state bank shall hereafter be created, nor shall the state own or be liable for any stock in any corporation or joint stock association for banking purposes to be hereafter created.” And section 6 says: “The general assembly shall encourage internal improvements by passing liberal general laws of incorporation for that purpose.” It was not possible therefore for the state to engage in any banking business or improvement schemes, but they might grant charters or rather pass laws which would greatly favor individual effort along these lines. It may also be recalled that when the state was in the banking business that an effort was made to build up Alton as a rival of St. Louis, but the city did not make very substantial progress, while St. Louis was growing rapidly. This state policy was nothing more nor less than a determination on the part of a majority of the general assembly to withhold charters for railroads running east and west across the state unless these cross roads would terminate at such points on the Illinois side of the Mississippi, and on the west side of the eastern boundary of the state, as might be designated by the legislature. These patriotic statesmen insisted that it was the height of folly to say that as great cities could not be built up within the state as beyond its limits. In other words they said let the western termini of all cross roads be Alton, and then Alton will become a great city. But St. Louis was already a great market for the produce of all southern Illinois, as well as a great wholesale and distributing point. Capitalists were anxious to connect Louisville, Cincinnati, and other cities to the east of us with St. Louis by railroads, but this could not be done unless charters could be had from the state legislature of Illinois. Such permission was refused in the summer of 1849.

       Then the people in the belt of counties between Terre Haute and St. Louis held a great convention at Salem in Marion county in which a plan of campaign was outlined to secure so important a public enterprise as a cross railroad. There were one thousand delegates, and three thousand other men in attendance. It was a formidable gathering. But this meeting only put the state policy people to work, and as a result a great meeting was held in Hillsboro in Montgomery county, which was attended by ten thousand people. At this meeting the action of the P 237 legislature was endorsed and the virtue of the state policy greatly praised.

       Missouri now took a hand in the fight by imposing a tax of $4.50 on every $1,000 worth of produce raised beyond the limits of the state when sold on the markets of St. Louis. This tax would raise about $150,000 annually on the produce from Illinois. The law was finally declared inoperative by the Missouri courts.

       At a special session of the legislature in the fall of 1849 strong resolutions passed the general assembly sustaining the state policy. The outside world now attacked Illinois and the matter became one of general interest in the east.

       The legislature of 1852 was more kindly disposed toward the best interests of the south end of the state, and a beginning was made by chartering the Ohio and Mississippi Railroad Company. This concession was no doubt the result of efforts of Douglas and other prominent Illinois people in congress in consideration of the grant of land just made by congress for the construction of the Illinois Central Railroad. Public sentiment was changing, and in 1854, at a special session of the legislature, a general law incorporating railroad companies in conformity with the sixth section of Article X, was passed without opposition.

THE ILLINOIS CENTRAL RAILROAD

       Railroads made their advent into England in the year 1822. George Stephenson was the engineer of the first road. In 1825 a wooden rail track was first used in America for the removal of excavated earth on the Delaware-Chesapeake canal. In 1826 Stephen Van Renssalear, of New York, procured a charter for a railroad from Albany to Schenectady. This was known as the Mohawk and Hudson River Railroad; It began operations in 1831. In 1827 the Mauch-Chunk Railroad was put in operation. The first built expressly for locomotives was in South Carolina—from Charleston to Columbia. It was chartered in 1827 and was ready for use in 1829. The Tom Thumb, the first engine built in America, was constructed for a road from Baltimore to Ellicott Mills. It was built by Peter Cooper, of New York city.

       On January 28, 1831, the general assembly of Illinois chartered a canal or railroad in St. Clair county. This is the first legislation on railroads in this state. On February 15, 1831, a bill providing for the substitution of a railroad for the canal from Chicago to the Illinois river was passed by the legislature. From this time forward the legislature was very liberal in granting charters for railroads. But nothing was actually done until in 1837. In that year a railroad was actually put in running order in Illinois.

       Governor Reynolds says in his history, “My Own Times,” that he was defeated for congress in 1836 and not having anything else to do, conceived the idea of building a railroad from the bluffs in St. Clair county to a point on the river opposite St. Louis, for the purpose of transporting coal to the market. The road was about six miles long. The engineer named a certain sum of money as the cost, but Reynolds says it cost twice as much. The road was completed in one season. The motive power was horses. The road was not chartered till 1841.

       Just who ought to have credit for originating the idea of a railroad from the junction of the Ohio with the Mississippi to the head of navigation of the Illinois river, and perhaps with Chicago and Galena, is not easy to determine. It is stated that Senator Alexander M. Jenkins, of P 238 Jackson county, proposed a survey of a route for a central railroad from Cairo to Peru, in the state senate in 1832.

       On October 16, 1835, Sidney Breese, afterwards a noted jurist of this state, addressed to Mr. John Y. Sawyer, a prominent gentleman of Edwardsville, a letter in which he suggests the building of a road from Cairo to the north end of the state. This letter dealt with the location, cost, and benefits of such a road. Judge Breese afterwards said that the matter was suggested to him by a friend of Bond county.

       On January 18, 1836, a charter was granted by the legislature incorporating the “Illinois Central Railroad Company.” This charter provided for fifty-eight incorporators, one of whom was Judge Breese. Nothing of any consequence was done by this company. On the twenty-seventh of February, 1837, the Internal Improvement Bill was passed and one of the important features was a railroad from Cairo to the northern part of the state. $3,500,000 was appropriated for its construction. As a result of this move on the part of the state, work was begun on the Central road, as it was called. Work was also begun on other roads. The road from Jacksonville to Meredosia was practically completed and an engine placed on it, November 8, 1838. It was finished to Jacksonville from Meredosia in January, 1840, and to Springfield in 1842, February 15. By 1843 the state practically abandoned the attempt to build the railroads, though it had done considerable work on various lines within the state.

        The Great Western Railway Company was chartered March 6, 1843. This company was identical with the Cairo City and Canal Company, previously chartered. This company spent large sums of money in grading on the line from Cairo north to the southern terminus of the Illinois and Michigan canal. Congress had made grants of land so liberally to the state that it was believed it would do so for this Central railroad.

       Judge Breese and Stephen A. Douglas were in the United States senate in 1847; and Douglas introduced a bill for a grant of land to Illinois which was endorsed by Breese and passed the senate, but failed in the house. The old Western Company now saw a chance to get the grant of land and the Illinois legislature was induced to give the contemplated grant to the Western Company, but the gift was afterwards cancelled at the request of Senator Douglas.

       On September 20, 1850, congress gave to the states of Illinois, Mississippi, and Alabama, a grant of land with which to build a road from the gulf to the lakes.

       The law granted the right of way through the public lands between Cairo and the canal, and between the north end of this line and Chicago and Galena. The right of way should be two hundred feet wide. Congress granted to the state every unentered, even-numbered section for a space of six miles on each side of the right of way; and when the even-numbered section had been entered or preempted then the state might choose even-numbered sections in equal amounts anywhere on either side of the right of way to the distance of fifteen miles. The road was to be begun at opposite ends at the same time, and be completed within ten years. The total grant contained two million five hundred and ninety-five thousand acres.

       The government by the same act which made this munificent gift to the state, raised the price of land along this right of way in the P 239 odd-numbered sections to $2.50 per acre.

Certificate of Stock in the Old Cairo City and Canal Company

 

In a short time the land was taken off the market for two years and when placed upon the market again it brought on an average of $5 an acre.

       The gift was made to the state, and the legislature might dispose of it anyway it chose, provided it be used to construct the railroad. The government reserved the right to use the road as a public highway for the transmission of armies, munitions, and other government property, free of charge forever.

       Probably the government intended that this reservation should include the use of cars and engines, but the courts decided that the pro­vision applied only to the roadbed and not to the rolling stock.

       Notwithstanding the recent experience in railroad building by the state, there were those who thought the state ought to build the road. Then again there were all sorts of suggestions as to the towns through which the road should pass, and as to the point from which the branches should diverge.

When the legislature met in January, 1851, there were all kinds of propositions presented for the construction of the Central Railroad. But a proposition made by a company of men from New York and Boston attracted the attention of the legislature. It was in brief as follows:
 
 I. The memorialists are named as follows:
Robert Schuyler Robert Rantoul, Jr.
George Griswold Jonathan Sturges
Gouverneur Morris Thomas W. Ludlow
Franklin Haven John F. A. Sandford
Day A. Neal  

  
       2. They say they have examined the route proposed for the road and they propose to organize a company and employ the best of talent in the construction of the road.

       3. They pledge themselves to build the road and have it ready for operation by the fourth of July, 1854.

       4. The road shall be as well built as the road running from Boston to Albany.

       5. They agree to pay into the treasury of the state annually per cent of their gross earnings, provided the state will transfer to the company the lands granted by congress for the construction of the road.

       This proposition became the basis of the agreement between the state and the company afterwards known as the Illinois Central Railroad Company. The rate per cent of the gross earnings of the road which should be paid over to the state was fixed so that it should be “at least” seven per cent.

       At first glance it may appear that the government was recklessly liberal in granting two and a half millions of acres for the construction of this railroad. But we should remember that there were, in 1850, thousands of acres of unentered land, lying in the central and north part of the state, which had lain there on the market for from ten to twenty-five years. The price was $1.25 per acre. And it is said that after the Mexican war, soldiers who had received their land warrants were willing to take from 50 to 60 cents on the dollar in cash for these warrants. In this way many people got cheap lands by buying up land warrants and using them in locating homesteads. As soon P 241 as the road was built and in operation, there was a rapid rise in the prices of land. Cities sprang up and farms were opened. This increased valuation of these lands soon brought in an increasing amount of taxes and thus the burden of the state debt was gradually lifted. The cost of the road, according to a statement made by Mr. Ackerman in 1883, at that time president of the road, was $40,000,000.     The sale of the lands along the line of the road produced some income for the company, but within a few years the company was in debt over $23,000,000. Mr. Ackerman further says that the road was kept from bankruptcy by the heroic work of its officers, assisted by Richard Cobden on behalf of the English shareholders.

       The charter granted to the Illinois Central Railroad Company conveyed to that corporation all the lands which congress had so generously given to the state by the act of September 20, 1850. The provisions of the charter pertaining to the returns which the company should make to the state for the gift of the lands, were the result of much discussion and several compromises. The memorial addressed to the legislature by the nine gentlemen contained near the close, this clause: “And the said company, from and after the completion of the said road, will pay to the state of Illinois, annually . . . . per cent of the gross earnings of the said railroad, without deduction or charge for expenses or for any other matter or cause.” After a thorough discussion of all the interests involved, the following sections were incorporated in the charter:

       Section 18. In consideration of the grants, privileges, and franchises herein conferred upon said company for the purposes aforesaid, the said company shall, on the first Mondays of December and June in each year, pay into the treasury of the state of Illinois five per centum on the gross or total proceeds, receipts or income derived from said road and branches, for the six months then next preceding.

       The same section then provides for the keeping of accurate and detailed records of such income, and for reports, etc., to the governor. Section 22 of the charter provides that all the lands shall be exempt from taxation till sold by the company. It also provides for the exemption of all the stock of the road for six years. Then follows this provision:

       Section 22. After the expiration of six years, the stock, property, and assets, belonging to said company shall be listed by the president, secretary or other officer, with the auditor of state, and an annual tax for state purposes shall be assessed by the auditor upon all the property and assets of every name, kind and description belonging to said corporation. Whenever the taxes levied for state purposes shall exceed three-fourths of one per centum per annum, such excess shall be deducted from the gross proceeds or income herein required to be paid by said corporation to the state, and the said corporation is hereby exempted from all taxation of every kind, except as herein provided for. The revenue or income arising from said taxation and the said five per cent of gross or total proceeds, receipts or income aforesaid, shall be paid into the state treasury in money, and applied to the payment of the interest-paying state indebtedness until the extinction thereof; Provided, in case the five per cent, provided to be paid into the state treasury and the state taxes to be paid by the corporation, P 242 do not amount to seven per cent of the gross or total proceeds, receipts, or income, then the said company shall pay into the state treasury the difference so as to make the whole amount paid equal, at least, to seven per cent of the gross receipts of said corporation.

       The first four semi-annual payments made to the state treasury by the Illinois Central Company consisted of five per cent of the gross earnings. Since April 30, 1857, the payments have been made on a basis of seven per cent of the gross earnings. The first semi-annual payment made October 31, 1855, amounted to $29,751.59. The last semi-annual payment made October 31, 1911, was $620,388.12. The total paid into the state treasury in the past fifty-one years is $30,942,282.80. In at least two instances in the past fifty years, the Illinois Central Company has advanced the semi-annual payment several months before it was due, and thus relieved the state from the embarrassment of a deficit in the treasury.

       As stated above, the company has annually paid seven per cent of its gross earnings into the treasury with the understanding that this is the maximum amount to be paid in lieu of all forms of taxation. The attorney-general, the Hon. W. H. Stead, has furnished to the auditor of public accounts an opinion upon the subject of taxation of the Illinois Central Railroad Company, which briefly stated is as follows:

       1. As provided in section 18 of the charter, the said company is required to pay into the state treasury semi-annually on the first Mondays in December and June, five per cent of the gross earnings for the preceding six months.

       2. Section 22 of the charter makes it the duty of said company to list the stock, property, and assets belonging to the said company with the auditor of public accounts for the purpose of taxation.

       3. It is the duty of the auditor of public accounts to levy upon said property as listed, an annual state tax which shall be paid as are other state taxes. (Provision is made that this tax shall never exceed 75 cents on the $100.)

       4. This tax so levied and collected must be paid into the state treasury; and if this tax, together with the five per cent of the gross earnings shall not equal seven per cent of the gross earnings, then the company is bound by the charter to make good such deficiency.

       5. If the tax levied by the auditor of public accounts together with the five per cent of the gross earnings shall exceed seven per cent of the gross earnings the said tax must nevertheless be paid in full.

       6. The provisions of the charter apply to the Illinois Central Railroad from Cairo via Centralia to La Salle, 300.99 miles; from La Salle via Galena to Dunleith, 146.73 miles; from Centralia to Chicago, 249.78 miles; total 697.5 miles. The provisions of the charter do not apply to any roads leased, purchased, or built by the company other than the 697.5 miles referred to above.

       The said company listed, its property with the auditor of public accounts from 1855 to 1859, but since that time until the spring of 1906 it did not do so, claiming that the seven per cent of its gross earnings was the maximum amount which the company was required by the charter to pay into the state treasury. In the spring of 1906 the company listed its property with the auditor and has continued to do so since. The suit entered by Governor Deneen and Attorney ­ P 243

       General Stead resulted in the collection of a large amount of unpaid taxes, but now the road after paying in five per cent of its gross earnings and then submitting to taxation as any other railroad finds that five per cent plus the taxes does not equal seven per cent of the gross receipts and the deficit is made up as is shown by the following letter from the auditor of public accounts:

       Springfield, Ill., February 15, 1912.—Ma. Gen. W. Smith,

       Carbondale, Ill.—Dear Sir :—Replying to your favor of the 14th instant I beg to inform you that the value of the stock, property and assets of the Illinois Central Railroad Company, listed by said Company to the Auditor of Public Accounts as required by the provisions of “An Act to incorporate the Illinois Central Railroad Company,” approved February 10, 1851, is as follows:

 

Value of right of way  $60,354,234.00
Value of buildings on right of way 2,339,832.00
Value of main track 24,695,733.00
Value of Second. 3rd, 4th and additional main tracts 9,427,063.00
Value of side and turn-out tracks 3,792,670.00
Value of rolling stock 12,550,247.00
Value of personal property other than rolling stock 933,329.00
Value of stocks, bonds, cash and other assets  67,973,984.55
Aggregate value of all property and assets $182,067,092.55

Payments into the State Treasury by the Illinois Central R. R. Co. since
May 1, 1906, are as follows:

7 per cent on gross receipts for 6 mos. ending Oct. 31, 1906 $600,102.55
7 per cent on gross receipts for 6 mos. ending Apr. 30, 1907 596,210.28
7 per cent on gross receipts for 6 mos. ending Oct. 31, 1907 642,325.84
7 per cent on gross receipts for 6 mos. ending Apr. 80, 1908 533,342.89
7 per cent on gross receipts for 6 mos. ending Oct. 31, 1908  559,773.55
7 per cent on gross receipts for 6 mos. ending Apr. 30, 1909 563,307.52
7 per cent on gross receipts for 6 mos. ending Oct. 31, 1909 589,361.82
7 per cent on gross receipts for 6 mos. ending Apr. 30, 1910 607,918.20
7 per cent on gross receipts for 6 mos. ending Oct. 31, 1910 610,009.64
7 per cent on gross receipts for 6 mos. ending Apr. 20, 1911 619,096.12
7 per cent on gross receipts for 6 mos. ending Oct. 31, 1911 620.388.12
The State tax rate for the year 1910 was assessed against one-third of the above total valuation of stock, property and assets which amounted to $60,689,030.85, the tax rate extended against said valuation being 30c on the $100, and was computed in the assessment as follows:

5 per cent on $8,684,545.71 gross receipts for 6 mos. ending Apr. 30, 1910

$434,227.29

5 per cent on $8,714,423.45 gross receipts for 6 mos. ending Oct. 31, 1910

435,721.17

State tax assessed on stock, property & assets for 1910   

182,067.09
Balance necessary to make the taxes equal 7 per cent of gross receipts. 165,912.29
Total tax due for 1910  $1,217,927.84
 

Statement of the amounts paid into the State Treasury on account of 7 per cent of the gross receipts is as follows:

June 1910, 7 per cent on $8,684,545.71 gross receipts for 6 mos. ending Apr. 30, 1910       

$607,918.20

December 1910, 7 per cent on $8,714,423.45 gross receipts for 6 mos.
ending Oct. 31, 1910  
610,009.64
Total tax paid the State Treasurer $1,217,927.84
 

Yours truly,

 

J.  S. MCCULLOUGH

 

Auditor P. A.

 

 

A NEW BANKING SYSTEM

       The experience of Illinois in the banking business, had been so unfortunate that there was inserted in the constitution of 1848, Article P 244 X, Section 5, this provision: “No act of the general  assembly, authorizing corporations or associations with banking powers, shall go into effect or in any manner be enforced, unless the same shall be submitted to the people at the general election next succeeding the passage of the same, and be approved by a majority of all the votes cast at such election for and against such law.” Section 4, of the same article provided that all stockholders in banking associations issuing bank notes, should be individually responsible proportionately to the stock held by each, for all liabilities of the corporation or association. Since the winding up of affairs of the old State Bank and the Bank of Illinois there were no banks in Illinois issuing bank bills. The only money in circulation was gold and silver, and paper money from banks located in other states.

       In 1838, the legislature of New York passed a law which created a system of banking quite different from anything before tried in this country. This bill provided the following plan, briefly outlined:

       1. A person or persons might deposit with the comptroller of the state a certain amount of United States bonds, New York state bonds, or other state bonds, or mortgages to be approved by that officer, as security.

       2. The comptroller issued to such persons bank bills which when properly signed by the bank officers might be put into circulation as money.

        3. Said notes when put in circulation were to be redeemed by the bank when presented for redemption by the holder within a limited time, or

       4. The comptroller could sell the bonds deposited with him and redeem said bank notes.

       5. In case the state had to wind up the affairs of any such bank and the securities on deposit did not bring an amount equal to the outstanding bank notes, the available cash from the sale of the bonds was used in paying as large a per cent as possible on the dollar, and all else was lost to the bank-note holder.

       Upon the face of this law it looked as if there was scarcely any chance for loss to the bank-note holder and of course there could be none to the state as it was acting merely in the capacity of an agent of trust. Following the ratification of the constitution of 1848, there began almost immediately an agitation for banks of issue in Illinois. In the session of 1851 the legislature passed a banking law modeled upon the New York law outlined above. This law could not go into effect until ratified by the majority of the votes cast at a general election. The general election was provided for in November, 1851, and the vote stood—for the law, 37,626; against the law, 31,405—a very light vote.

       This law was called the “Free Banking Law,” because anyone could Illinois state bonds, other state bonds. A provision in the law con go into the banking business. That is one did not have to have a specially enacted charter. The securities were to be deposited with the auditor of public accounts, and might consist of United States bonds, templated the depreciation in value of state bonds and so they were not taken for their full face value. No bank could be organized with a smaller bank issue than $50,000. It was also provided in the law that if any bank refused to redeem its issue, it was liable to a fine of twelve and one-half per cent on the amount presented for redemption. P 245

       One way the bank managed to keep people from presenting their bills for redemption was as follows: A bank, say in Springfield, Illinois, would send $25,000 of its own issue to a bank in Massachusetts, say in Boston; the Boston bank returning a like amount to the Springfield bank. Each bank would then pay out this money over its counter in small quantities and in this way the Springfield bank issue would become scattered all over New England and no person holding but a few dollars would think of coming to Springfield to get his bills redeemed. The issue of the Boston bank would be scattered through the west. In this way, and in other ways the money of Illinois became scattered in other states while in the ordinary business transactions in this state one would handle a large number of bills daily which had been issued in other states.

       No doubt many corporations went into the banking business under this law with clean hands and carried on a properly conducted banking business but there were ways by which irresponsible and dishonest men might go into the banking business and make large sums of money without very much capital invested.

       These banks were known as Wild Cat banks. The name is said to have originated from the picture of a wild cat engraved on the bills of one of these irresponsible banks in Michigan. However, they may have been named from the fact that the words “wild cat” were often applied to any irresponsible venture or scheme.

       There were, in Illinois, organized under this law, one hundred and fifteen banks of issue. Up to 1860 the “ultimate security” was sufficient at any time to redeem all outstanding bills, but when the Civil war came on the securities of the southern states, on deposit in the auditor’s office, depreciated greatly in value. The banks were going into liquidation rapidly. They redeemed their bills at all prices from par down to 49 cents on the $1. It is estimated that the bill-holders lost about $400,000, but that it came in such a way that it was not felt seriously. This system of banking was followed by the National Banking System with which we are acquainted today.

       The one hundred and fifteen banks of issue which were in operation in Illinois just prior to the Civil war, issued nearly a thousand different kinds of bank bills. Because of the large number of kinds of bills, counterfeiting was easy, and it is said that much of the money in circulation was counterfeit. Bankers received reports as to the condition of the banks over the state daily. One never knew when he presented a bill in payment of a debt, whether or not it was of any value. Often the merchant would accept this paper money only when heavily discounted.

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