X I B RAR.Y 
 
 OF THE 
 
 U N IVERSITY 
 OF ILLINOIS 
 
 . 385.4 
 
 Illinois 
 Hist. Survey
 
 UNIVESITY OF ILLINOIS STUDIES 
 
 IN THE 
 
 SOCIAL SCIENCES 
 
 VOL. -, NOS.3ANDA SEPTEMBER - DECEMBER, 191B 
 
 BOARD OF EDITORS 
 
 ERNEST L. BOGART JOHN A. FAIRLIE 
 
 LAURENCE M. LARSON 
 
 PUBLISHED BY THE UNIVERSITY OF ILLINOIS 
 
 UNDER THE AUSPICES OF THE GRADUATE SCHOOL 
 
 URBANA, ILLINOIS 
 
 Reprinted with the permission of the University of Illinois Press 
 
 JOHNSON REPRINT CORPORATION JOHNSON REPRINT COMPANY LIMITED 
 111 Fifth Avenue, New York, N.Y. 10003 Berkeley Square House, London, W. 1
 
 COPYRIGHT, 1915 
 BY THE UNIVERSITY OF ILLINOIS 
 
 First reprinting, 1967, Johnson Reprint Corporation 
 Printed in the United States of America
 
 History of the Illinois Central 
 Railroad to 1 870 
 
 HOWARD GRAY BROWNSON, Ph.D.
 
 CONTENTS. 
 
 CHAPTER PAGE 
 
 I Illinois in 1850 9 
 
 II The Land Grant and Charter 17 
 
 III Construction of the Charter Lines 40 
 
 IV Construction and Development, 1857 to 1870 64 
 
 V Traffic, 1857 to 1870 74 
 
 IV Finances of Construction and Operation, 1851 to 1870 116 
 
 VII Conclusion 157 
 
 Appendix 165 
 
 Bibliography _ 169 
 
 Index .. 175
 
 INTRODUCTION. 
 
 The following study was submitted in 1909 as a thesis in 
 partial fulfillment of the requirements for the doctor's degree 
 of the Graduate School of the University of Illinois. Since that 
 date the "University of Illinois Studies in the Social Sciences" 
 have been established as a medium of publication for mono- 
 graphs prepared by members of the faculty or graduate stu- 
 dents, and it seemed desirable that Dr. Brownson's History of 
 the Illinois Central to 1870 should be included in this series. 
 The study was originally planned on a more ambitious scale 
 as a complete history of this important railroad system, and 
 the choice now presented itself of asking the author to carry 
 out his first intention or of printing the thesis as it was sub- 
 mitted. The latter alternative was preferred as the history of 
 the first twenty years covered fully the early development of 
 the charter lines and was of sufficient interest and value to 
 justify publication without further delay. When the work was 
 edited for publication, however, it was found necessary to omit 
 some of the matter included in the thesis as originally submitted 
 and also to make some textual changes, both of which have 
 been approved by the author. Among the items omitted may 
 be mentioned an elaborate series of traffic charts prepared in 
 connection with chapter V, of financial charts and tables 
 for chapter VI, David A. Neal's Report on Traffic, and the 
 correspondence of Breese and Douglas relative to the claims 
 made by each for the credit of the land grant. These may all 
 be found in the original thesis, which is on file in the University 
 Library. 
 
 It is believed that the monograph as printed contains a 
 substantial contribution not merely to the history of a par- 
 ticular railroad system, but also to the economic history of the 
 country. Called into existence to meet the exigent demand 
 of the growing population of the interior sections of the state 
 for adequate transportation to market their surplus products, 
 the Illinois Central Railroad was built in 1850, after several
 
 failures, to connect the rich agricultural region of central Illi- 
 nois with the historic, and as it seemed the natural, market in 
 the lower Mississippi valley. But the industrial development 
 of Europe and of the states on the north Atlantic seaboard 
 created a demand for agricultural products which diverted the 
 traffic of the road from the lower South and directed it to 
 Chicago and the East, a movement which was emphasized but 
 not occasioned by the Civil War. How well the road met these 
 changing demands and how it developed during these early and 
 trying years of its history are here clearly told by Dr. Brownson. 
 
 Acknowledgments may properly be made to the officials of 
 the Illinois Central Railroad for cooperation with the author 
 in the preparation of this monograph, especially to Mr. Stuyve- 
 sant Fish, then president of the road, for the loan of original 
 material and for personal assistance, and to Mr. L. C. Fritch; 
 to the libraries mentioned in the bibliography for the use of 
 their facilities and for various courtesies; and finally to Pro- 
 fessor E. R. Dewsnup of the University of Illinois for his advice 
 and assistance in the writing of the thesis. 
 
 E. L. BOGART. 
 
 University of Illinois 
 December 1, 1915.
 
 CHAPTER I. 
 
 ILLINOIS IN 1850. 
 
 It has been said that a history of the Illinois Central Rail- 
 road is a history of Illinois. The project for a railroad through 
 the center of Illinois was one of the first propositions for internal 
 improvement in the West. Its construction between 1851 and 
 1857 opened up to settlers the rich interior counties of the state ; 
 and, when completed, it connected these agricultural counties 
 with the remainder of the country, and made Illinois an essen- 
 tial part of the economic system of the United States. 
 
 The building of the Illinois Central Railroad and its subse- 
 quent growth was the natural result of economic and social 
 conditions in the Middle-West which made necessary such a sys- 
 tem of internal transportation. A glance at the map shows that, 
 while Illinois is practically encircled by natural waterways, the 
 interior of the state, which is by far the most fertile portion, is 
 without natural means of transportation. 1 Such counties as 
 Coles, McLean, Macon, and Champaign were, before the intro- 
 duction of the railroad, almost entirely isolated. 
 
 In the early history of Illinois, various attempts had been 
 made to provide a comprehensive system of internal transporta- 
 tion, but the results were of slight importance. The most 
 successful of such undertakings was the Illinois and Michigan 
 Canal from Chicago to La Salle. It was commenced about 1820, 
 Imt financial difficulties prevented its completion until 1848. 
 The canal was the most fortunate of all the enterprises started 
 by the state, and for a number of years it was of great value. 
 Nevertheless it served only a limited area ; its capacity prevented 
 the use of large and economical canal boats ; frequent breaks in 
 the masonry or at the locks made navigation difficult even dur- 
 ing the summer months; and, finally, ice rendered the canal 
 useless during the winter season. 2 
 
 1 The territory tributary to parts of the Kankakee and Illinois rivers 
 is an exception, but the size of this territory is comparatively small. 
 
 ^Chicago Daily Democrat, 1849-1851 ; references in Davidson and 
 Stuve, A Complete History of Illinois, under Illinois-Michigan Canal ; cf. 
 Moses, Illinois Historical and Statistical, references in index to Illinois- 
 Michigan Canal. 
 
 9
 
 10 HISTORY OF ILLINOIS CENTRAL RAILROAD [294 
 
 The Legislature, as well as private citizens, had made many 
 efforts to supplement the Canal with a system of railroads. As 
 early as 1837, the General Assembly had planned an extensive 
 system of internal improvements, and, without accurate surveys 
 or estimates, ten million dollars were appropriated to build 
 twelve hundred miles of railroad, deepen the rivers of the state, 
 and provide numerous turnpikes. Millions were borrowed, and 
 expended with a lavish hand, but mismanagement, corruption, 
 and the exhaustion of public credit at a time when all financial 
 undertakings were paralyzed by the panic of 1837, brought the 
 state to the verge of bankruptcy. A few surveys, a hundred 
 miles of half completed railway embankment, and one poorly 
 constructed railroad, utterly useless for traffic, were the results 
 of this chimerical experiment. 3 
 
 Private construction of railroads was somewhat more suc- 
 cessful. In the center of the state, the old Springfield and Mere- 
 dosia Railroad, from Springfield to Jacksonville, constructed by 
 the state in 1837, had been entirely rebuilt by private parties, 
 under the name of the Springfield and Sangamon. In the north, 
 the Galena and Chicago Union project had been revived, and 
 the railroad extended to a point about twenty miles west of 
 Chicago. 4 These lines at their best gave service of but one 
 freight and one passenger train a day, and the few thousand 
 tons of wheat and merchandise carried by them was a mere 
 bagatelle, compared with the enormous quantities of freight 
 transported from the neighboring counties a few years later. 
 Schedule time was slow, and actual time was even slower. Rates 
 were too high and service too poor to satisfy the necessities of 
 even the adjoining territory. 5 
 
 Aside from the few rivers, the lakes, the canal, and the two 
 short railroads, local transportation did not exist. Words are 
 lacking to describe properly the wretched condition of Illinois 
 highways in 1850: There were a few old corduroy roads and 
 three or four government turnpikes, but they were short and ill- 
 kept. Elsewhere former Indian trails or newly made section 
 roads were the only semblances of highways that existed. In 
 summer these roads were little better than the surrounding 
 prairies, often worse ; in winter they were mere mud holes. For- 
 
 3 Newton, Early Illinois Railway Legislation, Chap. iv. Mr. Newton 
 gives a bibliography on the subject, which may be used for further read- 
 ing. Cf. Moses, Illinois Historical and Statistical, references in index to 
 Internal Improvement Act. 
 
 4 Newton, Railway Legislation in Illinois, 1828 to 1870, pp. 29 ff. 
 
 ''Ibid.; cf. Chicago Daily Democrat, 1849, 1850.
 
 295] ILLINOIS IN 1850 11 
 
 tunate, indeed, was fhe traveller who was not compelled to help 
 pry the coach out of the deep mud or wait until morning for a 
 yoke of oxen to pull him out of some worse than ordinary 
 slough. Mails were often delayed, and, during the winter storms 
 and spring rains, farm houses, and even large towns were com- 
 pletely isolated. Moreover, the state had shown itself utterly 
 unable to remedy these evils. The statute books were filled with 
 enactments declaring certain trails or mud roads public turn- 
 pikes, but even a sovereign state cannot legislate a mud hole 
 into a turnpike. Charters, almost without number, were 
 granted to private corporations, but without tangible results of 
 any importance. 6 Local enterprise was equally fruitless, and 
 the efforts of the counties to improve the public roads had gen- 
 erally failed. 
 
 The absence of good transportation facilities greatly 
 retarded the economic development of central Illinois. The cost 
 of carrying freight over ordinary country roads or even on well- 
 built highways, under the most favorable circumstances, is very 
 great. 7 On such roads as existed in Illinois in 1850 the expense 
 of moving heavy freight for any distance was practically pro- 
 hibitive, and ten to twenty miles was as far as grain or other 
 bulky goods could be hauled with any degree of profit. As 
 nearly all the products of the interior counties of Illinois con- 
 sisted of articles of small value compared with their bulk, an 
 extensive network of railroads, or canals, was necessary to the 
 proper economic development of the state. Instead of such a 
 system of internal transportation, Illinois had less than a hun- 
 dred and fifty miles of railroads and canals, and all portions of 
 the state more than ten to twenty miles back from the railroads, 
 the canal, the lake, and the rivers were practically isolated. A 
 farmer living in the interior of the state could carry only a 
 small part of his crop of wheat or corn to market to be 
 exchanged for "store goods", and the total amount of grain 
 received at Chicago, St. Louis, Peoria, and other centers which 
 came from the central counties was insignificant. 
 
 The interior counties of Illinois, as stated above, were the 
 most fertile parts of the state, and their isolation had a retarding 
 influence on the economic development of the commonwealth. 
 
 ^Session Lcm's of Illinois, 1837-1850. 
 
 7 The cost of carrying a ton of freight from Buffalo to New York was 
 $100 by wagon, or about 20c per ton per mile. (Bogart, Economic His- 
 tory of the United States, p. 191). This was over good roads and the 
 cost per ton per mile for carrying grain in Illinois must have averaged 
 considerably more.
 
 12 HISTORY OP ILLINOIS CENTRAL RAILROAD [296 
 
 The earliest settlements in Illinois were made by the French at 
 Cahokia and Kaskaskia near the Mississippi River, and until the 
 end of the third decade nearly all subsequent settlements were 
 also near the banks of the Ohio, the Mississippi, and Illinois 
 rivers, and especially in the southern counties. At that time the 
 majority of the population were immigrants or descendants of 
 immigrants from Kentucky, Tennessee, and other parts of the 
 South. 8 Then from 1830 to 1850 there occurred a heavy immi- 
 gration into the northern and central counties, but most of 
 these new settlers were from the eastern states or Europe. 9 By 
 1850 Illinois had a population of eight hundred and fifty thou- 
 sand, and three fourths of the inhabitants were living north of 
 Vandalia and were of northern or European stock. 10 Further- 
 more, despite the absence of good transportation, three hun- 
 dred and seventy five thousand people were in the thirty six 
 counties which possessed neither a canal, a river nor a railroad, 
 and the number living more than ten miles from such means 
 of communication must have been considerably larger. 11 But 
 this population was only a fraction of what could be supported 
 in the same counties when railroads and good turnpikes were 
 introduced. 
 
 As the great bulk of the population in 1850 was engaged 
 in agriculture, the inadequate system for transportation of farm 
 products had a depressing influence on that occupation which in 
 turn affected all other industries of the commonwealth. Farmers 
 living near the waterways and railroads found good markets 
 for their produce, but those not so favorably situated shipped 
 little grain or meat outside the state. Only slight cultivation 
 of the rich prairie soil w r as necessary to produce abundant crops, 
 and the immediate needs of the farmer and his family were easily 
 
 8 Sixth Census (1840) ; Greene, Government of Illinois, p. 26; cf. 
 various addresses of Mr. C. W. Alvord, of the University of Illinois, on 
 this subject in publications of the Illinois State Historical Library. 
 
 9 Eighth Census (1860). 
 
 10 Seventh Census (1850), pp. 117, 118. The thirty counties south of 
 Vandalia had a population of 219,863 ; the sixty-nine counties north of 
 Vandalia had 631,607. The foreign born population was as follows : 
 England, 18,628; Scotland, 4,661; Wales, 572; Ireland, 27,786; British 
 America, 10,699; Germany, 38,446; total, 110,593. Native born of foreign 
 parentage, not given. 
 
 il lbid. The thirty-six counties not crossed by the Illinois-Michigan 
 Canal, the Galena and Chicago Union and Springfield and Sangamon 
 railroads, and the Illinois, Ohio, and Mississippi rivers, had a population 
 f 375.5 2 9 in 1850, or 44.1% of the total population.
 
 297] ILLINOIS IN 1850 13 
 
 supplied. Labor saving farm machinery was not in general 
 use, and the work of gathering the crops had to be performed 
 by hand; farm labor was scarce and commanded high wages. 
 As a result, there was little incentive to raise large crops, while 
 the large amount of physical work involved made it impossible 
 for the farmer to plant or gather more than a moderate yield. 
 Shiftless methods of farming were the natural consequence and 
 only a small portion of the arable land was under cultivation. 
 Out of a total area of thirty five million acres, slightly over 
 three million were planted in the five staples, wheat, corn, oats, 
 rye, and potatoes. 12 One third of the entire area, or eleven and 
 a half million acres, was still unoccupied government land, 13 
 and much of the remainder had never been broken by the 
 plough. 14 . The yield per acre was much less than could be 
 expected from the almost virgin soil of the prairies. 15 Cultiva- 
 tion of fruit and vegetables was neglected, and three quarters 
 of a million dollars would be an ample estimate of the value of 
 all the orchard and market crops of the state. 16 The production 
 of the three leading grains, wheat, corn, and oats, was, of 
 course, large, but corn and oats constituted eighty-eight per 
 cent of the yield of these three crops, as against twelve per cent 
 for wheat. However, they were so bulky compared with their 
 value at market that the entire production of both corn and 
 oats was of little importance, except for use on the farm. 17 In 
 general, prices were high, but the excessive cost of transporta- 
 tion and the great expense of gathering the crops, resulting- 
 from poor methods of farming, gave the farmer only a meagre 
 profit. 18 
 
 Perhaps the most profitable form of agriculture at that 
 time was the raising of live stock, especially swine. Through 
 stock trains and refrigerator cars did not exist, and all meat 
 had to be salted or pickled on or near the farm. This seriously 
 restricted the raising of cattle and sheep, but did not affect the 
 pork business, which enjoyed a period of prosperity seldom 
 
 12 Letter of Rantoul, Documents Relating to the Organization of the- 
 Illinois Central Railroad. 
 
 13 Ibid.; Seventh Census (1850), p. 730. 
 
 "Seventh Census (1850), p. 730. 
 
 15 Compendium U. S. Census, 1850, p. 170. Average yield in bushels 
 per acre was : wheat, 1 1 ; rye, 14 ; corn, 33 ; oats, 29 ; barley, 40. 
 
 17 The cost of hauling a bushel of wheat was no greater than the cost 
 of hauling a bushel of corn, and yet the price of the former averaged 
 about three times that of the latter. 
 
 18 Cf. Chap. v.
 
 14 HISTORY OF ILLINOIS CENTRAL RAILROAD [298 
 
 equalled. Over two million swine were on the various farms 
 and something like a million were slaughtered each year. 19 A 
 large part of the corn crop was used for feeding cattle or hogs, 
 and was thus sent to the market on "the hoof". 20 
 
 Mining was affected by lack of cheap .transportation to an 
 even greater extent than agriculture. In 1850 coal was mined 
 in all parts of the state, especially in the Danville, La Salle, 
 Springfield, and Du Quoin districts. The mines at Danville, 
 Du Quoin, and Springfield had been in operation for a com- 
 paratively short time and were of only local importance. 21 The 
 La Salle field, being located on the Illinois and Michigan Canal, 
 and thus possessing comparatively good transportation facilities, 
 was the most important district in the state. However, it was 
 handicapped by the high cost of mining, which was about one 
 dollar per ton more than in the Ohio mines. This prevented it 
 from supplying the Chicago market to any considerable extent. 22 
 The Belleville mines were the oldest in the state, and produced 
 nearly one half the coal mined in Illinois. Their proximity to 
 St. Louis made the mines of this district very profitable. 23 For 
 some reason lead-mining was of less importance in 1850 than it 
 had been fifteen or twenty years earlier. The Galena district 
 was the only part of the state where any considerable amount of 
 lead was mined, and even there the yield was on the decrease. 24 
 Thus, both coal and lead-mining were of comparatively little im- 
 portance, and less than a thousand miners were employed in the 
 entire state in 1850. 25 
 
 Illinois was primarily an agricultural state at the close of 
 the fifth decade of the 19th century and a very small proportion 
 of the population was engaged in other pursuits. Slightly over 
 3100 different establishments existed in the state, varying in 
 size from a small village tannery or carpenter shop employing 
 two or three men to large plants such as the McCormick Reaper 
 Company at Chicago. 26 Altogether, the industries of the state 
 
 "Compendium U. S. Census, 1850, p. 170. 
 
 20 Cf. Chap. v. 
 
 21 J. W. Foster, Report on Mineral Lands on the Illinois Central Rail- 
 road. 
 
 "Ibid. 
 
 23 Ibid.; Ackerman, Early Illinois Railroads, p. 17. 
 
 24 Wm. Spensley, The Mines of Jo Daviess County; Seventh Census 
 (1850), p. 115. 
 
 25 J. W. Foster, Report on Mineral Resources on the Illinois Central 
 Railroad; Seventh Census (1850), p. 115. Cf. Chap. v. 
 
 28 Seventh Census (1850), p. 115.
 
 299] ILLINOIS IN 1850 15 
 
 had a capital of six and a half million dollars, employed a force 
 of twelve thousand hands, and produced products valued at 
 seventeen and a quarter millions. 27 Packing, flouring mills, dis- 
 tilleries, breweries, iron and steel works, woolen mills, agricultural 
 implement works, ship building plants, tanneries, and brick works 
 were the leading industries. 28 Outside of the cities industrial 
 conditions were backward, but not as primitive as many writers 
 indicate. The log cabin and homespun were regarded as evi- 
 dences of lack of progress, and settlers, even on the isolated 
 farms of the interior, were supplied with many of the luxuries of 
 civilized life. 
 
 The lack of internal transportation, with the accompanying 
 isolation of the interior counties of the state, the backward agri- 
 cultural conditions, and the unimportance of mining and manu- 
 facturing were an effective check on the trade between Illinois 
 and the eastern and southern states. In the period before the 
 Civil war there were three principal markets for the surplus 
 products of the Northwest, (1) the North Atlantic seaboard, 
 (2) the lower Mississippi valley, and (3) western Europe. In 
 1850 there was good connection between Chicago or St. Louis 
 and these markets. The Great Lakes and the Erie Canal afforded 
 western grain the cheapest means of inland transportation in 
 the country. The Mississippi River likewise offered cheap 
 transportation to the population along its banks. The introduc- 
 tion of the steamboat on both the Great Lakes and the rivers 
 permitted extensive reductions in the cost of carrying such 
 bulky goods as grain and lumber. Consequently, farm products 
 could be sent east or south over the waterways at reasonable 
 charges after they had been brought to a lake or river port. 
 
 However, as already noted, the lack of roads, canals, and 
 railroads prevented the movement of grain and pork from the 
 central counties of Illinois to either the lake or the Mississippi 
 River. Only the counties directly on the banks of the water- 
 ways could take advantage of the low charges from Chicago or 
 St. Louis to New York or New Orleans. In other words, the 
 great agricultural resources of Illinois were unavailable. Illi- 
 nois wheat, corn, oats, and live stock were shipped east or south 
 in comparatively slight quantities. Although the state ranked 
 first among all the states of the Union in the yield of grain, 
 New York, Pennsylvania, Ohio, Indiana, Missouri, Kentucky 
 
 "Seventh Census (1850), p. 115; cf. Chap. v. 
 
 28 For a much more detailed description of the trade routes from 
 Illinois east and south, cf. Chap. v.
 
 16 HISTORY OP ILLINOIS CENTRAL RAILROAD [300 
 
 and Tennessee each supplied a larger portion of the southern, 
 eastern or European demand than did Illinois. Out of a total 
 production of seventy-seven million bushels of the three staples, 
 oats, corn and wheat, less than three million bushels were for- 
 warded from Chicago and the amount sent from Ohio or Missis- 
 sippi river towns was not much larger. 29 If we compare the 
 production and shipments of grain in 1850 and 1880, for in- 
 stance, the difference shows among other things the effects of 
 poor transportation on the state. Against seven or eight million 
 bushels shipped east and south in 1850 twenty times as much was 
 moved in the later year. 
 
 With conditions as they were in the middle of the nineteenth 
 century, the most important need of Illinois was some system of 
 transportation which would connect the fertile interior counties 
 with the Great Lakes and the Mississippi Eiver. The develop- 
 ment of a large portion of the state depended upon the con- 
 struction of such means of communication. Many schemes came 
 before the people, but the one that had the greatest possibilities 
 and which appealed most strongly to the imagination of the 
 citizens of the state was a central railroad from Galena to 
 Cairo. 30 
 
 2g Chicago Daily Democrat, January 23, 1850; Seventh Census (1850). 
 
 30 The most important references used in this and subsequent chapters 
 are found in the footnotes at the bottom of each page. At the end of 
 Chapter vn a critical bibliography of all authorities made use of in this, 
 monograph will be found. Many of the topics treated in Chapter i are 
 discussed at greater length in Chapter v, and cross references are given.
 
 CHAPTER II. 
 
 THE LAND GRANT AND CHARTER. 
 
 A great central highway connecting the northern and 
 southern counties of Illinois had always been a favorite project 
 with the legislatures and executives of the state. As early as 
 1830 Governor Coles suggested that ''Lake Michigan . . . 
 might easily be tapped and the water taken by canals not only 
 into the Illinois, but on the dividing line between that river and 
 the Wabash down through the center of the state." 1 Only two 
 years later, Lieutenant Governor A. M. Jenkins proposed in the 
 Senate that a survey be made for a central railroad from Cairo 
 to Peru, 2 and, though somewhat premature, the proposal cre- 
 ated considerable discussion, both in and out of the legislature. 
 By 1835, the building of the "Central" had become one of the 
 important issues in state politics. The project was ably advo- 
 cated by such newspapers as the Sangamo Journal 3 and also 
 by a number of leading citizens, prominent among them being 
 Sidney Breese, whose fifteen years of service in promoting the 
 undertaking entitles him to be called the "Father of the Illinois 
 Central Railroad". 4 
 
 With such support it was not long before definite measures 
 were taken, and on January 18th, 1836, the Illinois legis- 
 lature incorporated the Central Railroad Company to construct 
 
 a railroad from ' ' the mouth of the Ohio to a point 
 
 on the Illinois River at or near the termination of the Illinois 
 and Michigan Canal." 5 Fifty-nine incorporators were named, 
 among them Governor Reynolds, Lieutenant Governors A. M. 
 Jenkins and Pierre Menard, Judge Sidney Breese, Darius B. 
 Holbrook and Albert K. Snyder, 6 and a capital of two and a 
 
 ^Illinois Monthly Magazine, Vol. I, No. i, October, 1830. 
 
 2 Newton, Early Railway Legislation in Illinois, p. 7 ; Ackerman, His- 
 torical Sketch of the Illinois Central Railroad, pp. 6, 7. 
 
 s Sangamo Journal, October 31, 1835. 
 
 4 Cf. Appendix to Early History of Illinois by Sidney Breese. In this 
 book Mr. Breese reviews his efforts in behalf of the Illinois Central 
 Railroad. 
 
 ^Session Laws of Illinois, 1835-1836, pp. 129 ff. 
 
 'Among the incorporators were Mr. Holbrook and several other 
 
 17
 
 18 HISTORY OP ILLINOIS CENTRAL RAILROAD [302 
 
 half million dollars was authorized. From the first, this road 
 was regarded as a peculiar state institution, and lest its policy 
 should be dominated by a foreign monopoly, ^provision was made 
 that no person could subscribe to more than five shares of stock 
 and that at least one fifth of the capital should be offered for 
 sale in the state. 7 Provision was also made that, whenever the 
 company earned more than twelve per cent on the cost of con- 
 struction for a period of ten years, the legislature could so 
 reduce earnings and tolls for the next ten years that the earn- 
 ings would not exceed that amount, reports being made to the 
 state to show cost of construction and gross and. net receipts. 8 
 In return for this restriction on the powers of the company, the 
 legislature inserted a clause in the charter agreeing not to incor- 
 porate any competitive railroad for a period of fifty years. 9 
 
 However, the promoters of the railroad had chosen a most 
 inopportune time for commencing this important undertaking. 
 During the thirties the country was agitated by one of those pop- 
 ular movements in favor of government aid to internal improve- 
 ments. In Illinois, after months of agitation, mass meetings, 
 and conventions, the movement culminated in the celebrated 
 internal improvement act of 1837. This act provided for an 
 extensive network of railroads intersecting the state in all direc- 
 tions. The backbone of the system was to be a central railroad 
 from Cairo northward, via Vandalia, Shelbyville, Decatur, 
 Bloomington, and Savannah, to Galena, at that time the most 
 important city in the state. 10 In addition there were several 
 cross lines extending from the main stem to the importanl_cities 
 on the eastern or western boundaries. One of these branches 
 from Shelbyville or Decatur to the state line corresponded very 
 closely to the Chicago branch under the act of 1851. 11 The 
 entire system amounted to about twelve hundred miles, but the 
 estimates as to cost of construction were surprisingly low. Three 
 
 gentlemen connected with him in later enterprises, but as the company 
 never commenced active construction work, it is impossible to say whether 
 this company was controlled by Mr. Holbrook. As he was not a resident 
 of Illinois and otherwise would not have been among the incorporators, 
 the presumption is that he had a very important influence in the organiza- 
 tion of the company under this act of 1836. 
 
 7 Session Laws of Illinois, 1835-1836, p. 134. 
 
 *Ibid., p. 133. 
 
 9 Ibid., sec. 6. 
 
 ^Session Laws of Illinois, 1836-1837, p. 121 ; Newton, Early Railway 
 Legislation in Illinois, pp. 21-23.
 
 303] LAND GRANT AND CHARTER 19 
 
 and a half million dollars was regarded as sufficient to build 
 the four hundred and fifty miles of the main line, while the 
 Shelbyville and Alton branches were to cost $650,000 and $600,- 
 000 respectively, or from seven to ten thousand dollars per 
 mile; 12 less than one fourth what it cost the present company 
 fifteen years later. 13 A loan, based on the credit of the state, 
 was to provide funds, while a board of seven commissioners was 
 appointed to manage the enterprise during its construction and 
 after completion. 14 Immediately after the passage of the act 
 these commissioners commenced work, and for a while it seemed 
 as if this colossal undertaking might be finished. Grading was 
 commenced at Cairo, Galena, and intermediate points; tens of 
 thousands of dollars were expended on the dikes and levee at 
 Cairo; large quantities of rails were purchased; about forty 
 miles of embankment north of Cairo were completed; and, alto- 
 gether, something like a million dollars was expended on the 
 central route and branches, although certainly not in the most 
 effectual manner. 15 But the task was entirely beyond the ability 
 of the state; financial difficulties prevented the floating of the 
 necessary bonds ; and extravagance, corruption, and mismanage- 
 ment exhausted the money already procured. The result was 
 that a hundred miles of grading and a few thousand tons of iron 
 were the only tangible results of this second attempt to con- 
 struct a railroad through the center of Illinois. 16 
 
 Even this failure did not deter the state or its citizens from 
 endeavoring to complete the project, and on March 6th, 1843, 
 only six years after the passage of the Internal Improvement 
 Act, the legislature incorporated the Great Western Railway 
 Company, better known as the Holbrook Company. 17 To under- 
 
 12 Session Laws of Illinois, 1836-1837, p. 121 ; Newton, Early Railway 
 Legislation in Illinois, pp. 21-23. 
 
 18 Cf. Chap. vi. 
 
 14 Session Laws of Illinois, 1836-1837, p. 121. 
 
 "Chicago Daily Democrat, December 24, 1849. Editorial. 
 
 19 Ibid. It is interesting to note that the legislature which passed the 
 Internal Improvement Act is regarded as the strongest legislature ever 
 convened in Illinois, and contained such men as Lincoln, Logan, Douglas, 
 Bissell, etc. The act was passed to a large extent through an arrangement 
 with the Springfield delegation by which the state capital should go to 
 that city in return for the passage of the act by their votes. Cf. chapters 
 in Moses, Illinois Historical and Statistical, and Davidson and Stuve, 
 History of Illinois, relating to the Internal Improvement Act. 
 
 "Session Laws of Illinois, 1843-1844, pp. 199, 200; Newton, Early 
 Railway Legislation in Illinois, p. 33; Ackerman, Early Illinois Railroads, 
 p. 9.
 
 20 HISTORY OP ILLINOIS CENTRAL RAILROAD [304 
 
 stand this act it is necessary to go back six years to March 
 4th, 1837. 
 
 On that date, the Cairo City and Canal Company was incor- 
 porated with power to hold real estate in Alexander County, 
 especially the tract of land now included in the corporate limits 
 of Cairo, and to carry on general industrial enterprises. 18 Mr. 
 Darius B. Holbrook, of New York, one of the incorporators of 
 the Central Railroad of 1836, was elected president, and for 
 twenty years the enterprise was dominated by his masterful 
 personality until the two became synonymous. 19 During the 
 prosperous period just before the panic the company borrowed 
 between two and three million dollars, largely from English 
 capitalists; purchased several thousand acres of land at the 
 mouth of the Ohio River ; established industries of all kinds ; laid 
 out an extensive city at what is now Cairo; protected it by 
 embankments and levees; carried on a general mercantile busi- 
 ness; and enacted ordinances for the government of the citizens 
 of Cairo. 20 However, the resources of the company were not 
 equal to the demands made upon it and the failure of the inter- 
 nal improvement policy in 1840, following closely after the 
 severe panic of 1837, forced the enterprise into bankruptcy. 
 English investors refused further financial support and the 
 stoppage of work on the state railroad destroyed the undeveloped 
 industries at Cairo. The directors neglected the undertaking; 
 the property in and near Cairo was abandoned; and for a time 
 the place was occupied only by squatters and disreputable char- 
 acters from the river boats. 21 
 
 The extreme depression existing in Illinois after the panid 
 of 1837 and the failure of the state policy prevented Mr. Hol- 
 brook from doing anything with the Cairo City and Canal Com- 
 pany until 1843. Realizing the possibilities of the "Central" 
 railroad, he induced the legislature to pass the Great "Western 
 Railway Act of that year. According to the charter the presi- 
 
 l *Session Laws of Illinois, 1836-1837, March 4, 1837. The powers 
 granted the Cairo company by the legislature were almost unlimited and 
 the company's acts were often in opposition to the general acts of the 
 General Assembly. 
 
 19 In nearly all newspaper references to the Cairo City and Canal Xx>m- 
 pany it is referred to as the Holbrook Company. Mr. Holbrook was 
 regarded as an unscrupulous promoter and was thoroughly disliked 
 throughout the state. 
 
 20 Anon., History of Cairo, Publications of the Cairo City and Canal 
 Company; Henry Long, History and Prospects of Cairo.
 
 305] LAND GRANT AND CHARTER 21 
 
 dent and directors of the Cairo City and Canal Company were 
 incorporated as the Great Western Railway Company and were 
 given authority to construct a railway from Cairo to the .Illinois 
 and Michigan Canal. 22 In many ways this act was quite favor- 
 able to the state. The otherwise worthless grading done in 1837 
 to 1840 was to be purchased at a fair valuation; twenty-five 
 per cent of the net receipts from operation, after a twelve per 
 cent dividend had been paid on the stock, were to go to the 
 state; and the legislature could alter the charter of both the 
 Great Western Company and Cairo City and Canal Company 
 after all the indebtedness of the former was paid. But, for half 
 a dozen years the Cairo Company had been known as a flagrant 
 example of speculative and corrupt corporate management, and 
 to turn over to such a company the most important industrial 
 enterprise within the state, without reasonable compensation or 
 even adequate safeguards as to the completion of the work, was, 
 to say the least, a short sighted policy. Moreover, a clause was 
 inserted in the closing section of the act surrendering to the 
 company any public lands which might come into the possession 
 of the state of Illinois during the life of the charter. Not even a 
 guarantee was demanded that such lands should be used for the 
 construction of the railroad. This legislation shows the wretched 
 financial condition of the state in 1843 and illustrates the lack 
 of foresight characteristic of the General Assembly during the 
 period. 23 
 
 For a time it seemed as if the company was seriously deter- 
 mined to proceed with the "Central" railroad. Large sums 
 were borrowed and expended in finishing the original state sur- 
 veys and completing the grading. Numerous buildings were 
 erected at Cairo, and an extensive system of levees was planned 
 and partially constructed. 24 But conditions were not favorable, 
 and the company could not obtain capital to continue the work. 
 Several millions had already been expended by the Cairo com- 
 pany without dividend paying results; all Illinois credit, both 
 state and private, was under suspicion on account of the partial 
 repudiation of the state debt; and eastern and European cap- 
 
 22 Session Laws of Illinois, 1842-1843, pp. 199 ff. The terms of the 
 act are peculiar and this provision making the directors of one company 
 directors of another is typical of the loose charters granted by state legis- 
 latures before the Civil War. Contrast this charter with the charter of 
 February 10, 1851. 
 
 23 Session Laws of Illinois, 1843-1844, pp. 199 ff; p. 203, sec. 18. 
 
 24 Ackerman, Historical Sketch of the Illinois Central Railroad, p. 10.
 
 22 HISTORY OF ILLINOIS CENTRAL RAILROAD [306 
 
 italists refused to risk further investments in Illinois. 25 Lack 
 of funds stopped all construction within a few months after 
 the charter was secured and the directors finally gave up in 
 despair. On March 3, 1845, with the consent of the company, 
 the charter was repealed by special act of the legislature; all 
 work done by the company reverted to the state ; 28 and the third 
 and most promising attempt to construct the "Central" railroad 
 ended with heavy loss to the promoters and no profit to the 
 state. 
 
 The failure of the Great Western Railway, following closely 
 upon the disastrous Internal Improvement project of 1837-1840, 
 made it evident to the legislature, as well as to local and eastern 
 capitalists, that under the depressed condition of Illinois credit, 
 the construction of this important and expensive railroad was 
 an utter impossibility without substantial aid from the national 
 government. As a result, the efforts of the state during the 
 seven years from 1843 to 1850 were directed almost entirely 
 towards obtaining such support. 
 
 Under these circumstances, the people of the state consid- 
 ered themselves fortunate in having elected to the Senate of the 
 United States, in 1843, Judge Sidney Breese, who was regarded 
 as the most enthusiastic advocate of the "Central". On Decem- 
 ber 23rd, 1843, only a few days after being sworn in as senator, 
 he introduced into Congress a memorial of the Great Western 
 Company praying for preemption rights to a portion of the 
 public lands through which the proposed road would run. Al- 
 though profit to the railroad could only come from selling the 
 land at more than a dollar and a quarter an acre, the preemption 
 price, the measure met with such indifference and opposition 
 that the committee on public lands, to which the memorial was 
 referred, refused to report a bill. 27 
 
 26 Session Laws of Illinois, 1844-1845, March 3, 1845. 
 
 21 Sen. /., December 23, 1843; Ackerman, Historical Sketch of the 
 Illinois Central Railroad, p. 10. As Breese was elected at the session of 
 the legislature which passed the Great Western Act of March 6, 1843, 
 containing the provision turning over to that company any federal lands 
 the state might receive, and immediately after taking his seat in the 
 Senate introduced a bill granting a preemption right to that company, it 
 looks as if there might have been some understanding between him and 
 the Cairo Company. Breese was always a warm supporter of the Cairo 
 Company. The Cairo City and Canal Company was very unpopular in 
 Illinois, especially among the people. From the act of 1836 on Judge 
 Breese was an outspoken advocate of this company and believed the
 
 307] LAND GRANT AND CHARTER 23 
 
 Two years later, Judge Breese was appointed chairman of 
 the Committee on Public Lands and, with the additional pres- 
 tige and influence of that position, he introduced a bill, in 1846, 
 granting alternate sections of public land to the Northern Cross 
 and Central railroads of Illinois. 28 Breese himself had little 
 faith in a direct grant of land and did not push the project 
 vigorously. As chairman of the Committee on Public Lands, to 
 which all these bills were referred, he was able to make a strong 
 report in favor of his proposal, but, for some reason, the bill 
 was not brought up after leaving the committee. 29 Undismayed 
 by his previous lack of success, he again introduced, at the 
 second session of the twenty-ninth Congress, his favorite project 
 of a preemption grant. 30 The Committee on Public Lands advo- 
 cated the measure in a vigorous report, which ranks among the 
 ablest congressional documents on the land question. The argu- 
 ments advanced in favor of the bills were convincing, and Sena- 
 tor Breese followed up his report by active work on the floor 
 of the Senate. His persistent and energetic support of the plan 
 had its influence, and the Senate finally passed his measure. 31 
 The bill went to the House, but none of the Illinois delegation 
 took an active interest in it, and there is no evidence in the 
 House records that an attempt was made to secure its passage. 32 
 
 When the condition of political affairs at the time is con- 
 sidered it is evident that Breese was contending against almost 
 insurmountable difficulties, and, although his proposals met with 
 little success, he must be given great credit for accustoming the 
 members of Congress to the novel project of granting public 
 land to assist, directly or indirectly, in the construction of pri- 
 vate railroads. His reports from the Committee on Public Lands 
 
 railroad should be built by the Great Western Company. He feared a 
 direct grant of land would be used by the legislature to renew the Internal 
 Improvement policy of 1837, and for that reason, together with his gen- 
 eral support of the Holbrook corporations, he endeavored to get a right 
 of preemption for the Great Western. The Illinois members of the house 
 desired the construction of the central railroad, but not under the direc- 
 tion of Mr. Holbrook. There are no grounds to question Mr. Breese's 
 good faith in his advocacy of the Holbrook companies. 
 
 ^Congressional Globe, 29 Cong., i sess., p. 208; Sanborn, Congres- 
 sional Grants of Land in Aid of Railways, p. 25. 
 
 29 Ibid. 
 
 ^Congressional Globe, 29 Cong., 2 sess.; Sanborn, p. 26. 
 
 31 Ibid.; Ackerman, Historical Sketch of the Illinois Central Railroad, 
 p. 10. 
 
 "Ibid.
 
 24 HISTORY OP ILLINOIS CENTRAL RAILROAD [308 
 
 were clear and logical statements of the arguments in favor of 
 congressional aid. He lacked, however, the political prestige 
 and aggressive personality necessary to secure the assent of his 
 colleagues to such an unusual policy. He also failed in securing 
 the support of the Illinois delegation in the House, and complete 
 success was, thus, almost impossible. 33 
 
 Fortunately for the Central project, Stephen A. Douglas 
 entered the United- States Senate in 1847, and within a short 
 time became the recognized leader of the dominant party in that 
 body. Like Breese he was an ardent advocate of a railroad 
 through central Illinois, and believed that the federal govern- 
 ment should assist in its construction. But the two men differed 
 in the methods to be adopted by the government. Breese advo- 
 cated conferring the right of preemption upon a private com- 
 pany. Douglas favored a direct grant of land, not to a private 
 corporation but to the state of Illinois. In this position he was 
 ably seconded by the Illinois delegation in the House of Repre- 
 sentatives. 3 * 
 
 At the commencement of the long session of 1847-8, each 
 senator introduced a measure in accordance with his respective 
 view. Breese presented his previous plan for a preemption 
 right to the Cairo company for a railroad from Cairo to Ga- 
 lena. 35 On the other hand his colleague advocated a direct grant 
 of land to the state of Illinois to be used in building a first class 
 railroad from Cairo to Galena, as in Breese 's plan. In addition 
 he proposed that there be a branch from this "main" line to 
 Chicago ; 36 in effect this meant a trunk line from the Great Lakes 
 at Chicago to the Mississippi River at Cairo. By his plan 
 whatever profit would come from an increased value of the land 
 would inure to the benefit of the state, not to the advantage of 
 a private corporation. The whole plan was one of those shrewd 
 schemes for which Douglas was famous. From an ill-fated and 
 ill-managed local project of one of the less important western 
 states the Illinois Central became a national enterprise. 
 
 In deference to his colleague, Judge Breese consented to 
 postpone his preemption bill, though he still kept it on the 
 calendar that, as he said, he might call it up after the failure 
 
 33 Cf. correspondence between Douglas and Breese in Appendix, Early 
 History of Illinois, by Sidney Breese. 
 
 ^Congressional Globe, 29 Cong., 2 sess. 
 35 Ibid., 30 Cong., i sess.
 
 309] LAND GRANT AND CHARTER 25 
 
 of the land grant measure. 37 The bill introduced by Senator 
 Douglas was reported favorably from the Committee on Public 
 Lands, and was made a special order on May 3rd, 1848. From 
 that time its passage through the Senate was comparatively 
 easy. In general the measure was supported by members from 
 the western states and opposed by representatives of the eastern 
 and southern states. 38 Although introduced by the Democratic 
 leader of the Senate, the land grant received much better sup- 
 port from the Whigs than from their opponents. As distribu- 
 tion of the public lands in this way was distinctly a Whig 
 policy, it was natural that the minority should favor the bill. 
 Moreover, most of the unoccupied government land was in the 
 West, and representatives of states where the amount was large 
 aided the measure on the assumption that its success might 
 mean a similar grant to them later on. Likewise members from 
 the eastern states opposed this new policy on the ground that 
 the whole nation should share the benefits of the western lands. 
 Senators and representatives from the southern and gulf states 
 were strict constructionists and opposed Congressional action 
 which would assist either the North or West at the expense of 
 the South. Their position was entirely consistent with the im- 
 mediate interests of their constituency. After the fashion of 
 the time, most of the speeches defended or opposed the land 
 grant on constitutional grounds, the main point of dispute being 
 
 37 Breese to Douglas, January 5, 1850, quoted in Illinois State Journal, 
 February 6, 1851 ; Sanborn, Congressional Grants of Land in Aid of Rail- 
 ways, p. 26. 
 
 ^Congressional Globe, 30 Cong., i sess., p. 314; Appendix, pp. 535, 
 536, 537 ; Sanborn, Congressional Grants of Land in Aid of Railways, pp. 
 26 ff. The vote on the measure in the House and Senate was distributed 
 as follows: 
 
 FOR AGAINST 
 
 SENATE HOUSE SENATE HOUSE 
 
 New England 2 10 35 
 
 Middle 2 25 i 22 
 
 South 27 3 31 
 
 Gulf 43 34 
 
 West (land) 10 27 09 
 
 West (non-land) 41 i 8 
 
 TOTAL 24 73 n 79 
 
 Democrat 14 30 10 42 
 
 Whig 10 43 i 37
 
 26 HISTORY OF ILLINOIS CENTRAL RAILROAD [310 
 
 whether Congress had a constitutional right to give away the 
 national lands in aid of internal improvements. 39 
 
 With the members of Congress divided along the lines indi- 
 cated above, the success of the bill depended upon the relative 
 strength of the "West as opposed to the East and South. Al- 
 though the bulk of the population was in the eastern and south- 
 ern states the number of western states was as large as the 
 number of eastern states. As all states had an equal repre- 
 sentation in the Senate the passage of the bill was comparatively 
 easy, the final vote standing twenty-four for, as against eleven 
 opposed to the bill. 40 In the House, however, where representa- 
 tion was in proportion to population, the large middle and 
 southern states were able to defeat the act. The vote was close, 
 and had some of the western members supported the grant more 
 vigorously it would probably have been passed. As it was, the 
 majority against it was only seven. 41 In accordance with a pre- 
 vious understanding, Judge Breese again introduced his pre- 
 emption bill at the short session, and, though not in conformity 
 with the views of Douglas, the latter, as a personal and political 
 favor to his colleague, allowed it to pass the Senate, with the 
 tacit understanding that it was to be rejected in the House of 
 Representatives. 42 
 
 In the six years since Judge Breese introduced his first pre- 
 emption bill, sentiment in both the Senate and House had 
 become quite favorable to some kind of a land grant or pre- 
 emption right in aid of the Illinois Central Railroad. Any 
 measure would undoubtedly be of considerable value to the state 
 of Illinois or to private parties who might build the road, and 
 the Cairo City and Canal Company determined to make use of 
 the apparently favorable conditions. Accordingly, after the 
 failure of the first land grant bill and probably in anticipation 
 of greater success at the next session, the Cairo City and Canal 
 Company petitioned the legislature for a renewal of their pre- 
 
 * 9 Congressional Globe, 30 Cong., I sess. ; Appendix. The views of the 
 members of Congress are gathered from speeches in the Globe. 
 
 ^Congressional Globe, 30 Cong., i sess., p. 314. 
 
 41 Cf . p. 18, n. 38. The bill was refused a third reading by vote of 74- 
 78 (73-79?) Ho. ]., 30 Cong., i sess., p. 1270; Congressional Globe, 30 Cong., 
 I sess., p. 1071 ; Sanborn, Congressional Grants of Land in Aid of Rail- 
 ways, pp. 29, 30. 
 
 * 2 Douglas to Breese, letter quoted in Illinois State Journal, February 
 6, 1851. Cf. correspondence between Breese and Douglas in Appendix to 
 Breese's Early History of Illinois.
 
 311] LAND GRANT AND CHARTER 27 
 
 vipus rights, which had been repealed by the act of March 3rd, 
 1845. Although the Holbrook companies generally were disliked 
 throughout the state, they represented the wealthiest aggregation 
 of capital in Illinois, and apparently were the best able to com- 
 plete the Illinois Central Railroad. In recognition of this fact 
 the legislature on February 10th, 1849 reincorporated the Great 
 Western Railway Company,* 3 with all its former privileges, and, 
 in addition, gave it outright the remains of the old state surveys, 
 gradings, and embankments, and a right of way two hundred 
 feet wide from Cairo to Galena. 44 The surprising feature of the 
 act is that the legislature included in the charter the clause 
 surrendering to the company whatever lands the federal govern- 
 ment should grant the state. No restriction whatever was placed 
 on the use of these lands, and, so far as the charter was con- 
 cerned, these lands, once in the possession of the corporation, 
 might have been used for the personal advantage of the presi- 
 dent or directors. Moreover, the only condition imposed upon 
 the company in return for the charter was that it should spend 
 at least $200,000 each year until the road was completed, and 
 even this condition was vague and ill defined. 45 
 
 "With this remarkable enactment of the legislature before 
 them, it was only natural that members of Congress should hesi- 
 
 43 Session Laws of Illinois, 1849-50, February 10, 1849. 
 
 "Ibid. 
 
 45 The provision in the acts of 1843 and 1849, granting the Great 
 Western Railroad whatever federal lands should come into the posses- 
 sion of the state, is one of the most peculiar ever passed by an Illinois 
 legislature. In 1843 there was little prospect that the national government 
 would ever turn over lands to Illinois to aid in railroad construction, but 
 in 1849 several bills had passed the Senate and one had passed the House 
 giving either preemption or direct grants to Illinois, and it was consid- 
 ered almost certain the 3ist Congress would pass the desired legislation. 
 It is very probable that the clause was inserted in both acts as a "joker" 
 and escaped the notice of the members. At the time charters were 
 granted giving private companies almost unlimited powers and evidently 
 this is an example. 
 
 At the same time it is very likely that the Cairo City and Canal Com- 
 pany resorted to underhand methods to secure the insertion of this provi- 
 sion. From the bitter criticism of the provision in 1849 and 1850 after the 
 passage of the federal act, especially in the Springfield Register and Jour 
 nal, two of the leading papers in the state, it is certain this clause could 
 not have been inserted with the open approval of the legislature. The 
 advantage to the company from such a provision is too obvious to require 
 further reasons in defence of the attitude of the company. 
 
 The action of the Great Western Railroad indicates that it was incor-
 
 28 HISTORY OP ILLINOIS CENTRAL RAILROAD [312 
 
 tate to give to Illinois public lands which might be turned over 
 to a speculative private corporation without materially further- 
 ing the "Central" railroad. No one saw this more clearly than 
 Senator Douglas, and, even before the first session of the thirty- 
 first Congress opened, he made vigorous attempts to obtain a re- 
 peal of the obnoxious features of the charter. He was not at first 
 successful, but his colleagues at Washington and prominent citi- 
 zens of the state assisted him and just before Congress convened 
 he was able to induce the president and directors of the Cairo 
 City and Canal Company to execute a release of the charter of 
 the Great Western Railroad Company. The surrender was only 
 conditional, however, and the Cairo company insisted that the 
 release should be accepted at the next session of the legislature 
 and that another company be immediately incorporated to 
 carry on the project. 46 
 
 The Great Western tangle having been straigtened out, the 
 Illinois delegation in Congress was in a position to renew their 
 efforts in behalf of the Illinois Central grant. At the previous 
 election several changes were made in the personnel of the dele- 
 gation, which gave new strength to the advocates of a direct 
 grant. In the Senate Judge Breese was succeeded by General 
 Shields, and the new representatives were in sympathy with the 
 plans of Douglas. 47 Judge Douglas was an able politician, as 
 
 porated with the object of securing the land grant. From its incorpora- 
 tion until the passage of the federal land grant the company did practically 
 nothing. Then with the passage of the Act of September 2oth several 
 thousand dollars were expended in and near Cairo, evidently to fulfill the 
 legal requirements of the charter. For a full discussion of this matter, 
 the reader is referred to the files of the Journal and Register, Springfield, 
 during the Fall and Winter of 1849. (Illinois Weekly State Journal, 
 October 16, 1850.) 
 
 4 *Illinois State Journal, October 16, 1850. There was a very bitter 
 fight in Illinois over the release of the charter of the Great Western 
 Company. The Cairo Company was, of course, reluctant to surrender the 
 charter, and they were supported by many political opponents of Douglas. 
 The company obtained considerable aid from politicians in the southern 
 part of the state, but was almost unanimously opposed by the central and 
 northern parts of the state. The two Springfield newspapers were the 
 most bitter opponents of the Hobrook company. Cf. the conflict over the 
 passage of the repeal act of February 10, 1851. In October, 1850, Mr. Hoi- 
 brook, as President of the company, executed a release, but Mr. Douglas 
 did not accept it. Cf. correspondence between Breese and Douglas, in 
 Appendix to Breese's Early History of Illinois. 
 
 47 General Shields was a warm personal friend of Senator Douglas, 
 while Senator Breese was not always on intimate terms with him. Shields
 
 313] LAND GRANT AND CHARTER 29 
 
 well as a statesman of national prominence, and the experience 
 of the previous session showed the necessity of aggressive action. 
 As a matter of course, the friends of the land grant, both in and 
 out of Congress, secured a large number of memorials and peti- 
 tions requesting definite action by the federal government. 48 
 In addition, Senator Douglas resorted to various political bar- 
 gains to insure complete success of his policy. In the previous 
 session he had added to his plan a branch from the proposed 
 main line of the railroad to Chicago, and thus made the enter- 
 prise one which appealed to the interests of many eastern repre 
 sentatives. 49 In his plans for the thirty-first Congress he made 
 the railroad even more comprehensive. He extended the pro- 
 posed grant to the Mobile and Ohio Railroad, which was then 
 endeavoring to get a foothold in southern Alabama, and to 
 certain other southern roads. A trunk line from Chicago to 
 Mobile was a project which appealed to the imagination of the 
 people of the entire Mississippi valley ; even the strict construc- 
 tionists had to admit it was a matter of more than state impor- 
 tance. At the same time, the southern part of the plan removed 
 the opposition of the gulf states and secured the active support 
 of certain northern members who were very much interested in 
 the Mobile and Ohio Railroad. 80 He also removed the opposition 
 of certain New England and Pennsylvania Congressmen by a 
 compromise on the tariff. Douglas cared very little about new 
 
 was also one of the most popular politicians in Illinois. Among the lead- 
 ing supporters of the measure were Representatives Bissell, Baker, and 
 Wentworth of Illinois. 
 
 48 Ackerman, Historical Sketch of the Illinois Central Railroad, p. 17. 
 Wentworth, Congressional Reminiscences (Fergus Historical Series). 
 
 49 The addition of the Chicago branch is interesting as showing the 
 increased importance of northern Illinois and the district around Chicago. 
 In the early plans the northeastern part of the state was neglected and 
 this addition by Douglas is a recognition of the changes which took place 
 in the previous fifteen years. Senator Douglas was accused of making 
 the change in order to increase the value of Chicago real estate, in which 
 he was deeply interested. There may be some truth in the statement, but 
 it also shows that he recognized the future importance of Chicago. The 
 entire success of the Illinois Central has depended upon the Chicago 
 branch, and if this extension had not been made, the road would have 
 become a merely local undertaking. 
 
 80 Sanborn, Congressional Grants of Land in Aid of Railways, p. 31 ; 
 Breese to Douglas, Illinois State Journal, February 6, 1851 ; Wentworth, 
 Congressional Reminiscences (Fergus Historical Series).
 
 30 HISTORY OP ILLINOIS CENTRAL RAILROAD [314 
 
 tariff legislation, while the eastern representatives were not 
 interested in the land grant, but did desire a change in the tariff. 
 A compromise was easy and the eastern Congressmen agreed to 
 support the Illinois Central measure in return for active efforts 
 on the part of the western members in favor of a change of 
 tariff. 51 A third agreement, though of less importance than the 
 other two, was arranged late in the session by which Dunleith, 
 opposite Dubuque, Iowa, instead of Galena, became the northern 
 terminus of the proposed road. 52 These various agreements and 
 compromises materially strengthened the Illinois delegation 
 and made the passage of the land grant act a practical certainty. 
 A few days before the second release was executed Senator 
 Douglas introduced in the Senate a bill granting to Illinois 
 alternate sections of public land for six miles on each side of a 
 proposed railroad from Cairo to Galena and from Chicago to a 
 junction with the main line. 63 With the consent, and probably 
 at the suggestion of the Illinois Senators, King of Alabama 
 added an amendment making a similar grant to the states of 
 Mississippi and Alabama, 54 and a little later Senator Dodge of 
 Iowa made another amendment extending the road to Dun- 
 
 "Wentworth, Congressional Reminiscences (Fergus Historical Series). 
 Among the eastern members secured by this agreement were Daniel 
 Webster and Mr. Ashmun of Massachusetts. It is very likely that the 
 Boston and New York capitalists who built the Illinois Central were 
 deeply interested in the success of the land grant act. Mr. Rantoul, one 
 of the leading promoters, was a close personal friend of the two gentle- 
 men named above, 'and succeeded Mr. Webster in the Senate. Mr. Ash- 
 mun was also interested in the Illinois Central, and the town of that name 
 on the charter line is named after him. 
 
 "Ackerman, Historical Sketch of the Illinois Central Railroad, p. 17. 
 Senator Dodge, of Iowa, is credited with being the originator of this 
 extension. The change was bitterly opposed by Galena and was instru- 
 mental in causing the decline of that city. Two railroads were being pro- 
 jected from Dubuque in 1849, one of them, the present Dubuque & Sioux 
 City Railroad and the extension to Dunleith, made possible a through line 
 from Chicago and Cairo to central Iowa. The change, although of great 
 importance to the Illinois Central, attracted little attention in Congress. 
 
 Sen. /., 31 Cong., i sess. 
 
 ^Congressional Globe, 31 Cong., i sess., p. 845. It should be noticed 
 that the Act of September 20, 1850 makes grants of land to the three 
 states of unoccupied government land inside the state limits to be used in 
 building a railroad inside the state. This is due to the strict construc- 
 tionist views of the Democratic majority of Congress. Cf. the Union 
 Pacific Land Grant Act.
 
 315] LAND GRANT AND CHARTER 31 
 
 leith. 55 With these amendments securing the support mentioned 
 on the previous pages the passage of the bill thrpugh the Senate 
 was comparatively easy and the measure was approved by a 
 vote of 26-14. The real opposition came in the House, but the 
 Illinois delegation, under the leadership of Bissell, McClernand, 
 and Wentworth, forced the Senate bill through the lower house. 
 At times the opposition was extremely bitter, and it was only 
 by the various agreements effected in the early part of the ses- 
 sion that the act secured sufficient votes to be passed. Finally, 
 a vote was taken, and the bill passed 58 the House of Representa- 
 tives by a majority of twenty-five, the vote taking place on the 
 17th of September. Three days later, President Fillmore signed 
 the bill and the construction of the Illinois Central was assured 
 so far as the United States Congress was concerned. 57 
 
 By the terms of this act alternate sections six miles on each 
 side of the proposed railroad were given to the states of Illinois, 
 Mississippi and Alabama to construct a railroad from Chicago 
 to Mobile. The act, as it related to Illinois, provided for a railroad 
 ' ' from the southern terminus of the Illinois and Michigan Canal 
 to a point at or near the junction of the Ohio and Mississippi 
 rivers, with a branch of the same to Chicago on Lake Michigan, 
 and another, via the town of Galena, in said state, to Dubuque, 
 in the state of Iowa." 58 The land in alternate, even numbered, 
 sections for six miles on both sides of this road was given to the 
 state to assist this undertaking, but with the provision that the 
 road should be completed within ten years and that if this were 
 not done all unsold lands should revert to the federal govern- 
 ment and the state should pay to the United States whatever 
 it had received for land already sold. Furthermore, the road 
 should be a public highway, free of toll, or other charges, for 
 the transportation of any property or troops of the United 
 
 55 Ackerman, Historical Sketch of the Illinois Central Railroad, p. 17. 
 
 56 The vote on the land grant bill was as follows : 
 
 FOR AGAINST 
 
 SENATE HOUSE SENATE HOUSE 
 
 New England i 10 4 II 
 
 Middle 2 28 4 22 
 
 South 28 3 23 
 
 Gulf 5 13 II 
 
 West (land) 13 34 I 12 
 
 West (non-land) 38 17 
 
 TOTAL 26 101 14 76 
 
 6T f7. S. 'Statutes at Large, ix, 466.
 
 32 HISTORY OP ILLINOIS CENTRAL RAILROAD [316 
 
 States; Congress was to decide what compensation should be 
 given for carrying the mails. To compensate for the loss of land 
 Congress ordered that the alternate, odd numbered, sections six 
 miles on either side of the road, belonging to the government, 
 should be sold at $2.50 per acre, instead of $1.25 as previously. 
 Lands already settled were to be retained by the settlers upon 
 payment to the state of the preemption price, or the latter could 
 recompense itself by taking other unoccupied land within fifteen 
 miles of the road. 59 The land could never be used for any 
 purpose other than the construction of the road. 
 
 The passage of the land grant act of September 20th marks 
 an epoch in the history of Illinois. At last, after years of dis- 
 couragement and failure, the state had in sight the means neces- 
 sary to build the Illinois Central Railroad. To even the most 
 conservative citizen, three million acres of land seemed sufficient 
 to guarantee the construction of the road. The more sanguine 
 looked forward to the time when the central counties of the state 
 would be thickly settled and the land grant had paid off all of 
 the burdensome Internal Improvement Debt. Senator Douglas 
 and the other representatives in Congress who had secured the 
 grant were applauded from Cairo to Galena ; mass meetings and 
 banquets were held in their honor; and every means was taken 
 to show the popular appreciation of their services. 60 The influ- 
 ence on the general credit of Illinois was great as was shown by 
 a rise of several points in the internal improvement stock. 61 
 
 The mere passage of the federal act, was the least difficult 
 of the many problems confronting the friends of the Illinois 
 Central. For some fourteen years the questions connected with 
 this railroad had been before the legislature and the citizens of 
 
 U. S. Statutes at Large, IX, 46. 
 
 60 Ackerman, Early Illinois Railroads, p. 35. On their return to Illinois 
 at the close of the session, Mr. Douglas and Gen. Shields were tendered 
 a public dinner by the citizens of Chicago, in consideration of their serv- 
 ices in obtaining the passage of this act In declining the honor, they mod- 
 estly awarded to their colleagues in the house the full measure of credit 
 for having successfully carried the bill through to completion. 
 
 81 "The New York Evening Post of the i8th inst. says : A considerable 
 advance has been obtained in Illinois Internal Improvement stock : 55^ 
 was bid for it this morning and 60 asked. This is a rise of five to ten per 
 cent and is due to the advising obtained this morning from Washington 
 of the donation by congress of lands in Illinois in aid of the railroad con- 
 structed between Chicago and Mobile, which runs through the whole state 
 of Illinois also of the swamp land measure." Illinois Daily Register, 
 September 30, 1850.
 
 317] LAND GRANT AND CHARTER 33 
 
 the state, and now that success was probable, all the previous 
 conflicts were renewed with additional strength. The most 
 troublesome of these involved the method of construction and 
 the route. 
 
 There were four possible ways of utilizing the land grant, 
 each of which had its vigorous adherents: (1) State construc- 
 tion of the railroad by means of the grant, along the line of the 
 internal improvement plan of 1837; (2) Surrender of the grant 
 to the bondholders and construction by them on terms similar 
 to those made by the holders of canal bonds in 1840; (3) Com- 
 pletion by the Great Western Railway Company under its char- 
 ter of 1849, including the retention of all state lands; (4) Crea- 
 tion of an entirely new private corporation and the transfer to it 
 of the land grant under certain restrictions and with certain pay- 
 ments to the state ; this company to assume entire responsibility 
 for the completion of the road. 
 
 To many citizens state construction of the Illinois Central 
 still seemed a feasible project. From 1831 to 1843 the various 
 plans for the railroad depended on government support, and, 
 despite the collapse of the Internal Improvement plan of 1837, 
 there was considerable talk of direct construction by the legis- 
 lature. The cost of building the road was underestimated, while 
 the value of the land was overestimated. It was expected that 
 the road could be built without recourse to bond issues and it 
 was thought that the profits from operation would then quickly 
 retire the old state debt. 62 But the panic of 1840 and the de- 
 pressing influence of the debt were still vivid in the minds of 
 the citizens of Illinois, and they generally condemned any fur- 
 ther attempt by the state. As Senator Shields said: "capital- 
 ists will not embark in this enterprise unless they have the 
 control of the servants, agents, etc. ... in a word of the 
 construction and management of the road. ' ' 63 
 
 Another form of semi-legislative management was contained 
 in the so-called "bond-holders' plan", which was submitted to 
 the legislature in January, 1851. As a result of the various 
 attempts at internal improvement Illinois had accumulated a 
 debt of some fifteen million dollars and was unable to meet the 
 
 62 For instance, Mr. John S. Wright, of Chicago, published a pamph- 
 let in which he took the ground that the grant, being of such immense 
 value, the State should hold the lands and again attempt the construction 
 of the road. Ackerman, Early Illinois Railroads, p. 35. 
 
 63 Speech of General Shields, Springfield, 111., November 20, 1850, given 
 in full in Illinois Weekly Journal, November 20, 1850.
 
 34 HISTORY OF ILLINOIS CENTRAL RAILROAD [318 
 
 full interest charges. In fact, the state had barely escaped re- 
 pudiation or bankruptcy, and the bondholders supposed it would 
 be utterly incapable of attracting the capital necessary to con- 
 struct the Illinois Central. Under the circumstances, certain 
 eastern bondholders suggested an arrangement somewhat sim- 
 ilar to the one under which the Illinois and Michigan Canal was 
 built. A company, composed largely of bondholders, was to 
 be chartered and given power to construct the railroad. Three 
 dollars of bonds or four dollars of stock, entitled new internal 
 improvement stock, were to be given for each dollar of cash paid 
 in. The state was to receive stock at par to an amount equal 
 to the value of the lands sold, and in return pay all expenses of 
 surveys, etc. The stock belonging to the state must be set apart 
 to retire the state debt. The stock of the new company could 
 also be made the basis for state banking. 64 On the whole, the 
 terms were about as onerous as could be imposed on a bankrupt 
 state, and they are in striking contrast to the Illinois Central 
 charter of 1850. It is impossible to state just what men were 
 behind the scheme, as it was disowned by many leading bond- 
 holders. The project never received serious attention from either 
 the newspapers or the legislature. 65 
 
 The proposed construction by the Great Western Railroad, 
 or in other words by Mr. Holbrook and the Cairo City and Canal 
 Company, attracted much more attention than either of the other 
 two plans. In 1849, as already mentioned, the legislature re- 
 newed the charter of the Great Western, including a grant to 
 the company of whatever lands the state might receive from 
 the federal government. Then, in December, 1849, the directors, 
 under pressure from Senator Douglas, executed a release of both 
 the charter and the grant, on condition that the legislature would 
 accept the same at its next session and incorporate another com- 
 pany to carry on the enterprise. The charter of 1849 was evi- 
 dently obtained with the distinct object of securing the federal 
 land grant, and no work was done on the railroad until it was 
 almost certain that congress would pass the act. Then, construc- 
 tion work was started, and it was stated that large quantities of 
 rails were purchased in England. At the same time, active 
 
 64 A copy of the bill presented by the bondholders is given in the 
 Chicago Daily Democrat, January n, 1851, and a summary is given in the 
 Illinois Weekly Journal, January 29, 1851. Cf. Ackerman, Early Illinois 
 Railroads, p. 37, n. 
 
 "Editorial in Illinois Weekly Journal, January 29, 1851 ; ibid., Jan- 
 uary 22.
 
 319] LAND GRANT AND CHARTER 35 
 
 efforts were made to defeat any bill repealing the charter. It is 
 uncertain Whether this company intended to carry on the under- 
 taking, or, as Senator Douglas alleged, merely sell the charter 
 in Europe. At any rate, the opposition to the Great Western, 
 especially in the southern part of the state, was bitter and deep 
 seated. 66 
 
 The last plan was to turn over the grant under proper re- 
 strictions to a private corporation, other than the Cairo City 
 and Canal Company. The memorial of the Boston capitalists, 
 who later built the road, was the first direct proposition of the 
 kind, but it is probable that the memorialists had early sug- 
 gested a similar plan to the leading legislators of the state. In all 
 probability, other capitalists were also deeply interested in the 
 railroad. However, there was no definite project of the kind 
 before the people during November and December, 1850. 6T 
 
 More troublesome than the method of construction, though 
 of less real importance, was the matter of route. When Lieu- 
 tenant Governor Jenkins made his proposal in 1832, it was for 
 a railroad from Cairo to Peru at the junction of the canal and 
 the Illinois river. In the internal improvement act Galena was 
 made the northern terminus and the route was more distinctly 
 marked; it included Vandalia, Shelbyville, Decatur, Blooming- 
 ton, and Savannah. This line was retained in the charters of 
 1843 and 1849, and in the various bills introduced into the fed- 
 eral Senate by Sidney Breese. But Judge Douglas, in his bills 
 of 1847 and 1849, radically altered the route by extending the 
 road to Dunleith and making a branch to Chicago. As a result, 
 the whole question of route was reopened, and every city and 
 county of importance in the central part of the state asserted its 
 claims. The contests over the Chicago and Dunleith branches 
 were especially strenuous, and the continued discussion resulted 
 in greater confusion. The decision was necessarily left to the 
 legislature and by them transferred to the company. 68 
 
 Congress passed the land grant act in September, 1850, and 
 the legislature was elected the following November. On account 
 
 66 This opposition to the Holbrook companies is evident in the news- 
 paper discussion of the time. 
 
 8T None is given in any of the important state papers and if any project 
 were before the people it would be given in the newspapers. 
 
 ^Illinois Weekly Journal, January 22, 1851 ; also numerous articles in 
 Chicago Daily Democrat, Illinois Weekly Journal, Illinois Daily and 
 Weekly Register during October, November, and December, 1850, and 
 January, 1851.
 
 36 HISTORY OF ILLINOIS CENTRAL RAILROAD [320 
 
 of the release of the Great "Western charter it was necessary to 
 settle the matter at the first session of the General Assembly, and, 
 consequently, the selection of proper representatives and sen- 
 ators was of vital importance. As soon as it became evident that 
 the federal House of Representatives would act favorably on 
 Senator Douglas' bill, the advocates of state construction and 
 the friends and opponents of the Cairo City and Canal Company 
 commenced an active campaign to secure a majority of the mem- 
 bers of the legislature. Other state issues were consigned to 
 the background and the question of the land grant and the 
 acceptance of the Great Western Release were the important 
 factors in the election of members to the sixteenth General 
 Assembly. The newspapers of the state had numerous editorials 
 and contributed articles defending or opposing the respective 
 plans, or emphasizing the importance of one route over another. 
 Mass meetings and conventions were held at various points along 
 the line of the proposed railroad, and the excitement often was 
 at fever heat. By November the controversy had become bitter 
 and personal. Individual motives were impugned; the charac- 
 ter of some of the leading newspaper editors, of Mr. Holbrook, 
 Senator Douglas, Judge Breese, and others, was maligned; and 
 charges of bribery and fraud were frequent. By the time the 
 legislature convened in January, the whole discussion had degen- 
 erated into a typical Illinois political fight. On the whole, the 
 opponents of both state ownership and of the Holbrook com- 
 pany had much the better of the argument. Only a few news- 
 papers, such as the Benton Standard and the Cairo Times, and 
 a few politicians, the most prominent of them being Sidney 
 Breese, openly defended the Cairo City and Canal Company or 
 its subsidiary company, the Great Western. However, the Great 
 Western was already in possession of the desired charter and, 
 conditionally, of the land grant. Thus, inaction on the part of 
 the legislature meant success for the Holbrook party, and the 
 Cairo City and Canal Company exerted every effort to block 
 legislation and prevent the incorporation of a rival company. 
 On account of the many minor fights it was not at such a disad- 
 vantage as was indicated by newspaper editorials. 69 
 
 69 The following are the most important references to the conflict 
 between the two factions : Illinois Daily Register, October 30, 1850 ; Illi- 
 nois Weekly Journal, January 22, 29, 1851 ; Illinois Daily Register, Novem- 
 ber 8, 1850; December 12, 1850; ibid., October 17, 1850; ibid., October 10, 
 1850; ibid., October 9, 1850; Illinois Weekly Journal, November 13, 1850; 
 ibid., November 6, 1850; ibid., October 30, 1850; ibid., October 16, 1850;
 
 321] LAND GRANT AND CHARTER 37 
 
 Most of the plans had been thoroughly discussed during 
 the campaign, and, when the legislature met the first day of 
 January, 1851, its members were well acquainted with the main 
 points at issue. In the organization of the House the Holbrook 
 faction secured a temporary advantage by the election of Judge 
 Breese as speaker, and during the first two weeks of the session 
 they were strong enough to prevent radical action. Bills were 
 presented in both houses repealing the charter of the Great 
 Western, but both were strongly opposed. The senate passed a 
 bill concerning the Illinois Central, which did not accept the 
 release of the Holbrook company ; the house passed a bill accept- 
 ing the release and refused to adopt the senate measure. 70 A 
 large majority of the members of each body favored the repeal of 
 the Great Western charter, but until a more reasonable propo- 
 sition was presented many preferred to retain the Cairo com- 
 pany rather than to be entirely without a means of building the 
 road. 
 
 At this stage of the contest affairs were entirely altered by a 
 businesslike memorial presented by Mr. Robert Eantoul of Mas- 
 sachusetts, acting in the interest of a group of wealthy New 
 York and Boston capitalists. In brief, the plan of the memorial- 
 ists was as follows: The legislature should create a corpora- 
 tion and surrender to it the federal land grant. In return the 
 incorporators agreed to build a railroad "equal in all respects 
 to the railroad running between Boston and Albany, with such 
 improvements thereon as experience has shown to be desirable 
 
 Chicago Tribune, October 22, 1851 ; Illinois Weekly Journal, January 22, 
 1851 ; Illinois Daily Register, October 23, 1850; ibid., November 20, 1850. 
 
 As the leading advocate of the "Central"' Senator Douglas had endeav- 
 ored to secure an early acceptance of the release and continually urged such 
 action from the time he received the final release of the Great Western. 
 Even as early as October, 1849, he had attempted to obtain action by the 
 legislature, but without success (Illinois Daily Journal, October 31, 1849). 
 The matter was brought up at the special session and Representative 
 Denny introduced a resolution "that the committee on internal improve- 
 ments be instructed to inquire into the expediency of so altering and 
 amending or repealing the charter of the Great Western Railway as in 
 their judgment will be best calculated to promote the interests of the 
 state. . . ." (Illinois Daily Journal, October 31, 1849). The discussion 
 was at times very heated, but the policy of inaction finally prevailed, it 
 being thought that the matter could rest until the regular session of 1851. 
 (Illinois Daily Journal, October 24, 1849). 
 
 70 Illinois Daily Register, January 15, 1851 ; also Sen. J. and Ho. J ., 
 January 1-15, 1851.
 
 38 HISTORY Or ILLINOIS CENTRAL RAILROAD [322 
 
 and expedient ; to complete the road by July 4, 1854 ; and to pay 
 the state _ per cent of the gross receipts in return for the 
 land." 71 The memorialists were men of considerable capital and 
 experience with railroad promotion in other parts of the country. 
 On the whole, they made a much more favorable offer than could 
 have been expected. The Governor recommended the accept- 
 ance of their proposition in a special message, and most of the 
 members of the legislature and friends of the Illinois Central 
 believed that this memorial was a first class opportunity for the 
 state. This is illustrated by the following quotation from the 
 Illinois Weekly Journal, "We agree with the legislature that 
 'this company are seeking no advantages, and that their object 
 is to build the road without loss to themselves and with advan- 
 tage to the state.' "" 
 
 Coincident with the transmission of this memorial Mr. 
 Afc**i Gridley introduced in the senate a bill "for an act to 
 incorporate the Illinois Central Railroad." 73 On February 5th 
 Mr. J. L. D. Morrison offered a substitute for the original bfll, T4 
 and on the next day it passed by a vote of 23 to 3. T5 Four days 
 later it passed the house by an almost unanimous vote of seventy- 
 two to two/" and was immediately signed by Governor French/ 7 
 
 The passage of the charter through both houses was not as 
 easy as the vote seems to indicate. Shortly after the receipt of 
 the memorial the whole matter was referred to a committee, 
 whose members, in connection with Mr. Hantoul and Colonel 
 BisselL representatives of the promoters, spent considerable time 
 in preparing the measure. As the duration of the session was 
 limited to forty days, the Holbrook interests made every effort 
 to delay the bffl, and during the last week of January and the 
 first of February it looked as if their efforts would meet with 
 
 the copy of the memorial given in the Appendix. In the 
 original mtmn'al the amount paid to the state was left vacant. It was 
 proposed in the House that ten per cent be given, bat the company, through 
 the efforts of Robert Rantoul and Representative Bissefl, managed to 
 reduce the amount to seven per cent. The real reasons for the action of 
 the legislature in this attri are not known, and in his campaign for 
 election as governor. Colonel Bissefl was accused of having obtained the 
 reduction to the disadvantage of the state. 
 
 n IUmois Weekly Jonrxal, January 22, 1851. 
 
 ^Ackerman, Early Illinois Railroads, p. 39. 
 
 T *IUixois Weekly Journal, February 12, 1851. Sen. J. and Ho. J. 
 
 n lbid. 
 
 "Ibid.
 
 323] LAND CTLAXT AXD CHASTE* 39 
 
 success. At last, as noted above, the bill was passed by both 
 houses only a few days before the close of the session. The main 
 difficulty came in the selection of a route, and the legislature 
 was finally forced to leave the exact location of the road to the 
 incorporators. 78 The other point of conflict was Ike prmiitipr 
 to be paid the state. This was finally fired at seven per cent 
 of the gross receipts, but the company was exempted from paying 
 any state or local taxes. 
 
 As passed, the bill incorporated the Illinois Central Bail- 
 road company, with, a perpetual charter, gave it the remains 
 of the old state surveys and grading^ gave it the federal lad 
 grant and right of way, and exempted its property from taxa- 
 tion. In return, the railroad was obliged to complete the Tnafn 
 line in four years, and the branches in six, to build the road 
 "'equal in all respects to the Great Western of Massachusetts", 
 to hold the state free from any responsibility connected with 
 the grant, and to pay the state seven per eent of the gross earn- 
 ings. 
 
 Weekly Jommal, February S 12, 1851.
 
 CHAPTER III. 
 CONSTRUCTION OF THE CHARTER LINES. 
 
 Chartering a private corporation with liberal powers and 
 granting it nearly three million acres of public land were merely 
 a preliminary step in the building of the Illinois Central. In 
 1851 railroad construction was in its infancy. The largest sys- 
 tem at that time, the New York and Erie, was only three hun- 
 dred miles long, and the construction of a first class trunk line 
 some seven hundred miles in length through the thinly settled 
 interior counties of a western state involved engineering and 
 administrative difficulties entirely new to the promoter of the 
 early fifties. Never before in this country had such an enor- 
 mous amount of capital been expended on a single private under- 
 taking, and what the building of the Canadian Northern or 
 Panama Canal is to-day, the construction of the Illinois Central 
 was in the decade preceding the Civil War. 
 
 From the first this final attempt to build a railroad through 
 the center of the state was supported by some of the ablest rail- 
 road magnates of the time men who had had abundant experi- 
 ence in other lines of business activity and who also had the 
 financial resources necessary to push the enterprise to a suc- 
 cessful completion. It is doubtful whether twelve men could 
 have been selected who, at the time, possessed the confidence of 
 the country to a greater extent than did Robert Schuyler, 
 Gouverneur Morris, Robert Rantoul, and the other members of 
 the first board of directors. 
 
 In general the promoters represented successful merchants 
 who constituted the moneyed class of the period; a class whose 
 activities extended into politics and government, as well as into 
 strictly commercial enterprises. Of the entire board Robert 
 Schuyler and Robert Rantoul were probably the best known 
 and most respected. 1 
 
 Robert Rantoul, Jr., the man most influential in securing 
 
 1 For an interesting account of the various persons connected with the 
 early history of the Illinois Central the reader is referred to Mr. Acker- 
 man's Historical Sketch of the Illinois Central Railroad. 
 
 40
 
 325] CONSTRUCTION OF CHARTER LINES 41 
 
 the passage of the .charter by the Illinois Legislature, was a 
 leading lawyer of Massachusetts. He had held several high 
 elective and appointive offices under both the federal and state 
 governments and, in 1852, on the death of Daniel Webster, he 
 represented his state in the federal senate during the remainder 
 of the term. During the administration of President Fillmore 
 he was strongly advocated as successor to Secretary of the Treas- 
 ury Walker, but did not receive the nomination and died shortly 
 afterwards. The charter of 1851 is very largely his work, and 
 during the organization of the company he was influential in 
 shaping its financial policy. The present city of Rantoul about 
 one hundred miles south of Chicago, is named after him. 2 
 
 Second in importance to Rantoul, was the first president, 
 Robert Schuyler. During the first years of the company's ex- 
 istence he seems to have been the leading director of its work 
 and was most active in organizing the corporation. One com- 
 pany after another, the New York and New Haven, Alton and 
 Sangamon, Great Western, Boston and Albany, and Illinois 
 Central, all came under his direction or control, and in general 
 they were well managed. Up to 1853 his record was entirely 
 above suspicion, but in that year he became involved in some 
 extremely questionable proceedings in connection with the New 
 York and New Haven Railroad by which he fraudulently issued 
 over a million of stock to himself and friends. 3 
 
 Although not one of the original directors Mr. William H. 
 Osborn soon became interested in the Illinois Central, and from 
 the retirement of President Schuyler in 1853 to the acquisition 
 of the southern lines in 1882 he was the dominant figure in the 
 history of the company. A man of great ability and strong 
 personality, with a broad grasp of affairs, he won the absolute 
 support of stockholders, employees, and shippers, and for over 
 twenty years English and Dutch shareholders gave him their 
 unqualified proxies, thus entrusting to him the complete con- 
 trol of the Illinois Central. So well did he execute this trust 
 that even during the periods of deepest depression they did not 
 condemn his management of the road. The company owes more 
 to Mr. Osborn than to any other person connected with it. 4 
 
 The remaining directors were prominent business men, but 
 
 2 Ackerman, Historical Sketch of the Illinois Central Railroad, pp. 
 27-36; Chicago Daily Democrat, January 16, 1851. 
 
 3 Ackerman, Historical Sketch of the Illinois Central Railroad, pp. 
 57-60; cf. Chap. vi. 
 
 4 Ackerman, Historical Sketch of the Illinois Central Railroad.
 
 42 HISTORY OP ILLINOIS CENTRAL RAILROAD [326 
 
 they did not exert such an influence upon the management of the 
 property, as did Eantoul, Schuyler, and Osborn. With one or 
 two exceptions, they are practically unknown to-day. 5 How- 
 ever, as has been the case with most of their successors in the 
 directorate, they took an active interest in the affairs of the cor- 
 poration, and much of the financial success of the railroad is 
 due to their hard and consistent work in directing the construc- 
 tion of the road and watching over the financial operations. 
 
 With such a strong group of promoters, the active work of 
 organization followed closely upon the chartering of the com- 
 pany. It is very probable that a preliminary organization had 
 been created some months before the charter was actually se- 
 cured. According to the provisions of the charter the promoters 
 were allowed sixty days to accept it and immediately upon 
 receipt of the act steps were taken to complete the regular 
 organization. However, Governor French was ex-officio a 
 director, and as there were many matters of interest to the 
 state, action was deferred until his arrival. 6 Finally, on March 
 19, 1851, the incorporators met in a little dimly lighted room at 
 1 Hanover Street, New York City and there formally organized 
 the Illinois Central Railroad Company by accepting the legisla- 
 tive act of February 10th, by making provision for the various 
 requirements of the charter, and by electing Robert Schuyler 
 president. 7 
 
 The records of the following meetings have never been 
 made public, but from newspaper reports, it seems that active 
 work was not long delayed. One million dollars of stock was 
 subscribed, later another million was taken, and enough was paid 
 in to allow Mr. Ketchum, the treasurer, to deposit the guaran- 
 tee fund of $200,000 required by the charter; officers of the 
 company were elected; arrangements were made for active 
 prosecution of the work in Illinois; negotiations were opened 
 
 5 Ackerman, Historical Sketch of the Illinois Central Railroad, 
 pp. 21 ff. Credit for the success of the company should also be 
 given to the English and Dutch stockholders. Up to comparatively 
 recent date the Illinois Central was owned largely by foreign stock- 
 holders and these shareholders have always kept a close watch on the 
 affairs of the company. At times there has been friction between the 
 stockholders and the management in this country, but on the whole, 
 much of the success of the railroad is due to the active cooperation of the 
 English investors. This was especially true in the early history of the 
 company. 
 
 9 1 bid., pp. 21-60. 
 
 ''Ibid.; Chicago Daily Democrat, March 10-30, 1851.
 
 327] CONSTRUCTION OF CHARTER LINES 43 
 
 with the federal government in regard to the land grant; and 
 a definite financial program was prepared. 8 
 
 The charter provided that work should commence on the 
 main line not later than January 1, 1852, and, as the entire 
 route of the road had to be determined long before that date, 
 there was no time for delay. On March 22nd, or only three 
 days after the organization of the company, Mr. Roswell B. 
 Mason, the Engineer and General Superintendent of the New 
 York and New Haven Railroad, better known on account of his 
 career as mayor of Chicago, was appointed Engineer-in-Chief 
 and given entire charge of construction work in Illinois. 9 At 
 that time there were few men who had had either a practical 
 or theoretical training in railway civil engineering, and the 
 selection of an efficient engineering staff was by no means an 
 easy undertaking. But good pay, the importance of the new 
 railroad, and the high reputation of Colonel Mason overcame 
 the difficulty, and by the middle of May, a staff of about seventy 
 engineers had been collected and were on their way to Chi- 
 cago. 10 
 
 The party arrived in Illinois on the 17th of May, and the 
 work of preliminary survey was immediately started. Only 
 five specific points were given in the charter, viz. Galena, Chi- 
 cago, Cairo, southern terminus in the Illinois and Michigan 
 Canal, and Dubuque. The only other restrictions upon the 
 route were that the line should pass within five miles of the 
 northeast corner of Township 21, range 2, east of the third 
 principal meridian; should not vary more than seventeen miles 
 either way from a straight line from Cairo to the southern ter- 
 minus of the canal ; and that the Chicago branch should not be 
 north of the parallel of 39 degrees and 30 minutes. 11 Other- 
 wise, the company had entire latitude in locating the route. 12 
 As has been the case with practically every new railroad in this 
 country, various towns entered upon a bitter contest for the 
 new railroad. In the present instance sectional rivalries had 
 been fanned into a fierce flame by fifteen years of agitation. So 
 intense was this competition that the legislature could not decide 
 the route and left the controversy to the railroad. 18 
 
 For the main line from Cairo to La Salle there had been 
 
 8 Cf. Chap. vi. 
 
 Ackerman, Historical Sketch of the Illinois Central Railroad, p. 82. 
 
 "Charter of February 10, 1851, sec. 15, II 3. 
 
 Ibid. 
 
 13 Cf. Chap. n.
 
 44 HISTORY OF ILLINOIS CENTRAL RAILROAD [328 
 
 but a single route proposed since 1835, namely th , present line, 
 passing through Du Quoin, Vandalia, Decatur, and Blooming- 
 ton. The "southern terminus" of the canal was in dispute 
 between La Salle and Peru, each claiming that it was the legal 
 terminus and consequently the end of the railroad. From La 
 Salle to Galena there were two possible routes, one passing 
 through Freeport and the other through Savannah. Local com- 
 mittees were appointed to bring pressure on the officials; offers 
 of free right of way and liberal city franchises were made, and 
 even railroad bridges and short sections of track promised, if 
 only the railroad would build through particular districts. 
 Shelbyville was insistent upon the advantages of that place as 
 a point on the main line, as also the junction of the Chicago 
 branch, while the controversies between Peru and La Salle, and 
 Savannah and Freeport became extremely bitter. Each of these 
 places took active measures to secure the railroad and even went 
 so far as to institute legal proceedings to force the company to 
 choose the particular location desired by the litigant. 14 . In the 
 midst of this "down state" controversy the territory around 
 Chicago was aroused by a rumor that the "Central" was in- 
 tending to pass by that city and run its line from a junction 
 with the Michigan Central at the state line near what is now 
 Hammond, directly southward along the state border to Jones- 
 boro. 15 But threats, bribes, and litigation alike had little influ- 
 ence upon the management, and it proceeded to lay out the 
 route without heeding the demands or threats of the various 
 rival towns along the proposed right of way. 
 
 For the purpose of surveying the various routes Colonel 
 Mason divided the territory into seven general divisions, each 
 with the usual surveying party, and within a few days after the 
 engineers had reached Chicago the surveys were actually com- 
 menced. 16 It was spring in Illinois and to the usual disad- 
 vantages of reconnoisance work on the frontier were added the 
 inconvenience of Illinois mud and rain. Mr. Mason himself took 
 an active part in the work and spent all the time he could spare 
 from affairs at Chicago to obtain first hand information. Thus, 
 by the middle of summer he was in a position to make a deci- 
 sion as to the route. 17 
 
 14 Chicago Daily Democrat, May 15, July 23, 1851. 
 
 15 Ibid., May 15, 1851. 
 
 16 Ackerman, Early Illinois Railroads, p. 82. 
 
 17 Ibid. For an interesting description of the difficulties connected with 
 the construction of the road, the reader is referred to Mr. Ackerman's 
 account, Early Illinois Railroads, p. 82.
 
 329] CONSTRUCTION OF CHARTER LINES 45 
 
 In deciding the route there were four important considera- 
 tions: (1) As the company could not take land more than fif- 
 teen miles from the tracks it was not desirable to run the line 
 through thickly settled regions where much of the land granted 
 the company by the federal government had already been occu- 
 pied. (2) The road should be so located as to build up the 
 largest and most profitable traffic possible. (3) Wherever 
 practicable there should be a minimum cost of operation, and 
 all grades, curves, and sections involving heavy maintenance 
 work, should be avoided. (4) Finally, the cost of construction 
 should be confined to the lowest amount consistent with safety 
 and good operating efficiency; expensive rights of way, heavy 
 masonry work, long bridges, expensive gradings, and other 
 costly work were decidedly undesirable. 
 
 Thus, the company selected the route entirely upon its 
 economic and engineering merits and, with slight exceptions, 
 the line chosen was the most direct and shortest of the possible 
 routes. From Cairo to Freeport the railroad was as. straight as 
 practicable, only slight variations being made to include the 
 important towns of Vandalia, Decatur, Bloomington, La Salle, 
 and Mendota, and there is one stretch of track south of La Salle 
 which extends sixty miles without a curve. The Chicago branch 
 from the junction with the main line at Centralia, was also 
 almost straight, and for the entire distance of two hundred and 
 fifty miles only three curves, and those of large radius, were 
 necessary. In selecting the route from Dixon to Galena, the 
 preference was given to Freeport instead of Savannah ; and the 
 present line of the Chicago branch was decided upon in prefer- 
 ence to the line farther east. With the various disputed points 
 decided, the total length, according to Colonel Mason's first 
 report, was 699 miles. 18 
 
 The questions connected with the route having been settled, 
 the engineers were free to spend their entire time in completing 
 the surveys and preparing the preliminary estimates of cost of 
 construction. Work progressed rapidly, and by September 1, 
 1851, a preliminary report covering both amount and cost of 
 construction work was submitted to the president. 19 Heavy T 
 rails, light grades, easy curves, well built embankments and fills, 
 ample cuts, and brick or stone buildings were to be provided, 
 
 "Report of President Schuyler to Directors, September 12, 1851, in 
 Documents Relating to the Organization of the Illinois Central Railroad.
 
 46 HISTORY OP ILLINOIS CENTRAL RAILROAD [330 
 
 and everything was to be of the highest standard consistent with 
 the light traffic conditions which would prevail on a western rail- 
 road. 20 Although built over the level prairies of Illinois, an 
 average of thirty thousand cubic yards of earth was to be used 
 per mile on embankments and fills. 21 Including equipment and 
 all construction expenditures, the total cost was estimated at 
 $16,537,212, or $23,700 per mile. 22 Even this liberal amount 
 proved to be insufficient and the final cost exceeded the prelimi- 
 nary figures by some ten millions of dollars. 23 
 
 The surveys were hastened as much as possible, but the final 
 results were submitted none too soon. According to the char- 
 ter, the main line was to be completed within four years from 
 February 10th, 1851, and the branches within six years, while 
 work on the main line was to be commenced by January 1st, 
 1852; therefore, it was imperative that the construction should 
 not be delayed. 2 * Nor was the undertaking an easy one to com- 
 plete within this short period. Large construction companies 
 did not then exist ; rails, chairs, fastenings, and bridge iron had 
 to be imported from England, and other supplies carried west 
 from New England, New York, and Pennsylvania; the amount 
 of grading was very great; and labor was far from abundant. 25 
 Thus, even aside from any financial difficulties, the question of 
 building the road within the time limit was very perplexing, and 
 the directors, as well as Colonel Mason, were forced to pay close 
 attention to construction work in Illinois. 
 
 Among the various questions which occupied the attention 
 of the directors was the one "by whom and in what way should 
 the road be built". As early as April 23rd, 1851, a Mr. Frank- 
 lin, for several years railroad engineer for the Russian Govern- 
 ment, offered to build the Illinois Central Railroad and take 
 bonds in payment on very liberal terms. 2 * Even before that 
 date it was rumored that private corporations were willing to 
 
 20 Report of President Schuyler to Directors, September 12, 1851, in 
 Documents Relating to the Organization of the Illinois Central Railroad; 
 also charter, Illinois Central Railroad, sec. 15, 1 3. 
 
 "Ibid. 
 
 23 Ibid.; cf. Chap. vi. 
 
 "Charter, Illinois Central Railroad, sec. 15, fl 3 ; ibid., sec. 23. 
 25 Cf. Chap. n. Practically no railroad material was made in this 
 country, and it had to be imported from Europe. 
 ^Chicago Daily Democrat, April 23, 1851.
 
 331] CONSTRUCTION OF CHARTER LINES 47 
 
 undertake the construction of large portions of the road. 27 But 
 the work was entirely beyond the capacity of any private con- 
 struction company and the officials of the Illinois Central wisely 
 determined either to build the road themselves or else to let 
 the work out in small sections. This conclusion was reached 
 early in 1851, and Colonel Mason's estimates, therefore, were 
 made with that end in view. 
 
 Although the preliminary engineering estimates were sub- 
 mitted by the first of September, the final estimates were not 
 submitted until much later, and it was impossible to start active 
 construction work on the main line that fall. However, in 
 accordance with the letter of the charter, the Illinois Central, 
 on December 23rd, 1851, broke ground at both Cairo and Chi- 
 cago, and amidst elaborate ceremonies, the salutes of cannon, 
 and the ringing of bells, formally commenced the construction 
 of this great enterprise. 28 During the winter contracts were 
 made for supplies, the federal land survey was completed, ar- 
 rangements were made for transfer of the land to the company, 
 and other preliminary work was completed. 
 
 Specifications had been prepared during the winter, and on 
 the 15th of March, 1852, the company invited bids for the con- 
 struction of divisions 1, 2, 6, 8, 9, and 10. The proposals were 
 to include grading, masonry, bridging, superstructure for the 
 entire division or a part of the same, or merely for a single item, 
 such as grading, if desired. 29 Bids could be entered with or 
 without material. The terms were one-half cash and one-half 
 seven per cent bonds at par, with the usual arrangement in 
 regard to inspection, completion within a specified period, and 
 other matters. At the time the contracts were placed the credit 
 of the road was exceptionally strong, and there was a ready 
 response on the part of contractors, both in Illinois and the east- 
 ern states. Men even came on from Europe and there was not 
 a section of the line that was not bid for several times. As a 
 
 "Chicago Daily Democrat, April 22, 1851. Cf. this method with the 
 Credit Mobilier in the Union Pacific and the Construction company in the 
 Iowa Falls and Sioux City, infra Chap. rv. 
 
 2 *Cairo Sun, December 25, 1851. 
 
 29 Chicago Daily Democrat, April 23, 1851 ; ibid., March 25, 1852. To 
 facilitate the work of construction, the road was divided into twelve divi- 
 sions, varying in length from fifty to seventy-five miles, according to the 
 character and extent of the grading and bridging. Over each division 
 was placed a division engineer, whose duty it was to supervise the indi- 
 vidual contracts and direct the construction done directly by the com- 
 pany.
 
 48 HISTORY OF ILLINOIS CENTRAL RAILROAD [332 
 
 result the bids were low and the terms favorable to the company. 
 This permitted the railroad to let the -work out at reasonable 
 figures. In many cases the division contractors sub-let part of 
 the work. The strong competition between bidders, and the 
 financial standing of the company, prevented letting the work 
 at excessively high prices and the Illinois Central was built as 
 cheaply as could have been expected under semi-frontier 
 conditions. 30 
 
 Contracts for the first six divisions were let early in June, 
 1852, and bids for the 3rd, 4th, 5th, 7th, llth, and 12th divisions 
 were accepted later in the summer. Work was commenced im- 
 mediately on the 3rd, 4th, 5th, and 7th divisions, but the llth 
 and 12th were not pushed until two years later. 31 The bids 
 included only the grading and part of the bridge construction; 
 the company itself laid the rails and erected most of the build- 
 ings. 32 Thus, by the end of October, 1852, the entire road, with 
 the exception of 52 miles north of the Big Muddy River, where 
 the contractors had given up their work, was under contract 
 and active construction had been started. 33 
 
 The affairs of the Illinois Central at Chicago did not pro- 
 ceed as smoothly as in the southern and central parts of the 
 state. Railroad matters in that city had been in a thoroughly 
 demoralized condition for many months prior to the passage of 
 the charter, and the company was forced to take a hand in local 
 railroad controversies and also in municipal politics in order to 
 secure adequate terminal facilities and a city franchise. The 
 conflict between the Lake Shore and Michigan Southern (then 
 the Southern Michigan) and the Michigan Central involved the 
 Illinois Central in the greatest difficulties. 
 
 For several years these two railroads had been keen rivals 
 in Michigan and northern Indiana, and during the year 1850 
 they had extended their tracks to within a few miles of Chicago. 
 Each endeavored to secure an independent entrance to the city 
 
 30 Advertisement in railroad journals, March, 1852; also Chicago Daily 
 Democrat, March 25, 1852. There was undoubtedly a small amount of 
 mismanagement in the construction of the road, but the amount was 
 small. Some of the directors were interested in contracts with the com- 
 pany, but there is no evidence to show that they used their official posi- 
 tions to defraud the company. For a full discussion of these points, 
 cf. Chap. vi. 
 
 ^American Railroad Journal, October 25, 1856. 
 
 **Ibid.
 
 333] CONSTRUCTION OF CHARTER LINES 49 
 
 and to prevent its competitor from obtaining a similar right. 
 The result was a bitter fight in the legislatures of Illinois, Michi- 
 gan, and Indiana, in the common council of Chicago, in munici- 
 pal politics of that city, and even between groups of workmen 
 along the tracks. 34 The companies were of equal strength, and 
 neither could secure a charter from the state of Illinois or a fran- 
 chise from the city. Despite all their efforts the two railroads, in 
 1851, were halted at the Illinois state line. 
 
 The charter for the Illinois Central was before the legisla- 
 ture at this time, and the Michigan Central allied itself with the 
 promoters of this road, hoping, thereby, to secure the coveted 
 entrance to Chicago. The influence of the Michigan company 
 was brought to bear on the legislature, and it is very probable 
 that financial assistance was extended to the promoters of the 
 new company. The charter was eventually passed, and the Illi- 
 nois Central was allowed to make connections with other rail- 
 roads. 35 At the time, it was commonly understood this provision 
 applied to the Michigan Central. 
 
 Very soon after the ''Central" was organized rumors began 
 to arise that the two companies were to form some kind of a 
 connection by which the Michigan corporation would enter Chi- 
 cago over the tracks of the Illinois Central. However, these ru- 
 mors were groundless and nothing more was heard until the 
 Illinois Central itself commenced surveys southwest of the city 
 towards the Indiana state line and the Kankakee Kiver. 38 
 
 While these preliminary surveys were being completed, the 
 company was making special efforts to secure an ordinance ad- 
 mitting it to the city of Chicago. Mr. Brayman, of Springfield, 
 and Eepresentative Bissell, of Belleville, had been appointed 
 solicitors of the company in Illinois and on July 12, 1851, the 
 latter, in connection with representatives of the Michigan Cen- 
 tral Railroad, presented a petition to the city council of Chicago 
 asking permission to lay down tracks within the city limits. 37 
 A few days later, this memorial was withdrawn for revision on 
 account of opposition in the council. 38 
 
 Three months later Colonel Bissell submitted a second me- 
 
 S4 Cf. Chicago Daily Democrat during the latter half of the year 1850. 
 Mr. Wentworth, editor of the Democrat, took an active part in the con- 
 troversy. 
 
 "Charter, Illinois Central Railroad, sec. II. 
 
 ^Chicago Daily Democrat, May 21, 1851. 
 
 37 Ibid., July 13, 1851. 
 
 "Ibid., October 17, 1851.
 
 50 HISTORY OF ILLINOIS CENTRAL RAILROAD [334 
 
 morial. 39 Although the construction of the Illinois Central was 
 regarded as one of the most important events in recent state 
 history the city council, and to a less extent, the daily newspa- 
 pers, were hostile to the company. The strife over the Southern 
 Michigan-Michigan Central entrance had been so 'bitter that the 
 supposed alliance between the Illinois Central and the Michigan 
 Central brought upon the former suspicion and even opposition. 
 So strong was the feeling that, upon a mere rumor that the 
 "Central" was planning to build a cut-off to Joliet, thus estab- 
 lishing a rival railroad center near the Indiana line, a resolution 
 was introduced into the city council of Chicago, disapproving 
 such a policy and bitterly attacking the Illinois company. 40 The 
 element opposed to the Michigan Central was strong enough to 
 pass the resolution and, in addition, appropriate ten thousand 
 dollars to be used in preventing the establishment of the Joliet 
 cut-off. 41 This action was commonly attributed to representa- 
 tives of the Southern Michigan Railroad, and immediately after 
 the passage of the resolution copies were printed and scattered 
 broadcast throughout the eastern states, England, and Holland 
 to hinder the floating of the Illinois Central loan. 42 The city 
 council soon found that their action was uncalled for, and a few 
 days after the passage of the original measure it reconsidered 
 the matter, modified the extreme statements of the first resolu- 
 tion, 43 and adopted a more conciliatory policy toward the three 
 railroad companies. 44 
 
 Despite the distrust and hostility shown in the action of 
 the council, Colonel Mason and Solicitor Bissell again presented 
 their petition for an entrance to the city. After a careful con- 
 sideration of the various routes the company asked for an en- 
 trance along the lake front. The railroad was to be built north- 
 east from Lake Calumet, now Kensington, to the southern limits 
 of the city at what is now 53rd Street. This, of course, was 
 outside the old city boundaries. From Hyde Park to Park Bow, 
 12th Street, the company was to have permission to place its 
 tracks along the lake shore and could purchase what land it 
 
 zg Chicago Daily Democrat, October 17, 1851. 
 
 40 Ibid., October 13, 17, 1851. 
 
 * l lbid. The files of newspapers for the days in which this resolution 
 was printed are unobtainable and the only information to be found in 
 regard to the same comes from editorials of a later date. 
 
 * 2 Ibid. 
 
 "Ibid.
 
 335] CONSTRUCTION OF CHARTER LINES 51 
 
 needed from private owners of real estate. From Park Row to 
 the Chicago River the railroad was to receive from the city a 
 five or six hundred foot right of way just east of Michigan 
 Avenue. In return for this grant, the company agreed to pro- 
 vide permanent protection, in the form of levees and piling, 
 against the encroachments of Lake Michigan. This protection 
 was to extend from Hyde Park to the Chicago River. 45 When 
 the petition of the company was presented, the city had provided 
 practically no protection against the lake, and most of the terri- 
 tory north of the city limits and east of the present Illinois 
 Central tracks was submerged land. 
 
 Sixty years ago Michigan Avenue was the aristocratic resi- 
 dence street of Chicago and the proposition to run a steam 
 railroad along the avenue provoked strenuous opposition from the 
 property owners, who believed it would destroy the value of 
 their investments. On the other hand, the north and west wards 
 had, for years, paid heavy taxes to protect the lake shore from 
 encroachments of Lake Michigan, and that portion of Chicago 
 gladly supported the Illinois Central plan. They argued that 
 the city was poor and the assumption by the railroads of the 
 expense of maintaining the south side levees would more than 
 compensate for any depreciation in the value of residence prop- 
 erty in the neighborhood. 46 Mass meetings and parades were 
 held by each side; circulars and petitions were widely circu- 
 lated ; the newspapers took an active interest in the matter ; and 
 both sides threatened to resort to legal proceedings to gain their 
 point. The fight was carried to the city council and this subject 
 occupied the attention of the members during the entire month 
 of December. The Illinois Central finally gained the upper hand 
 and on December 29, they secured the passage of the ordinance 
 by a close vote of ten to six. 47 The main features of the franchise 
 were those embodied in the petition of the company with some 
 minor exceptions. Among these was a reduction of the right of 
 way from 12th Street to the river to three hundred feet. The 
 restrictions upon the company were also made more severe. 
 
 The decision of the city council did not settle the fight. Wal- 
 ter Gurnee was Mayor at the time, and on account of a number 
 of minor objections to the ordinance as passed, and also on 
 account of his general opposition to the policy of the measure, 
 
 4S Chicago Daily Democrat, December 3, 1851. 
 **Ibid., daily notices during December, 1851. 
 "Ibid., December 30, 1851.
 
 52 HISTORY OF ILLINOIS CENTRAL RAILROAD [336 
 
 he vetoed the franchise. 48 The matter was again taken up in 
 the council and that body passed the ordinance over his veto. 49 
 The document was immediately forwarded to the directors of 
 the company in New York for their approval, but on the very 
 day on which the papers left the city, the whole matter was 
 reconsidered by the council. The two opposing parties compro- 
 mised their differences and a new franchise, agreeable to the 
 south side wards, was passed. It was signed by Mayor Gurnee 
 and forwarded to New York three days after the first ordi- 
 
 50 
 
 nance. 
 
 The original franchise had been duly received in New York 
 and the directors of the company, unaware of the amending 
 measure and well satisfied with the provisions, accepted the old 
 franchise. 51 Three days later, much to their astonishment, there 
 appeared the second ordinance. Although similar in most ways 
 to the petition of the company there were some new restrictions 
 upon the company which the directors did not desire to accept, 
 and consequently the board declined to accept it and preferred 
 to wait for more favorable legislation. 52 
 
 Supposing the first measure had definitely settled the ques- 
 tions under dispute in regard to an entrance into Chicago the 
 President immediately directed the engineers to commence active 
 construction work from Chicago to the state line. When the 
 second ordinance was not accepted, the company, of course, had 
 no legal right to enter the city, but rather than delay matters 
 it was determined to complete the railroad from Lake Calumet to 
 the city limits at -once. There was practically no danger of not 
 obtaining a proper entrance to the city, and the construction of 
 this section would provide the Michigan Central with its much 
 desired entrance into Chicago without a protracted delay. 58 
 Much of the ground south of the city limits, especially near Lake 
 Calumet and Woodlawn, was low and marshy, and this made it 
 necessary to place the tracks on trestle work at considerable 
 additional expense. Rails and ties had been ordered in the fall 
 of 1851 and by January, 1852, the first shipments had arrived. 
 Grading and other preliminary work was commenced in Decem- 
 ber, and the combined energies of the Michigan Central and 
 
 **Chicago Daily Democrat, January i, 1852. 
 
 49 Ibid., January 3, 1852. 
 
 60 Ibid., January 6, 1852. 
 
 "/&/., January 10, 1852. 
 
 "Ibid., March 12, 1852. 
 
 6 *Ibid., January 10, 1852.
 
 337] CONSTRUCTION OF CHARTER LINES 53 
 
 Illinois Central were exerted to finish the line from the Indiana 
 border to Lake Calumet and from there to Hyde Park. 54 Conr 
 struction was continued when possible during the winter, and 
 as soon as the weather permitted both companies placed" large 
 gangs of men at work. By May 1 the railroad was within eight 
 miles of the city limits, 55 and three weeks later that short stretch 
 was completed. On the twenty-first of the month, the first train, 
 hauling gravel and construction materials, left Calumet and ran 
 to the city limits. 56 Temporary freight and passenger stations 
 had been established just outside the limits and on the morning 
 of May 22 this first completed section of the Illinois Central 
 was formally opened, and a passenger train was run from Chi- 
 cago to the state line. 57 Regular freight and passenger trains 
 were placed in service a few days later. The Michigan Central 
 made use of the tracks of the Illinois Central from Calumet to 
 Chicago, and this piece of roadbed became the final link by which 
 the former company established a through line from Chicago to 
 the East. 58 
 
 The tracks from the city limits south were not completed 
 without several sharp fights with the Southern Michigan. That 
 company opposed the construction of the road and endeavored 
 to prevent the Illinois Central from crossing its tracks. It de- 
 manded that the latter company put in an overhead crossing at 
 what is now Grand Crossing, which was refused. The difficulty 
 could not be settled and each company refused to allow the other 
 to put in any crossing at all. Finally the Illinois Central impa- 
 tient of this delay sent laborers to build the crossing under cover 
 of night. The Southern Michigan was taken by surprise, its 
 watchmen were overpowered, and the grade crossing was finished 
 before morning. The Michigan company was forced to accept 
 the situation and the last obstacle to the completion of this sec- 
 tion was removed. 59 
 
 This steady construction work, carried on regardless of the 
 warring factions in the Chicago city council, exerted a strong 
 
 B4 Ackerman, Early Illinois Railroads, p. 82. 
 
 ^Chicago Daily Democrat, May 3, 1852; cf. March 25, 1852. 
 
 s *Ibid., May 22, 1852. 
 
 S7 Ibid., May 23, 1852; Ackerman, Early Illinois Railroads, p. 85. 
 
 68 Ibid.; also advertisements of train service in Chicago newspapers 
 after June, 1852. 
 
 ^Chicago Daily Democratic Press, April 30, 1853. The matter of 
 Grand Crossing was a sore point between the two roads for several years. 
 Within a few weeks after the crossing was put in, a bad accident occurred
 
 54 HISTORY OP ILLINOIS CENTRAL RAILROAD [338 
 
 pressure upon that body. This influence was further strength- 
 ened by vague rumors of a cut-off from Joliet to Calumet which 
 would divert a considerable traffic from Chicago proper. 80 No 
 attempt was made to press the franchise question until the 
 twentieth of April, only a month before the railroad reached the 
 city limits. Local objections still continued, but the pressure of 
 the Illinois Central and Michigan Central overcame this oppo- 
 sition, and, finally, on June 14th, 1852, the common council re- 
 enacted the first ordinance originally passed on December 29. 
 The railroad was admitted to the city via the lake front route 
 and was granted a three hundred foot right of way from Hyde 
 Park to the Chicago River. In return for this grant, the rail- 
 road assumed the responsibility of protecting the lake shore 
 along its right of way, and agreed not to put up any permanent 
 buildings from Park Row to Randolph Street. Certain other 
 obligations and restrictions were imposed upon the company, 
 but, in the main, the franchise greatly favored the railroad. 81 
 
 With subsequent purchases of land between Park Row and 
 the river, partly from private owners and partly from the federal 
 government, the Illinois Central secured probably the finest ter- 
 minal property possessed by any single railroad in the world. 
 Its stations and shops were situated in the heart of the city and 
 its right of way between Grand Crossing and the river was not 
 crossed by a railroad and for most of the distance not even by 
 a highway. From the standpoint of the railroad, the right of 
 way along the lake front was of almost inestimable value ; from 
 the standpoint of the public, there is much to criticise in having 
 the otherwise splendid lake front marred by smoky trains and 
 unsightly railroad tracks, but it must not be forgotten that in 
 the early fifties the bargain was in favor of the city. In pro- 
 tecting the many miles of shore line from the river to Hyde 
 Park the railroad assumed a responsibility that was both trou- 
 blesome and expensive, while the city was relieved of expendi- 
 tures amounting to tens of thousands of dollars a year, not an 
 inconsiderable item for the Chicago of 1850. Nor must it be 
 forgotten that this easy and uninterrupted entrance to the very 
 
 in which several lives were lost, and the two companies accused each 
 other of having been to blame for not putting in an overhead crossing. 
 However, evidence seems to show that both companies were equally to 
 blame. Cf. articles in Chicago Daily Democratic Press, April 30, 1853. 
 
 ^Chicago Daily Democrat, May 3, 15, 1852; Ackerman, Historical 
 Sketch of the Illinois Central Railroad, p. 81. 
 
 ^Chicago Daily Democrat, May 3, 15, 1852; Ackerman, Early Illinois 
 Railroads, p. 85.
 
 339] CONSTRUCTION OF CHARTER LINES 55 
 
 heart of the business district has been an important factor in 
 the industrial development of the city. 
 
 Once the legal difficulties were removed, the work of con- 
 struction proceeded rapidly. Rails, ties, and piles were already 
 on hand and within a few weeks after the passage of the fran- 
 chise admitting the railroad to the city, the track was extended 
 to Twelfth Street. Temporary freight and passenger stations 
 were built there and used until the permanent structures were 
 finished. Much of the right of way was under water and heavy 
 expenditures were necessary to put the tracks in a safe condition. 
 The rails were laid on trestle work for nearly the entire distance 
 from Hyde Park to Randolph Street and beyond the right of 
 way a temporary breakwater of piling was erected. The pile 
 and trestle work was to be filled in at a later time when the 
 company's finances would justify the outlay. 82 
 
 The company also purchased large quantities of land in the 
 heart of the city near Randolph Street and expended something 
 like $250,000 in purchasing urban property, in addition to half 
 a million more expended on the lake shore protection, virtually 
 purchase money for the generous right of way granted by the 
 city. 63 At the foot of Randolph Street on land purchased from 
 the federal government, the company, in 1853, commenced the 
 erection of its famous Chicago passenger station, the total cost 
 of which was over a quarter of a million of dollars. At the time 
 it was the most expensive railroad station in the country. The 
 facilities for handling passengers were excellent, and there was 
 an abundance of room. The building was used jointly by the 
 Illinois Central, Michigan Central, and Chicago, Burlington and 
 Quincy railroads, and the top floor of the station was used as a 
 general office. North of the passenger station, the company 
 erected a large in-and-out freight house, which was also the 
 largest depot of its kind in the country, and the largest brick or 
 stone building in the city. At Fourteenth Street, near the pres- 
 ent Park Row passenger station, were placed the terminal shops, 
 roundhouses, and cleaning yards. Then, in 1856, the Fourteenth 
 Street works of the American Car Company of Chicago were 
 purchased and after that date most of the heavy engine and car 
 
 62 Ackerman, Historical Sketch of the Illinois Central Railroad, pp. 
 80-85 ; Annual Report, Illinois Central Railroad, 1855 ; Chicago newspapers, 
 1852. The breakwater and trestlework were not filled in until after the 
 Chicago fire of 1871. 
 
 ^Annual Report, Illinois Central Railroad, 1855-1860. Chicago Daily 
 Democrat, January i, 1852-1860. Cf. Chap. vi.
 
 56 HISTORY OP ILLINOIS CENTRAL RAILROAD [340 
 
 repairs on the system were handled at these shops. A number 
 of locomotives and cars were also built by the company at the 
 new works. By 1855, nearly a million dollars had been expended 
 by the company for construction, right of way, lake shore pro- 
 tection, buildings, and other terminal improvements in the city 
 limits. The work was continued during the following five years, 
 in which time an additional million was spent on the Chicago 
 terminals. 
 
 Moreover, on June 23rd, 1852, the company had secured an 
 amendment to its charter permitting it to build a railroad from 
 Twelfth Street to the south branch of the Chicago River. 64 This 
 road, known as the St. Charles Air Line, served as an inner belt 
 railroad for the Illinois Central, Michigan Central, Lake Shore, 
 Chicago, Burlington and Quincy, Galena and Chicago Union, Chi- 
 cago and Eock Island, and Chicago and Northwestern railroads. 
 It was built by the Illinois Central and was completed in 1856 
 at a total cost of $50,000. 65 
 
 % While these large expenditures were being made at Chicago, 
 work on other portions of the system was not neglected. The 
 company had little difficulty in securing the right of way and 
 station ground needed. Nor was there much trouble in obtain- 
 ing village and town franchises. The Illinois Central created a 
 majority of the villages and towns along its tracks, and it held 
 the grounds before there was any municipal organization. The 
 only opposition to granting a franchise was at Galena. The 
 railroad, under both the state and Holbrook projects, terminated 
 at that city, and the citizens were bitterly opposed to the exten- 
 sion of the line to Dunleith. They realized that the construction 
 of the "Central" to that point meant disaster to their business 
 interests. Since the extension of the road was an essential part 
 of the state charter and of the act of Congress conferring the 
 land grant, there was no possibility of changing the provision. 
 The city, however, placed numerous obstacles in the way of the 
 railroad, and for several months refused to give the company a 
 franchise. These tactics, of course, were childish, and the city 
 council finally yielded. The railroad received the right to enter 
 Galena, but only with many conditions and restrictions. 68 
 
 "Session Laws of Illinois, 1852-1853, June 23, 1852. 
 
 ^Annual Report, Illinois Central Railroad, 1855-1857. The Illinois 
 Central subsequently sold three-fourths of its interest in the St. Charles 
 Air Line to the Michigan Central, Chicago, Burlington & Quincy, and 
 Chicago & Northwestern. 
 
 "The following is taken from the Chicago Daily Democratic Press
 
 341] CONSTRUCTION OF CHARTER LINES 57 
 
 The matter of local franchises did not interfere with the 
 commencement of construction work, and, as noted above, con- 
 tracts for the entire road were let in the spring and early sum- 
 mer of 1852. The Illinois Central was more fortunate than most 
 of the roads of the time in that it had considerable resources 
 upon which it could draw at a moment's notice. The sale of the 
 four million loan of February, 1852, and the five million sterling 
 loan of June, the same year, together with subscriptions by the 
 stockholders, provided ample funds for starting the work. Part 
 of the later loans, especially the Free Land issue of 1855-56, 
 were placed at' a considerable discount, but the money market 
 fluctuations which brought this condition to pass, did not se- 
 riously interfere with the loans. Moreover, the capital stock of 
 over fourteen million dollars was issued subject to assessment, 
 and the directors always had this to fall back upon in emer- 
 gency. Thus, at all times, the company had either in hand or 
 in sight, whatever funds were necessary to carry on the enter- 
 prise in the most economical and expeditious manner. Economy 
 and good management were always observed, but the directorate 
 was also in a position to push the work as much as possible. 
 Materials and labor were paid for in cash or bonds equivalent 
 to cash and payments were met promptly. With the exception 
 of a few weeks after the assignment of 1857, all bills, contracts, 
 notes or other obligations were liquidated when due, and the 
 credit of the company was always high. 67 This condition was a 
 decided contrast to the "hand-to-mouth" policy pursued by such 
 southern roads as the New Orleans, Jackson and Great Northern 
 or by western lines like the Ohio and Mississippi, and it enabled 
 the Illinois Central not only to finish the work within the limits 
 set by the charter, but also to carry on the enterprise at a com- 
 paratively low cost. 68 
 
 of March isth, 1853: "Permission is given the Illinois Central Railroad 
 (by the city of Galena) to lay down and operate a road through the city 
 upon a prescribed line, by locomotive engines. Permission was given 
 the company to bridge Galena river within the limits of the city and a 
 portion of the levee, three hundred feet in length, was appropriated for 
 their use. The usual regulations in regard to use of streets, etc. were in- 
 serted. The company will spend $10,000 under the direction of the city 
 authorities for dredging the stream in front of the depot grounds." 
 
 67 As stated in Chapter vi, the assignment did not affect the credit of 
 the Illinois Central to any great extent. The great bulk of the construction 
 work was finished in 1855 ; the floating debts that could not be met were 
 only indirectly related to contracts for construction. 
 
 68 In Chapter vi a statement is made that the company was forced to
 
 58 HISTORY OF ILLINOIS CENTRAL RAILROAD [342 
 
 Nevertheless, the management in Illinois was involved in 
 several difficulties during this period. The most important re- 
 lated to the contracts for material and labor. Tlie road was let 
 to contractors in the spring and summer of 1852, and at that 
 time Illinois Central seven per cent bonds were selling at a slight 
 premium. Accordingly, the directors stipulated that the terms 
 for all work be one-half cash and one-half seven per cent bonds 
 at par. 69 This arrangement was accepted, and the first payments 
 were made on such a basis. The contracts were also based on 
 the prices prevailing in 1852, and on account of the competition 
 between bidders they were taken at low figures. During 1853 
 and 1854 the price of bonds, materials, and labor remained ap- 
 proximately the same as in 1852. But about the time of the 
 Schuyler frauds various influences combined to depress the quo- 
 tations of Illinois Central bonds, while rising prices increased 
 the cost of railroad supplies and labor throughout the entire 
 country. This was especially severe in Illinois on account of the 
 large amount of railroad construction and the abundant crops, 
 which made enormous demands for unskilled labor. Naturally, 
 the contractors were unwilling to stand the decline in bonds and 
 increased cost of construction, and asked for additional compen- 
 sation from the company. Where definite contracts had been 
 made the management refused to make any radical changes. 
 Most of the contractors, however, had taken up the work in such 
 a way that the company could not force them to continue at the 
 old terms, or else did not feel it desirable to do so. Under the 
 circumstances, the provision making half payment in bonds was 
 not carried out, and the payments to the contractors were largely 
 increased. In spite of this reasonable action by the railroad 
 many contractors surrendered their contracts and threw the 
 unfinished work back upon the company. 70 
 
 pursue a hand-to-mouth financial policy. This was true; at the same 
 time there were always sufficient funds in the treasury to meet the con- 
 tracts when due. The condition was similar to what occasionally exists 
 on any large railroad when financial stringencies prevent the floating of 
 Jaonds at favorable terms and the company is forced to sell short term 
 note* at a discount. However, this lack of funds very seldom affects 
 employees of the company or creditors, although it does make any new 
 work more expensive on account of the difficulty of obtaining cash. 
 
 "Chicago Daily Democrat, March 25, 1852; also advertisements. 
 
 C<*iro Mirror and City Directory, 1864, 1865; letter of W. H. 
 Osborn, dated, N. Y., Oct. 16, 1855, quoted in Railway Times, November 
 10, 1855 ; official communication from the Board of Directors, dated 
 November 7, 1854, quoted in Railway Times, November 25, 1854; Satter-
 
 343] CONSTRUCTION OF CHARTER LINES 59 
 
 In most of these cases the directors did not enter into new 
 contracts, but carried on the work under its own division super- 
 intendents. The portions of the line surrendered were the most 
 difficult, and the responsibility placed upon the company's engi- 
 neers was large. The most important of these divisions were 
 the ones from Cairo to Carbondale, and those near Decatur. 71 
 But the same difficulties which enhanced the cost to the con- 
 tractors made the work more expensive for the company. As 
 most of the responsible work, such as bridges, trestles, buildings, 
 culverts, and the heaviest pieces of grading, was performed 
 directly by the railroad the advance in prices had an important 
 effect. As high as $1.50 per day was paid for ordinary section 
 labor and proportionate wages for skilled workmen. 72 The re- 
 sult of greater wages and prices on company work and larger 
 compensation for contractors was a general advance in the cost 
 of building the road, amounting to several millions of dollars. 
 The estimate made by Colonel Mason was found to be much too 
 low. At about the same time between one and two million of 
 bonds, taken by contractors in 1852 and 1853, were returned 
 to the company in such a way that the market for Illinois Cen- 
 
 thwaite's Report, Railway Times, July 22, 1854. The greatest difficulty was 
 experienced in the division north of Cairo and near Decatur. 
 
 The Illinois Central profited by the depression and fluctuations in 
 prices of labor and supplies. The following statements taken from the 
 report of Mr. F. E. Satterthwaite, American correspondent of the Rail- 
 way Times, in the number for July 22, 1854, are interesting: "The first 
 thing done was to buy the iron for the whole road at $45 per ton for 
 bonds at par. In six month after the purchase the value of iron doubled, 
 by which the company saved $1,500,000. The high character of the com- 
 pany and the rapid progress of the road commanded confidence so that 
 the company was enabled to sell the whole of the $17,000,000 at par (sic), 
 with the exception of the February (1854) issue. The sales were made 
 
 payable in instalments which will be completed in July next " 
 
 Mr. Satterthwaite undoubtedly exaggerates the profits made from buying 
 the iron and other supplies, nevertheless the saving was considerable. 
 For instance, the N. O. J. & G. N. paid $85 per ton for poorer rails than 
 those for which the Illinois Central paid $45, but this was affected 
 slightly by the lack of confidence in the southern road. There was also 
 some saving made in contracts, which the contractors were forced to 
 live up to. 
 
 71 Cairo Mirror and City Directory, 1864, 1865 ; official communica- 
 tion from the Board of Directors, November 7, 1854, quoted in Railway 
 Times, November 25, 1854. 
 
 "Ibid.
 
 60 HISTORY OF ILLINOIS CENTRAL RAILROAD [344 
 
 tral securities was depressed and, consequently, it was harder to 
 secure money. 73 
 
 Aside from these difficulties, the management had little to 
 contend with beyond the general engineering problems involved 
 in such an extensive enterprise. The prairies of Illinois offered 
 an almost ideal location for a railroad, and except for somewhat 
 difficult construction on three or four divisions, the building of 
 the road proceeded without serious delays. Even in the bluffs 
 along the Illinois and Cache rivers the engineering problem was 
 extremely simple compared with the building of the Union 
 Pacific or many eastern lines. The greatest trouble was found 
 in the distance of the work from the older parts of the country 
 and in high cost of transportation. The labor problem was 
 solved by the employment of foreign laborers, largely Irish. In 
 fact the road was built almost entirely by this class of workmen. 
 At one time nearly ten thousand men were working on the road, 
 but the need of help on the farms and demand by other railroads 
 prevented the "Central" from keeping all the men it needed. 
 Rails, bridge iron, equipment, and other railroad materials were 
 carried from the eastern states and England to Cairo, Chicago, 
 and Dunleith by water. From those places they were either 
 hauled by wagon across the country or else carried on the rivers, 
 the canal, and the Galena and Chicago Union railway as near 
 the construction work as possible and then hauled by wagon. 
 This method, at best, was slow and expensive, and resulted in 
 considerable delay. Supplies for the men were hauled long dis- 
 tances by teams, as most of the country through which the road 
 went was sparsely settled. 
 
 By the 1st of January, 1855, all the main line and over 
 half of the Galena and Chicago branches were in operation. 74 
 
 73 Most of the bonds taken by contractors were returned to the com- 
 pany after the Schuyler frauds, when the price of seven percents had 
 dropped to 64. 
 
 74 The following "History of Construction" is taken from the Chicago 
 Daily Democratic Press, being quoted in the American Railroad Journal, 
 October 25, 1856: "Published contracts were first made in June, 1852, 
 and the grading of the 1st, 2nd, 6th, 8th, 9th, and loth divisions let. On 
 the I4th of October following the 3rd, 4th, 5th, 7th, nth, and I2th were 
 put under contract. In July the first instalment of the first English loan 
 was paid and it was not until this payment had been made that the orig- 
 inators of the enterprise had confidence in its success. In March, 1853, 
 Colonel Mason was elected Superintendent. On the i6th day of May the 
 first sixty miles of the Illinois Central from La Salle to Bloomington was
 
 345] CONSTRUCTION OP CHARTER LINES 61 
 
 During the next six months the remainder of the Galena branch, 
 and the Chicago branch as far south as Mattoon, were finished, 
 leaving only the line from the St. Louis and Terre Haute Rail- 
 road to Centralia, seventy-seven miles, incomplete. 76 The finan- 
 cial difficulties in 1855, lack of labor, and the fact that the com- 
 pany already had a connection with the main line by way of the 
 Great "Western from Tolono to Decatur and by the Terre Haute 
 road from Mattoon to Pana, made it unadvisable to finish the 
 work before September, 1856. 76 The last rail was laid on Sep- 
 tember 26. 
 
 Although formally opened in September, 1856, the railroad 
 was only partially completed. Many of the station buildings 
 were not built, fencing, ballasting, construction of levees and 
 piling at Chicago, Cairo, La Salle, and Dunleith were incomplete, 
 and much of the bridge and culvert work was of a temporary 
 nature. The equipment was also inadequate. Thus, the expen- 
 ditures during the fall of 1856 and during 1857 were very large. 
 By the close of the latter year everything was finished, and 
 
 opened for business, and the company commenced working the road on 
 its own account. The following are the dates of opening by sections : 
 
 MAIN LINE, CAIRO TO LA SALLE, 308 MILES. 
 
 LaSalle to Bloomington 
 
 60 miles 
 
 May 16, 1853. 
 
 Bloomington to Clinton 
 
 23 " 
 
 March 14, 1854. 
 
 Clinton to Decatur 
 
 22 " 
 
 October 18, 1854. 
 
 Cairo to Sandoval 
 
 118 " 
 
 November 22, 1854. 
 
 Decatur to Sandoval 
 
 85 " 
 
 January i, 1855. 
 
 GALENA BRANCH, 
 
 LA SALLE TO DUNLEITH, 146 MILES. 
 
 Mendota to La Salle 
 
 16 miles 
 
 November 14, 1853. 
 
 Freeport to Warren 
 
 25 " 
 
 January 9, 1854. 
 
 Warren to Scales Mound 
 
 14 " 
 
 September n, 1854. 
 
 Scales Mound to Galena 
 
 12 " 
 
 October 30, 1854. 
 
 Mendota to Freeport 
 
 62 " 
 
 February i, 1855. 
 
 Galena to Dunleith 
 
 17 " 
 
 June 12, 1855. 
 
 CHICAGO BRANCH, 
 
 CHICAGO TO CENTRALIA, 250 MILES. 
 
 Chicago to Calumet 
 
 14 miles 
 
 May 15, 1852. 
 
 Calumet to Kankakee 
 
 42 " 
 
 July 11, 1853. 
 
 Kankakee to Spring Creek 31 December 2, 1853. 
 
 Spring Creek to Pera 22 " May 18, 1854. 
 
 Pera to Urbana 20 " July 24, 1854. 
 
 Urbana to Mattoon 44 " June 25, 1855. 
 
 Mattoon to Centralia 77 " September 27, 1856." 
 
 15 Anterican Railroad Journal, October 25, 1856.
 
 62 HISTORY OP ILLINOIS CENTRAL RAILROAD [346 
 
 further construction work was confined to extensions and to 
 providing for the demands of increasing traffic. 77 
 
 Compared with the present charter lines of the Illinois 
 Central, the construction was poor and the equipment was 
 very inadequate. Only a portion of the road was ballasted 
 with gravel, none with stone. The embankments were narrow 
 and the roadbed was greatly inferior to present Illinois Central 
 standards. Bridges, culverts, and trestles were weak and un- 
 adapted to heavy loads. Freight houses were poorly arranged, 
 and the terminal yards were mere collections of tracks, without 
 any definite system. Locomotives, both freight and passenger, 
 were light, the heaviest weighing only thirty tons, and all used 
 wood instead of coal. Eight tons was the maximum load for 
 freight cars, while the proportion of tare to net load was about 
 one to one. In 1857 most of the coal, and some of the house cars, 
 had only a single pair of trucks, while those possessing two 
 trucks were classed as two cars. The passenger equipment 
 lacked most of the conveniences now regarded as essential 
 steam heat, air brakes, ventilators, improved springs, automatic 
 couplers, vestibules, good lights. No sleeping cars were included 
 in the equipment of the road when finished. 78 
 
 However, the Illinois Central, in 1857, was the best built 
 railroad in the West and as good as most eastern lines. The 
 total cost of construction was $26,568,017.61, or $37,600 per 
 mile, of which some twenty-one millions were expended on road- 
 way, buildings, etc. 79 In no sense of the word could the con- 
 struction work be regarded as temporary. Buildings were of a 
 permanent character, generally stone or brick. The roadbed 
 was well built, according to the standards of the time, and was 
 laid with sixty pound iron T rails, placed on chairs. 80 Sidings 
 were ample for the traffic of the period, and much of the line 
 was adapted for double tracking. Bridges were made of iron, 
 with stone abutments, and the culverts were generally built of 
 stone. The line, following the original surveys, was straight and 
 free from heavy grades or sharp curves. Terminal facilities 
 were ample and permitted extensive additions without a large 
 expenditure for land or right of way. The equipment was more 
 than sufficient for the needs of the railroad when completed. 
 
 77 Annual Report, Illinois Central Railroad, 1855-1857. 
 Ibid.; cf. Ringwalt, Development of Transportation Systems in the 
 United States. 
 
 "Cf. Chap. vi. 
 
 The rails were of exceptionally good material and according to
 
 347] CONSTRUCTION OF CHARTER LINES 63 
 
 Both locomotives and freight and passenger cars were up to the 
 highest standards of the period and, with slight exception, the 
 rolling stock was entirely new. On the whole, the railroad con- 
 formed to the provisions of the charter, and "was made equal, 
 in all respects, to the road leading from Boston to Albany, 
 usually known as the Great Western, with such improvements 
 as experience has shown to be expedient." 81 
 
 Mr. Ackerman some of them were in use as late as 1881. 
 "Charter, Illinois Central Railroad, sec. 15, ff 3.
 
 CHAPTER IV. 
 
 CONSTRUCTION AND DEVELOPMENT, 1857 TO 1870. 
 
 The construction of the roadbed and buildings and the pur- 
 chase of rolling stock were merely the first step in the develop- 
 ment of the Illinois Central System. Traffic had to be secured, 
 markets found for the products of the territory tributary to the 
 railroad, and the agricultural and manufacturing interests of 
 that region stimulated ; an operating organization was necessary 
 and provision had to be made for the rapid and economical 
 handling of both freight and passenger business. As further 
 steps there came the formation of traffic alliances with connect- 
 ing or branch railroads, trackage agreements for the use of cer- 
 tain desirable pieces of track, organization and maintenance of 
 pools and similar arrangements, and finally the physical exten- 
 sion of the railroad through the lease of old lines or the con- 
 struction of new. These were the problems before the manage- 
 ment, in 1857, and their solution is the real history of the 
 company. 
 
 The organization of the various departments was developed 
 gradually. During the first three years of construction the 
 operating side was handled by the Chief Engineer, Mr. Mason, 
 and the net receipts from the traffic went directly into the 
 construction account. Later Mr. Mason was made general super- 
 intendent, and a separate operating department was created. 1 
 In 1856 Mr. Arthur was made general superintendent, in place 
 of Mr. Mason, who resigned, 2 and he, in turn, was succeeded by 
 George B. McClellan, Commander in Chief of the federal armies 
 during a part of the Civil War. By 1855 most of the road was 
 completed and the traffic was large enough to make a complete 
 operating organization necessary. Accordingly traffic, mainte- 
 nance of way and equipment, operating, financial, and legal 
 departments were established under the supervision of the gen- 
 eral superintendent. The president did not transfer his offices 
 to Illinois until several years after the construction of the road 
 and the board of directors has always kept New York as its 
 
 1 Ackerman, Early Illinois Railroads, p. 43. 
 2 Ibid., p. 44. 
 
 64
 
 349] DEVELOPMENT, 1857-1870 65 
 
 official meeting place. For that reason it was necessary to have 
 some ranking executive officer in Chicago, and Mr. Arthur, Mr. 
 McClellan, and their successors in the office of general superin- 
 tendent had full charge of all operating matters, subject, of 
 course, to the approval of the president and board of directors. 
 Otherwise the organization of the railroad was similar to that 
 of other companies doing the same kind of work. 
 
 As soon as a stretch of track was completed, freight and 
 passenger service was commenced. In the passenger department 
 the standard service was two trains a day in each direction over 
 all important sections of the road. In addition such extra trains 
 were run as the traffic demanded, but from 1857 to 1870 this 
 standard of two trains a day in each direction was maintained. 3 
 The freight traffic was more irregular and the service conformed 
 to the special needs of the season. 4 As freight traffic developed, 
 it became necessary to increase the number of trains until by 
 1870 there was an average of five freight trains a day in each 
 direction. 5 By that time most of the mixed trains had been 
 taken off, and the separation of the two branches was complete. 
 In addition to the regular passenger service the company estab- 
 lished a suburban service from Hyde Park and later from towns 
 as far south as Kensington to Chicago. 6 From the commence- 
 ment of passenger service the trains carried both mail and 
 express. According to the federal act of September 20th, 1850, 
 the railroad was obliged to carry what mail the Post Office 
 Department directed on terms prescribed by Congress. 7 Mail 
 was handled on all regular trains, and the Illinois Central be- 
 came one of the most important arteries of the Post Office 
 Department. The Adams Express company was given a mo- 
 nopoly of the express business in 1856, and a regular system 
 was installed. 8 
 
 Even before trains were put in operation it was necessary 
 to issue tariffs. Bate matters, however, were in a chaotic condi- 
 tion and no formal tariff sheets were printed. In some respects 
 the regulations as to the making of rates were much stricter 
 than in later years. The number of different rates was small 
 and it was an easy matter for the general superintendent or 
 even the president to adjust the charges personally. Most ship- 
 
 *Annual Report, Illinois Central Railroad, 1855-1870. 
 
 *Ibid., 1855-1859- 
 
 *Ibid., 1870. 
 
 /&/., 1856. 
 
 7 Act of September 20, sec. 6. 
 
 ^Annual Report, Illinois Central Railroad, 1856.
 
 66 HISTORY OP ILLINOIS CENTRAL RAILROAD [350 
 
 pers regarded railway rates in the same light as ordinary busi- 
 ness transactions a matter of individual bargaining, and tariffs 
 were often adjusted by the local station agent. 9 
 
 The railroad was just getting the various departments well 
 organized when the development of the road and the country 
 tributary to it was arrested by the panic of 1857, the assignment 
 of that year, and a series of droughts and crop failures. The 
 traffic of 1856 and the early part of 1857 promised a rapid 
 development of the business of the company. 10 In the last three 
 or four months of 1857 shipments and earnings decreased con- 
 siderably. The next year, 1858, a severe drought ruined much 
 of the corn and wheat, and in 1859 prices for grain were so low 
 that the farmers did not find it profitable to market their corn 
 and wheat. 11 Instead of the income of the road increasing it 
 actually declined in these two years, and the net revenue did 
 not provide for a third of the interest charges accruing during 
 the period. 12 New construction work was suspended, purchases 
 of equipment cancelled, and maintenance work reduced as much 
 as practicable, but even these savings did not prevent the 
 decrease in net earnings. The shareholders were forced to pay 
 assessments on their stock, and the railroad received a setback 
 which was not overcome for three or four years. 13 
 
 By 1860 conditions were again normal, and the first few 
 months of 1861 were the most profitable the company had en- 
 joyed to that time. But this prosperity was temporarily checked, 
 this time by the commencement of the Civil "War. State troops 
 were rushed to Cairo the first week in May, and during the next 
 four years the regular business of the railroad was constantly 
 interrupted by the demands of the Government. 1 * The outbreak 
 of hostilities destroyed southern shipments of grain and mer- 
 chandise from Cairo and, for a time, checked the growth of 
 Illinois. Traffic declined and the officials of the company were 
 left without plans on account of the rapid change in affairs. 
 At the same time the working force of the company was disor- 
 ganized by the enlistment of men in the army and the sudden 
 demands of the War Department for transportation of troops 
 or supplies. 15 Thousands of men were sent south to Ca:":o via 
 the railroad, and immense quantities of grain, meat, ammuni- 
 
 9 Statement of station agent at Calumet, 1857. 
 
 ^Annual Report, Illinois Central Railroad, 1855-1857. 
 
 "Ibid., 1858. 1859. 
 
 12 Ibid. 
 
 13 Ibid., 1860. 
 
 Ibid., 1861-1865. 
 
 is lbid.; Ackerman, Early Illinois Railroads, pp. 45, 46.
 
 351] DEVELOPMENT, 1857-1870 67 
 
 tion, and other materials for the armies were forwarded in the 
 same direction. In all cases precedence was given to trains 
 carrying troops or government supplies, and the regular work- 
 ing of the road was constantly delayed. Moreover, these sudden 
 calls reduced the amount of equipment available for other uses, 
 and the company was compelled to pay heavy damages for 
 failure to furnish cars. 16 
 
 Nevertheless, the war aided the railroad more than it dam- 
 aged it. The development of manufacturing in the eastern states 
 and the needs of the army created a demand for the products of 
 Illinois and several times as much grain was handled during the 
 closing years of the war as in 1857 to 1860. Furthermore, the 
 army traffic was profitable, although the provisions of the land 
 grant act and the charter compelled the company to carry both 
 troops and supplies at reduced rates. From 1862 until the close 
 of the war the railroad was utterly unable to handle the freight 
 offered it. 17 As a result both gross and net earnings increased 
 more than two fold during the conflict, and in 1865 they were 
 sufficient to provide for dividends on all the stock outstanding. 18 
 The same influences which brought about the traffic development 
 of tne Civil War period produced an even greater growth in the 
 next five years, and the earnings of 1869 and 1870 were well 
 ahead of those of any previous years. 19 
 
 On the other hand the Civil War made impossible the use 
 of the north and south trade routes. The Illinois Central was 
 primarily a north and south railroad and the officials of the 
 company, in 1859 and 1860, had managed to build up a fairly 
 lucrative trade with the southern Mississippi valley states. But 
 during the war the grain traffic of the West was sent east to 
 the Atlantic seaboard. When the war was over the resources of 
 the south were gone, and the company was unable to revive its 
 north and south business for a number of years. 20 The pros- 
 perity of the period under discussion was unnatural, and events 
 occurring after 1870 inflicted serious damage upon the company. 
 
 Most of the growth of business from 1857 to 1870 occurred 
 on the charter lines of the company, but it was aided by a num- 
 ber of extensions and traffic alliances made at various times. 
 The Illinois Central was built in the shape of a Y and in fact 
 
 ^Annual Report, Illinois Central Railroad, 1865. 
 "Ibid., 1862-1865. 
 18 /fetU, 1865. 
 Ibid., 1869, 1870. 
 
 20 Ibid., 1861 ff.; Report of the Delegates Appointed by the English 
 and Dutch Shareholders, 1877.
 
 68 HISTORY OF ILLINOIS CENTRAL RAILROAD [352 
 
 consisted entirely of main line, although the portion from Chi- 
 cago to Centralia and from Dubuque to La Salle were then 
 classed as branches. As a result the territory directly tributary 
 was confined to the limited area within fifteen or twenty miles 
 of the tracks. Moreover, there was no connection between the 
 Chicago branch and the main line, resulting in great inconveni- 
 ence to the company. As a remedy for the first of these evils 
 the company, from 1855 to 1870, built up a system of semi-sub- 
 sidiary branch lines. Until after 1860 the Illinois Central was 
 the largest and strongest railroad in the central "West and, there- 
 fore, was in a position to assist smaller roads. In pursuance of 
 such a policy, the railroad, either by direct action of the directors 
 or else through the personal efforts of individual members, helped 
 several east and west lines. Among the most important were 
 the Great Western (now the Wabash) from the Mississippi to 
 Danville; the Terre Haute, Alton and St. Louis (St. Louis Divi- 
 sion of the C. C. C. & St. L.) from Alton to Terre Haute; the 
 Ohio and Mississippi (Baltimore and Ohio Southwestern) from 
 Illinoistown (E. St. Louis) to Cincinnati; and the Mineral Point 
 (Chicago, Milwaukee and St. Paul). 21 All of these have devel- 
 oped into important east and west main line roads, but from 
 1855 to 1865 or 1866 the cost of rail transportation made it 
 impossible for them to carry grain from Illinois eastward. More- 
 over, several of the companies were without eastern connections 
 until the early sixties. 
 
 In addition to the transverse or semi-branch roads the Illi- 
 nois Central lent its aid to four other companies in an effort to 
 establish a connection between the two arms of the system. In 
 1852 or 1853 an arrangement was made with the Galena and 
 Chicago Union, by which the latter should not build its line 
 beyond Freeport, but instead should use the tracks of the ' ' Cen- 
 tral", while the latter should have trackage rights over the for- 
 mer's line from Freeport to Chicago. 22 From 1854 to 1858 or 
 1859 this connection proved of great service to the company. 
 But about 1857 disputes arose between the two railroads, and 
 the Illinois Central was able to make more advantageous arrange- 
 ments with the Chicago and Northwestern at Dixon and later 
 with the Chicago and Burlington at Mendota. 23 None of these 
 agreements allowed the "Central" any profit on the transfer of 
 freight between the branches, while the movement of equipment 
 
 "Annual Report, Illinois Central Railroad, 1855-1870. 
 "Ibid. 
 
 2 *Ibid., 1857-1860. The cars were hauled through without breaking 
 bulk.
 
 353] DEVELOPMENT, 1857-1870 69 
 
 was handicapped. The result was a third attempt to establish a 
 satisfactory connection. This time it assisted the Logansport, 
 Peoria, and Burlington, later the Peoria and Oquaka, (now the 
 Toledo, Peoria and Western branch of the Pennsylvania sys- 
 tem) in floating its loans, took part of the company's bonds and 
 secured trackage rights from El Paso to Oilman. The terms 
 were favorable to the "Central" and the arrangement was made 
 permanent by a provision that a certain percent of the gross 
 earnings of interchange business should be invested in Peoria 
 and Oquaka bonds. 24 Through trains were run from the main 
 line to the branch and the arrangement was so satisfactory that it 
 was continued until the company built its own line. At various 
 times prior to 1860 the tracks of the Great "Western, Terre Haute, 
 Alton and St. Louis, and Ohio and Mississippi, were used to pro- 
 vide a connection between the two parts of the system, but these 
 arrangements were merely temporary. 25 
 
 In addition to the agreements mentioned above, the Illinois 
 Central had close relations with the Terre Haute, Alton and St. 
 Louis. As soon as that line was built from Alton to Pana, a 
 trackage agreement was made by which through trains were run 
 from Chicago to St. Louis. In fact the Terre Haute-Illinois 
 Central line was the first through line between those cities. 
 Solid trains were handled, besides coaches and sleepers. 26 The 
 distance by this route was not much longer than over the St. 
 Louis, Alton and Chicago and it was regarded as an important 
 rival of the latter, especially from 1857 to I860. 27 Towards the 
 close of the period a further connection was established between 
 the Illinois Central and St. Louis by way of the Belleville, South- 
 ern Illinois, and Du Quoin. The latter company, a lessee of the 
 Terre Haute company, was finished in 1869, and through con- 
 nections were immediately established. Three express trains a 
 day in each direction were run from St. Louis to Cairo, and the 
 "Cairo Short Line" as it was termed proved profitable for both 
 companies. 28 
 
 While these arrangements were of great value to the Illinois 
 Central, it made, the serious mistake of pursuing a too conserva- 
 tive course. Several of the roads, for example, the Mineral 
 Point, Great Western, Peoria and Oquaka, and Chicago, Fulton 
 
 -^Annual Report, Illinois Central Railroad, 1858-1860. 
 
 2 *Ibid., 1855-1857- 
 
 2Q Ibid., 1856 ff; cf. advertisements in St. Louis newspapers. 
 
 "Ibid. 
 
 28 Railroad Gazette, II, 252.
 
 70 HISTORY OF ILLINOIS CENTRAL RAILROAD [354 
 
 and Iowa (Northwestern) could have been leased or purchased 
 on favorable terms. If this had been done it would have pre- 
 vented their development into rival systems, and would also have 
 furnished the ''Central" with the necessary branches. Instead, 
 loose traffic agreements were made and all of these lines grew 
 into strong competitors, while the Illinois Central in 1870 had 
 practically no branches or connecting lines. 29 
 
 There was one exception to this statement. Of all the rail- 
 roads connected with the "Central" from 1856 to 1870 only one 
 became a permanent part of its system. 30 This was the Dubuque 
 and Sioux City Eailroad of Iowa. Originally chartered as the 
 Dubuque and Pacific, before the Civil War, it was finished dur- 
 ing that period, being built westward from Dubuque. 31 As soon 
 as a short portion beyond Dubuque was finished a traffic agree- 
 ment was made with the Illinois Central for mutual exchange of 
 freight. 32 Both roads developed rapidly, and by 1867 this inter- 
 change of freight was of considerable value, especially to the 
 Illinois Central. 33 At first the "Central" was the only com- 
 pany connecting the Iowa company with Chicago or Milwaukee, 
 but in 1866 and 1867 other railroads, principally lines now 
 forming the Chicago, Milwaukee and St. Paul system, made 
 traffic agreements with the Dubuque and Sioux City, and threat- 
 ened to divert its traffic to Milwaukee. 3 * In order to prevent the 
 loss of such a valuable feeder, the directors of the Illinois Central 
 leased the Iowa lines for twenty years, the first ten at thirty five 
 per cent of the gross earnings and the next ten at thirty six per 
 cent, with the right of perpetual lease at the latter figure. 35 
 
 But the Dubuque and Sioux City was building branch lines 
 by means of two subsidiary companies, the Iowa Falls and Sioux 
 City and the Cedar Falls and Minnesota. To obtain the parent 
 company it was necessary to lease the branch lines on the latter 's 
 own terms. The Dubuque and Sioux City was built by persons 
 closely connected with the Credit Mobilier and the Union Pacific, 
 and they applied similar methods to the construction of the Iowa 
 
 2g Report of the Delegates Appointed by the English and Dutch Share- 
 holders, 1877. 
 
 30 Except Belleville and Southern. 
 
 ^Annual Report, Dubuque and Sioux City Railroad, May 31, 1864. 
 
 S2 Ibid. 
 
 **Annual Report, Iowa State Agricultural Society, 1861 ff. American 
 Railroad Journal, March 20, 1858. 
 
 34 Dubuque newspapers, 1865-1867. 
 
 3s Annual Report, Illinois Central Railroad, 1867.
 
 355] DEVELOPMENT, 1857-1870 71 
 
 company. 36 A majority of the board of directors of the Dubuque 
 corporation organized the Iowa Falls and Sioux City Railroad 
 Company and also a construction company, with which the rail- 
 road company made a contract to build the road in return for 
 a certain amount of stocks and bonds per mile of line. Then 
 as directors of the Dubuque and Sioux City they leased their 
 own road, before it was constructed, to the Dubuque and Sioux 
 City for a minimum annual rental of $1500 per mile, which 
 amount just covered the interest charges on the bonds they had 
 agreed to turn over to the construction company. 37 The Iowa 
 Falls line had no equipment, was not completed and passed 
 through a thinly settled territory from which the traffic would, 
 necessarily, remain small for years. While there is no direct 
 evidence to show that fraud existed, the inference from the 
 reports of the House Committee and the minutes of the board 
 of directors of the Dubuque and Sioux City, is to that effect. 
 
 Despite the apparent unprofitableness of the Iowa Falls and 
 Sioux City lines the Illinois Central was forced to include them 
 in the lease in order to obtain the profitable Dubuque and Sioux 
 City. Since control of these lines secured a large and profitable 
 traffic for the Illinois lines the directors of the Illinois Central 
 were justified in making the arrangement. It was a good busi- 
 ness proposition despite the peculiar methods pursued in leas- 
 ing the Iowa Falls to the Dubuque and Sioux City. 
 
 Aside from the lease of the Dubuque and Sioux City the 
 only important action taken by the directors of the company 
 occurred in the celebrated Lake Front Case. 38 With the devel- 
 opment of passenger traffic taking place in the sixties the Michi- 
 gan Central, Chicago, Burlington and Quincy, and the Illinois 
 Central found their Chicago station inadequate and a new build- 
 ing became necessary. A location on the lake front was especially 
 fitted to the business of the three roads and, accordingly, they 
 asked the legislature for the right to fill in certain parts of the 
 submerged land along the lake front. The legislature was finally 
 
 36 Report of Credit Mobilier and Dubuque and Sioux City Railroad, 
 House Reports. 
 
 "Official statement by solicitor of Dubuque and Sioux City Rail- 
 road in Annual Report, 1887. Cites proceedings of Board of Directors. 
 As this monograph deals with the charter lines of the Illinois Central, 
 and as the Dubuque and Sioux City was not leased until the close of 
 the period under discussion, the above description is regarded as suffi- 
 cient. 
 
 38 As yet the author has not been able to find sufficient material on 
 this subject to give a thorough treatment.
 
 72 HISTORY OF ILLINOIS CENTRAL RAILROAD [356 
 
 induced to grant their request, and a bill giving the three com- 
 panies the right to the submerged land was passed. Governor 
 Palmer vetoed it in a vigorous message to the General Assembly 
 which body, however, passed it over his veto. "While the main 
 features of the bill were not bad, there were several provisions 
 which worked a gross injustice upon the city of Chicago and 
 gave excessive rights to the company. The common council of 
 Chicago refused to accept the provisions of the bill, public opin- 
 ion was aroused by certain parts of the measure and by the 
 way the legislature passed it over the governor's veto, and the 
 legislature repealed the act. The case was carried to the courts 
 and finally decided against the company. The act was com- 
 monly known as the Lake Front Steal, and by its connection 
 with the matter the Illinois Central incurred the ill will of the 
 public. 
 
 The physical development of the Illinois Central railroad 
 from 1856 to 1870 was much less important than its extensions 
 through traffic agreements or leases.' The increased traffic 
 demanded many improvements that could not be charged to 
 maintenance of way. As a result, large expenditures were made 
 both from capital and from income, and the condition of the 
 property in 1870 was much better than in 1857. However, there 
 were no radical changes. Only a few miles of steel rails were in 
 use and the weight of rail remained the same. The entire line, 
 except from Kensington to Chicago, was single tracked, and 
 bridges, culverts, roadbed, sidings, ballast, buildings, and ter- 
 minals were still in accordance with the general standards 
 adopted in 1851. 39 
 
 On the other hand the development of the equipment was 
 much greater than the improvement of roadbed and buildings. 
 Forty per cent of all the money charged to capital from 1857 to 
 1870 was expended on new equipment, and the amount of roll- 
 ing stock was over twice as great in the latter year as in the 
 former. There was also a marked improvement in certain kinds 
 of equipment, especially in the passenger service. Sleepers 
 were introduced in the first part of the seventh decade and by 
 1870 they were in common use on all night trains on the system. 
 Air brakes, automatic couplers, vestibules, improved seats, 
 heavier cars with better riding qualities, steel springs, more ex- 
 pensive furnishings, these were the important advances made 
 during the period. Many of these improvements would have 
 
 39 Annual Report, Illinois Central Railroad, 1855-1870; especially 
 annual reports of Maintenance of Way Department; cf. Chap. vi.
 
 357] DEVELOPMENT, 1857-1870 73 
 
 been classed as curiosities a generation later, but at the time 
 they were considered of great importance and so they were. The 
 greatest change in locomotives was the substitution of coal for 
 wood as fuel, the use of iron or steel boiler tubes, somewhat 
 heavier engines, and the development of distinct freight and pas- 
 senger types. The general character and size of freight cars 
 remained about the same, although a few cars capable of carry- 
 ing twenty tons were in use and the old four wheel cars had 
 been sent to the scrap heap. 40 
 
 The conditions which confronted the management of the 
 Illinois Central from 1857 to 1870 were peculiar. Panics, crop 
 failures, and the Civil War prevented the natural development 
 of the system and forced it into policies not suited to its geo- 
 graphical location. Moreover, the officers of the company were 
 handicapped by its foreign control and often adopted more con- 
 servative methods than would have been followed under a dif- 
 ferent system of ownership. As a result, the company could not 
 pursue the policy adopted by some of the more aggressive of its 
 competitors and often lost traffic as a result. Moreover, many of 
 the successes obtained by the Illinois Central from 1857 to 1870 
 were merely temporary, and they inflicted loss upon the com- 
 pany later on. 
 
 40 'Annual Report, Illinois Central Railroad, 1857-1870; Ringwalt, De- 
 velopment of the Railway System of the United States, various chapters; 
 American Railway Journal, technical articles and advertisements, 1857- 
 1870.
 
 CHAPTER V. 
 TRAFFIC, 1857 TO 1870. 
 
 In 1851 Illinois was practically isolated from the remainder 
 of the country. There was comparatively little trade with other 
 portions of the nation, and intercourse even between local com- 
 munities was of slight importance. Moreover, the central coun- 
 ties, comprising fully one-half of the arable land of the state, 
 were thinly settled and the people living there raised only such 
 crops as were necessary for their own immediate wants. Even 
 along the banks of the rivers, where there was the greatest 
 opportunity for commerce, the industrial and agricultural con- 
 ditions were more backward than in Ohio or western New York. 1 
 The total yield of wheat, corn, and oats, according to the seventh 
 census, was only seventy-seven million bushels, slightly over 
 one-sixth the crop of 1879 and but little more than the amount 
 raised in either Indiana, Ohio, or Pennsylvania. Of the amount 
 grown less than one-tenth was shipped to markets outside the 
 state. Fully two-thirds of such shipments were sent south by 
 way of the Mississippi Eiver, while less than one-third went 
 east via the Great Lakes. 2 The lower Mississippi valley states, 
 especially Louisiana, Mississippi and Alabama, were the chief 
 domestic market for the agricultural products of Illinois. The 
 exports to Europe from the central West were also handled by 
 way of New Orleans. Thus, the trade of Illinois, as well as that 
 of the other upper Mississippi valley states, was along north 
 and south lines. 
 
 Consequently, from the traffic standpoint, the construction 
 of the Illinois Central railroad involved peculiar problems. 
 When Senator Douglas secured the land grant of 1850, it 
 was given by Congress for the definite object of building a rail- 
 road from the Great Lakes and the upper Mississippi River to 
 the Gulf of Mexico, with Chicago, Dubuque, and Mobile, the re- 
 spective termini. The Illinois Central was only a part of a 
 larger project, and a similar grant of land was given to the 
 
 !Cf. Chap. i. 
 
 2 Ibid.; Report of the Committee of English and Dutch Stockholders,. 
 1877. 
 
 74
 
 359] TRAFFIC, 1857-1870 75 
 
 Mobile and Ohio and other southern railroads to complete the 
 line from Cairo to the Gulf. 3 This all-rail route from the north 
 to the south was intended to supplement the Mississippi River 
 and to provide an economical trade route which would retain 
 the commerce of the Mississippi valley in existing channels. 4 
 
 The importance of this north and south railroad was clearly 
 understood by the promoters, and they built the road on the 
 most direct line from Chicago and Dubuque to Cairo. The 
 latter city, not Chicago, was expected to be the main terminus 
 of the system, although not necessarily the larger city. 5 So far 
 as the company was concerned the location of the line meant that 
 the only profitable route for the grain of central Illinois, espe- 
 cially that portion along the main line from Dixon to Vandalia, 
 was south to Cairo. Otherwise, the road would get only a short 
 haul to some junction point. From Cairo, it was thought, the 
 Mississippi River, and the Mobile and Ohio, the New Orleans, 
 Jackson and Great Northern, and the Mississippi Central rail- 
 roads, with connections, would form the southern part of a 
 through route from the Great Lakes and the upper Mississippi 
 to Mobile and New Orleans. 6 
 
 However, in the sixth and seventh decades of the 19th 
 century, the old trade routes between the west and the other 
 portions of the United States were radically altered. The devel- 
 opment of steam navigation on the Great Lakes, the construction 
 of a vast network of railroads, the industrial expansion of west- 
 ern Europe and of the north Atlantic seaboard, and the Civil 
 
 3 Cf. Chap. n. Section 7 of the Act of September 20, 1850, states: 
 "That in order to aid in the continuation of said Central Railroad from 
 the mouth of the Ohio river to the city of Mobile, all the rights, privi- 
 leges, and liabilities shall be conferred on the states of Ala- 
 bama and Mississippi." 
 
 ^Report of the Delegates Appointed by the English and Dutch Share- 
 holders, 1877; Annual Report, Illinois Central Railroad, reports of the 
 President and Directors, 1861-1875. 
 
 6 Ever since the establishment of Cairo the capitalists interested in 
 the promotion of the city have had extremely sanguine ideas as to the 
 future importance of the place. When the Illinois Central was incor- 
 porated Chicago had a population of only thirty thousand, and frequent 
 prophecies were made that Cairo would soon be the metropolis of the state. 
 Sober statements were made that the city would have a population of 
 half a million before the end of the century. 
 
 Reports of Robert Rantoul and David Neal in Documents Relating 
 to the Organization of the Illinois Central Railroad; Annual Report, Illi- 
 nois Central Railroad, 1861-1874.
 
 76 HISTORY OF ILLINOIS CENTRAL RAILROAD [360 
 
 War, with the resulting prostration of the South, resulted in a 
 readjustment of the commerce between different sections of the 
 country. Trade was forced out of the paths it had followed 
 prior to the war and was established on new lines. The com- 
 merce of the North and South was almost destroyed and trade 
 was carried on along lines of latitude, not longitude. 7 
 
 The most important influence which brought about this 
 change was the industrial expansion of the north Atlantic states. 
 By 1850 this portion of the country had become largely industrial 
 in character, while agriculture was relatively of much less im- 
 portance than a generation previous. Then, from 1850 on, the 
 rapid settlement of the west, the prosperity of the southern 
 states, abundance of capital, and various tariff measures, cul- 
 minating in the highly protective Morrill act of 1861, combined 
 to stimulate this movement. As early as the close of the fifth 
 decade these states liad reached practically their limit of agri- 
 cultural production ; in other words, the food supplies necessary 
 for their rapidly growing population could no longer be furnished 
 by the farms east of the Alleghany mountains. This condition 
 was made more prominent by the large immigration of the period 
 and the higher standard of living which meant larger per capita 
 consumption of all articles. Thus, there was an enormous 
 demand for food stuffs over and above that supplied by the 
 agricultural population of those states, and even in 1870 consider- 
 ably over one-third of the total grain used was purchased from 
 the west. 8 
 
 The influence of the Civil War in changing the routes by which 
 western produce was sent to market can hardly be overestimated. As 
 stated in the text, the commerce of the upper Mississippi valley was 
 almost entirely with the southern states. In the publications of the time, 
 it is taken for granted that the Mississippi river is the natural outlet of 
 this region. At the present time we are so accustomed to having western 
 produce sent east by way of the Great Lakes that the southern route is 
 the unnatural one. Looking at the matter purely from the standpoint 
 of natural advantages the southern route is by all odds the most advan- 
 tageous one. As shown by the correspondence between Breese and Doug- 
 las, it was clearly the purpose of Breese and Douglas to make the Illinois 
 Central a north and south line which would develop New Orleans or 
 Mobile in preference to New York. 
 
 ^Transportation Routes to the Seaboard, p. 14; Bogart, Economic His- 
 tory of the United States, Chaps, xi, xu. 
 CONSUMPTION OF WESTERN GRAIN IN NORTH ATLANTIC STATES : 1872. 
 
 Shipments of western grain to New England states 41,132,225 bus. 
 
 Shipments of western grain to Atlantic states 63,744,897 " 
 
 TOTAL 104,877,122 "
 
 361] TRAFFIC, 1857-1870 77 
 
 A similarly increasing demand occurred in Great Britain, 
 Holland, and other countries of western Europe. English and 
 continental industries grew very rapidly during the middle of 
 the 19th century and this movement was necessarily accompanied 
 by a steady growth in population. In 1846 the Corn Laws of 
 England were repealed, 9 and the industrial population was free 
 to purchase wheat and corn from abroad. The bulk of this 
 supply came from the United States, and the export of grain 
 (including flour and meal) rose from thirteen million bushels in 
 1850 to over fifty million in 1870. 10 
 
 The third market for Illinois products was the southern 
 Mississippi valley. The cotton states, such as Mississippi, 
 Alabama, Louisiana and Georgia, although well adapted to the 
 raising of corn and oats, found it more profitable to devote their 
 energies to the production of cotton and sugar, and to purchase 
 many of their food supplies from the west. The high price of 
 cotton prior to the Rebellion made it especially profitable to 
 pursue this policy, and in the three or four years immediately 
 preceding the war the demands for western corn and pork were 
 especially heavy. However, the Civil War destroyed this market 
 and diverted the grain traffic to the eastern seaboard. After 
 1865 attempts were made to revive this trade, but the enormous 
 losses of the southern planters, the emancipation of the slaves, 
 the lack of capital, the falling price of cotton, and the destruc- 
 
 9 In 1841 the population of the United Kingdom was 26,730,000; in 
 1871 this was 31,484,000, or an increase of 4,754,000 million in the thirty 
 years. During the same time the agricultural population actually de- 
 creased. Gibbins, Industry in England, p. 446; Levi, History of British 
 Commerce, p. 297; Seignobos, Political History of Europe since 1814, 
 P- 59- 
 
 10 Levi, History of British Commerce, p. 297; cf. Tenth Census (1880), 
 volume on Agriculture, monograph on Cereal Production in the United 
 States, especially p. 468. 
 
 In 1870 the United Kingdom consumed 14,100,000 quarters of wheat 
 grown on English farms, and imported 7,950,000 quarters, or 63,600,000 
 bushels. The exports of the United States in 1870 were: wheat, 36,584,- 
 ooo bushels; flour, 3,463,000 barrels; corn, 1,392,000 bushels; corn meal, 
 187,000 barrels. This was the greatest amount exported since 1863. From 
 1850 to 1870 the continental demand for American grain or grain products 
 was slight. During occasional years the exports were sufficient to attract 
 attention, but usually they were not. Until the Civil War the West 
 Indies were an important market for grain, especially grain sent south 
 by way of the Mississippi River. The competitors of the United States 
 for the English market were France, Russia, and Turkey.
 
 78 HISTORY OF ILLINOIS CENTRAL RAILROAD [362 
 
 tion or diversion of the transportation facilities made it difficult 
 to develop the old commerce, while the changed economic condi- 
 tions forced the planters to raise more of their food supplies than 
 before. Therefore, in 1870, the southern market for Illinois and 
 Iowa grain was almost negligible. 11 Moreover, the same influences 
 which affected the domestic market ruined the exportation of 
 western products via New Orleans. Prior to 1850 the southern 
 port was as important a grain center as New York, but various 
 causes, some of them originating before the war, reduced the 
 amount of grain exported to an insignificant figure, and in the 
 fifteen years from 1856 to 1870 the total shipments of corn, flour, 
 and wheat from New Orleans were less than fifteen million 
 bushels, as against three hundred million bushels from New 
 York City. 
 
 The industrial development of the country and the growth 
 of a non-agricultural population were not confined to the eastern 
 states. The northwestern and upper Mississippi valley states 
 grew very rapidly in population from 1850 to 1870, and this 
 growth was especially noticeable in the towns and cities. Cleve- 
 land, Indianapolis, Toledo, Chicago, Milwaukee, Detroit, and 
 St. Louis became large cities, while the general urban population 
 grew much faster than the agricultural population. This large 
 increase of an element which did not produce its own food sup- 
 plies made necessary a correspondingly larger production of 
 grain and meat by the agricultural districts. 
 
 Thus, the combined demands of Europe, of the north 
 Atlantic states, and of the urban population of the central west 
 necessitated a large increase in the grain production of the 
 country. 12 This demand could be met in only two ways : either 
 a highly intensive system of cultivation must be adopted in such 
 states as New York, Pennsylvania, Ohio, and Indiana, or else the 
 uncultivated prairies of Michigan, Illinois, Wisconsin, Missouri, 
 and Iowa would have to be utilized. To depend upon highly 
 intensive farming was uneconomical at that time and the natural 
 alternative was the utilization of the western lands. Of this 
 
 "Olmsted, The Lower South, A Journey Through the Back Country; 
 Helper, The Impending Crisis, especially Chap. I, pp. 9, 10; Annual Re- 
 port, Illinois Central Railroad, 1857-1861; Eighth Census (1860), volume 
 on Agriculture, Introduction ; Report of the Delegates Appointed by the 
 English and Dutch Shareholders, 1877 ; Bogart, Economic History of the 
 United States, Chap, xx, p. 273. 
 
 "The following table shows the concentration of grain production in
 
 363] TRAFFIC, 1857-1870 79 
 
 territory the most available part, as well as the richest in poten- 
 tial agricultural resources, was the corn belt of Illinois and 
 Iowa, particularly the region traversed by the charter lines of 
 the Illinois Central Railroad. Because of these advantages, this 
 section, during the period from 1850 to 1870, developed into the 
 most important single source of grain production in the United 
 States and the center of supply for both the eastern states and 
 for Europe. 13 
 
 However, as explained in Chapter I, it was this very part of 
 Illinois, possessing as it did the greatest opportunities for 
 exploitation, that was the largest area unprovided with adequate 
 transportation. Accordingly, in 1850 there was a pressing need 
 on the part of the grain consuming territory in the east and 
 south, as well as on the part of the grain growing territory of 
 central Illinois, for a system of transportation that would open 
 up to development these slightly touched resources. The means 
 for the accomplishment of this result was an adequate system of 
 transportation, both local and external, for the interior of the 
 state the construction of railroads such as the Illinois Central; 
 for the country as a whole, the improvement of the existing 
 natural waterways and the construction of new railroads, or 
 
 the central western states. The statistics in the table are obtained from 
 the United States Census, volumes on Agriculture. 
 
 INCREASE IN PRODUCTION OF CORN, WHEAT, AND OATS, 1850-1870. 
 
 1850 1870 INCREASE PER CENT 
 
 Group 1 151,408,000 190,097,000 38,689,000 25.6 
 
 Group II 151,870,000 208,161,000 56,291,000 35.4 
 
 Group III 156,450,000 521,255,000 364,805,000 232.7 
 
 Group IV 47,000 57,799,000 57,752,000 
 
 Group V 376,069,000 304,762,000 61,307,000 16.3 
 
 United States 624,600,000 1,408,044,000 784,044,000 125.4 
 
 Group I Connecticut, Delaware, Massachusetts, New Jersey, New 
 York, Rhode Island, Maine, New Hampshire, Vermont. 
 
 Group II Ohio, Indiana. 
 
 Group III Illinois, Iowa, Michigan, Missouri, Wisconsin. 
 
 Group IV Kansas, Minnesota. 
 
 Group V Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mis- 
 sissippi, Tennessee. 
 
 18 Cf. tables I to V. The 20 counties directly tributary to the I. C. 
 R. R. produced in 1870 four per cent of all the grain produced in the 
 country and nearly eleven per cent of that produced in Illinois, Iowa, 
 Michigan, Missouri, and Wisconsin. The proportion of corn and oats 
 was considerably larger.
 
 80 HISTORY OP ILLINOIS CENTRAL RAILROAD [364 
 
 extension of old ones, from Illinois to the Gulf of Mexico and to 
 the Atlantic seaboard. 
 
 From an examination of the map one perceives that Illinois 
 is located between the two great natural highways of North 
 America the Great Lakes St. Lawrence River (Erie Canal 
 after 1825) route to the north and east, and the Mississippi 
 River route to the south. Because of these natural connections 
 there was a small movement of grain outward from Illinois 
 prior to 1850, but, in the absence of railroads connecting the 
 interior counties with either of these two routes, the amount 
 shipped did not satisfy the growing needs of the country. More- 
 over, the efficiency of water transportation, as then existing, 
 was not such as to permit an economical movement of grain, 
 even when brought to the terminals of the waterways. Accord- 
 ingly, the development of central Illinois was dependent, in the 
 first place, upon the construction of the Illinois Central Rail- 
 road, or another railroad answering the same purpose; and, in 
 the second place, upon the improvement of the waterways and 
 railroads mentioned in the previous paragraph. Moreover, as 
 is likewise evident from an examination of the map, Illinois is 
 a watershed for both of these great waterways, so that, by only 
 a short land haul, traffic can be diverted to one or the other of 
 these routes. Consequently, the state can supply either or both 
 of the great domestic markets for food stuffs: the lower south 
 by way of the Mississippi River, and the eastern states by way 
 of the Great Lakes. Furthermore, in these two routes and the 
 ports of New Orleans and New York, it possesses alternative 
 trade routes to the main European markets. 14 
 
 w From the standpoint of geology, geography, history, politics, and 
 industry Illinois is the connecting link between the eastern, the southern, 
 the northern, and the western parts of North America east of the Rocky 
 Mountains. By geological formation and geographical location central 
 Illinois, as noted in the text, forms a plain tributary to both Lake Michi- 
 gan and the Mississippi River. Southern Illinois was settled mainly from 
 the southern slave states, while northern Illinois was settled by immigrants 
 from northern Europe, New England, and New York. Politically, the 
 state has had active and, at times, a leading place in the affairs of the 
 parties : Whig, Democrat, Republican, Populist, Progressive, and Socialist. 
 In industry it is not only the most important agricultural state, but, as is 
 seen in the great industrial developments around Chicago, E. St. Louis, 
 and in southern Illinois, it is the natural center of industrial production 
 for the central west. (St. Louis, Gary, etc., although just outside the 
 borders of the state are, in reality, an integral part of the greater com-
 
 365] TRAFFIC, 1857-1870 81 
 
 This naturally advantageous position of Illinois was im- 
 proved and strengthened by the construction of the Illinois 
 Central Railroad during the years 1851 to 1857, as told in detail 
 in Chapters III and IV. The main line and the Dubuque 
 branch extended in the form of a great bow from the upper 
 waters of the Mississippi, at Dubuque, to its junction with the 
 Ohio Eiver, at Cairo. The Chicago branch extended from Lake 
 Michigan, at Chicago, directly south to Centralia on the main 
 line and from there to Cairo, thus connecting the Great Lakes 
 and the Mississippi Eiver at its junction with the Ohio River. 
 Moreover, by the leases, trackage agreements, and traffic alli- 
 ances mentioned in Chapter IV, the company gradually estab- 
 lished connections from the Great Lakes, at Chicago, directly 
 west across the state to the upper Mississippi RiVer, at Dubuque, 
 and the Missouri River, at Sioux City; from the Great Lakes, 
 southwest across the state, to the Mississippi River, at St. Louis, 
 just below its junction with the Missouri River; and between 
 the two main terminals of the central Mississippi, i.e. Cairo and 
 St. Louis. 15 This strategic location of the railroad gave it two 
 important advantages that have proven of vital importance in 
 later years: first, the Illinois Central system constituted the 
 best, and at first the only means by which the farmers of the 
 greater part of Illinois could reach Chicago and St. Louis, the 
 two main grain and live stock markets of the West; second, the 
 fact that the system was tributary to both of the main natural 
 highways of ^the continent permitted the railroad, acting as 
 agent for its territory, to route traffic either to the south or to 
 the east as proved more advantageous, or to Europe via either 
 of the two gateways. 
 
 Of no less importance than the actual construction of the 
 
 monwealth.) These facts, though only slightly understood at the time, 
 played an important part in the early history of the Illinois Central and 
 have influenced in a dominant way its traffic development. 
 
 16 Cf. Chap, iv; viz. (i) Chicago (a) Galena & Chicago Union R. R., 
 or (b) Chicago, Burlington & Quincy R. R., or (c) Peoria & Oquaka 
 R. R. to main line of I. C. R. R. at Freeport, Mendota, and El Paso, 
 respectively; I. C. R. R. to Dubuque; Dubuque & Sioux City R. R. (west- 
 ern lines) to Sioux City. (2) Chicago Chicago Branch to (a) Sando- 
 val: Mississippi & Ohio R. R. (now B. & O. S. W.) to St. Louis, or 
 (b) Pana : St. Louis, Alton & Terre Haute R. R. (now C. C. C. & St. L. 
 R. R.) to St. Louis. (3) Cairo main line to Odin; M. & O. R. R. to St. 
 Louis, or, about 1868, main line to Du Quoin ; St. L. A. & T. H. R. R. 
 (now Cairo Short Line stem of I. C. R. R.) to St. Louis.
 
 82 HISTORY OP ILLINOIS CENTRAL RAILROAD [366 
 
 railroad was the cost of transportation, both from the farm to 
 Chicago, Cairo, or St. Louis, and from these terminals to the 
 ultimate destination in the South, the East, or Europe. If the 
 company and the territory tributary to it were to prosper it 
 was necessary, not only that the rates from the farm to the 
 final market be less than before the construction of the railroad, 
 but also that they be low enough to allow Illinois grain to travel 
 eastward or southward in competition with grain from such 
 states as New York, Pennsylvania, Ohio, Indiana, Kentucky, 
 or Tennessee, which were much nearer the consumer. Thus, the 
 traffic development of the Illinois Central Railroad and of its 
 territory was determined by two factors, both of them largely 
 beyond the control of the management: first and essential, such 
 an improvement in the efficiency of railroad and water trans- 
 portation that the cost of carrying grain from the farm to the 
 final market, plus the cost of raising the grain in Illinois, would 
 be less than the cost of producing and shipping it from the farms 
 which supplied the demand in 1850; second, and incidental, 
 such an improvement in transportation having been effected, 
 the determination of the question whether the best market 
 would be the existing one in the South or the newly developing 
 one in the East. In short, therefore, the traffic history of the 
 Illinois Central Railroad from 1857 to 1870, as discussed in the 
 following pages, is the story of the adaptation of the railroad 
 to the absolute and relative developments of the east and west 
 trade route via Chicago and of the north and south route via 
 Cairo. 
 
 Of these two routes, the one from Chicago east gained the 
 most from improvements in transportation facilities taking place 
 between 1850 and 1870. The water route, via the Great Lakes, 
 the Erie Canal, and the Hudson River, had provided reasonably 
 cheap rates for through traffic ever since 1825, but in the decades 
 before and after the Civil War, improvements were made which 
 reduced the charges to a basis much lower than what existed 
 in the thirties and forties. Larger and faster lake vessels were 
 put in service, steam generally supplanted sails, and various 
 economies of operation were made, the result of which greatly 
 decreased the actual cost of making a trip from Chicago to 
 Buffalo. 16 In 1862 the deepening of the Erie Canal was finished 
 and it became possible for canal boats of 250 tons to go from 
 
 18 Ringwalt, Development of Transportation Systems in the United 
 States, p. 135; Tenth Census (1880), volume on Agriculture, monograph 
 on Cereal Production.
 
 367] TRAFFIC, 1857-1870 83 
 
 Buffalo to New York City, thus reducing the cost of carriage per 
 ton. 17 At the same time, the important harbors on the Great 
 Lakes were dredged and the canals at Detroit, Sault Ste. Marie, 
 and Niagara Falls were enlarged to accommodate large lake 
 vessels. 18 Moreover, the reduced cost of carriage was accom- 
 panied by even more important improvements in the handling 
 of freight at Chicago, Buffalo, and other terminals, especially 
 through the erection of elevators, the introduction of steam 
 shovels, power conveyors and other labor saving machinery, and 
 the better arrangement of the docks. 19 The natural result of 
 these various devices to cheapen cost of transportation was a 
 large expansion of the lake and canal trade, which, in turn, 
 permitted further economies and allowed still more extensive 
 reductions in rates. 
 
 Quite as important as the improvement of water transporta- 
 tion was the development of all-rail connections between Chicago 
 and New York, Boston, Philadelphia, and Baltimore. In 1853 
 the Lake Shore and Michigan Southern was finished from Buf- 
 falo to Chicago; in 1854 Cornelius Vanderbilt consolidated sev- 
 eral disjointed lines into the New York Central and Hudson 
 River Railroad; in 1855 the Erie was built to Buffalo; in 1856 
 the Baltimore and Ohio, and Ohio and Mississippi route was 
 completed ; and in 1857 the Pennsylvania Central, and Pittsburg, 
 Fort Wayne, and Chicago line was extended to Chicago. Other 
 railroads were completed from Buffalo to the seaboard, so that 
 in 1870 there were a number of strong, competitive lines from 
 Lake Michigan to the Atlantic. 
 
 At first the all-rail lines were unable t6 compete with the 
 water route for the low grade freight, but between 1860 and 
 1870 further consolidations among the railroads, and extensive 
 reductions in cost of operation enabled the New York Central 
 and Pennsylvania to obtain a large share of the east and west 
 traffic. Fierce competition between the two rival lines caused 
 temporary reductions in rates, but more permanent influences, 
 such as consolidation of competing and connecting lines, reduc- 
 tion of curves and grades, technical improvements in motor 
 power, equipment, and roadbed, better methods of organization, 
 accounting and operation, largely increased traffic, and the adop- 
 
 1T Ringwalt, Development of Transportation Systems in the United 
 States, p. 135; Tenth Census (1880), volume on Agriculture, monograph 
 on Cereal Production.
 
 84 HISTORY OP ILLINOIS CENTRAL RAILROAD [368 
 
 tion of fast freight lines, enabled the railroads to carry most of 
 the flour and much of the wheat and other grain in competition 
 with the lake and canal boats. 20 
 
 The extensive improvements in both rail and water trans- 
 portation during the sixth and seventh decades, of the 19th cen- 
 tury had a direct influence on rates. Not only were there rad- 
 ical reductions of a temporary nature, caused by rate wars and 
 tariff controversies, but reductions in cost of operation allowed 
 permanent decreases hardly less important. As most of the 
 grain traffic from 1850 to 1868 or 1869 was handled by the lake 
 vessels the changes in lake rates were of primary importance. 
 In the twelve years from 1858 to 1870 the average lake rates 
 from Chicago to Buffalo decreased as follows : 20 * 
 
 CORN WHEAT 
 
 1858 I2.7C per bu. i5-5oc per bu. 
 
 1870 6.0 " " 6.77 " " 
 
 DECREASE 6.7 " " 8.73 " " 
 
 This reduction in lake rates was accompanied by similar reduc- 
 tions in freight charges on the Erie Canal and in 1870 the aver- 
 age rate per ton on down freight was $3.06 as against $4.81 in 
 1854, or a reduction from 14.4c per bushel to 9.2c. 21 The through 
 rate on wheat from Chicago to New York City, including all 
 tolls, declined from 28.36c per bushel in 1864 to 20.24c in 1871 
 (ll.llc in 1870), with rates on corn from Ic to 3c lower per 
 bushel. 22 As the price of corn, oats and wheat were over fifty 
 per cent higher in 1870 than in 1855, the decline in nominal 
 rates meant a much greater decline in absolute charges. Thus, 
 in 1858 one bushel of wheat at Chicago paid for the transporta- 
 tion of two bushels to New York, while in 1871 it provided for 
 the carriage of 6.1 bushels. 23 
 
 Although at first unimportant, all-rail shipments of grain 
 from the west to the east had become common by 1860 and by 
 1870 were fully as frequent as all- water shipments. The econo- 
 mies mentioned above permitted even more radical reductions 
 in rates by railroads than took place on the lake. In 1850 the 
 
 20 Johnson, American Railway Transportation, pp. 25-27; Ringwalt, 
 Transportation Systems in the United States, pp. 140-209. 
 
 20 *Annual Report, Chicago Board of Trade, 1905, p. 108. 
 
 ^Transportation Routes to the Seaboard, in Sen. Rep., 43 Cong., I 
 sess., Appendix, p. 168. 
 
 "Annual Report, Chicago Board of Trade, 1905, p. 108. 
 
 "Aldrich Report, II, pp. 7, 8, 60, 61.
 
 369] TRAFFIC, 1857-1870 85 
 
 usual charge for grain traffic was 4c per ton per mile, or occa- 
 sionally 3c, irrespective of distance. 24 By 1870 the New York 
 Central had reduced the general average rate per ton per mile 
 to 1.9 cents, as against 2.5c in the earlier year, 1856. On the 
 Erie there was a further reduction from 2.5c in the earlier period 
 to 1.4c in the later. 25 Moreover, during the summer months 
 wheat was carried by rail from Chicago to New York for 27c a 
 bushel, or 93c per ton per mile. 26 At times, on account of rate 
 wars, the tariff charges were reduced to an even lower figure 
 per ton per mile. However, the average rates for all-rail ship- 
 ments from Lake Michigan to the Atlantic seaboard declined 
 from 36.19c per bushel in 1858 to 28c in 1870 for corn, and from 
 38.61c to 30c for wheat. 27 Moreover, the railroads from Buffalo 
 to New York, especially the New York Central and Erie, made 
 special efforts to handle grain between these points in competi- 
 tion with the Erie Canal. As a result the average rail rate in 
 1871 was 18.3c for wheat and 17.0c for corn, as against 13.1c 
 and 11.3c respectively on the canal. The average lake and rail 
 rate, i.e. via lake to Buffalo and from there to New York by rail, 
 was 22. 2c per bushel on corn and 22. 5c on wheat. 28 
 
 Conditions existing in the east and west traffic did not hold 
 good for shipments from Chicago south. The actual cost of 
 handling freight from Cairo or St. Louis to New Orleans had 
 not materially decreased from 1850 to 1870, and, as a result, 
 rates between those points declined much more slowly than the 
 rates on east and west lines of transportation, so that in the 
 latter year charges from central Illinois to the Gulf were only 
 slightly less than the lake and canal tariffs to New York. The 
 barge rates from St. Louis were exceedingly low, but the gen- 
 eral introduction of this system of carriage did not take place 
 much before 1870 and, consequently, exerted only a slight influ- 
 ence on rates from 1850 to 1870. 29 The steamboat charges were 
 nearly twice those made by the barge lines, but quicker time and 
 less danger to the freight compensated the shipper for the dif- 
 ference. 30 Considering merely the tariff rates, there was a 
 
 ^Transportation Routes to the Seaboard, p. 61. 
 25 Ibid., p. 61. 
 Ibid., p. 52. 
 
 "Annual Report, Chicago Board of Trade, 1905, p. 108. 
 2S Ibid. 
 
 ^Transportation Routes to the Seaboard, I, 24, 52; ibid., Appendix, pp. 
 19, 20, 53, 96, 167, 168; ibid., II, 897-900. 
 30 Ibid.
 
 86 HISTORY OP ILLINOIS CENTRAL RAILROAD [370 
 
 difference of about V2 C P er hundred on fourth class shipments 
 and from lOc to 12c per bushel on grain from central Illinois to 
 market in favor of New Orleans. 31 However, service and other 
 conditions reversed this advantage. (1) The lowest north and 
 south rates were for shipment in bulk by barges and this service 
 was not in general use before 1866. Moreover, most of the lines 
 stopped at St. Louis, not Cairo, and the Illinois Central received 
 no advantage in sending grain to St. Louis in preference to 
 Chicago, as the rates from central Illinois to the two cities were 
 practically the same. (2) Shipments of grain by steamboat 
 from Cairo south had to be sacked and the cost of sacking aver- 
 aged several cents per bushel. (3) On account of the longer 
 route and the semi-tropical climate, loss from shrinkage via the 
 north and south route was much greater than via the east and 
 west one. This loss would run from ten to twenty per cent of 
 the weight of corn shipments. (4) Terminal, storage, and trans- 
 fer facilities were much poorer at New Orleans than at New 
 York. (5) The local southern demand for grain was small, and 
 Kentucky, Tennessee and Missouri were in a better position than 
 Illinois to compete for the traffic. 
 
 Moreover, through export traffic was practically prevented 
 by the higher steamer rates from New Orleans to Liverpool than 
 from New York to Liverpool. In 1870 there were no quotations 
 for the transportation of corn via steamer from New Orleans to 
 Liverpool and in only five months were there any quotations 
 for shipment by sailing vessels. In 1872, the only year for which 
 there is a good basis for comparison, the difference was as fol- 
 lows: (quotations in pence per bushel, corn) 
 
 STEAM SAIL 
 
 New York to Liverpool 7^d 6 u /i*d 
 
 New Orleans to Liverpool n/4d io^d 
 
 Difference in favor of New York 4d(8c) 4d(8c) 32 
 
 This difference of nearly eight cents per bushel in favor of New 
 York offset most of the advantages received by New Orleans 
 from lower domestic rates. Higher insurance, higher elevator 
 and wharfage charges, longer time en route, with increased 
 interest on the shipment, eliminated the remaining advantages 
 New Orleans possessed over New York and placed the two ports 
 
 ^Transportation Routes to the Seaboard, I, 24, 52; ibid., Appendix, 
 pp. 19, 20, 53, 96, 167, 168 ; ibid., II, 897-900. 
 
 32 Ibid., Appendix, pp. 20, 54. It should be noted that the comparison 
 of rates is based on a single year and is liable to error, but it was the 
 best that could be secured.
 
 371] TRAFFIC, 1857-1870 87 
 
 on an equality so far as transportation charges were concerned. 
 But even had equal rates existed the disadvantages of the south- 
 ern route were too great to permit any important export of 
 grain by way of New Orleans or Mobile. 33 
 
 The second important item affecting the movement of grain 
 from Illinois to the East was the local transportation charge, 
 that is, the rate from the local station to Chicago or Cairo. In 
 Chapter I it was shown that the cost of handling grain over 
 Illinois roads was so high that territory more than ten to fifteen 
 miles from railroad or river transportation could not send its 
 produce to outside markets, and that the Illinois Central Rail- 
 road was necessary to remedy this trouble. On the macadam- 
 ized turnpikes of the eastern states the cost of carrying grain 
 by wagon was about ten cents per ton per mile, but over the 
 Illinois roads this cost must have been increased fifty to one 
 hundred per cent. 34 With the completion of the railroad this 
 charge was reduced materially. Moreover, there was a slight 
 reduction in rates from 1856 to 1870, primarily in bulky articles 
 such as grain, lumber, coal, and salt. The higher class goods 
 had practically the same rates in 1870 as in 1856, although some 
 difference must be made for inflation of the currency. As early 
 as 1856 a rate of 1.75c per ton per mile was made on coal 35 and 
 in the next fourteen years this charge was reduced to less than 
 lc. 36 Grain from local stations was carried to Cairo in 1858 
 for 2.2c per ton per mile and for about 1.5c in 1870. On 
 through grain shipments to New Orleans the Illinois Central 
 received a rate of 1.3c per ton per mile in 1870. 37 A somewhat 
 
 ^Transportation Rdutes to the Seaboard, Appendix, pp. 20, 54. 
 Prior to 1861 a few stretches of railroad were constructed parallel 
 to the Mississippi River, (mainly, what is now the Mobile & Ohio 
 R. R., built under the Land Grant Act of 1850, the Mississippi Central 
 R. R. and the New Orleans, Jackson & Great Northern R. R., now the 
 southern lines of the I. C. R. R.) and, though incomplete, they were just 
 beginning to form a southern connection for the Illinois Central Rail- 
 road when the Civil War paralyzed all communication with the South. 
 Following the war efforts were made to rehabilitate and complete these 
 southern lines, but with little success until after 1870. Accordingly, dur- 
 ing the period covered in this monograph, railroad communication be- 
 tween Illinois and the Gulf of Mexico was almost non existent. 
 
 34 Ringwalt, Transportation Systems in the United States. 
 
 35 J. W. Foster, Mineral Resources of the Illinois Central Railroad, 
 p. ro. 
 
 36 Annual Report, Illinois Central Railroad, 1870. 
 
 37 Cairo Times, February 17, 1858; cf. pp. 115-117; also, Transporta- 
 tion Routes to the Seaboard, II, 897-900.
 
 88 HISTORY OP ILLINOIS CENTRAL RAILROAD [372 
 
 better basis of comparison is the average rate on different classes 
 of traffic. The per ton per mile rates on local and through 
 traffic in 1859 and 1870 were as follows: 
 
 1859 1870 
 
 Local freight north 2.190 2.440 per ton per mile. 
 
 Local freight south 2.06 2.35 " " " " 
 
 Through " north 1.70 1.12 " " " " 
 
 south 1.86 1.55 " " " 
 
 " n.&s 1.80 1.36 " " " " 
 
 All " n.&s 2.14 2.31 " " " " 38 
 
 Nearly all of the local traffic moving south consisted of lumber, 
 coal, and a little grain; three-fourths of the local traffic north 
 was grain, so that the rates on north and south local traffic give 
 an approximate idea of the rates charged for lumber, coal, and 
 grain. However, the true standard by which local rates must 
 be judged, is whether they permitted grain from central Illinois 
 to be carried east or south, in competition with grain from other 
 parts of the state, and from Missouri, Wisconsin, Michigan, and 
 Indiana. , Up to about 1868 the farmer along the Illinois Cen- 
 tral competed on favorable terms with the farmers of the states 
 farther east and south, but this was due to the high price of 
 wheat and corn and the richness of the soil, rather than to 
 favorable railway rates. 39 
 
 Reduced local and through rates on agricultural products 
 made it possible for farmers to take up the millions of acres 
 of vacant land in the northwestern and upper Mississippi valley 
 states and produce grain for eastern and European markets. 
 As a result, the two decades from 1850 to 1870 witnessed an 
 unprecedented immigration into Illinois, Michigan, Wisconsin, 
 Missouri, Minnesota, and Kansas, and by 1870 the population of 
 this territory was nearly four times what it was in 1850. 40 This 
 is shown in the following table : 
 
 I. 
 
 SETTLEMENT OF THE CENTRAL WEST. PER 
 
 GROUP 1850 1870 INCREASE CENT 
 
 Illinois & Iowa 1,043,000 3,733,ooo 2,710,000 259 
 
 Mich., Wis. & Mo 1,384,000 3,959,000 2,575,000 186 
 
 Minn. & Kansas 6,000 803,000 
 
 TOTAL 2,433,000 8,496,000 6,063,000 249 
 
 38 AnnuaI Report, Illinois Central Railroad, 1859, 1870. Cf. Chap. vi. 
 39 Eighth Census (1860), volume on Agriculture, Introduction; cf. 
 
 Martin, The Granger Agitation. 
 
 "Seventh and Ninth Censuses (1850, 1870).
 
 373] TRAFFIC, 1857-1870 89 
 
 The immigrants may be divided into groups according to the 
 relation to the Illinois Central of the territory settled by them: 
 
 ( 1 ) those settling in Illinois and Iowa tributary to the railroad ; 
 
 (2) those taking up land in parts of Illinois and Iowa in direct 
 competition with the Illinois Central territory in Wisconsin, 
 Michigan and Missouri; (3) Those going to Minnesota and 
 Kansas, where they did not compete actively with central Illi- 
 nois until about 1870. The two latter groups are outside the 
 field of this history, but it may be said that their growth was 
 much slower than that of Illinois and Iowa directly tributary 
 to the Illinois Central and subsidiary lines. 
 
 While this immigration went into every portion of the 
 state, the central counties along the Illinois Central Railroad, 
 and especially those between La Salle and Shelby counties, were 
 the least settled in 1850 and, consequently, offered the greatest 
 opportunity to farmers. In the twenty years from 1850 to 1870 out 
 of a total increase of population of 1,688,000, 981,292 occurred 
 in the belt of .counties near the ' ' Central ' ', and in the latter year 
 slightly over one half of the inhabitants of the state lived in the 
 forty four counties tributary to this railroad. 41 In 1850 the 
 central counties were thinly settled, and what is now called the 
 "corn belt" was almost entirely unoccupied government land, 
 but by 1870 this portion of Illinois had been transformed into 
 
 II. 
 
 SETTLEMENT OF THE FORTY FOUR COUNTIES IN ILLINOIS TRIBUTARY TO THE 
 ILLINOIS CENTRAL RAILROAD. 
 
 1850 PER CENT i860 PER CENT l8/O PER CENT 
 
 Group I ii5,H3 12.4 291,829 17.0 495.253 19-5 
 
 Group II 248,868 30.2 585,548 34-3 923,579 36.6 
 
 Cook Co 43,385 4-2 144,954 8.4 349,966 13.8 
 
 TOTAL 292,253 34.4 730,502 42.7 1,273,545 504 
 
 State 851,000 100.0 1,711,000 100.0 2,539,000 100.0 
 
 Group I consists of the following agricultural counties in the central 
 part of the state : Bureau, Champaign, Coles, De Witt, Douglas, Ford, 
 Iriquois, Cumberland, Kankakee, La Salle, Livingstone, Logan, McLean, 
 Macon, Marshall, Moultrie, Putnam, Shelby, Woodford, Piatt. 
 
 Group II consists of the above counties and Alexander, Bond, Clay, 
 Clinton, Effingham, Franklin, Fayette, Jackson, Johnson, Jefferson, Jo 
 Daviess, Lee, Marion, Montgomery, Ogle, Perry, Pulaski, Stephenson, 
 Union, Will, Williamson, Washington. All of these counties are within 
 fifteen miles of the Illinois Central Railroad and are tributary to it. 
 "Seventh and Ninth Censuses (1850, 1870).
 
 90 HISTORY OF ILLINOIS CENTRAL RAILROAD [374 
 
 a well settled farming community. With the growth of popu- 
 lation the area not under cultivation steadily declined, and by 
 1870 practically all the land surface of the state, especially in the 
 central part, was either under crop or else used for meadow or 
 woodland. 42 Early in the sixth decade the federal land was sold 
 and the railroad grant, with the exception of less than three 
 hundred thousand acres, was disposed of by 1870. 43 
 
 The rapid settlement of Illinois and Iowa was accompanied, 
 it might almost be said, was caused by important improvements 
 in agriculture. Improved plows and harrows, seeders, cultiva- 
 tors, binders, reapers, threshers, corn shellers and other imple- 
 ments were introduced and it became possible for one farmer with 
 the aid of farm machinery to raise several times as much grain 
 as under the old hand method, and, that too, with much less, 
 physical exertion. Naturally, this decreased the cost of raising 
 a crop and prevented any considerable increase in the price of 
 food stuffs. Accordingly, it was possible for the farmers tribu- 
 tary to the Illinois Central Kailroad, despite the large enlist- 
 ment in the federal armies during the Civil War and the 
 growth of the industries of the state, to increase their production 
 of food stuffs sufficiently to meet the enormously increased de- 
 mand of the eastern states during the decade from 1861 to 1870, 
 and at a cost of production low enough to permit good profits 
 to themselves and high rates to the railroad. 44 
 
 Coincident with the development in the sources of demand 
 and supply outlined so far, viz., increased eastern and European 
 consumption of grain, and improved rail and water connections, 
 on the one hand, and settlement of the interior counties of Illi- 
 nois, together with improved farming practice, on the other 
 hand, came the development of the traffic organization of the 
 Illinois Central Railroad as the connecting link between the two. 
 The railroad was built to connect these sources of demand and 
 supply in food stuffs and, until long after 1870, it was primarily 
 a carrier of agricultural products. Therefore the prosperity of 
 the company was dependent upon the ability of the adjacent 
 territory to raise and ship large quantities of grain and of live 
 stock. 
 
 "Seventh and Ninth Censuses (1850, 1870). 
 
 43 Annual Report, Illinois Central Railroad, 1870. 
 
 * 4 Bogart, Economic History of the United States, pp. 228-303; Quin- 
 tance, The Influence of Farm Machinery on Crop Production and Labor; 
 Fite, The Agricultural Development of the West during the Civil War, 
 Quar. Jour. Econ., XX, 259-278. Cf. Transactions of Illinois State Agri- 
 cultural Society during this period.
 
 375] TRAFFIC, 1857-1870 91 
 
 Prior to 1870 the Illinois Central Eailroad was the vital 
 factor in developing central and southern Illinois, and this influ- 
 ence commenced as soon the first piece of track was laid in May, 
 1852. Of course, the amount of traffic handled during the con- 
 struction of the road was small and consisted largely of local 
 freight, principally immigrant's goods, but even in this way it 
 was of great assistance in settling the interior counties. At 
 first, work trains, and then regular freight and passenger trains 
 were operated on sections of track as soon as completed, and in 
 this way it became much easier for settlers to reach either the 
 government or railroad lands which were on the market. How- 
 ever, the real traffic history of the company does not commence 
 until 1855, at which time all the railroad, with the exception of 
 seventy-seven miles from Mattoon to Centralia, was in use. 45 
 
 From 1857 to 1870 all of the charter lines, together with 
 such connections as were added from time to time, were open 
 for traffic. As stated in Chapter IV, a regular freight and 
 passenger service was established, tariffs were promulgated, 
 connections were secured, aid was extended to farmers along 
 the line ; in a word, everything was done to build up the traffic 
 of the road, especially that of grain and live stock. That the 
 railroad, next to the federal government, was the largest single 
 land owner in the country naturally stimulated its interest in 
 agricultural production, even beyond that of the other granger 
 railroads. 
 
 Moreover, the traffic policy of the Illinois Central Railroad 
 was greatly influenced by the fact that it was tributary to the 
 Great Lakes as well as to the Mississippi River. The Civil War 
 and other causes beyond the control of the management almost 
 destroyed the historical southern market of Illinois and had the 
 railroad been constructed as originally planned its traffic would 
 have been insignificant. Having been built tributary to Chicago 
 as well as to Cairo it was, however, in a position to divert busi- 
 ness northward when its natural connections with the South 
 were prostrate and Chicago became its main terminal. For that 
 reason prices and facilities there were the determining factor 
 
 ^Annual Report, Illinois Central Railroad, 1855-1857. The net earn- 
 ings to January I, 1855, amounted to $276,540.59. Estimates of the gross 
 earnings are given, but they are so incorrect, it is not worth while to 
 repeat them. However, the approximate gross earnings are supposed to 
 have been about three quarters of a million dollars in the period prior to 
 the first annual report in 1855.
 
 92 HISTORY OF ILLINOIS CENTRAL RAILROAD [376 
 
 in the growth of the railroad and of that part of Illinois and, 
 later, of Iowa dependent upon it. 48 
 
 As Illinois was primarily an agricultural state the move- 
 ment of its crops, especially corn and wheat, depended upon 
 demands outside the state, in other words upon the needs of the 
 industrial population of the East and South. But whether the 
 farmer in McLean or Macon county would ship his grain at all 
 the vital problem for the railroad was decided by the price of 
 grain at Chicago. Unless the New York price, less the cost of 
 transportation, in other words the Chicago price, would yield 
 a profit on a bushel of corn or wheat, the farmer would not ship 
 it, at least he would not produce and ship it for any length of 
 time. Fortunately for the Illinois Central, the price of all farm 
 products was high from 1861 to 1870, and was excessively low 
 in only one or two years before that period. These high prices 
 were accompanied by large demands from other parts of the coun- 
 try, as mentioned above, especially in the period from 1861 to 
 1870, and, at times, the supply of grain was insufficient to meet 
 all the necessary demands of the north Atlantic states and Eu- 
 rope. On account of the inflation of the currency the increase 
 in currency prices was very great, but there was a fair advance 
 in gold prices, while the expenses of the farmer for labor and 
 supplies did not increase as rapidly as the receipts from his grain 
 or cattle. 47 Of the different grains corn had the greatest rise in 
 price 48 and wheat the least, 49 but as the territory dependent on 
 the Illinois Central was largely corn country this proved of ad- 
 vantage to both the farmer and the railroad. There was also a 
 large increase in the price of cattle ; again favoring the central 
 counties of the state. 50 
 
 The general adoption of labor saving machinery, combined 
 with high Chicago prices for grain and a large demand for food 
 stuffs, had a very strong influence on the production of grain in 
 the territory along the Illinois Central Railroad. Vacant gov- 
 
 46 The rise of Chicago as the leading grain and live stock market of 
 the world was coincident with the developments in the traffic of the Illi- 
 lois Central Railroad mentioned in the text and was of great importance 
 *:o its territory in affording a convenient market for grain and live stock. 
 
 47 Fite, The Agricultural Development of the West During the Civil 
 War, Quar. Jour. Econ., XX, 259-278. Cf. Mitchell, History of the Green- 
 backs. 
 
 48 Aldrich Report, II, pp. 7, 8. 
 
 49 Ibid., pp. 60, 61. 
 
 50 Ibid., p. 26.
 
 377] 
 
 TRAFFIC, 1857-1870 
 
 93 
 
 eminent and railroad land was occupied and the acreage under 
 cultivation increased rapidly from census period to census period. 
 The growth in some of the interior counties was remarkable. 
 Champaign county increased its area under cultivation from 
 twenty two thousand acres in 1850 to four hundred and nine- 
 teen thousand in 1870; Livingstone from thirteen thousand to 
 three hundred and seventy seven thousand, and Iroquois from 
 thirty thousand to three hundred and twenty two thousand. 51 
 The twenty one typically agricultural counties had more than 
 seven times as many acres under cultivation in 1870 as in 1850, 
 as is shown in the following table : 
 
 III. 
 
 ACRES UNDER CULTIVATION, 1850 TO 1870. 
 
 i8so 
 
 Group 1 744,000 
 
 Group II 1,590,000 
 
 Cook Co 154,000 
 
 PERCENT 
 
 14.8 
 
 31.6 
 
 1860 
 
 2,902,000 
 5,101,000 
 
 267,000 
 
 PERCENT 
 22.2 
 38.3 
 2-4 
 
 1870 PERCENT 
 
 5,337,OOO 27.6 
 
 8,839,000 43.2 
 
 348,000 1.8 
 
 TOTAL 1,744,000 
 
 State 5,039,000 
 
 34.7 5,368,000 40.7 9,187,000 45.0 
 100.0 13,096,000 100.0 19,329,000 loo.o 52 
 
 The larger area in farms was accompanied by a greater yield of 
 farm products, especially corn, wheat and oats. It was also 
 accompanied by a greater diversity of farming, and the total pro- 
 duction of the three staples, consequently, did not increase as rap- 
 idly as the acreage did. 53 At the same time the growth of the 
 grain crops was large enough to attract attention. This was espe- 
 cially true of the central agricultural counties. The following 
 tables show the increased yield of the three staples, but the figures 
 for 1869 (census of 1870) were unduly small, owing to droughts, 
 and to obtain a correct estimate of the increase during the decade 
 the total should be considered about twenty-five per cent larger. 54 
 
 "Seventh, Eighth, and Ninth Censuses (1850, 1860, 1870), volumes on 
 Agriculture. 
 
 52 Ibid.; for the counties comprised in each group, see Table II; per 
 cent refers to per cent of total acreage contained in each county or group 
 of counties. Group II includes Group I. 
 
 53 Seventh, Eighth, and Ninth Censuses (1850, 1860, 1870), volumes on 
 Agriculture, Introduction. 
 
 "Ibid., 1870.
 
 94 
 
 HISTORY OF ILLINOIS CENTRAL RAILROAD 
 
 [378 
 
 IV. 
 
 PRODUCTION OF CORN, 1850 TO 1870. 
 
 1850 PERCENT i860 PERCENT 1870 PERCENT 
 
 Group 1 9,985,000 17.7 29,613,000 25.8 39,265,000 30.2 
 
 Group II 16,890,000 29.3 44,302,000 38.6 59,257,000 45.6 
 
 05 CookCo 429,000 .7 877,000 .7 770,000 .5 
 
 TOTAL 17,319,000 30.0 45,179,000 39.3 60,827,000 46.1 
 
 State 57,646,000 loo.o 115,174,000 100.0 129,921,000 100.0 
 
 V. 
 
 PRODUCTION OF WHEAT, 1850 TO 1870. 
 
 1850 PERCENT i860 PERCENT 1870 PERCENT 
 
 Group 1 949,000 10.1 4,105,000 17.6 4,043,000 12.8 
 
 Group II 2,171,000 25.1 8,870,000 37.2 10,625,000 35.4 
 
 Cook Co 238,000 2.7 299,000 1.3 149,000 .5 
 
 TOTAL 2,409,000 25.8 9,169,000 38.5 10,774,000 35.9 
 
 State 9,414,000 loo.o 23,837,000 100.0 30,128,000 ioo.o 56 
 
 VI. 
 PRODUCTION OF OATS, 1850 TO 1870. 
 
 l85O PERCENT i860 PERCENT 1870 PERCENT 
 
 Group 1 1,275,000 12.0 2,330,000 15.4 10,619,000 24,8 
 
 Group II 3,174,000 30.2 5,865,000 38.8 20,421,000 47.7 
 
 Cook Co 403,000 4.0 1,092,000 7.2 1,584,000 2.8 
 
 TOTAL 3,577,ooo 34.2 6,957,000 46.0 22,005,000 50.5 
 
 State 10,087,000 ioo.o 15,220,000 ioo.o 42,780,000 100.0" 
 
 These tables show not only a large increase in all crops, but also 
 an especial emphasis, particularly in the corn belt, on the pro- 
 duction of oats and corn instead of wheat. The increase in the 
 production of wheat in the state between 1850 and 1860 amounted 
 to 35.9 per cent, of corn 46 per cent, and of oats 50.5 per cent. At 
 the same time the total amount of grain produced in the forty 
 three counties along the Illinois Central (excluding Cook county) 
 increased from 21,200,000 bushels in 1850 to 80,500,000 bushels 
 
 "Seventh, Eighth, and Ninth Censuses (1850, 1860, 1870), volumes on 
 Agriculture. 
 "Ibid. 
 "Ibid.
 
 379] TRAFFIC, 1857-1870 95 
 
 in 1870, or 369%. The number of sheep, cattle and swine on the 
 farms will be taken up later on in this chapter. 
 
 Having seen the growth of grain production in the territory 
 tributary to the Illinois Central it is possible to ascertain what 
 influence these large crops had upon the railroad. In the preced- 
 ing pages it was shown that the Illinois Central was placed in a 
 very disadvantageous position in 1856 to 1870 in regard to ship- 
 ping grain south to New Orleans and that economic conditions 
 diverted western grain to Chicago and the east and west trade 
 route. Although not to its interests, the "Central" was forced 
 to yield to outside forces and make Chicago, not Cairo, its prin- 
 cipal terminus for the handling of grain. The phenomenal rise 
 of the former city as a grain center is a familiar story, and in the 
 period under discussion the Illinois Central did as much as any 
 other road to build up the interests of this city. It accomplished 
 this result despite its unfavorable location. In studying the map 
 of the Illinois Central one is impressed by its poor arrangement 
 so far as shipments to Chicago are concerned. It is better situ- 
 ated than any other Illinois road for the handling of corn and 
 oats from a large portion of the corn belt, but is in a weak posi- 
 tion so far as wheat from the northern counties is concerned. To 
 carry wheat from, say, La Salle county over its own rails it must 
 send the grain south to Centralia and then north again to Chi- 
 cago, or about three times as great a distance as that of the Chi- 
 cago, Eock Island and Pacific route. 58 The same condition ex- 
 isted in the handling of grain from many of the counties on the 
 main line north of Vandalia. This was obviated by traffic and 
 trackage agreements, but not in a manner profitable to the ' ' Cen- 
 tral." Up to 1860, the Galena and Chicago Union line from 
 Freeport to Chicago had an agreement with the "Central" by 
 which the latter 's business from points north and south of Free- 
 port was sent to Chicago over the rails of the Galena road in the 
 ' ' Central 's ' ' cars. 59 Later a similar agreement was made with the 
 Chicago, Burlington and Quincy from Dixon, but on somewhat 
 less favorable terms. However, on most of the grain originating 
 north of the Illinois river the Illinois Central obtained only the 
 short haul to Freeport or Dixon, while the other railroad received 
 liberal returns for carrying the cars to Chicago. Relations with 
 the Galena or Burlington lines were not always friendly, and 
 from 1858 to 1870 another means of uniting the main line and 
 the Chicago branch was obtained. The Illinois Central assisted 
 
 B8 Cf. Chap. iv. 
 
 ^Annual Report, Illinois Central Railroad, 1855-1859.
 
 96 HISTORY OP ILLINOIS CENTRAL RAILROAD [380 
 
 in the construction of the Peoria and Oquaka, now the Toledo, 
 Peoria and Western branch of the Pennsylvania system, and 
 made a trackage agreement with that company by which its trains 
 could run from El Paso to Gilman over the latter 's tracks. By 
 this connection the two arms of the system were united one hun- 
 dred and sixty miles above Centralia and the company was in a 
 position to get the long haul on shipments to Chicago. 80 
 
 Other traffic agreements were made with roads intersecting 
 the Central by which the latter got the haul to Chicago. Impor- 
 tant among these alliances was one with the Great Western, now 
 the Wabash, at Tolono and Decatur, the Ohio and Mississippi at 
 Odin and Sandoval, the Alton and Terre Haute, now the St. 
 Louis Division of the Big Four, at Pana and Mattoon, and the 
 Mineral Point railroads. 61 By far the most permanent alliance 
 was the one with the Dubuque and Sioux City, which, as de- 
 scribed above, was leased by the Illinois Central in 1867. By this 
 arrangement all grain originating on the leased lines could be car- 
 ried by the Illinois Central over the charter lines. Iowa, at this 
 time, was a very important wheat growing district and most of 
 the grain transferred at Dubuque was wheat. Naturally, this 
 extension of the system had an important influence on the Illinois 
 portion, and during the first few years of the lease control of the 
 Dubuque and Sioux City was profitable to the Illinois Central. 62 
 
 During the time these various traffic and trackage agree- 
 ments were being completed, the receipts of wheat, corn, and oats 
 at Chicago over the tracks of the Illinois Central grew very rap- 
 idly. In 1855 only a part of the road was in operation and in 
 1856, 1857, and 1858 there were poor crops, while most of the 
 land near the railroad had not yet been settled. As a result the 
 receipts of grain at Chicago from this territory were small. In 
 1859, 1860, and 1861, and most of the remaining years of the 
 decade crops were good and the shipments by the railroad in- 
 creased to considerable proportions. Had it not been for the 
 exceedingly low prices prevailing during much of the period from 
 1857 to 1862 and the large shipments south to Cairo from 1860 
 to the close of the war, the movement would undoubtedly have 
 been much greater. The largest amount of any one grain con- 
 
 Report, Illinois Central Railroad, 1857-1860. The Illinois 
 Central had merely a trackage agreement with this company and in later 
 years allowed other and rival railroads to control this company. 
 
 l lbid., 1855-1870. 
 
 02 Cf. Chap, vi, for statements as to net profits accruing to the Illinois 
 Central from this lease.
 
 381] TRAFFIC, 1857-1870 97 
 
 sisted of corn, which increased from 758,901 bushels in 1858 to 
 6,903,430 bushels in 1867 and 10,475,680 bushels in 1871. 63 Wheat 
 shipments grew at a somewhat slower rate, from 1,100,482 
 bushels in the earlier year to 5,244,540 bushels in the latter. 6 * 
 The amount of oats handled remained under half a million bush- 
 els a year up to 1865, when it jumped to 1,678,087 bushels and 
 to 4,258,340 bushels in 1870. This rapid increase was brought 
 about by the more general cultivation of this grain after I860. 65 
 Compared with other railroads and the Illinois and Michigan 
 Canal the Illinois Central was always one of the leading grain 
 lines, and during the Civil "War period it handled more grain 
 than any other road, with the possible exception of the Chicago, 
 Burlington, and Quincy. In 1858 the Central was third in its 
 receipts of corn at Chicago, being surpassed by the Chicago, Bur- 
 lington, and Quincy and the Illinois and Michigan Canal, with 
 the Chicago and Northwestern only a few thousand bushels be- 
 hind. In 1871 the Illinois Central handled more corn than any 
 other line entering Chicago, and during the thirteen years 
 increased its proportion of the total receipts from 8.1% to 
 24.8 %. 66 In 1858 the ''Central" was second in the receipts of 
 wheat, which position it held in 1870, being led in both years by 
 the Chicago and Northwestern. Its proportion of the total num- 
 ber of bushels reported, however, increased from 11.5% to 30.2%- 67 
 The growth in the handling of oats was even larger. From third 
 place in 1858 the Illinois Central advanced to first place in 1870 
 and led its nearest competitor by two and and a half million 
 bushels. In the latter year it delivered 40.9% of all the oats re- 
 ceived, as against only 4.9% in the former year. 68 Moreover, 
 these figures do not include grain handled by the Galena or Chi- 
 cago, Burlington and Quincy or Northwestern railroads for the 
 Illinois Central on trackage agreements. Had this been included 
 
 03 Annual Report, Illinois Central Railroad, 1858, 1867, 1871. Itemized 
 figures are not given before 1858. 
 
 **Ibid. There is a slight difference between the figures given by the 
 Chicago Board of Trade and the railroad due to different "fiscal years. 
 
 os Annual Report, Illinois Central Railroad, 1858-1870. Cf. Ninth Cen- 
 sus (1870), volume on Agriculture, Introduction, under heading, Oats. 
 
 09 Annual Report, Chicago Board of Trade, 1858-1870. 
 
 68 Ibid. From 1867 to 1870 there is a discrepancy in the reports of 
 the Illinois Central, and the figures given by the company cannot be given 
 for the period.
 
 98 HISTORY OF ILLINOIS CENTRAL RAILROAD [382 
 
 the proportion belonging to the latter road would have been 
 much larger. As it was, 27.2% of all the grain received at Chi- 
 cago came in over the tracks of the Illinois Central, although the 
 Burlington, Northwestern, and Kock Island systems had each a 
 much larger mileage. 09 
 
 While the great bulk of the grain handled by the company, 
 despite its efforts to divert the traffic southward, was forwarded 
 to Chicago, the receipts at Cairo showed a healthy growth during 
 the period, and for occasional years were almost as large as the 
 receipts at the northern end of the road. Prior to 1860 the 
 amount of wheat, corn and oats handled at Cairo was only nom- 
 inal, but in that year, and the first few months of 1861, the south- 
 ern movement assumed considerable importance as the result of 
 energetic efforts on the part of the traffic department. River and 
 railroad connections to Mobile and New Orleans were improving 
 and the company believed this growth was permanent. 70 . These 
 prospects were rudely shattered by the outbreak of the Civil 
 War and the occupation of Cairo by the federal troops entirely 
 destroyed the southern grain trade. During the struggle a large 
 proportion of the supplies furnished the Union armies in Ken- 
 tucky and Tennessee were forwarded by way of Cairo, and the 
 receipts at that city were larger from 1861 to 1867 than ever 
 before. The demand for oats was especially large, and from 
 49,068 bushels in 1855 the movement increased to 4,629,408 
 bushels in 1864. 71 The demands of the army for corn, although 
 not as large as the demands for oats, were considerable and were 
 supplemented by the requirements of the civil population of the 
 South. Thus, the maximum receipts occurred in 1866, just after 
 the close of the war, and amounted to 2,350,841 bushels, as 
 against only 6,873 bushels in 1855. 72 The war had practically 
 no influence on the receipts of wheat and the tonnage of both 
 wheat and flour increased until after the war. After the re- 
 sumption of peace the receipts of all grains at Cairo continued 
 large, but the amount received from year to year varied consid- 
 
 69 'Annual Report, Chicago Board of Trade, 1858-1870; Annual Report, 
 Illinois Central Railroad, 1856-1870, showing number of bushels of grain 
 turned over to the respective connecting lines. 
 
 70 Annual Report, Illinois Central Railroad, 1860, 1861. 
 
 71 Ibid., 1861-1870. Most of the grain was destined, directly or indi- 
 rectly, for the army. 
 
 72 Ibid., 1855-1870.
 
 383] 
 
 TRAFFIC, 1857-1870 
 
 99 
 
 erably. 73 Corn more than held its own in 1865, 1866, and 1867, 
 but dropped to only 109,370 bushels in 1868, 23,460 bushels in 
 
 7S Annual Report, Illinois Central Railroad, 1855-1870. The following 
 tables show the proportion of grain received at Chicago and Cairo from 
 1855 to 1870, being taken from the Annual Reports, Illinois Central 
 Railroad. 
 
 VII. 
 COMPARATIVE RECEIPTS OF CORN AT CHICAGO AND CAIRO, 1855 TO 1870. 
 
 MISCEL- 
 
 
 
 
 
 
 
 LANEOUS 
 
 
 TOTAL 
 
 CHICAGO 
 
 PERCENT 
 
 CAIRO 
 
 PERCENT 
 
 PERCENT 
 
 1855 
 
 902,600 
 
 402,105 
 
 44-5 
 
 6,873 
 
 7 
 
 54-8 
 
 1857 
 
 679,843 
 
 242,115 
 
 36.7 
 
 6,116 
 
 9 
 
 62.4 
 
 1858 
 
 993,571 
 
 758,921 
 
 76-3 
 
 4,187 
 
 4 
 
 23-3 
 
 1859 
 
 943,967 
 
 780,943 
 
 82.7 
 
 22,823 
 
 2.4 
 
 14.9 
 
 1860 
 
 3,691,777 
 
 2,839,659 
 
 77-0 
 
 727,880 
 
 19.7 
 
 3-3 
 
 1861 
 
 7,724,399 
 
 5,341,303 
 
 69.1 
 
 2,119,320 
 
 27-5 
 
 3-4 
 
 1862 
 
 6,024,156 
 
 4,346,301 
 
 72.1 
 
 166,536 
 
 2.8 
 
 25-1 
 
 1863 
 
 4,149,999 
 
 3,597,331 
 
 86.5 
 
 17,863 
 
 4 
 
 I3-I 
 
 1864 
 
 2,339,653 
 
 1,721,749 
 
 73-5 
 
 228,508 
 
 9-3 
 
 17.2 
 
 1865 
 
 6,203,513 
 
 4,433,270 
 
 71-5 
 
 1,133,220 
 
 17.9 
 
 10.6 
 
 1866 
 
 8,024,035 
 
 5,443,824 
 
 67.8 
 
 2,350,841 
 
 29-4 
 
 2.8 
 
 1867 
 
 7,820,560 
 
 5,970,519 
 
 76.4 
 
 1,678,090 
 
 21.4 
 
 1.2 
 
 1868 
 
 5,844,930 
 
 5.844,930 
 
 
 109,370 
 
 
 
 1869 
 
 5,717,890 
 
 5,334,260 
 
 
 23,460 
 
 
 
 1870 
 
 5,ii4,i30 
 
 3,533,3io 
 
 
 287,880 
 
 
 
 For some reason, the total number of bushels of oats, corn and wheat 
 handled in 1868, 1869, and 1870, does not correspond with the statistics 
 before 1868 and no percentages can be obtained for those three years. 
 
 The Miscellaneous item includes shipments turned over to connecting 
 roads, such as the Ohio and Mississippi and the Galena and Chicago Union, 
 or delivered at local stations. The large percentage in this column before 
 1860 shows the importance of the Galena and Chicago Union connection. 
 In 1863, 1864, and 1865 considerable quantities of grain were turned, over 
 to the O. & M. for the use of the army. 
 
 VIII. 
 
 COMPARATIVE RECEIPTS OF OATS AT CHICAGO AND CAIRO, 1855 TO 1870. 
 
 MISCEL* 
 LANEOUS 
 
 PERCENT PERCENT 
 10.6 44.1 
 
 14.3 6l.8 
 
 42.9 22.5 
 
 47-3 30.7 
 
 
 TOTAL 
 
 CHICAGO 
 
 PERCENT 
 
 CAIRO 
 
 1855 
 
 461,000 
 
 209,600 
 
 44-5 
 
 49,068 
 
 1857 
 
 670,424 
 
 160,265 
 
 36.7 
 
 95,881 
 
 1858 
 
 409,325 
 
 141,334 
 
 76.3 
 
 17,551 
 
 1859 
 
 622,449 
 
 137,596 
 
 82.7 
 
 294,595
 
 100 HISTORY OP ILLINOIS CENTRAL RAILROAD [384 
 
 1869 and 287,880 bushels in 1870, as against an average of over 
 sixteen hundred bushels in the three preceding years. Oats de- 
 creased in a similar way in 1868 and 1869, but recovered in 1870. 
 Wheat actually increased after the war. These fluctuations were 
 much greater than at Chicago and indicate the lack of strength 
 in the southern movement of cereals. In the aggregate the total 
 number of bushels forwarded to Cairo as compared with Chi- 
 cago was small, except during the six years from 1861 to 1867. 7 * 
 Next to grain the most important agricultural commodity 
 carried by the Illinois Central was live stock sheep, hogs and 
 cattle. Conditions in the packing industry from 1856 to 1870 
 were radically different from what they are now and there were 
 serious restrictions upon the development of the industry. Re- 
 frigerator cars were not in general use and the transportation 
 of fresh meat was not possible. This prevented the centralization 
 of meat packing in the "West, which took place a few years later, 
 and the shipment of pork, beef and mutton to the eastern states. 
 Instead, most of the meat used in that territory was packed in 
 local establishments from homebred live stock, or animals sent 
 from the West on the hoof. Even the shipment of western live 
 stock for slaughter in eastern cities was handicapped by the high 
 cost of railroad transportation shipment by lake being out of 
 the question and by the difficulty of carrying the animals long 
 distances without great depreciation in value. Moreover, the 
 number of small, local packing houses was large in the West as 
 well as in the East. On the other hand great quantities of pork 
 and beef were salted or pickled and in that condition could be car. 
 ried long distances. Thus, the market for meat products was not 
 confined entirely to the territory within a few miles of the pack- 
 ing house. 
 
 1860 1,329,108 202,967 77.0 934,007 71.1 13.1 
 
 1861 793,244 262,209 69.1 457,398 59-2 7-8 
 
 1862 1,760,066 534,659 72.1 427,693 24.2 45.4 
 
 1863 4,581,731 605,040 86.5 2,083,639 43.3 43.3 
 
 1864 7,794,095 214,158 73.5 4,629,408 59.5 13.0 
 
 1865 4,518,731 1,605,443 71.5 2,141,806 46.4 18.2 
 
 1866 4,002,825 2,358,285 67.8 836,115 20.4 20.9 
 
 1867 4,863,110 3,302,140 76.4 1,136,530 23.4 8.1 
 
 1868 5,082,090 5,082,090 350,000 
 
 1869 3,830,620 4,015,590 522,340 
 
 1870 5,641,870 4,258,340 1,414,180 
 
 74 Annual Report, Illinois Central Railroad, 1855-1870; cf. Report of the 
 Delegates Appointed by the English and Dutch Shareholders, 1877.
 
 385] TRAFFIC, 1857-1870 101 
 
 The conditions outlined above affected the Illinois Central 
 in two ways. The high cost of transporting live stock prevented 
 the use of the territory beyond the Mississippi until after the 
 close of the Civil War, and made Illinois the natural center of 
 the industry. Moreover, from 1856 to about 1863 or 1864 only 
 that portion of the state within a hundred and fifty miles of 
 Chicago, which even then was the center of live stock shipment, 
 could send its sheep, hogs or cattle to market. But while this 
 gave the central counties of the state an advantage over their 
 competitors it limited the number of animals which could be 
 slaughtered at Chicago or sent east from there to the packing 
 houses on the Atlantic coast. As the number of farmers was 
 comparatively small at this time, it was profitable for them to 
 raise live stock, but restricted the number of cattle carried on 
 the railroad. After the Civil War railway rates were reduced 
 and the trans-Mississippi territory became a strong competitor 
 of central Illinois. 
 
 There were other influences of a somewhat local nature 
 which affected the industry in the counties along the Illinois 
 Central. One of the most important of these was the cost of corn. 
 Prior to 1860 corn on the farm was of little value and it was 
 usually cheaper to feed it to swine or cattle than to attempt to 
 ship it. Thus, the amount of grain forwarded from local stations 
 along the railroad was much smaller than the large crops would 
 have permitted. During the Civil War period the price of corn 
 was high and the farmers found it more profitable to ship it in 
 bulk than "on the hoof". After the war there was a decline in 
 the price of corn, and the high prices of meat induced the farm- 
 ers to raise a much larger number of animals than before. 
 
 As would be expected from these changing conditions, the 
 number of live stock on the farms of the state fluctuated, although 
 the general tendency was upwards. The central counties profited 
 the most by this increase. Evidently the growers of the period 
 did not find it profitable to fatten hogs and cattle entirely on 
 corn, for the census returns show that the counties raising the 
 largest amount of grain did not have the largest number of meat 
 cattle. For some reason or other, possibly the high price of cot- 
 ton which stimulated the production of wool as a substitute for 
 cotton in the making of clothing, the number of sheep much more 
 than doubled in the decade from 1860 to 1870 and nearly tripled
 
 102 
 
 HISTORY OF ILLINOIS CENTRAL RAILROAD 
 
 [386 
 
 in the central agricultural counties along the Illinois Central 
 Eailroad. 75 
 
 In the decade from 1860 to 1870 Chicago became the lead- 
 ing packing center of the country, and, thus, afforded a market 
 for the growing number of live stock in the state and especially 
 in that portion near the Illinois Central. Prior to the war the 
 Illinois Central ranked second among the railroads entering 
 Chicago in the number of hogs and cattle received, being preceded 
 by the Chicago, Burlington and Quincy and closely followed by 
 the Northwestern, the Rock Island and the Alton. 76 During the 
 war the high price of corn and other unfavorable conditions 
 affected the Illinois Central more than the other roads, and it 
 
 75 The growth of the live stock industry in the state is shown by the 
 following tables, which are taken from the census reports : 
 
 IX. 
 
 NUMBER OF SWINE ON FARMS, 1850 TO 1870. 
 
 1850 PERCENT i860 PERCENT 1870 PERCENT 
 
 Group I 251,187 13.1 449,079 17-9 581,178 21.5 
 
 Group II 620,536 32.6 1,110,097 44.3 1,074,946 39.8 
 
 Cook Co. 9,398 .5 13,587 -5 15,552 .6 
 
 TOTAL 
 State 
 
 Group I 
 Group II 
 Cook Co. 
 
 TOTAL 
 State 
 
 Group I 
 Group II 
 Cook Co. 
 
 630,934 33-1 
 I.9 1 5,97 100.00 
 
 1,113,684 
 2,502,308 
 
 X. 
 
 44-8 
 
 IOO.O 
 
 1,094,467 
 2,703,343 
 
 40.4 
 
 IOO.O 
 
 NUMBER OF CATTLE ON FARMS, 1850 TO 1870. 
 
 l85O PERCENT i860 PERCENT 1870 PERCENT 
 
 00,332 l6.7 l66,6l5 17.2 265,683 25.1 
 
 187,954 34-6 436,096 45.1 454,495 43-O 
 
 11,155 2.6 14,432 2.00 14,431 1.4 
 
 199,109 
 541,209 
 
 37-2 
 
 IOO.O 
 
 455,408 47.1 
 
 970,799 IOO.O 
 
 468,926 
 1,055,499 
 
 444 
 
 IOO.O 
 
 XI. 
 
 NUMBER OF SHEEP ON FARMS, 1850 TO 1870. 
 
 1850 PERCENT i860 PERCENT 1870 PERCENT 
 
 138,403 15.5 111,669 14-5 292,605 18.6 
 
 285,964 32.0 163,514 21.2 593,368 37-8 
 
 13,496 1.5 8,653 i.i 10,622 .6 
 
 TOTAL 299,460 33.5 172,167 22.3 603,990 
 
 State 894,043 loo.o 760,735 100.0 1,568,286 
 
 Annual Report, Chicago Board of Trade, 1858-1861. 
 
 38.4
 
 387] TRAFFIC, 1857-1870 103 
 
 brought in the smallest number of any of the large systems. 77 
 Beginning with 1866 the territory tributary to the ' ' Central ' ' was 
 better situated than its competitors, and the railroad again as- 
 sumed second position, with the Burlington still ahead. 78 The 
 other three important roads were not far behind, and excepting 
 the Burlington, there was not a great difference between the num- 
 ber handled by each. 
 
 The shipments of live stock constituted an appreciable part 
 of the traffic of the road. There were over four times as many 
 hogs and cattle shipped to Chicago in 1870 as the average from 
 1858 to 1860. For instance, in 1870, the Chicago Board of Trade 
 credits the railroad with receipts of 379,513 hogs, 87,915 cattle, 
 and 89,597 sheep, equivalent to about eighty eight thousand tons. 79 
 This was equivalent to 6.5% of the total tonnage handled by the 
 system in that year. 80 As the rates and the average haul of this 
 class of freight were considerably greater than the average the 
 business must have amounted to at least ten per cent of the gross 
 earnings. 81 The company endeavored to encourage live stock 
 shipments, though entirely as an addition to the regular move- 
 ment of grain, and the results, judging from the above, were 
 satisfactory. 
 
 Nearly all the live stock handled by the company was sent to 
 Chicago, and, in 1867, the last year for which complete data is 
 available, 82.5% of the cattle, 85.8% of the sheep and 82.5% of 
 the hogs were forwarded to that city. The demands of the local 
 butchers were undoubtedly satisfied by animals driven into town 
 on the hoof. Moreover, from a comparison of tables IX, X, 
 and XI, it is evident that the shipments over the Illinois Central 
 constituted a large proportion of the number of animals on the 
 farms immediately contiguous to the railroad. Thus, from the 
 rapid increase in the shipments to Chicago and the correspond- 
 ingly rapid growth after 1860 on the farms, it is safe to assume 
 that the live stock industry was a reasonably profitable one. 
 
 The minor lines of agriculture, such as truck farming, fruit 
 growing, dairying, the production of hay, vegetables, etc., were 
 
 77 'Annual Report, Chicago Board of Trade, 1861-1866. 
 Ibid., 1866-1870. 
 
 79 Ibid., 1870. The figures are not given by the railroad company. 
 Sheep and hogs are estimated at 200 pounds each, cattle at 1000. 
 s Annual Report, Illinois Central Railroad, 1870. 
 Sl lbid.
 
 104 HISTORY OF ILLINOIS CENTRAL RAILROAD [388 
 
 comparatively unimportant. Except for a small territory adja- 
 cent to Chicago there was little demand for truck or dairy prod- 
 ucts. Small quantities of butter, eggs, cheese, and vegetables 
 were carried on the railroad, but the aggregate tonnage or earn- 
 ings were insignificant, never exceeding one per cent of the gross 
 tonnage. 82 As the territory adjacent to the Illinois Central, 
 except a few counties in the northern part of the state, is not 
 adapted to either truck farming or dairying this is not surpris- 
 ing. The amount of hay handled was also small and constituted 
 a little more than one per cent of the gross tonnage and about 
 the same proportion of earnings. 83 
 
 Fruit growing was more important. Southern Illinois be- 
 tween Cairo and Centralia was well adapted to fruit raising and 
 by the close of the Civil War this region was sending considerable 
 quantities of apples, peaches, strawberries, and other small fruit 
 to the Chicago market. During the height of the season special 
 trains were run from Cairo to Chicago on passenger schedule and 
 the fruit was placed in the city in time for the morning markets. 
 The railroad encouraged the development of this traffic by special 
 service and reduced rates, and a large proportion of the perish- 
 able fruit supply of Chicago came from southern Illinois. Ex- 
 press rates were charged for the freight not unreasonable con- 
 sidering the service and character of the commodity but the 
 total revenue was small. As late as 1870 only ten thousand tons 
 of both vegetables and fruit were handled by the railroad. 84 
 
 On the whole, the Illinois Central developed the agricultural 
 resources of the territory dependent upon it as much as could 
 reasonably have been expected. While rates on grain, live stock, 
 and other farm products were high and prevented a larger move- 
 ment than took place, the railroad established as low charges as 
 would yield it a good profit. Methods of operation common to 
 all railroads of the period, the lack of a large tonnage, the geo- 
 graphical location of the line, the direction of traffic, all com- 
 bined to make low charges impracticable. The Illinois Central 
 was not the only railroad handicapped by these difficulties and, 
 taking everything into consideration, it did as much to build up 
 the portion of the state through which it passed as the North- 
 western, Burlington, Eock Island, or Alton did to assist the coun- 
 ties of Illinois, Wisconsin or Iowa through which they ran. On the 
 other hand, the farms of the state developed the railroad as much 
 
 82 Annual Report, Illinois Central Railroad, 1855-1870. 
 * 3 Ibid.
 
 389] TRAFFIC, 1857-1870 105 
 
 as the railroad developed their interests. The over sanguine 
 prophecies of vice president Neal were not fulfilled until after 
 the Civil War, but after the central part of the state once com- 
 menced to grow it turned over to the railroad all the grain and 
 live stock it could handle. 
 
 Next to agricultural products lumber was the most important 
 commodity handled by the railroad. Except along the streams 
 central Illinois between Kankakee and Effingham was very 
 sparsely wooded, and what timber was found was poorly adapted 
 for fuel or building purposes. Necessarily, most of the lumber 
 and wood used in this region had to be brought from places where 
 timber was more abundant. In 1856 to 1870 there were three 
 sources from which the supply came; (1) southern Illinois; (2) 
 northern Illinois and southern "Wisconsin; (3) the timber re- 
 gions of the Northwest (handled by way of Chicago). As the 
 amount of building going on during the settlement of the state 
 was large in proportion to the population and as wood was the 
 common fuel until long after 1870 the demands for lumber and 
 wood were large. 85 
 
 Places along the main line and the Chicago branch as far 
 north as Vandalia and Mattoon were supplied from the forests 
 of southern Illinois. A small territory just south of the Illinois 
 river depended on northern Illinois and southern Wisconsin. The 
 remainder of the supply came from Chicago. Practically all the 
 lumber that left the city by railroad was sent south over the 
 tracks of the Illinois Central, and this one item amounted to over 
 half of the total tonnage forwarded from Chicago by the com- 
 pany. At first the rates on lumber were placed so high it could 
 not be transported more than a hundred to a hundred and fifty 
 miles and the poorer wood from the southern part of the state was 
 used in considerable quantities. Later improved methods of 
 operation and the presence of a large number of empty cars in 
 Chicago, arising from the excess of northbound over southbound 
 shipments, enabled the company to reduce its charges. These 
 reductions stimulated the growth of shipments from Chicago, and 
 by the close of the decade from 1860 to 1870 nearly ninety per 
 cent of the lumber handled by the railroad originated in Chi- 
 cago. 86 At the same time the absolute tonnage forwarded steadily 
 increased, though much more slowly than the general traffic of 
 
 85 Letters of David Neal and Robert Rantoul on resources of Illinois, 
 in Documents Relating to the Organization of the Illinois Central Rail- 
 road. 
 
 s& Annual Report, Illinois Central Railroad, 1867.
 
 106 HISTORY OP ILLINOIS CENTRAL RAILROAD [390 
 
 the system. As the heavy movement of grain and live stock to 
 Chicago greatly exceeded the return shipments of merchandise 
 and miscellanies, the growth of the lumber traffic provided south- 
 bound loads for a large proportion of the equipment. By this 
 arrangement the cost of carriage of both grain and lumber could 
 be reduced and lower rates established. The result was benefi- 
 cial to the agricultural districts of the state in that it increased 
 the price of their corn or wheat and decreased the cost of lum- 
 ber and fuel. 87 
 
 The third largest single article of freight handled by the 
 railroad was coal. As stated in Chapter I, there were three im- 
 portant coal fields near the Illinois Central: the Danville, Du 
 Quoin, and La Salle mines. A few scattered mines were in exist- 
 ence, but their output was of slight importance. When the rail- 
 road was built it was supposed that the mines near Danville 
 would ship large quantities of coal to Chicago by way of the 
 Great Western, now the Wabash, to Tolono, and by the Illinois 
 Central from there north. 88 The company was disappointed in 
 this expectation and for various reasons, principally the compe- 
 tition of the Ohio coal, the tonnage handled was negligible. 89 
 The other two fields were of more importance. At first the mines 
 at both places were handicapped by a high cost of operation, but 
 as the country became more thickly settled and the mines larger 
 this difficulty was removed. Their usefulness, however, was lim- 
 ited by the high railway charges in effect. In 1856 to 1870 the 
 small amount of tonnage handled, the poor methods of operation, 
 and other causes, made it absolutely impossible for the railroad 
 to make low rates on such bulky goods as coal. From a cent to 
 a cent and a half a ton-mile was the lowest charge the Illinois 
 Central made under the most favorable conditions. As the coal 
 fields were from two hundred to two hundred and fifty miles 
 from a large market the high tariff prevented the transportation 
 of coal to those markets. Under ordinary circumstances a hun- 
 dred miles was about as far as the coal could be carried and the 
 
 87 The fact that the Illinois Central had a large return tonnage from 
 Chicago was an important factor in keeping the rates on grain and live 
 stock from advancing. Instead of the northbound freight having to 
 stand the cost of carriage both ways, loaded up and empty down, it had 
 to provide for only the upbound expenses. 
 
 88 Letter of D. Neal, Documents Relating to the Organisation of the 
 Illinois Central Railroad. 
 
 89 Annual Report, Illinois Central Railroad, 1855-1860.
 
 391] TRAFFIC, 1857-1870 107 
 
 production of the mines was limited to the demands of such a 
 territory. 90 
 
 Moreover, coal, as a fuel, was forced to compete with wood. 
 When the Illinois Central was built, wood was the universal fuel, 
 and even the company's locomotives were wood burners. After 
 a series of tests, the railroad began to use coal instead of wood 
 on its engines, and, to increase its traffic, endeavored to stimulate 
 the demand for "stone coal" as it was termed. 91 For a long 
 time the prejudice in favor of wood, supplemented by an abun- 
 dance in districts near the mines, prevented its general use, and 
 it was not until after the Civil War that coal was burnt to any 
 considerable extent. Furthermore, Ohio or Pennsylvania coal, 
 owing to the all water route, was much cheaper at Chicago than 
 Illinois coal. Only a few mines on the Chicago and Alton, and 
 Rock Island were in a position to compete with the eastern prod- 
 uct. 92 Under the circumstances, the market for coal mined on 
 the Illinois Central was not great. 
 
 Nevertheless, there was a steady increase in product. Slightly 
 over two hundred thousand tons, in addition to that used by the 
 company, was forwarded from the mines in 1870. This was some- 
 thing over three times as much as was shipped in 1857, and thir- 
 teen times as much as in 1855. 93 From 1857 to 1864 the amount 
 mined remained nearly stationary, but in the next seven years 
 it increased to over two hundred thousand tons. 94 This was 
 caused by the exhaustion of the forests, the growing demands 
 for industrial purposes and the decline of the prejudice against 
 coal. In 1870 it amounted to 14.9% of all the tonnage handled 
 by the railroad. Both the rates and the length of haul were less 
 than the average and the total gross receipts must have formed 
 a much smaller percentage of the total earnings. Taking into con- 
 sideration earnings and cost of service, coal was of less impor- 
 tance to the railroad than the live stock traffic if the two are 
 compared on the basis of gross and net earnings. The chief value 
 of the coal traffic was in its indirect benefits to the manufacturing 
 and commercial interests of the state. 
 
 The least prominent of the industries of Illinois affecting the 
 
 90 J. W. Foster, Mineral Resources of the Illinois Central Railroad. 
 
 ^Annual Report, Illinois Central Railroad, 1858. 
 
 92 The Chicago & Alton was the only railroad which brought any con- 
 siderable amount of coal into Chicago. Annual Report, Chicago Board of 
 Trade. 
 
 B3 Annual Report, Illinois Central Railroad, 1855-1870. 
 
 *Ibid., 1870.
 
 108 HISTORY OF ILLINOIS CENTRAL RAILROAD [392 
 
 Illinois Central was manufacturing. As has been stated, Illinois 
 was primarily an agricultural commonwealth in 1870, and the 
 territory tributary to the "Central", aside from Chicago, was 
 the distinctly farming portion. From Kensington to Cairo and 
 from Centralia to Dunleith there were only three cities that were 
 manufacturing centers of any prominence Galena, Decatur, and 
 Bloomington, and none of these places had any large industries. 
 Even Chicago was not an industrial center of the first rank. Its 
 commercial interests, such as shipping, the handling of lumber, 
 live stock and grain and the transfer of freight between east and 
 west lines, were very large, but it did not manufacture many 
 kinds of merchandise which were consumed by the agricultural 
 population of the state. Farm machinery and such goods formed 
 the great bulk of the merchandise or miscellaneous shipments 
 originating there. 95 In the remainder of the territory tributary 
 to the Illinois Central manufacturing was confined to the produc- 
 tion of simple articles for local use, the important lines being 
 the making of boots and shoes, clothing, woodenware and other 
 articles of wood, some farm machinery, whiskey and other alco- 
 holic liquors. In 1860 less than one per cent of the total popu- 
 lation of the counties between Shelby and La Salle were engaged 
 in manufacturing, and the proportion in 1870 was not much 
 larger. 98 
 
 Moreover, the products made in these village or city plants 
 were those used in the immediate locality. With the exception 
 of a few factories in Chicago and a much smaller number in the 
 remainder of the Illinois Central territory the manufacturing 
 establishments enumerated in the censuses did not send freight 
 over the railroad. Nor did they bring in large quantities of raw 
 material, since most of the goods they manufactured were made 
 from materials raised locally or else were of comparatively small 
 value. Thus, the total amount of freight handled to or from the 
 manufacturies of the state was of much less importance than the 
 products of mines, farms or forests. 
 
 However, there was a large tonnage of merchandise and sun- 
 dries either brought from the east for domestic consumption or 
 sent over the railroad for points beyond its rails. Including 
 domestic manufactures, the absolute amount and relative propor- 
 tion of this high class freight steadily increased from 1857 to 
 
 95 Eighth and Ninth Censuses (1860, 1870), volumes on Manufac- 
 tures. 
 
 'Eighth Census (1860), volumes on Manufactures and Agriculture.
 
 393] TRAFFIC, 1857-1870 109 
 
 1870. In the former year it formed 14.5% of the total traffic and 
 21.1% in 1870. 97 During this time the absolute tonnage increased 
 from 64,298 tons to 283,756 tons, or 342%. 9S As most of the 
 freight classed as merchandise or sundry was carried at rates 
 higher than the average and for longer distances, the gross receipts 
 in 1870 must have amounted to nearly a quarter of the total 
 earnings of the road, while the net results from this traffic, 
 presumably, were even more satisfactory. However, it is uncer- 
 tain just what items are included in sundries, and, for that rea- 
 son, the above proportion may be too large. Furthermore, much 
 of the merchandise was carried at through rates which were very 
 much lower than the local charges. This, again, may be 
 a cause of error. At any rate, the tonnage and gross earnings 
 of the two items make them second only to agriculture in impor- 
 tance. 
 
 The traffic of the railroad, viewed as a unit, increased quite 
 as rapidly as did the special lines mentioned above. In 
 1855 the central part of the state was thinly settled, there was 
 not a large amount of surplus product to be shipped, nor were 
 the settlers able to purchase any considerable quantity of mer- 
 chandise, lumber, salt, or other necessities or luxuries. But as 
 the railroad became better established, the number of people 
 in the tributary territory larger, and their purchasing power 
 greater, there was a rapid development of the traffic of the road. 
 In the sixteen years from 1855 to 1870 the number of tons of 
 freight handled by the road as a whole, including the leased 
 lines, grew nearly six fold and the number of ton miles nearly 
 nine fold." On the charter lines alone over five times as much 
 tonnage was handled in 1870 as in 1855. 100 As the average rates 
 remained about constant during the period gross earnings in- 
 creased in about the same proportion as the number of ton 
 miles. 101 By 1870 the traffic on the Illinois lines was about all 
 that the company was able to handle with its equipment and the 
 
 97 'Annual Report, Illinois Central Railroad, 1855-1870. 
 
 **Ibid. 
 
 "Ibid.
 
 110 
 
 HISTORY OF ILLINOIS CENTRAL RAILROAD 
 
 [394 
 
 poor operating methods then in use, and this condition had existed 
 since the commencement of the war. 102 
 
 The great bulk of the freight handled by the railroad was 
 classed as local, that is, it both originated and terminated at the 
 company's stations. In 1868 over ninety six per, cent was local, 
 and only four per cent through. In no year was the proportion 
 of the latter to total traffic more than fifteen per cent, and usually 
 it was less than ten. 103 Moreover, the local traffic increased more 
 rapidly than the through traffic, despite the efforts of the com- 
 pany to increase its interchange business and to develop through 
 connections. As the railroad reached the important distributing 
 and receiving centers of the state over its own rails, through busi- 
 
 102 Annual Report, Illinois Central Railroad, 1855-1870; see following 
 table : 
 
 XII. 
 
 INCREASE IN FREIGHT TRAFFIC; SYSTEM. 
 
 
 TONS OF 
 
 
 FREIGHT 
 
 1855 
 
 241,704 
 
 1859 
 
 422,433 
 
 1870 
 
 1,623,944 
 
 INCREASE 
 
 1,401,511 
 
 333% 
 103 Ibid,; see following table 
 
 51,650,364 
 265,409,371 
 213,759,007 413% 
 
 AVERAGE 
 HAUL, 
 MILES 
 
 122 
 
 16343 
 4143 34-8% 
 
 XIII. 
 
 CHARTER LINES. 
 
 PROPORTION OF GRAIN, LIVE STOCK, LUMBER, COAL AND MERCHANDISE TON- 
 NAGE TO WHOLE TRAFFIC, 1850 TO 1870. 
 
 
 GRAIN 
 
 LIVE STOCK 
 
 LUMBER 
 
 COAL 
 
 MERCHANDISE 
 
 TOTAL 
 
 
 PERCENT 
 
 PERCENT 
 
 PERCENT 
 
 PERCENT 
 
 PERCENT 
 
 PERCENT 
 
 1857 
 
 29 
 
 6.8 
 
 24.2 
 
 134 
 
 14.6 
 
 IOO.O 
 
 1858 
 
 30.8 
 
 6.3 
 
 23.6 
 
 15.1 
 
 14.6 
 
 IOO.O 
 
 1859 
 
 23-7 
 
 4-5 
 
 19.4 
 
 17.1 
 
 16.2 
 
 IOO.O 
 
 1860 
 
 44.0 
 
 4-2 
 
 15-3 
 
 10.3 
 
 14-5 
 
 IOO.O 
 
 1861 
 
 53-2 
 
 4-5 
 
 11.4 
 
 6.8 
 
 IO.O 
 
 IOO.O 
 
 1862 
 
 48.2 
 
 5-8 
 
 9-9 
 
 7-5 
 
 13.8 
 
 IOO.O 
 
 1863 
 
 41-5 
 
 6.9 
 
 11.9 
 
 72. 
 
 19.0 
 
 
 1864 
 
 39-8 
 
 6.9 
 
 13-4 
 
 IO.O 
 
 18.0 
 
 IOO.O 
 
 1865 
 
 38.8 
 
 4-8 
 
 17-3 
 
 IO.O 
 
 18.0 
 
 IOO.O 
 
 1866 
 
 43-1 
 
 5-2 
 
 14-3 
 
 13.1 
 
 16.5 
 
 IOO.O 
 
 1867 
 
 40.9 
 
 5-1 
 
 7-9 
 
 n.3 
 
 18.2 
 
 IOO.O 
 
 1868 
 
 35-3 
 
 6.3 
 
 16.4 
 
 15-2 
 
 20.3 
 
 IOO.O 
 
 1869 
 
 29-3 
 
 6.1 
 
 15-7 
 
 16.8 
 
 21.9 
 
 IOO.O 
 
 1870 
 
 30.6 
 
 5-9 
 
 15-2 
 
 14.9 
 
 2I.O 
 
 IOO.O
 
 395] TRAFFIC, 1857-1870 111 
 
 ness was necessarily confined to shipments of merchandise and 
 small quantities of miscellaneous articles. After the lease of the 
 Dubuque and Sioux City the company had only one valuable 
 traffic connection over which freight was sent on through bill- 
 ing the St. Louis, Alton and Terre Haute, which included the 
 Belleville and Southern Illinois, which crossed the lines of the 
 Illinois Central at Pana, Mattoon, and Du Quoin. By means of 
 this system through trains were run from St. Louis to Chicago, 
 via Mattoon, and to Cairo, via Du Quoin. The line from Chicago 
 to St. Louis handled a large share of the freight between those 
 two cities and on the whole was very important. At the same 
 time, the tonnage routed over this connection was only a small 
 fraction of the total traffic of the system. 
 
 While local freight, in the technical meaning of the word, 
 was much more important than through business, local traffic, 
 in the common usage, referring to freight handled between local 
 stations, was unimportant. Grain, lumber, merchandise, and live 
 stock, the leading articles forwarded or received, originated at 
 or were destined to the three main termini of the road, Chicago, 
 Dunleith or Dubuque, and Cairo. Shipments between local sta- 
 tions were confined to coal, certain kinds of merchandise, and a 
 few miscellaneous goods. At the most, less than thirty per cent 
 of all the traffic on the road was carried between local stations. 
 
 As indicated in the previous pages the bulk of the traffic was 
 seasonal, that is, most of the shipments were made in a few 
 months of the year. In the fall grain was shipped north to Chi- 
 cago and during the remainder of the year this kind of traffic 
 was not of great importance. The same condition existed in the 
 handling of coal, live stock, and, to a less extent, lumber. More- 
 over, the preponderance of agricultural shipments over merchan- 
 dise and lumber meant that the inbound tonnage at Chicago and 
 Cairo greatly exceeded the outbound. 104 Furthermore, except 
 during the Civil War period, the bulk of the agricultural ship- 
 ments were forwarded to Chicago, while the receipts at Cairo 
 were slight. 105 However, the northbound and southbound traffic 
 during the period from 1858 to 1870, inclusively, taken as a 
 whole, was evenly balanced. 106 
 
 The large increase in traffic which commenced with 1860 
 was brought about by the general development of the country, 
 
 10 *Annual Report, Illinois Central Railroad, 1855-1870.
 
 112 HISTORY OP ILLINOIS CENTRAL RAILROAD [396 
 
 and not by any marked reduction of rates. The tariffs on 
 through freight were considerably lower in 1870, but, as stated 
 above, local rates were higher during the latter year than when 
 the railroad was put in operation. 107 . However, the rates seem 
 to have been as low as was necessary to move the traffic. Lower 
 charges on certain articles such as coal and possibly lumber 
 might have increased the tonnage turned over to the railroad, but 
 it is almost certain that a reduction on the tariffs for grain and 
 live stock would not have attracted a much larger traffic. As it 
 was, the territory immediately adjacent to the Illinois Central 
 increased its production of agricultural products at a much faster 
 rate than the state as a whole and it is difficult to see how the 
 country could have grown much faster than it did. In the few 
 years immediately after the war, conditions were somewhat 
 different, but the statements made above still hold good for that 
 period. 
 
 Thus, it is safe to say that the Illinois Central Eailroad, so 
 far as freight traffic was concerned, fulfilled the object for which 
 it was built. Compared with the results accomplished by other 
 railroads in the central West, the achievements of the Illinois 
 Central were as satisfactory as could reasonably have been de- 
 manded. The territory tributary to it made gigantic strides in 
 agriculture, stock raising, mining, and manufacturing. The 
 country was well settled and the population, as a whole, was 
 prosperous and contented. 108 
 
 In the first few years in which the railroad was in operation 
 the passenger business was of more importance than the trans- 
 portation of freight. Before the war there was a large immi- 
 gration into all parts of Illinois and a large proportion of these 
 settlers used the Illinois Central railroad. Other reasons induced 
 a large passenger traffic and during 1856 and 1857 there was a 
 larger number of passengers carried on the railroad than in the 
 years immediately following the war. The Civil War also had 
 an important influence on travel over the railroad through the 
 
 107 Cf. Chap. vi. 
 
 108 These remarks do not apply to the years after 1868. After the war 
 there were important changes in economic conditions in the central west. 
 It became less and less profitable for the farmers to ship grain and the 
 agriculture communities suffered severely. This dissatisfaction led to the 
 Granger agitation of the early Seventies. However, these influences had 
 just begun to affect central Illinois and the results were not sufficient to 
 change the statement made in the text.
 
 397] TRAFFIC, 1857-1870 113 
 
 transportation of troops and the movement of persons to and 
 from the armies south of Cairo. With the removal of the tem- 
 porary stimuli to pasesnger traffic this part of the railroad's 
 business became of less relative importance than in the period 
 from 1855 to 1865. 109 
 
 The large traffic during the construction of the road and 
 the Civil War was accompanied by extremely low rates. In 
 order to induce settlers to come to Illinois and to develop the re- 
 sources of the state the tariffs from 1856 to 1860 were very low. 
 In 1857, the year of greatest travel, the average rate per passen- 
 ger was only two cents a mile. Local tariffs were placed at four 
 cents a mile, but most of the people using the road travelled for 
 much less, and the charges for immigrant and excursion traffic 
 were considerably below the average. During the war large 
 numbers of troops were carried at approximately half rates and 
 this made the charges appear lower than they really were. After 
 1865 conditions were normal and the local fare of four cents a 
 mile seems to have been the universal charge. 
 
 The bulk of the passenger business, as of the freight, was 
 local, but the proportion of through to local was much greater, 
 as the number of passenger connections was larger than the num- 
 ber of freight connections. In 1860 fourteen railroads, besides 
 those at Chicago, connected the Illinois Central with points east 
 or west, and this number had increased to twenty ten years later. 
 The most valuable of these connections were the eastern lines at 
 Chicago; the Toledo, Peoria, and Western at El Paso and Oil- 
 man ; the Toledo, Wabash, and Western at Decatur and Tolono ; 
 the St. Louis, Vandalia and Terre Haute and the Terre Haute 
 and Indianapolis at Vandalia and Effingham; the Chicago and 
 Northwestern at Freeport; the Chicago, Burlington, and Quincy 
 at Mendota ; and the Ohio and Mississippi at Odin and Sandoval. 
 Taking the through passenger business as a whole the Illinois 
 Central received about as many persons from other lines as it 
 turned over to them, and the business was quite profitable. 110 
 
 109 Annual Report, Illinois Central Railroad, 1855-1870. 
 
 ll Ibid. The number of persons received from and delivered to efich 
 
 of the connections of the railroad is given in the annual reports. The 
 summarized totals are as follows : 
 
 1860 1870 
 
 Received 66,127 95,046 
 
 Delivered 73,686 102,286
 
 114 HISTORY OP ILLINOIS CENTRAL RAILROAD [398 
 
 Although the Illinois Central Railroad was built to fit into 
 economic conditions in the upper Mississippi valley in which 
 the important lines of trade were north and south, not east and 
 west, it adapted itself, in the years from 1856 to 1870, to an east 
 and west movement of western produce. Had the original plans 
 of its promoters been carried out to their full extent, the Illinois 
 Central would, probably, have built up the territory dependent 
 on it to an even greater extent than it did. At the same time 
 the profits to its owners and promoters would have been greater. 
 As it was, economic conditions in the central "West and upper 
 Mississippi valley were such that the peculiar location of the 
 railroad did not interfere with its usefulness. The Illinois Cen- 
 tral was more influential than some of the distinctly east and 
 west roads, such as the Northwestern or Rock Island, in building 
 up the commercial interests of Chicago. Thus, the traffic his- 
 tory of this railroad from 1856 to 1870 presents the curious in- 
 stance of a road built to develop one line of commerce, in the 
 particular case, trade along north and south lines, actually doing 
 more than any other company to build up trade on a competitive 
 route. 
 
 Much of this success was due to an unusually fortunate 
 combination of circumstances. The favorable location of the 
 railroad, making it tributary both to the Great Lakes and to the 
 Mississippi River; the phenomenal industrial development of 
 the United States and of England, together with a considerable 
 increase in the price of farm products ; the exploitation of a rich 
 and virgin agricultural territory at a time when the revolution 
 in farming practice of the middle of the 19th century tremen- 
 dously stimulated grain production ; and the absence of all com- 
 petition in fact, practically every railroad touching the Illinois 
 Central Railroad was tributary to it all of these factors com- 
 bined to make the period from 1861 to 1870 the most prosperous 
 one in the history of the railroad. 
 
 However, most of these favorable influences were temporary 
 in their effect. The agricultural resources of Illinois were lim- 
 ited and after 1870 most of the causes which had worked for 
 the prosperity of the road before that time were to work for its 
 impoverishment for several years afterward. The most impor- 
 tant single influence, and one which was becoming influential 
 even before 1870, was the extension of the trunk lines, i.e. 
 Wabash, Pennsylvania, New York Central, Baltimore and Ohio, 
 and Erie railroads, with their connections, directly into the 
 territory of the Illinois Central Railroad. With these extensions
 
 399] TRAFFIC, 1857-1870 115 
 
 there followed a period of radical rate reductions which made it 
 possible for these roads to divert grain from central Illinois 
 directly east over their own rails, thus eliminating Chicago as 
 a terminal for this territory and giving the Illinois Central Kail- 
 road only a short haul to junction points. While these events 
 belong to the period after 1870 their influence commenced soon 
 after the Civil War and made clear to careful observers even 
 then the temporary nature of the railroad's prosperity during 
 this period. 
 
 On the whole, however, notwithstanding these accidental 
 influences, the period from 1857 to 1870 was one of solid traffic 
 development. Central Illinois was settled; a prosperous agri- 
 cultural population was made tributary to the railroad; 
 numerous towns and cities were established ; industries in these 
 places and at Chicago were well under way; a number of coal 
 mines had been opened and the coal introduced both for domestic 
 and industrial purposes. These results constituted the outward 
 achievements of the company. Supplementing them was the 
 internal development of the railroad in the way of traffic 
 organization and connections, the establishment of policies, and 
 the perfection of the machinery of operation and management. 
 Most important of all was the fact that the Illinois Central 
 Railroad had built itself firmly into the very center of the 
 economic organization of Illinois. Other systems might be 
 stronger or larger, but no system has ever been able to supplant 
 the "Central" in its hold on the industries of the state. What 
 the Pennsylvania Railroad is to Pennsylvania, the New Haven 
 to southern New England, and the Southern Pacific to Cali- 
 fornia, that, though perhaps to a slightly less extent, the Illinois 
 Central Railroad is to Illinois. Whatever else was won or lost 
 during the period to 1870, the fact remains that during this 
 time solid foundations were laid for the industries of central 
 Illinois as well as for the traffic of the company. These results, 
 moreover, were secured by a service more valuable than that 
 rendered by any other railroad of the period. Thus, in 1870, 
 the Illinois Central Railroad was established as the keystone in 
 the economic organization of Illinois; for that purpose it was 
 planned; for that purpose it was constructed; and the years 
 from 1857 to 1870 were the years during which that purpose 
 was fulfilled.
 
 CHAPTER VI. 
 
 FINANCES OP CONSTRUCTION AND OPERATION, 1851 TO 1870. 
 
 As already indicated, financial difficulties connected with 
 building a railroad through the center of Illinois prevented its 
 construction before 1850. Three successive private companies 
 and the state itself failed to secure the financial support neces- 
 sary to complete the enterprise and it must have been with many 
 misgivings that Robert Schuyler and his associates assumed re- 
 sponsibility for this previously illfated project. 
 
 Before 1851, the fiscal operations connected with the road 
 were neglected. As far as can be found from the records of the 
 Cairo City and Canal Company and of the state of Illinois, no 
 definite estimates of cost of construction were ever made. In 
 the Internal Improvement Act of 1837 a gross appropriation 
 of $3,500,000, only $10,000 per mile, was made, and the Cairo 
 companies evidenty regarded this sum as sufficient. 1 . Thus, one 
 of the first duties of the promoters of the new company was to 
 secure an approximate statement of the cost of the railroad. To 
 make a regular survey was too expensive, and, as a substitute, 
 Mr. Rantoul, late in 1850, through certain friends in the East, 
 secured the cost of the Alton and Sangamon and seven leading 
 eastern railroads. Upon these figures he prepared a prelimi- 
 nary estimate, which became the basis of the fiscal program of 
 the memorialists. According to this statement, the total cost 
 would vary from $14,950,000 ($23,000 per mile) to $32,078,843 
 ($41,681.81 per mile), depending upon length of line and char- 
 acter of construction. 2 
 
 In financing the enterprise the promoters had three methods 
 open to them. The one most common at that time, especially in 
 the East and South, was to sell sufficient stock to provide for 
 
 1 Session Laws of Illinois, 1836-1837, p. 121 ; cf . Chap, n ; also records 
 of the various Cairo companies in the office of the Cairo Title and Trust 
 Company, Cairo, 111. 
 
 Illinois State Journal (Springfield), February 12, 1851. The estimate 
 was forwarded to Representative U. F. Lender. 
 
 116
 
 401] FINANCES, 1851-1870 117 
 
 most of the expenditures, this being supplemented, if necessary, 
 by the issue of mortgage or income bonds. The second and less 
 conservative method, nevertheless rapidly growing in favor, was 
 to build the railroad by selling mortgage bqnds, usually at a 
 heavy sacrifice, and distribute the stock as a bonus to the pro- 
 moters. 3 With the Illinois Central there was a third possibility. 
 The company had a federal land grant of from two and a half to 
 three million acres of farming land and this allowed the company 
 to pursue a policy entirely different from what would otherwise 
 have been possible. 
 
 To the eastern capitalists the land grant was considered the 
 most valuable part of the undertaking, and a few years later 
 Mr. Richard Cobden expressed the opinion of these men very 
 clearly when he said "It is not as a railroad investment that I 
 regard so favorably this undertaking, but its value in my eyes 
 depends on the landed estate. . . ."* However, the value 
 of even three million acres of rich prairie land, hundreds of miles 
 from good transportation, was not great. Between every section 
 of railroad land the federal government held another section, 
 equally fertile, which it was willing to sell as low as two dollars 
 and a half an acre. Six miles back from the tracks lay a vast, 
 practically unoccupied stretch of government land, the maximum 
 price for which was a dollar and a quarter an acre. At imme- 
 diate sale, this enormous domain belonging to the "Central" 
 would not yield over eight or ten millions of dollars, less than half 
 the total cost of the railroad, and to supply the remaining mil- 
 lions themselves was not an inviting prospect to the promoters. To 
 avoid this difficulty the directors adopted a plan by which the 
 grant could be held until a large return would be received and 
 yet the land remain the basis of all fiscal operations. 
 
 This policy was worked out in detail in the report made by 
 President Schuyler to the board on April 23rd, 1851, the main 
 features of which are as follows. The land grant was to be 
 the basis of all financial operations, but to secure money for im- 
 mediate expenditures, mortgage bonds would be issued. (1) 
 All the railroad track, right of way, stations, etc., and two 
 million acres of land, were to be mortgaged to the extent of 
 $21,400,000, which was then considered the approximate cost of 
 
 3 Cf. Thompson, Cost and Capitalization of American Railroads. 
 
 4 Mss. letter from Richard Cobden to Sir Joshua Walmsley, written 
 from Midhurst, England, September 18, 1857. Original in office of the 
 President, Illinois Central Railroad.
 
 118 HISTORY OF ILLINOIS CENTRAL RAILROAD [402 
 
 construction. 5 These two million acres would be held for ten or 
 fifteen years, and then sold at such prices that the cash realized 
 would equal the total amount of bonds issued. The entire issue 
 would be retired not later than the year 1875. (2) Two hun- 
 dred and fifty thousand acres were set apart as a guarantee of 
 interest on the mortgage bonds and could be sold at the discre- 
 tion of the directors. (3) The remainder of the land amount- 
 ing to something between one quarter and three quarters of a 
 million acres, according to the exact route selected, was to be free 
 land, that is available for any contingency. (4) The stock, 
 equal in amount to the cash expenditures, was to be distributed 
 as a bonus to purchasers of bonds, promoters, directors, or sold 
 to outside parties, a moderate payment of $5 to $10 per share 
 being made to meet incidental and extraordinary expenses. 6 
 
 Thus, in return for an investment of a million or two dol- 
 lars, the stockholders were to receive, free of debt by 1875, a 
 first class trunk line, seven hundred miles in length, and five 
 or six hundred thousand acres of rich Illinois prairie land, worth 
 altogether eighteen to twenty million dollars. It was a business- 
 like proposition to secure to the promoters of the Illinois Central 
 the greatest profits ever realized to that time by a group of 
 American capitalists. Had it not been for a serious underesti- 
 mate of the cost of construction by Colonel Mason ; the panic of 
 1857 ; and the Civil War events entirely unforseen in 1851 
 these prospects would undoubtedly have been realized. 
 
 President Schuyler's plan of April 23rd was based on Ran- 
 toul's statement, and definite action was necessarily deferred 
 until Colonel Mason submitted his preliminary estimate in Sep- 
 tember, 1851. According to his report, the railroad would be 
 699 miles in length and for that distance the cost of roadway, 
 buildings, equipment, and incidentals was placed at $16,537,212, 
 or $23,600 per mile, as against $21,400,000 allowed by Rantoul. 7 
 
 'The lands were divided as follows : 
 
 400,000 acres inferior agricultural land at $ 6 acre $ 2,400,000 
 
 1,200,000 " " " 10 " 12,000,000 
 
 300,000 " superior " " 15 " 4,500,000 
 
 100,000 " especially valuable " " 25 " 2,500,000 
 
 TOTAL $2 1 ,400,000 
 
 "Letter of Robert Schuyler to Board of Directors, April 23, 1851, in 
 
 Documents Relating to the Organization of the Illinois Central Railroad; 
 
 cf. mortgage of September 13, 1851, in same pamphlet. 
 
 7 Report of President Schuyler to Board of Directors, September 12, 
 
 1851.
 
 403] FINANCES, 1851-1870 119 
 
 The schedules were prepared with great care and represented a 
 reliable estimate of the cost according to prices current in the 
 summer of 1851. At the same time, either through errors in 
 the surveys, wrong estimates of bridge work, grading, and build- 
 ings, or else through a desire to present to the outside world as 
 favorable a showing as possible, the report greatly underesti- 
 mated the cost of construction. The seriousness of this error is 
 shown by a difference of $10,030,805.61 between the estimate of 
 September, 1851, and the actual cost to December 31st, 1857 . 8 
 For an engineer of Mason's standing this difference of 60.5% 
 was inexcusable, and many subsequent financial difficulties were 
 caused by this mistake. 
 
 With the estimated cost of construction decreased from $21,- 
 400,000 to $16,500,000, the directors deemed it wise to decrease 
 the amount of money to be borrowed to $17,000,000. Accord- 
 ingly, on September 13, 1851, the Illinois Central Railroad Com- 
 pany mortgaged its right of way, track, buildings, and two mil- 
 lion acres of land, but not the rolling stock or remaining five 
 hundred thousand acres of land, as security for $13,000,000 seven 
 per cent, and $4,000,000 six per cent, coupon bonds, due in 1875, 
 with interest payable semi-annually in gold. The main fea- 
 tures of the mortgage were the same as outlined in the president 's 
 report of April 23, 1851, with the exception of the size of the 
 mortgage. 9 Three trustees were appointed to handle matters 
 relating to the mortgage. Two of these were appointed by the 
 Governor of Illinois and the third by the company. 10 
 
 In the charter the amount of capital stock was fixed at one 
 million dollars and could be ''increased ... to any sum not 
 exceeding the entire amount expended on account of said road. ' ni 
 
 No restriction, other than the above, was placed on the issu- 
 ing of stock, and the directors had entire power to fix the terms 
 of sale. Accordingly, in line with the letter, and perhaps with 
 the spirit, of the charter, the directors determined to keep the 
 stock at an amount equal to the total cost of the railroad, irre- 
 
 8 Construction expenditures to December 31, 1857, $26,568,017.61 
 Estimate of September 12, 1851, 16,537,212.00 
 
 DIFFERENCE $10,030,805.61 
 
 9 Mortgage of September 13, 1851. Documents Relating to the Organi- 
 sation of the Illinois Central Railroad. 
 
 10 John C. Moore and Samuel C. Lockwood were appointed by Gov- 
 ernor French, and Morris Ketchum represented the railroad. 
 
 "Act of February 10, 1851 (Illinois Central Charter), sec. 4.
 
 120 HISTORY OF ILLINOIS CENTRAL RAILROAD [404 
 
 spective of the cash paid in by the shareholders. Originally this 
 amount was fixed at $17,000,000, but later was increased to $25,- 
 500, OOO. 12 Under the president's plan, the bonds, and ultimately 
 the land grant, were intended to provide funds for construction, 
 and the stock was to be assessed only a nominal amount, say 
 $10 to $20 per share. 13 
 
 The charter provided that $200,000 should be deposited with 
 the state treasurer as a guarantee of good faith and that $20 per 
 share should be paid on the first one million of stock. Immedi- 
 ately after the company was organized one million dollars was 
 subscribed by the incorporators and $50,000, or $5 per share, 
 paid in to provide for the various expenses of organization. 14 
 Shortly afterwards this first assessment was increased to $20 per 
 share and another million dollars subscribed. A payment of 
 $10 per share was asked on the second issue. This gave a total 
 of $300,000 received from the first two issues of stock ($200,000 
 from the first issue and $100,000 from the second). As a guar- 
 antee that the road would be built two hundred thousand dollars 
 was deposited 1 with the banking firm of Ketchum, Rogers, and 
 Bement and with Mr. John Griswold, of New York, subject to 
 the order of the state of Illinois. 15 
 
 The receipts from the sale of the first two million of stock 
 paid the expenses of organization, but by winter it became neces- 
 sary to secure adequate funds for construction, and, in accord- 
 ance with President Schuyler's plan, mortgage bonds were 
 issued. In 1851, after several years of depression, the country 
 entered upon a period of great financial prosperity during which 
 there was a heavy demand in the United States and Europe for 
 good investment securities and the directors of the Illinois Cen- 
 tral were able to take immediate advantage of the favorable 
 financial situation. 
 
 12 Chicago Daily Democrat, August 17, 1853; also Annual Report, Illi- 
 nois Central Railroad, 1855, 1870. 
 
 13 Report of President Schuyler, September 12, April 23, 1851. 
 
 ^Chicago Daily Democrat, August 17, 1853. 
 
 15 At this time Mr. Moore was severely criticized for depositing the 
 money with men connected with the Illinois Central, but there is no ground 
 for believing that he was influenced by other than business motives. 
 Messrs. Griswold, Ketchum, Rogers, and Bement paid the state interest 
 at five per cent and gave as security additional certificates of deposit more 
 than covering the money borrowed. See letter of John Moore, dated 
 Springfield, January 24, 1852, quoted in Chicago Daily Democrat, February 
 6, 1852.
 
 405] FINANCES, 1851-1870 121 
 
 According to newspaper reports, one banking firm had 
 already agreed to take the entire $17,000,000 at par or over, 
 when a slight stock market flurry occurred, preventing comple- 
 tion of the arrangements. 16 Probably the real reason was that 
 investors hesitated to advance such a large amount before a 
 shovelful of earth had been removed. 17 This made it necessary 
 to reduce the issue to four or five millions, and numerous offers 
 were made for the smaller amount, including, it is said, a very 
 flattering proposition from the Rothschilds. 18 The success of 
 the smaller loan was immediate. By December, 1851, bankers 
 in New York, Boston, and Philadelphia had promised to take 
 $4,000,000 seven per cent bonds at par, and in February, 1852, 
 the negotiations were completed. 19 The sale at once placed the 
 credit of the Illinois Central on a sound basis, and showed that 
 it could borrow money on as good terms as well established roads 
 like the Hudson River and the New York and New Haven rail- 
 roads. It also enabled the company to pay cash for all construc- 
 tion work. 20 The success of the undertaking was thus assured. 
 
 Even before the mortgage had been signed, plans were made 
 to place part of the loan in Great Britain, and in August, 1851, 
 ex-secretary of the treasury Robert J. Walker and vice-president 
 David A. Neal were appointed as agents to visit Europe. They 
 reached London in November and before selling any bonds they 
 spent several months disseminating information in regard to the 
 "Central"; consulting bankers, brokers, and investors; and 
 making arrangements with manufacturers of railroad materials. 21 
 The results were entirely satisfactory. Before the formal an- 
 nouncement on June 12th, 1852, a large number of investors and 
 manufacturers had promised to take bonds, and within a few 
 weeks after the bids were asked for, the entire amount was dis- 
 posed of at a small premium. 22 The strength of the company's 
 credit was illustrated in a striking way when a number of large 
 rail makers took bonds rather than cash in payment of materials 
 purchased. It was also emphasized by the fact that the whole 
 
 ^Chicago Daily Democrat, November 5, 1851. 
 
 "See editorials in American Railway Journal, December, 1851. Mr. 
 Poor was editor of the Journal and my conclusions are based very largely 
 on his editorials. 
 
 ^Chicago Daily Democrat, November 5, December 15, 1851. 
 
 Ibid., February 16, 1852. 
 
 20 Ibid., February 15, 1852. 
 
 ^Ibid., September 8, 1851. 
 
 22 Railway Times (editorial), June 12, 1852; ibid., advertisement.
 
 122 HISTORY OP ILLINOIS CENTRAL RAILROAD [406 
 
 loan of 1,000,000 sterling, or five millions of dollars, although 
 most of it 23 was bearing only six per cent interest one per cent 
 less than the New York issue was over subscribed at a small 
 premium. 2 * However, the British purchasers were allowed to 
 subscribe to five shares of stock for every $1000 bond and as 
 Illinois stock, subject to possible assessments of $80 per share, 
 was selling at or near par, many investors bought high grade 
 bonds to secure such valuable stock. 25 Thus, by August 1st, 
 1852, $9,000,000 of six and seven per cent bonds had been sold 
 at par. 26 On the other hand, the shareholders had contributed 
 only $300,000. 
 
 From June, 1852, to June, 1853, there was a small increase 
 in the amount of stocks and bonds outstanding. No new bond 
 issues were sold, but a number of contractors and manufacturers 
 agreed to take bonds instead of cash in settlement of contracts. 
 Likewise, subscriptions from contractors and manufacturers, 
 stock subscriptions by purchasers of six per cent bonds, and pur- 
 chases by investors generally increased the amount of stock out- 
 standing. 27 'Furthermore, on June 15th, 1853, seven per cent 
 bonds to the amount of three million dollars were disposed of at 
 par, although it is probable that nearly all of this loan had been 
 unofficially promised several months prior to that time. 28 Thus, 
 by August 1st, 1853, 109,293 shares of stock had been subscribed. 
 Payments from $5 to $20 per share were made, and the total 
 amount received was $746,465, while $13,086,000 of bonds had 
 been sold or contracted for, of which $6,195,117.66 had been 
 paid. 29 All of the bonds had been disposed of, at or above par, 
 and, including differences in exchange and discount, there was a 
 premium of $84,014.27. Miscellaneous accounts, principally bills 
 payable, brought the total cash receipts to $7,840,525.68. Con- 
 struction and general office expenses, interest charges, and the 
 cost of organization took $6,558,216.45, leaving a nominal bal- 
 
 23 Of the $5,000,000, $1,000,000 bore seven per cent interest, and the 
 remainder, $4,000,000, bore six per cent. 
 
 24 Amertcan Railway Journal, May 14, 1853; also official statement of 
 Daily Democrat, August 17, 1853. 
 
 ^Railway Times, June 12, 1852; also miscellaneous editorials, adver- 
 tisements and notices during July, 1852. 
 
 2<s Statement of the treasurer, Chicago Daily Democrat, August 17, 1853. 
 
 27 Ibid.; also Railway Times, June 12, 1852. 
 
 "Ibid.
 
 407] FINANCES, 1851-1870 123 
 
 ance of $1,382,309.23. After deducting current liabilities, how- 
 ever, this was reduced to $370,232.45. 30 
 
 This is a favorable report, and had the financial situation 
 remained the same in 1854 as in 1852 and 1853 there would have 
 been no danger from the small cash balance. However, these 
 years had been times of tremendous expansion in all lines of busi- 
 ness and the demand for new capital was so great that it was soon 
 impossible to borrow on anything like reasonable terms. When 
 ten per cent bonds of reputable companies such as the Ohio and 
 Mississippi were selling at sixty or seventy, it was out of the ques- 
 tion to dispose of six and seven per cent Illinois Central bonds 
 at par. The money market was also affected by the outbreak of 
 the Crimean war which created large additional demands for 
 money, especially in England and prevented free investment 
 in industrial and railroad securities. By the middle of October, 
 1853, the six per cent bonds, which only a few months before 
 had been eagerly sought for at a premium, were selling for 95, 31 
 and by the last of April a further drop of fifteen points had 
 taken place. 32 This rapid decline was accentuated by the actions 
 of President Schuyler. He was president of the New York and 
 New Haven Railroad, as well as of the Illinois Central, and in the 
 name of the former company he had fraudulently issued a million 
 of stock, selling the same for the personal profit of himself and 
 friends. The leading railroad magnate of his time and a promi- 
 nent stock exchange broker, his defalcation had a disastrous influ- 
 ence on the stock market. A Wall Street panic commenced on the 
 24th of July, the day his embezzlement became known, and 
 securities dropped rapidly in price. 33 The effect on the Illinois 
 Central was especially damaging. Robert Schuyler, its president, 
 was a fugitive in Canada and Gouverneur Morris, one of the lead- 
 ing directors, was a bankrupt. The stock declined over forty 
 points in a few days and seven per cent bonds became a drug on 
 the market at 63. 34 With its treasury depleted and payments on 
 
 30 Statement of the treasurer, I. C. R. R., Chicago Daily Democrat, 
 August 17, 1853. 
 
 31 Railway Times, October 24, 1853. 
 
 32 Ibid., Feb. 4, 1854; seven per cent bonds sold at Si l / 2 to 81^; ibid., 
 July 22, November 24, 1854. 
 
 * 3 Railway Times, November 14, 1854; editorial references in each 
 number July 24 to November n, 1854; cf. New York and Chicago news- 
 papers of the same dates.
 
 124 HISTORY OF ILLINOIS CENTRAL RAILROAD [408 
 
 millions of dollars worth of construction work due within the 
 year, the situation was critical. 
 
 Fortunately at this time Mr. W. H. Osborn, who, more than 
 any other person connected with the road, had helped to place 
 its finances on the substantial basis of today, assumed complete 
 control of the financial affairs of the company. Prom August 
 1st, 1853, to December 31st, 1857, not quite four and a half years, 
 a total of $23,339,722.76 was expended on construction work and 
 interest payments. After deducting bills and accounts payable, 
 the company, at the commencement of this period, had only 
 $370,232.45 in cash, leaving some twenty-three million dollars to 
 be raised within this short period. Against these expenditures, 
 the company had potential assets to the extent of eight millions 
 in the form of unpaid installments on bonds already subscribed. 
 However, a large proportion had been taken by contractors or 
 manufacturers in payment of work or supplies, and when the 
 bonds dropped below par they refused to accept anything but 
 cash in settlement of their contracts. Thus, less than six million 
 dollars was actually received in cash from these unpaid instal- 
 ments. 35 At the same time rapid increases in the price of raw 
 material and the wages of laborers forced the contractors to de- 
 mand a larger compensation for work already commenced. These 
 demands the company was bound to respect, in order to prevent 
 a complete demoralization of the work through contractors giving 
 up their contracts. 36 Under the circumstances the directors were 
 forced to sell construction bonds at a discount. The charter pro- 
 hibited this, but by the act of February 27, 1854, this restriction 
 was removed. 37 As early as February, 1854, the company sold 
 bonds at a small discount, and in spite of the low quotations for 
 Illinois Central securities further issues were sold at current 
 market rates, sometimes as low as only $600 per bond. 38 Thus, 
 by the 31st of December, 1857, the management had disposed of 
 approximately four and a half millions of seven per cent bonds 
 at 65, as against par for six per cent issues sold in 1852 and 
 1853. 39 Including instalments on loans made prior to 1854, i.e. 
 the four and five million loans of 1852 and the three million loan 
 of 1853, the company realized $9,192,784.38 in cash from con- 
 
 Z5 Annual Report, Illinois Central Railroad, 1855-1857. 
 ^Railway Times, May 5, 1855 ( Satterthwaite's Report). 
 "Session Laws of Illinois, 1853-1854, February 27, 1854, sees. 2, 3. 
 ^Rail-way Times, May 5, 1855.
 
 409] FINANCES, 1851-1870 125 
 
 struction bonds from August 1st, 1853, to December 31st, 1857.* 
 For the four and a half million sold in this period the company 
 received only $2,900,000, or $650 per bond. 
 
 By selling these four and a half million dollars of bonds at 
 65 instead of par, the company decreased its receipts by approxi- 
 mately sixteen hundred thousand dollars, while, from various 
 causes, cost of construction was increased by several millions. 
 To meet this deficit in receipts the management resorted to the 
 three hundred thousand acres of free land reserved by the 
 mortgage of 1851, and in 1855 an additional mortgage, covering 
 $3,000,000 seven per cent Free Land bonds of 1860, was placed on 
 the railroad and on the free lands.* 1 The change that had come 
 over the financial position of the Illinois Central is strikingly 
 illustrated by the results of this loan. Only $2,079,876.61, or 
 $694 per bond, were received. Including the discount, this was 
 equivalent to about fifteen per cent for the five years the bonds 
 ran, as against slightly under six per cent for the London loan 
 of 1852. 42 
 
 Even the Free Land Loan of 1853 was not sufficient to meet 
 construction expenditures and finally, in 1856, the company re- 
 sorted to what was virtually a debenture note. In that year there 
 was issued $900,000 of eight per cent optional right bonds, pay- 
 able at any time after 1858. 43 To make the notes more inviting to 
 investors, holders of these securities were given an option on stock 
 equal to the face value of the bonds. 44 This issue was disposed of 
 at a higher average price than the Free Land bonds, as it realized 
 $945 per bond, equivalent, including discount, to about eleven 
 per cent interest. 45 However, borrowing money on short time 
 notes at eleven per cent to finance a partially constructed railway 
 was a dangerous as well as expensive piece of financiering. 
 
 These loans did not provide the necessary capital, and to 
 tide the company over the period of construction floating obli- 
 gations in the form of bills and accounts payable were allowed 
 
 *Annual Report, Illinois Central Railroad, August i, 1853, 1855-1857. 
 
 /Wrf., 1855, 1856. 
 
 * 2 Ibid. The interest on the money actually received ($694 per bond 
 at 7%) was 10.1%. In addition, the company had to pay $1000 per bond 
 in 1860, although it received only $694. As the company had the use of 
 the money for between five and six years this was equivalent to about 
 five per cent more, making a total of fifteen per cent. 
 
 * s lbid., 1856. 
 
 "Ibid. 
 
 "Ibid.
 
 126 HISTORY OF ILLINOIS CENTRAL RAILROAD [410 
 
 to accumulate a makeshift which eventually inflicted great mor- 
 tification as well as financial loss upon the company. Accord- 
 ingly, miscellaneous obligations were increased from $812,076.78, 
 on August 1st, 1853, to $3,700,551 on October 20th, 1857. Against 
 this liability the company carried in New York less than a hun- 
 dred thousand dollars in cash or cash assets. 46 
 
 While pursuing these expensive, though perhaps necessary, 
 expedients of selling bonds and notes at a heavy discount, the 
 company continued its weak policy in regard to assessments on 
 the capital stock. Prior to 1854, calls for only a nominal amount 
 had been made upon the stockholders, and, on August 1, 1853, 
 only $746,465 had been paid, an average of $6.80 per share. 47 
 In 1854 two assessments of $10 and $5 respectively were made 48 
 and this was followed the next year by two small calls of $5 per 
 share on the entire capital. 49 $1,000,000 of new stock was also 
 sold at $25 per share. In the middle of 1857 another call of $10 
 was made, but only partial payments were made during the sum- 
 mer. 50 By December 31, 1855, there had been received in cash 
 $2,571,050, or an average of $19.93 on the $12,925,600 outstand- 
 ing. The next year this was increased to $3,558,615, 51 or $25.20 
 per share on $14,034,700. 
 
 Two additional sources were utilized during the period from 
 1853 to 1857, viz. net receipts from operation and sales of interest 
 and free lands. Early in 1853 short portions of the road were 
 put in operation, and the net receipts began to constitute an ap- 
 preciable amount. From 1853 to 1855, inclusive, $1,281,305.02 
 was received in this way. 52 In 1856 cash sales of free and interest 
 lands were important, the combined receipts to 1857 being as 
 follows : 
 
 Net receipts from Operation $2,134,403.78 
 
 Net receipts Free & Interest Lds 1,148,049.22 
 
 Total net receipts _. $3,282,453.00 
 
 Interest to Dec. 31, 1857 _. 5,897,644.18 
 
 Net deficit _ $2,615,191.18 53 
 
 46 Statement of the treasurer, August i, 1853; Annual Report, Illi- 
 nois Central Railroad, 1857; Fisher Report, Railway Times, June 19, 1858. 
 
 "Ibid. 
 
 "Viz. $10 on 90,000 shares; $5 on 129,346 shares; making a total of 
 $20 per share. 
 
 * 9 Annual Report, Illinois Central Railroad, 1855. 
 
 50 /&uf., 1857. 
 
 "/</., 1855, 1856. 
 id., 1855. 
 rf., 1855, 1857-
 
 411] FINANCES, 1851-1870 127 
 
 Thus the net receipts from operation and land sales failed to 
 meet the interest payments in this period by two million six hun- 
 dred thousand dollars and the deficit had to be made good by 
 assessments on the stock and by sale of bonds. In fact it was not 
 until the year 1861 that receipts from free lands and the oper- 
 ation of the railroad paid all interest charges. 5 * 
 
 The various issues of short term notes and the accumulation 
 of unpaid bills meant that from 1853 to 1857 the directors were 
 forced into a hand-to-mouth financial policy, offset to only a par- 
 tial degree by subscriptions to stock or sale of long time bonds. 
 The result of this policy is shown by the condition of the treasury 
 in 1857. Over three million dollars of bills and accounts payable 
 were still outstanding, while the amount of cash, actually on hand 
 in New York did not exceed a few thousand dollars. The com- 
 pany had a large amount of bills and accounts receivable, time 
 loans and other slow assets, and uncollected instalments on stock, 
 but these assets were not available in case of a sudden market 
 stringency. 55 Steps had been taken to remove these difficulties, 
 but before they could be carried out there occurred the panic of 
 1857. The directors of the Illinois Central were unprepared for 
 such a catastrophe ; Mr. Osborn was in Europe at the time. Notes 
 were presented for payment; the funds in the treasury at New 
 York were very low, and though the company had eleven hundred 
 thousand dollars to its credit in England and over a hundred 
 thousand more in Chicago, it was impossible to draw bills of 
 exchange at any reasonable discount. For the first and only 
 time in its history the company was forced to suspend payment ; 
 the creditors, under stress of general financial failure, became 
 urgent for their money ; and, in the absence of the President, the 
 Secretary made a temporally assignment of the property in order 
 to prevent seizure of valuable assets by creditors. 58 
 
 On his return to this country, Mr. Osborn commenced ener- 
 getic measures to restore the property to the stockholders. Funds 
 were rushed from England ; arrangements were made with cred- 
 itors for extension of notes ; and the directors used their personal 
 credit to put the company on its feet. Mr. Osborn, himself, en- 
 
 5 *Annual Report, Illinois Central Railroad, 1861. 
 
 ^American Railway Journal, quoted in Railway Times, November 7, 
 1857; Annual Report, Illinois Central Railroad, 1856; Fisher Report, Rail- 
 way Times, June 19, 1858.
 
 128 HISTORY OP ILLINOIS CENTRAL RAILROAD [412 
 
 dorsed notes to the extent of several hundred thousand dollars. 57 
 Unpaid assessments were immediately collected; a call, payable 
 September 25th, of $10 per share, was made ; and a further assess- 
 ment of $10 ordered early in 1858. 58 In the emergency, the stock- 
 holders supported the company loyally, and made prompt pay- 
 ment of the additional calls, often at great personal inconvenience. 
 The crisis showed the danger of large balances of unpaid bills 
 and to eliminate this evil the directors issued sufficient short term 
 notes to pay off all such bills. Previously, they had found that 
 the optional right bonds had been very successful, and the $900,- 
 000 outstanding was now increased to $3,200,000. Optional rights 
 on 83,000 shares of stock were to expire between the first of June 
 and the first of July and this formed the basis of the loan. The 
 bonds were convertible into stock prior to February 20th, 1860, 
 on the basis of twenty five shares of stock with $40 paid in, for 
 each $1000 bond, and were to be redeemed on or before the 20th 
 of February, 1868. 59 Although the interest rate was only seven 
 per cent, the convertible feature was so attractive that something 
 like $2,558,000 were subscribed by the 1st of May, 1858. 60 
 
 These energetic measures accomplished their object, and by 
 the close of the year 1858 the company was again on a sound 
 financial basis. All the floating debt was either paid or otherwise 
 provided for and the assignment was removed. During the fif- 
 teen months from October, 1857, to December 31st, 1858, between 
 seven and eight million dollars were paid into the treasury of the 
 company in cash or in various Illinois Central bonds in payment 
 of stock, allowing the directors to retire the entire floating debt, 
 with the exception of $396,167.53, and to pay all construction and 
 interest charges in full. 61 ThuX through the efforts of Mr. Os- 
 born and his associates, the company passed through the assign- 
 ment with an untarnished record, and, in 1858, its credit was 
 higher than it had been for six years. Though somewhat expen- 
 
 57 A number of the English investors accused Mr. Osborn of taking 
 advantage of the company's condition to fill his own pockets, but this 
 resulted from the strong feeling over increased stock assessments, and 
 Mr. Osborn's long connection with the company, during which he was 
 ably supported by these very same men, amply refutes this assertion. 
 What compensation he received was by regular vote of the directors. 
 
 ^Railway Times, June 19, 1858; November 7, 1857; August 7, 1858; 
 January I, 1858. 
 
 Ibid., January i, 1858; August /, 1858. 
 
 *Ibid., August 7, 1858. 
 
 ^Annual Report, Illinois Central Railroad, 1855-1858.
 
 413] FINANCES, 1851-1870 129 
 
 sive, on account of the various financial expedients which had to 
 be adopted, the crisis of 1857 taught the company a valuable 
 lesson. 
 
 By 1859 all danger from the floating indebtedness had been 
 removed but there still remained the Optional Right bonds of 
 1868 and the Free Land bonds of 1860. Under the mortgages 
 these bonds could be retired in 1859 and 1860, and in those two 
 years all notes and floating liabilities in excess of those included 
 in strictly operating accounts, and the Free Land and Optional 
 Right bonds, were cancelled, leaving the construction bond mort- 
 gage of 1875 as the only lien upon the property. Thus, at a late 
 date, the company adopted a policy that should have been pur- 
 sued from the commencement of the undertaking. 
 
 During the years 1857 and 1858 the shareholders had paid 
 in an average of $35 per share on stock which they supposed 
 would cost them practically nothing, and judging from comments 
 in the English press British investors in the Illinois Central were 
 thoroughly indignant at the American directors. Meetings of 
 shareholders were held, two special committees were sent to the 
 United States, and the English stockholders and bondholders 
 formed a permanent organization to supervise the affairs of the 
 corporation. 62 The continued assessments, stimulated by a strong 
 bear movement on the exchange, forced down the price of both 
 stocks and bonds and for a time many of the small shareholders 
 were thoroughly frightened. The company was not yet in a 
 position to ignore the stock market and accordingly, as a peace 
 offering, the directors adopted two very important measures, 
 both of considerable financial benefit to the shareholders. 
 
 The first of these was the Cancelled Bond Scrip Dividend. 
 By 1856 the sales of land had been sufficient to cancel about $600,- 
 
 02 Cf. Railway Times, November, 1857 to December, 1858. 
 
 The attitude of the more conservative investors is shown by the 
 following letter written by Richard Cobden : "I do not change in the 
 slightest degree my opinion in consequence of the fall in the Illinois. 
 That the stock will go up again to its former level I have no doubt. 
 It is not as a railroad investment that I regard so favorably this under- 
 taking, but its value in my eyes depends on the landed estate which is the 
 noblest domain ever transferred in one conveyance. Nothing but an 
 earthquake or some other convulsion of nature can impair the value of 
 2,600,000 acres of the richest soil in the world, situated in the midst of 
 the most industrious & intelligent population. The Wall Street 'bulls' 
 and 'bears' will make no durable impression on such a property." Mss. 
 letter to Sir Joshua Walmsley, Midhurst, September 18, 1857. Original 
 in office of President, Illinois Central Railroad.
 
 130 HISTORY OP ILLINOIS CENTRAL RAILROAD [414 
 
 000 of the construction bonds and on July 12, 1858, as the result 
 of strong pressure from the English shareholders, the manage- 
 ment ordered that "whenever the amount of construction bonds 
 cancelled in a year should amount to five per cent on the share 
 capital of the company, certificates setting forth the amount so 
 cancelled should be distributed pro rata among the shareholders 
 and this scrip should be entitled to the same dividends as regular 
 stock." 63 These dividends were continued until 1863, by which 
 time the amount so distributed was $1,772,270. After 1863 the 
 profits from the land sales were divided among the shareholders 
 in other ways. 64 
 
 The second was dated from May 27th, 1859, and entitled any 
 stockholder who had paid up the full par value of his stock to 
 receive four per cent interest per annum on the same until a 
 regular cash dividend of at least four per cent had been declared. 
 There had been previous interest dividends paid in cash, but they 
 were sporadic, and this measure now offered an inducement to 
 the shareholders to pay up their stock in full. 65 
 
 These measures had a very important influence on the stock 
 account and encouraged the shareholders to pay up all unpaid 
 calls and assessments. As a result the number of full paid shares 
 increased from none in 1858 to 97,821 in 1863, and the cash re- 
 ceived from all shares from $3,558,615 in the spring of 1857 to 
 $15,654,980 in 1860 and $17,543,700 in 1863. 66 
 
 During the three years ending December 31, 1860, expen- 
 ditures for construction amounted to $1,080,237.86 and the deficit 
 in net earnings over interest charges to $2,095,408.08, thus leav- 
 ing $5,622,899.06 to cancel bonds and miscellaneous obligations. 67 
 The Free Land bonds were paid off at maturity in 1860, and the 
 optional right bonds were either redeemed by cash payments or 
 converted into stock. This left the construction bonds of 1875 as 
 the only funded debt. Moreover, receipts from land sales had 
 reduced the amount outstanding in 1860 to approximately fifteen 
 millions, as against a share capital of $17,945,400, of which $15,- 
 654,980 had been paid in cash. 68 This was a decided contrast to 
 
 63 Resolution of the Board of Directors, July 12, 1858, quoted in 
 Railway Times, August 7, 1858. 
 
 ^Annual Report, Illinois Central Railroad, 1863. 
 
 65 Ibid., 1855-1865 ; Resolution of Board of Directors, quoted in Rail- 
 way Times, June 18, 1858. 
 
 ^Annual Report, Illinois Central Railroad, 1856-1864. 
 
 ^Ibid., 1858-1860. 
 
 6S Ibid., report of the Land Department, 1860.
 
 415] FINANCES, 1851-1870 131 
 
 conditions in 1853 when less than eight hundred thousand dollars 
 had been paid by the shareholders. 
 
 The methods used to obtain money for construction purposes 
 having been reviewed it is important to see where these millions 
 of dollars went. To December 31st, 1857, when the railroad was 
 in full operation, the expenditures for equipment and construc- 
 tion amounted to a total of $23,436,668.32, or $33,198 per mile, to 
 which should be added interest during the period of construc- 
 tion. Including all proper construction charges, the total expen- 
 ditures for permanent improvements chargeable to capital were 
 as follows : 
 
 Construction charges to December 31st, 1857 $23,436,668.32 
 
 Interest charges to Dec. 31, 1856 $4,874,279.59 
 
 Less net rcpts. from operation 1,742,930.30 3,131,349.29 
 
 TOTAL COST OF THE ILLINOIS CENTRAL $26,568,017.61 C9 
 
 While the aggregate cost is high there seems to be no reason 
 to question the correctness of the accounts. In 1857 the Illinois 
 Central Railroad was undoubtedly the best built road in the 
 West ; ample terminal and yard facilities existed ; right of way 
 and station grounds were more than sufficient for the existing busi- 
 ness ; bridges and culverts were usually of stone or iron and al- 
 ways substantial ; grades were light, curves were of large radius, 
 and tangents constituted about ninety per cent of the line ; the 
 equipment was up-to-date in every particular, ample in amount, 
 and well built; on the whole roadbed and equipment were suffi- 
 cient to provide for traffic several times that of 1857. There were 
 occasional misappropriations of funds, poor contract work, and 
 speculations, but there was not that organized corruption and 
 mismanagement characteristic of many of the land grant roads. 
 The company itself did most of the construction work and all 
 contracts were satisfied in cash or bonds at par. More6ver, the 
 officials of the company were able to secure supplies and labor 
 at low prices. The average wages of employees did not exceed 
 those paid in the eastern states; nearly all of the iron was pur- 
 
 Annual Report, Illinois Central Railroad, 1855-1857. 
 
 The interest charge is based on the following assumptions: (i) the 
 road was not in completed condition until December 31, 1857; (2) inter- 
 est, less net receipts from operation, should be allowed from the time 
 individual sections were opened until the whole was in complete operation. 
 These assumptions are not absolutely correct, but the above plan seems 
 to be the best .basis for determining interest during construction.
 
 132 HISTORY OP ILLINOIS CENTRAL RAILROAD [416 
 
 chased in England at very low prices ; and the right of way, which 
 to-day is worth a fabulous amount, was secured at a nominal 
 cost. Three times the English shareholders sent a special com- 
 mittee to this country to audit the construction accounts of the 
 Illinois Central ; they were given complete access to all vouchers 
 and original records; and in their published reports the three 
 committees state emphatically that, so far as they could discover, 
 the accounts were honestly kept, and no fraud or speculation of 
 any extent was found. 70 Moreover, from a comparison of detailed 
 expenditures of the Illinois Central with those of several other 
 roads 71 it appears that, in the majority of cases, the Illinois cor- 
 poration paid lower unit prices for material than any of these 
 companies. The amount of interest seems somewhat excessive, but 
 this was made necessary by the size of the railroad, which pre- 
 vented efficient operation of the road until the whole was com- 
 pleted in 1856. Therefore, it is safe to say that the $26,568,017.61 
 given above is a reasonable and bona fide statement of the actual 
 expenditures and is a proper charge to capital. 72 
 
 It is not possible to make so favorable a statement in regard 
 to the wisdom with which part of this money was spent. 
 Throughout the early history of the company the directors held 
 rather exaggerated views of the traffic possibilities of the road. 
 They also adhered to the English system of building a railroad 
 in a thoroughly substantial manner. It goes without question 
 that the heavy initial expenditures materially reduced operating 
 expenses, but it is also true that a much lighter construction 
 would have answered the needs of that period just as well, and 
 the company would have been saved interest charges on expendi- 
 tures, which were useless for many years. For instance wooden 
 trestles would have answered as well as stone culverts; frame 
 stations might have been used instead of brick ; and similar inex- 
 pensive, but serviceable, equipment could have been used to ad- 
 \antage in many places. 
 
 70 Ackerman, Historical Sketch of the Illinois Central Railroad. Viz. 
 Railway Times, November 27, 1858; ibid., June 19, 1858; Report of the 
 Committee of Dutch and English Stockholders, 1876. 
 
 71 Viz. New Orleans, Jackson & Great Northern ; Mississippi Central ; 
 Mississippi & Tennessee ; Ohio & Mississippi ; Michigan Central. 
 
 72 With different methods of accounting used in the fifties it is impos- 
 sible to obtain an absolutely accurate statement of expenditure at that 
 time. However, the figures may be regarded as absolutely correct for the 
 first two places. The smaller amounts are retained to conform to the 
 figures of the company.
 
 417] FINANCES, 1851-1870 133 
 
 The period from 1850 to 1857 was a time of construction; 
 the years from 1857 to 1870 were years of enormous traffic devel- 
 opment which necessitated large additions to capital. Gross 
 earnings rose from $2,300,000 in 1857 to $8,700,000 in '1870, or 
 an increase of 266%, while the number of tons of freight moved 
 one mile increased from fifty million to two hundred and sixty 
 five million, or 430%. 73 At any period of railroad history, such 
 an enormous development would have demanded heavy capital 
 expenditures, but with the poor operating methods then in vogue 
 the amount of equipment had to increase in almost direct pro- 
 portion to the growth of tonnage. The greater number and 
 weight of trains also necessitated many improvements of the 
 property. In the thirteen years ending December 31st, 1870, the 
 charges to capital amounted to $7,084,421.10, bringing the total 
 cost in 1870 to $33,653,339.71, or $47,710 per mile. This amount 
 was distributed as follows : 
 
 Construction $4,317,169.05 
 
 Equipment 2,767,252.05 
 
 TOTAL ............................................................................................................... $7,084,421.10 74 
 
 In addition to the money expended on the Illinois Central proper, 
 a few thousand dollars were applied to capital account on the 
 Iowa leased lines, but this is not included in the total. 75 
 
 73 Annual Report, Illinois Central Railroad, 1857-1870; the last three 
 years include earnings of 200 .to 402 miles in Iowa, amounting to between 
 a million and a million and a half a year. 
 
 15 Ibid. The expenditures for Permanent Improvements were distrib- 
 uted as follows : 
 
 Bridging .......................................................... $ 496,016.59 
 
 Ballasting ........................................................ 401,865.55 
 
 Sidings ............................................................ 495,624.06 
 
 Lake shore Protection ................................ 292,416.23 
 
 Real estate ............ . ......................................... 163,115.91 
 
 Rails ................................................................ 49,223.60 
 
 Ties .................................................................................... 
 
 Fencing ............................................................ 74,815.79 
 
 Telegraph ........................................................ 36,674.16 
 
 Engineering .................................................... 40,953.92 
 
 Gen'l Expense ......................................... ...... 420,360.65 
 
 Buildings ........................................................ 951,108.45 
 
 Masonry .......................................................... 1 19,172.83 
 
 Roadway ........................................................ 261 ,237.54 
 
 Miscellaneous .................................................................. $4i3i7ji69.05
 
 134 HISTORY OP ILLINOIS CENTRAL RAILROAD [418 
 
 Statements have been made that in the Civil War period 
 and the years immediately thereafter the permanent improvement 
 account of the Illinois Central was unduly increased at the ex- 
 pense of operating charges. 76 There is just enough truth in the 
 statement to make necessary a somewhat thorough explanation. 
 Prior to about 1872 or 1873 maintenance expenditures were very 
 high even when compared with present expenses on the system, 77 
 and it is improbable that with such liberal appropriations the 
 property would run down. The company also had a very good 
 system of accounting and the accounts were as accurately dis- 
 tributed as on any railroad of the time. The following statement 
 of the Board of Directors approved by them on February 6th, 
 1874, shows the attitude of the company towards this matter: 
 "It should be noted that upon the plan of making up the con- 
 struction account followed by most railways, our charge to con- 
 struction expenditures would be considerably increased, owing 
 to the fact that, during the last ten years, extensive improve- 
 ments and additions have been made to your property, which 
 might have been charged to capital account, but have been in- 
 cluded in working expenses. ' ' 78 Moreover, with the exception of 
 the years 1865 and 1866, the net receipts from operation greatly 
 exceeded the fixed charges and dividends, and consequently, there 
 was no motive to increase the capital account at the expense of 
 operating charges. 79 Thus, it seems entirely reasonable to accept 
 
 Locomotives $1,071,944.08 
 
 Freight cars 1,389,385.64 
 
 Coal cars 10,985.22 
 
 Passenger cars 140,151.49 
 
 Shop machinery, etc 141,963.31 2,767,252.05 
 
 TOTAL $7,084,421.10 
 
 79 In the report of the English and Dutch Committee of 1876 it was 
 claimed that up to that time many items, properly chargeable to operation, 
 were included in capital accounts. 
 
 77 For instance, in 1867, the year the Iowa lines were taken over, but 
 before the lease had affected conditions in Illinois, the expenditures for 
 maintenance were : 
 
 Bridges, $123; buildings, $135; labor, $1,672; total maintenance of way, 
 $2,080 per mile ; repairs, locomotives, $3,060 per locomotive ; repairs, pas- 
 senger cars, $1,378 per passenger car; repairs, freight cars, $87 per car; 
 total maintenance of equipment, $1,470 per mile. Annual Report, Illinois 
 Central Railroad, 1867. 
 
 78 Quoted in Annual Report, Illinois Central Railroad, 1874. 
 
 79 Annual Report, Illinois Central Railroad, 1857-1870.
 
 419] FINANCES, 1851-1870 135 
 
 the company's statement of permanent improvements for this 
 period. As the greater proportion of the permanent improve- 
 ments were paid for out of surplus receipts in other words, at 
 the expense of possible dividends it may be taken for granted 
 that reasonable economy was exercised. However, as explained 
 at greater length on page 18, the Illinois Central diverted a part 
 of the receipts of the Land Department from the purposes out- 
 lined in the mortgage of September 12th, 1851, and had this not 
 been done there would have been a deficit in some of the years. 
 In no year did the net earnings and ' ' proper ' ' receipts from the 
 Land Department equal the interest and dividend payments. As 
 a result the company virtually paid dividends out of capital. 
 While this policy disregarded the spirit of the mortgage of 1851 
 and was not as conservative as might have been desired, it is 
 unreasonable to accuse the company of a serious error in account- 
 ing. 
 
 In the period before 1857, practically all the expenditures 
 for permanent improvements or construction, came from the sale 
 of bonds ; after 1857 net receipts from operation and sale of lands, 
 and assessments on stock, paid the major portion of such charges. 
 From 1861 to' 1870, net receipts from sales of free and interest 
 land and from operation exceeded dividends and fixed charges 
 by $2,381,203, however, the fixed charges and interest dividends 
 from 1857 to t 1860 exceeded the net earnings by $1,809,613.13, 
 leaving a net surplus for the thirteen years of only $285,794.95. 80 
 The deficit of interest and dividend payments over net receipts 
 from operation alone amounted to several million dollars. 81 
 
 In President Schuyler's financial plan of 1851, the funded 
 
 80 Annual Report, Illinois Central Railroad, 1857-1870. 
 
 81 From 1857 to 1870 there were received in cash from the shareholders 
 $12,880,265, to which should be added the net surplus of $285,794.95, mak- 
 ing a total of $13,166,059.95. During this period various expenditures not 
 chargeable to operation were as follows : 
 
 Permanent Improvements $ 7,084,421.10 
 
 Redemption Free Land Bonds, Optional Right Scrip, 
 
 current liabilities, etc. (approximately) 6,500,000.00 
 
 TOTAL $13,584,421.10 
 
 Received from stockholders and net surplus from 
 
 operation 13,166,059.95 
 
 DIFFERENCE $ 418,361.15 
 
 This difference would be accounted for by the surplus in 1870, and miscel- 
 laneous investments during the period.
 
 136 HISTORY OF ILLINOIS CENTRAL RAILROAD [420 
 
 debt, then represented by the $17,000,000 construction bonds of 
 1875, was a temporary expedient. Under the terms of the mort- 
 gage two million acres of land were set apart as security for the 
 loan, and the instrument was so worded that on the completion of 
 each sale, bonds, equal in value to the land disposed of, would be 
 cancelled. Thus, through the operations of the Land Department, 
 the entire loan was to be paid off not later than 1875. Various 
 difficulties delayed the sale of the construction lands. Except 
 in a few favored regions, transportation facilities were still poor 
 and several million acres of government land, selling as low as 
 $2.50 an acre, were also on the market. By the mortgage $8 was 
 the lowest price for any of these lands and the company found it 
 necessary to wait until most of the government domain had been 
 disposed of before placing its own land on the market. The con- 
 struction of the railroad in 1856 made settlement of the interior 
 counties of Illinois much easier and by that year practically all 
 of the government land had been sold. Tens of thousands of 
 settlers were seeking farms near the railroad, and the company 
 was thus in a position to demand reasonably high prices for its 
 land. However, through legal restraints and the good judgment 
 of the directors, the company pursued a very liberal policy. Cash 
 payments were not required, as was the case with the federal 
 land office. Instead, the settler could purchase his farm on credit 
 by giving a note for the amount, the principal to be paid in five 
 equal instalments, with interest at six per cent, the company, of 
 course, retaining title until all payments were completed. 82 
 
 In 1856 active efforts were made to sell the land and nearly 
 five hundred thousand acres were sold for upwards of four and a 
 half million dollars. The sales in 1857 were almost as large. 83 
 Most of the sales were made to actual settlers in small holdings 
 of one hundred to a hundred and twenty five acres, although at 
 first a considerable quantity was disposed of to speculators. In 
 the panic of 1857 the company experienced much difficulty with 
 this class of purchasers, and from 1857 on it refused to sell except 
 to bona fide settlers. 
 
 Up to the summer of 1857, sales were all that the company 
 could have desired, and everything indicated a continuation of 
 
 82 Land Office Pamphlets, Illinois Central Railroad, 1856-1870. The 
 interest per annum varied from two to six per cent, but most of the land 
 was sold on the basis of six per cent. 
 
 83 Reports of the Land Office. Annual Report, Illinois Central Rail- 
 road, 1856, 1857.
 
 421] FINANCES, 1851-1870 137 
 
 the purchases on the same extensive scale. But just at the height 
 of the sales, there occurred the panic of 1857 and the assignment, 
 which, of course, put a sudden stop to immigration into the state 
 and to further sales. Purchases dropped from $4,500,000 in 1856 
 to less than $500,000 in 1858 and to still smaller proportions in 
 1859. 8 * More important, still, many of the farmers along the 
 road had purchased land on credit and the panic left them unable 
 to market their corn, wheat, and pork, or else they had no crops 
 to market on account of repeated droughts. In many cases 
 settlers were unable to make any payment whatever. Over a mil- 
 lion dollars was due in both 1858 and 1859 and the purchasers had 
 no cash to meet the instalments. To foreclose the mortgages or 
 notes meant distress to tens of thousands of farmers and a serious 
 impairment of revenue, through reduced acreage, to say nothing 
 of universal ill-will. In this emergency the company followed a 
 wise and conciliatory policy. Farms purchased by speculators 
 or those too shiftless to succeed, were foreclosed. Where crop 
 failures and the panic prevented payment of the instalments by 
 bona fide settlers, payment in kind was allowed, generally corn. 
 Where even this could be done, notes were extended and in 
 other ways the farmers were encouraged to remain. Most of the 
 settlers along the railroad took advantage of this generosity, and 
 a large proportion of the payments due in 1858 and 1859 were 
 extended. Altogether, over two million bushels of corn were re- 
 ceived in payment of land notes and the officers of the company 
 found themselves engaged in the grain business on an extensive 
 scale. Miles of cribs were erected along the tracks and corn was 
 held there for several months. In the end the company lost quite 
 a large amount by handling this grain, though it was much more 
 than compensated by the increased good will of the people along 
 the line and by the prosperity of the farmers. 85 Its liberal policy 
 secured it the support of the entire rural population of Illinois, 
 and for a decade the Illinois Central Railroad was the most pop- 
 ular corporation in the state. It must be admitted, however, that 
 the English shareholders viewed this generous policy with many 
 misgivings and severely criticised the management for its lib- 
 erality. 86 
 
 84 Reports of the Land Department. Annual Report, Illinois Central 
 Railroad, 1858, 1859. 
 
 S5 Report of the Committee of English and Dutch Stockholders, 1877; 
 Fisher Report, Railway Times, November 27, 1858; Annual Report, Illinois 
 Central Railroad, 1856-1861. This loss was borne by the Land Department. 
 
 *Ibid.
 
 138 HISTORY OF ILLINOIS CENTRAL RAILROAD [422 
 
 Following the droughts, crop failures, and panics of 1857, 
 1858, and 1859, came the good times of 1860, and the sales of 
 land again reached the proportions of 1856. The respite was 
 only temporary, and in the spring of 1861 the great struggle be- 
 tween the North and South commenced. The Illinois farmer was 
 cut off from his southern market ; thousands of men entered the 
 federal a'rmies ; and lack of a market and scarcity of labor made 
 the year 1861 notable for its severity upon the farmers. 87 But 
 the war created a demand for vast quantities of corn, wheat, 
 oats and meat for the army ; the eastern and New England states 
 increased their manufacturing industries enormously, and the 
 West was called upon to supply a part of the raw materials for 
 these new industries and food for the men supported by them. 8 * 
 Several hundred thousand settlers took up claims or purchased 
 farms in the western states and a considerable proportion of this 
 immigration remained in Illinois. The demand for railroad lands 
 grew with the immigration and in 1863 the sales of the Land De- 
 partment surpassed all previous records, and, that too, at in- 
 creased prices. 89 By 1864 the farmers were again in a position 
 to pay their notes, and in that year the cash receipts of the Land 
 Department reached the high water mark of $1,440,000. 90 
 
 The remainder of the decade continued to be a period of 
 unabated prosperity in which the agricultural interests of Illinois 
 were especially favored, and the demand for farms remained 
 good. By 1870 practically all the land north of Vandalia, and 
 much south of that town, had been disposed of at good prices, 
 while instalments on previous purchases had been paid promptly 
 and in full. 91 Thus, by December 31, 1870, $13,641,616.40 had 
 been received from construction land and $8,800,000 more from 
 free and interest lands, while upwards of four millions was still 
 due the company on notes, making a grand total of considerably 
 over $26,000,000 received from the land grant prior to 1870. 92 
 
 From 1870 to 1875 the sales of new land were very small. 
 Less than two hundred thousand acres of inferior land was sold, 
 
 87 Bogart, Economic History of the United States, Chap. xx. Cf. 
 Chap, iv, where these points are taken up at much greater length. 
 
 88 Bogart, Economic History of the United States, Chap. xxv. Cf. 
 Chap. iv. 
 
 S9 Annual Report, Illinois Central Railroad, 1860-1863. 
 
 Ibid., 1865. 
 
 91 Ibid^ 1870. 
 
 92 Ibid., 1870, report of the Land Department.
 
 423] FINANCES, 1851-1870 139 
 
 as compared with five times as much in the previous half decade". 
 However, it was a period in which practically all the outstanding 
 notes were paid off, with the result that cash receipts were large. 
 From 1871 to 1874 $2,304,649.87 was received in cash for sales 
 of new land and nearly all of the unpaid notes of 1870 were liqui- 
 dated. 93 At the close of 1874 the mortgage of September 13, 1851, 
 was cancelled and the land grant was freed from all restrictions. 
 The following table shows the total receipts from the land office 
 from 1851 to 1874, inclusive : 
 
 Construction Bond Fund $15,946,272.27 
 
 Interest Fund 6,051,856.85 
 
 Free Land Fund 3,508,488.51 $25,506,627.63 
 
 Expenses Land Office to 1873 1,383,644.04 
 
 Paid Traffic Department 297,589.59 
 
 Bills receivable, etc. (1874) 75,369.90 1,754,603.53 
 
 TOTAL $27,261,231.16 
 
 Net receipts Land Office, 1875 to 1907 2,219,061.66 
 
 GRAND TOTAL $29,480,292.82 94 
 
 By 1874 approximately two million two hundred thousand acres 
 had been sold, which made an average receipt per acre of a little 
 over twelve dollars, including expenses, or eleven dollars net re- 
 
 93 Report of the Land Department. Annual Report, Illinois Central 
 Railroad, 1874. 
 
 94 Ibid., 1855-1907; Fisher Report, Raiway Times, November 27, 1858; 
 Report of the Committee of English and Dutch Stockholders, 1877; cf. 
 special reports of the president, Illinois Central Railroad, 1890, 1897, 1906. 
 In 1851 President Schuyler predicted that the land grant would be suffi- 
 cient to pay the entire cost of the railroad and if the receipts of the Land 
 Department had been applied to the capital account that prophecy would 
 have been fulfilled. 
 
 Cost of Railroad to Dec. 3ist, 1857 $26,568,017.61 
 
 Receipts Land Department to 1874 net 25,506,627.63 
 
 DIFFERENCE $ 1,061,389.98 
 
 The value of unsold lands in 1874 was much larger than this difference. 
 If the spirit of the mortgage of 1851 had been rigidly followed and deficit 
 in earnings before 1863 had been made up out of surplus receipts from 
 1864 to 1870, the receipts of the Land Department would have sufficed to 
 have paid back the cost of construction to 1857. However, a large part 
 of the receipts from the land grant went directly into the treasury of the 
 company.
 
 140 HISTORY OF ILLINOIS CENTRAL RAILROAD [424 
 
 ceipts. This grant of two and a half million acres of land has 
 been a source of great profit to the company. At the same time 
 it has been managed well, and sold to the best advantage of the 
 community as a whole, as well as of the company. 
 
 Of the total receipts of the land office, $11,779,407.02 to 
 1907, or $9,560,355.36 to 1874, was used for the payment of inter- 
 est and dividends ; the cancellation of floating indebtedness, free 
 land bonds and optional right notes; for permanent improve- 
 ments defrayed from income ; to purchase securities of other com- 
 panies, especially the lines south of Cairo ; in a word to the same 
 purposes as the ordinary receipts from operation. 95 The remain- 
 der, amounting to $15,946,272.27, was applied towards cancelling, 
 in part, the construction bonds of 1875, in accordance with the 
 mortgage of 1851. It will be seen from the report of the land 
 department for 1872, the last full report, that $15,103,178.59, re- 
 ceived to that date, paid off construction bonds to the value of 
 $13,609,500, allowing a premium of eleven per cent, or $1,493,- 
 678.59. In 1873 and 1874 $657,856.47 was received, and the pro- 
 portion of premium to par value was presumably about the 
 same. 96 
 
 Since the mortgage covered $17,000,000 and only $14,200,000 
 was received from the sale of land there was a balance of approxi- 
 mately $2,900,000, which came from other sources, mainly the 
 Sterling and Currency Redemption loans. These bonds had three 
 uses (1) to provide construction bonds for the Land Department; 
 
 (2) to pay for permanent improvement chargeable to capital; 
 
 (3) to substitute new bonds for the construction bonds, and to 
 allow the sales of construction land to be used for interest and 
 dividends. 
 
 By the terms of the construction bond mortgage, bonds had 
 to be cancelled on the completion of every sale of land. Prior to 
 1861 the cash receipts from construction land were less than two 
 and a half million dollars and sufficient bonds could be obtained 
 in the open market on reasonable terms. So long as this condition 
 continued the terms of the mortgage inflicted no hardship upon 
 purchasers of land. The prosperity resulting from the Civil "War 
 allowed settlers along the railroad to pay for their farms, and, in 
 both 1862 and 1863, there were large demands for the bonds, 
 which naturally advanced the price of these securities. Many 
 
 95 Annual Report, Illinois Central Railroad, 1855-1906. 
 "Ibid., 1855-1875; Report of the Committee of English and Dutch 
 Stockholders, 1877.
 
 425] FINANCES, 1851-1870 141 
 
 holders saw a chance to make a profit by retaining the bonds and 
 forcing the company to recall them at the twenty per cent advance 
 specified in the mortgage, which again tended to advance the 
 price. The bonds were gilt edge securities with interest payable 
 in gold and with the general advance in prices during the period 
 they increased in value from this cause also. To compel the set- 
 tlers or the Land Department to purchase the bonds at an ad- 
 vance of fifteen to twenty per cent was an injustice and to remove 
 the difficulty the directors, in 1863, isused $2,500,000 six per cent 
 1st lien currency redemption bonds of 1870, with the object of 
 purchasing construction bonds. These new bonds could be ex- 
 changed for the old on the basis of $100 currency bonds for an 
 equal amount of six per cent construction bonds, or $115 of the 
 new for $100 seven per cent construction bonds. 97 
 
 This absorption of construction bonds in 1863 and 1864 tem- 
 porarily satisfied the needs of the Land Department, but, by 1867, 
 some $6,441,145.37 had been received from purchasers of land and 
 conditions were as bad as in 1863. The same remedy was applied. 
 In 1867, sterliijg six per cent redemption bonds of 1875 to the 
 amount of 500,000, or $2,500,000, were issued and exchanged for 
 construction bonds on about the same terms as the currency re- 
 demption bonds. 98 Both issues were easily disposed of, and, by 
 1870, the entire loan of $5,000,000 had been sold for cash at par 
 or above, or exchanged for construction bonds on the terms speci- 
 fied above. 99 Of the combined total approximately $4,000,000 was 
 used to purchase construction bonds, and, of this amount, per- 
 haps $750,000 was used in strict accordance with the terms of 
 the mortgage of 1851. 
 
 When the two loans were placed it was understood that a 
 part of the proceeds should be used to defray the cost of new 
 equipment and improvement of the property. No figures are 
 given by the company as to just how much was spent, for this 
 purpose, but, as shown on page 186 the approximate amount ex- 
 pended in this way was a million and a half. Of this perhaps a 
 half was received from the sale of bonds for cash and the re- 
 mainder by exchanging redemption bonds for construction bonds 
 
 97 Annual Report, Illinois Central Railroad, 1863. The six per cent 
 currency bonds were a first class security and the few bonds sold on the 
 open market brought $1000 per bond. However, nearly all of the issue 
 was exchanged for the construction bonds on the agreed terms. 
 
 "Ibid., 1867. 
 
 "Ibid., 1863-1870.
 
 142 HISTORY OP ILLINOIS CENTRAL RAILROAD [426 
 
 and transferring the proceeds from the Land Department to per- 
 manent improvements. 
 
 However, the greater portion of the receipts from these two 
 issues was used in a way entirely contrary to the spirit of the 
 construction bond mortgage. When that instrument was made 
 in 1851, it was understood that the two million acres set apart 
 would be sufficient to cancel the entire loan and that all the 
 proceeds from the land would be used to retire the construction 
 bonds. If the construction bonds were purchased through the issue 
 of other bonds it would not be necessary to apply the receipts 
 from the sales of land to that purpose and the money so received 
 could be turned into the general treasury to be used for interest 
 and dividend payments. About $3,500,000 of the redemption bonds 
 were used to purchase construction bonds and instead of an equal 
 amount of receipts from the land department being credited to 
 the Permanent Improvement account, as an offset to the new 
 bonds, the money was turned into the Free and Interest Land 
 account and made available for interest and dividend payments. 
 In this way the net earnings from operation were greatly in- 
 creased and the company was able to pay ten per cent dividends. 
 Had the $3,500,000 been applied in strict accordance with the 
 mortgage there would have been a deficit in net earnings for the 
 period from 1857 to 1870 of approximately $3,250,000, instead 
 of a surplus of $250,000. Under the changed conditions the com- 
 pany could not consistently have paid the dividends it did. In 
 other words, following a strict construction of the mortgage of 
 1851, the company from 1863 to 1870 was paying part of its divi- 
 dends out of capital. Except for a very few years the net earn- 
 ings from operation alone were never sufficient to provide for 
 both interest and dividends. Moreover, for the thirteen years, 
 the net earnings from operation and the receipts from the free 
 and interest lands as originally created, were less, by some two 
 and a quarter million dollars, than the disbursements for interest 
 and dividends, to say nothing of expenditures for permanent 
 improvements. 100 
 
 However, the course pursued was not without justification. 
 
 o f Land Department, Annual Report, Illinois Central Rail- 
 road, 1872, 1873, 1874; Fisher Report, Railway Times, November 7, 1858; 
 Report of the Committee of English and Dutch Stockholders, 1877. Neither 
 the company itself nor the various investigating committees make any 
 definite statement as to where the receipts from the six per cent redemp- 
 tion bond issues went and for that reason the figures given above are 
 only approximate.
 
 427] FINANCES, 1851-1870 143 
 
 Strict adherence to the mortgage would have necessitated a reduc- 
 tion of dividends by about two per cent a year. After the railroad 
 was built there were no legal restrictions upon the company 's use 
 of the land grant, except those provided in the mortgage of Sep- 
 tember 13th. The other restraints were those of the company's 
 own making and so long as the security of the bondholders was 
 not impaired it had a perfect right to abolish such self imposed 
 obligations. Moreover, under the circumstances, it would have 
 been foolish for the management to have pursued an ultra-con- 
 servative policy, detrimental to the immediate interests of the 
 shareholders, when a more liberal construction of the mortgage 
 and the president's plan of 1851 was very profitable to the owners 
 of the road, and did not impair the value of the property. 
 
 Aside from the objections noted above, the construction bond 
 account was well managed, and, on the whole, was of real benefit 
 to the railroad. At the same time, it was a rather expensive 
 loan. For the $17,000,000 of bonds issued there was received in 
 cash only $15,387,902.06 while $18,493,678.59 was spent to retire 
 them, allowing a difference of $3,105,776.53, or 20.2 %. 101 Prac- 
 tically all the loss fell upon the seven per cent issues, and by some 
 strange movement of chance the six per cents netted the company 
 nearly fifty per cent more per bond than the seven per cents, 
 although the latter were equally well secured and bore one per 
 cent additional interest. On the other hand, the construction 
 bond loan of the Illinois Central was far more profitable to the 
 company than were the results of similar loans for construction 
 purposes of such companies as the Ohio and Mississippi, St. 
 Louis. Alton and Terre Haute, and Great Western of Illinois. 
 
 Closely connected with the operations of the Land Depart- 
 ment and the issue of the two redemption loans was the action 
 of the company in regard to the stock account. Prior to the 
 assignment of 1857, as already stated, only nominal assessments 
 were made on the share capital, most of the funds for construc- 
 tion coming from the sale of bonds. Then from 1858 to 1863 
 this policy was reversed and heavy calls were made upon the 
 stockholders, with the result that from 1857 to 1870 $12,880,265 
 was received in cash from stock assessments. This, of course, 
 was a favorable showing. Beginning as early as 1860 the re- 
 ceipts from construction lands had decreased the funded debt 
 and during the same period payments on the capital stock 
 
 lol Annual Report, Illinois Central Railroad, 1855-1875. Cf. Report of 
 the Committee of English and Dutch Stockholders, 1877.
 
 144 HISTORY OP ILLINOIS CENTRAL RAILROAD [428 
 
 allowed an increased investment in the property, without a 
 corresponding increase in liabilities. By 1865 these two parallel 
 movements brought the cost of the railroad to something like 
 three million dollars more than the sum of all liabilities ; in other 
 words there was a surplus of that amount. 102 This was a condi- 
 tion directly opposed to the original plan of the promoters, by 
 which the bonds were to pay for the road and thfe stock was to 
 be largely "water", and to conform to the plan of 1851 the 
 directors from 1858 to 1863 issued $1,772,270 of Cancelled Bond 
 Scrip Dividends, referred to above. 103 Further reduction of the 
 funded debt continued to take place and in 1865 a stock dividend 
 of ten per cent, or $2,119,930, was declared, followed in 1868 by 
 another of eight per cent, or $1,881,100. 104 According to the 
 common meaning of the term these stock distributions constituted 
 stock watering, because in no case did the shareholders contribute 
 a penny directly to the company in return. Nevertheless, this 
 action was justified from the standpoint of the shareholders and 
 the company. 
 
 The reasons advanced for these stock dividends were as fol- 
 lows: (1) This $5,764,600 was represented by an actual cash 
 investment in the property, though received through operations 
 of the Land Department. (2) From 1856 to 1867, the share- 
 holders had made up annual deficits in operation, not chargeable 
 to capital, to the extent of $1,506,285.55, and the stock was con- 
 sidered a repayment of these advances. (3) Some of the share- 
 holders for as long as twelve years and others for shorter periods, 
 had invested money in the stock of the company, for which they 
 had received practically no remuneration and naturally, they 
 desired some compensation for this lost interest. 105 While the 
 last two items were important, they were more than compen- 
 sated for by later indirect rewards. In 1864 the stock was placed 
 on a ten per cent basis and dividends continued at that rate for 
 ten years. Furthermore, the stock dividends were enormously 
 valuable. In 1863, 1865, and 1868, the lowest prices reached in 
 August, the month in which the stock was received, were $100, 
 $123, and $143, respectively. 106 For the shareholder of 1862, this 
 
 102 Annual Report, Illinois Central Railroad, 1863. 
 Ibid., 1855-1863. 
 10 */frtU, 1865, 1868. 
 
 10 *Ibid., 1855-1867 ; Fisher Report, Railway Times, November 7, 1858 ; 
 Report of the Committee of English and Dutch Stockholders, 1877. 
 108 Compare quotations on Illinois Central securities, 1860 ff.
 
 429] FINANCES, 1851-1870 145 
 
 represented a bonus of 29.6% of stock, worth $36.30 per share 
 at current market quotations. For all the stockholders the value 
 of the stock dividends amounted to $7,069,756^90, as against an 
 alleged loss of interest of $1,506,285.55. Further dividends and 
 stock rights on this additional stock may be ignored as they 
 would have accrued anyway, and the same dividend would have 
 been distributed over a smaller number of shares. There was 
 nothing wrong in the stock distributions, the amounts were com- 
 paratively small, and a cash equivalent had been received in 
 each case in an indirect way, but, nevertheless, these three divi- 
 dends must be regarded as contrary to the conservative policy 
 ordinarily pursued by the Illinois Central. 
 
 The paramount purpose of the undertaking, to which stock 
 dividends, price of stocks, or profits from the sale of the land 
 grant were incidental, was its efficient operation as a railroad. 
 Upon the basic fact of earnings rested the permanent financial 
 success of the company. For the purpose of this study, the 
 operating accounts of the railroad may be divided into seven 
 successive classes, viz. gross earnings from operation, expenses 
 of operation, taxes, fixed charges, net income applicable to divi- 
 dends (including miscellaneous income), dividends, and surplus. 
 Of these accounts that of gross earnings was determined mainly 
 by the general prosperity of Illinois, that of taxes by the provi- 
 sions of the charter, that of fixed charges by the original invest- 
 ment in the railroad, thus leaving the item of expense of 
 operation to indicate the efficiency of management, and the items 
 of dividends and surplus to indicate the financial wisdom of the 
 board of directors. 107 
 
 The first of these accounts, i.e. gross earnings from opera- 
 tion, as the product of traffic carried and rates charged, was 
 determined by the traffic conditions outlined in Chapter V, most 
 of which were beyond the control of the management. 108 More- 
 over, the period from 1855 to 1870 was quite abnormal on account 
 of the panic of 1857, the Civil War, the prostration of the South, 
 the feverish industrial activity of the East, and the fact that 
 the territory tributary to the road was just being settled. 109 In 
 
 1<)7 Operating accounts for the period ending 1870 have been rearranged 
 somewhat so as to conform to recent practice. No attempt, however, has 
 been made to have them conform to the latest rulings of the I. C. C. 
 
 108 Cf. particularly the concluding paragraphs. 
 
 109 A very good present comparison is the traffic on the newly completed 
 Canadian Northern.
 
 146 HISTORY OF ILLINOIS CENTRAL RAILROAD [430 
 
 the earlier part of the period, or from 1855 to about 1861, the 
 railroad was just being put in shape for operation, and the 
 earnings were much below normal. 110 
 
 Commencing with the Civil War, gross earnings increased 
 at a phenomenal rate. Not until 1871 was the company 
 able to handle the enormous business forced upon it, and al- 
 though the larger traffic necessitated increased expenses, the 
 margin between the two grew larger insted of smaller from year 
 to year. From a million and a half in 1855 the gross earnings 
 from operations steadily advanced until the maximum of eight 
 million, six hundred thousand dollars was reached in 1870. 
 Part of this was due to increased mileage, but the receipts on 
 the charter lines alone were seven million two hundred thousand 
 in the final year. 111 In the first five years in which the road 
 was in operation, the total earnings increased by approximately 
 six hundred thousand dollars, about twenty-five per cent. This 
 slow growth was caused by the panic of 1857 and the crop fail- 
 ures in succeeding years. During this time passenger earnings 
 actually decreased. 112 Then, beginning with the second year of 
 the war, and continuing until the close of the decade, there took 
 place a remarkable traffic development, with a corresponding 
 growth of revenue. 113 In the eight years from 1862 to 1869 
 freight earnings grew from one million, nine hundred thousand 
 dollars to five millions, six hundred thousand, or one hundred 
 and ninety per cent. On the other hand, the receipts of the 
 passenger department increased only sixty-one per cent. 114 As 
 a result, freight was responsible for two-thirds of the revenue 
 in 1870, as against less than half in 1855. 115 
 
 110 This condition is made clear by the fact that quite a large propor- 
 tion of the equipment purchased up to 1857 was not used until about 1862. 
 Cf. Annual Report, Illinois Central Railroad, 1855-1862. 
 "Mnnwa/ Report, Illinois Central Railroad, 1855-1870. 
 112 Ibid., 1855-1862. 
 d., 1862-1870. 
 d., 1855-1870. 
 
 115 The following table shows the proportion of freight, passenger, and 
 miscellaneous revenue in years indicated : 
 
 PERCENT PERCENT PERCENT 
 1855 1862 1870 
 
 Freight 40 54 65 
 
 Passenger 47 37 24 
 
 Miscellaneous 13 9 II
 
 431] FINANCES, 1851-1870 147 
 
 As noted in Chapter V, 116 average rates per ton- and pas- 
 senger-mile were actually higher in 1870 than in the period 
 immediately preceding the Civil War. Passenger rates were 
 the most peculiar in this respect and were practically twice as 
 great in the last year of the decade as in 1857 , 117 The average 
 freight charge on all goods was three mills per ton-mile higher 
 in the later year than in 1859. In general, through rates de- 
 clined during the period, and local rates increased, but there 
 were important fluctuations caused by special conditions. 118 
 While rates were well maintained the total number of ton- and 
 passenger-miles more than doubled, permitting the rapid in- 
 crease in revenue noted above. 119 However, the currency infla- 
 tion of the Civil War period brought about such a change in the 
 value of money that a comparison of the years from 1862 to 
 1867 is almost worthless. 120 Moreover, the character of tonnage 
 and length of haul changed from year to year, and this cause 
 alone prevented a correct estimate of actual rate movement. 121 
 
 As a result of the heavy increase in traffic during the period 
 expenses of operation also increased, although at a somewhat 
 slower rate than gross earnings, or from $1,453,000 in 1856 to 
 $4,801,000 in 1870, ($2200 to $4300 per mile). However, the 
 operating ratio, i.e. the proportion of expenses of operation to 
 gross earnings, fluctuated greatly. Commencing at 58.9% in 
 1856, it rose, with the panic of the following year, to a maxi- 
 
 116 Chap. v; see also Annual Report, Illinois Central Railroad, 1855- 
 1870. 
 
 wibid. 
 
 W.; cf. Chap. v. 
 
 120 Cf. Bogart, Economic History of the United States, Chap, xxiv, 
 especially pp. 339, 340, 341; Mitchell, History of the Greenbacks; Fite, 
 Agricultural Development of the West during the Civil War, Quar. Jour. 
 Econ., XX, 259-278; Chap. v. 
 
 121 Statement of tonnage given in Annual Report, Illinois Central Rail- 
 road, 1855-1870. Only isolated tariffs and the average rate per ton or 
 passenger mile are available for comparison. The influence of the inflation 
 of the currency during the period from 1862 to 1870 is quite important. 
 An examination of the charts in this chapter and Chapter v shows a rapid 
 increase in all prices and charges given there, the rise being especially 
 marked in 1864 and 1865. However, it wpuld be unfair to assume that 
 revenues and expenditures rose in direct proportion to the inflation of the 
 currency in these years. Many payments were made on long term agree- 
 ments, and others, such as wages, cost of fuel, etc., did not rise with the 
 general rise of gold.
 
 148 HISTORY OP ILLINOIS CENTRAL RAILROAD [432 
 
 mum of 77.2%, from which point there was a gradual decline, 
 due to increased traffic, to a minimum of 46.8% in 1862. The 
 Civil War caused an increase to 62.9% in 1865, from which 
 level there was another decline to 54% in 1870. On the whole 
 the ratio of expense to earnings was less than is now considered 
 good practice, but operating conditions at that time were so 
 different that this low ratio was then consistent with good 
 management. The more prominent of these differences are: 
 (1) The volume of traffic, due largely to high rates, was only 
 a fraction of what is now carried. This resulted in less wear 
 and tear on equipment and roadway. (2) Wages, the most 
 important single item in operation, were considerably lower than 
 at present. (3) The freight and passenger' service was much 
 poorer. (4) On account of the light volume of traffic and the 
 higher return on capital, fixed charges and dividends took a 
 much larger proportion of earnings. 122 
 
 As might be expected from the light traffic of the period 
 maintenance of way expenditures represented a much larger 
 proportion of the total than in recent years. The total for this 
 account rose steadily, with the exception of the years 1861 and 
 1862, from $323,000 in 1856 to a maximum of $1,632,000 in 1869 
 ($1,495,000 in 1870), or from $450 per mile in the earlier year 
 to $1500 per mile in 1870, with a maximum of over $2200 in 
 1865. This expenditure was for a railroad that was almost 
 entirely single track and was well built and maintained from 
 the first. The proportion of maintenance of way to expense of 
 operation gradually increased from 22.3% in 1856 to 36.5% in 
 1865, with an average of over 30%. The question of whether 
 these expenditures did keep the roadway in good shape is dis- 
 cussed in a later paragraph. 1 ' 23 
 
 Expenditures for maintenance of equipment, in marked 
 contrast to present practice, due in part to the heavy charges 
 for renewals and depreciation now insisted on by the Interstate 
 Commerce Commission, were much smaller than for mainte- 
 nance of way, increasing from $278,000 in 1856 to a maximum 
 of $1,211,000 in 1870, or from $442 per mile in 1857 to $1093 
 in 1870. The proportion of maintenance of equipment to ex- 
 
 122 In reviewing expenses of operation prior to 1870 the fact must be 
 kept constantly in mind that it was not until a much later date that modern 
 methods of operation, with their tremendously efficient handling of traffic, 
 were introduced. 
 
 123 Cf. n. 134.
 
 433] FINANCES, 1851-1870 149 
 
 penses of operation varied from a minimum of 16.5% in 1859 
 to a maximum of 23.9% in 1868. As might be expected, the 
 maintenance per locomotive or car, particularly since most of 
 the equipment -was still new and much of it purchased in 1855- 
 1857 was not used until after 1861, was much less than at pres- 
 ent. Locomotive repairs per locomotive increased from $800 in 
 1855 to $2800 in 1870, with maximum of $4000 in 1865 ; in the 
 same years passenger car repairs per car increased from $250 to 
 $900, with maximum of $1650, and repairs to freight cars per 
 car increased from $35 to $75, with maximum of $100. 124 
 
 Expenditures for conducting transportation increased more 
 slowly than either gross earnings or maintenance expenditures, 
 and formed a considerably smaller proportion of expenses of 
 operation in 1870 than in 1856. The actual expenditures in- 
 creased from $768,000 in 1856 to a maximum of $2,038,000 in 
 1870, or from $1240 per mile in 1857 to $1840 in 1870. The 
 proportion of conducting transportation to expenses of opera- 
 tion, however, decreased from 53% to 41.9% during the same 
 years. 125 Of these totals slightly over half went for train opera- 
 tion, one fourth for station expenses, and the remaining fourth 
 was divided among the other charges, including part of the traffic 
 expense. These results, taken in connection with the large 
 increase in traffic mentioned in Chapter V, would seem to indi- 
 cate a considerable increase in operating efficiency. However, 
 an examination of the detailed statements given in the annual 
 reports, which lack of space prevents being printed here, shows 
 that this is not the case. 1 * 6 Three reasons may be given to 
 explain this apparent discrepancy: (1) Since the years from 
 1855 to 1862 were years of abnormally light traffic the cost of 
 handling it was heavy in proportion to the actual amount car- 
 ried. Consequently decreased costs later indicate merely a nor- 
 mal operating efficiency. 1 ' 27 (2) Few important improvements 
 
 124 It must be remembered that these expenditures were for the very 
 much smaller, lighter, and cheaper equipment then used. 
 
 125 This ratio is generally regarded as representing the actual efficiency 
 of management, since maintenance expenditures are determined quite 
 largely by external conditions. 
 
 126 According to the report of the company, although the figures for 
 the earlier years are probably less inclusive than for the later one, the 
 cost of train operation increased from 3.7 mills in 1859 to 9.9 mills in 
 1870 per passenger mile, and from 1.3 mills to 2.6 mills per ton mile. 
 
 127 As stated in Chap, iv, it was nef issary to establish complete train 
 service during the years before 1861, ev< l though the traffic did not justify 
 so extensive schedules.
 
 150 HISTORY OF ILLINOIS CENTRAL RAILROAD [434 
 
 in operating methods were introduced during the period, while 
 from 1863 to 1870 there was a congestion of traffic not favorable 
 to efficient operation. (3) Wages and the cost of materials 
 advanced considerably, especially during the closing years of 
 the Civil War. In summing up the efficiency of conducting 
 transportation *during the period it may be said that, conducting 
 transportation took a smaller proportion of the gross earnings 
 than at present, due, largely, to a higher class of freight; the 
 cost of operations, per unit, i.e. train ton, or passenger mile, was 
 also very much higher than at present; improvements in oper- 
 ating methods were slight and insufficient to overcome increased 
 expenses. 128 
 
 The last item in expense of operation, i.e. general expense, 
 varied quite decidedly from year to year, both in actual amount 
 and in proportion to the total cost of operation. 129 The total 
 increased from $84,000 in 1856 to a maximum of $257,000 in 
 1870, with a proportion of 5.5% and 5.9%, respectively. How- 
 ever, in 1861 general expenses consumed eleven per cent of 
 operating expenses, while in 1867 it fell to only four per cent. 
 Since this account included many miscellaneous items this wide 
 variation is to be expected. 1180 
 
 The question naturally arises, in an analysis of the various 
 items in expense of operation, whether the expenditures were 
 sufficient to properly maintain the railroad and to provide an 
 adequate service. To answer these questions completely would 
 require a presentation beyond the possibilities of this chapter, 
 but, in general, an affirmative answer may be given to both. 
 The matter of maintenance charges is discussed in the two fol- 
 lowing paragraphs and for the matter of service it may be said 
 that both an analysis of the reports of the company and an 
 examination of the publications of the time indicate that the 
 train service, both freight and passenger, considering the rail- 
 way development of the period, was reasonably adequate. From 
 a little before 1870 until several years later, there was much 
 
 128 Cf. statements in regard to operating efficiency in the annual reports 
 of the president, Annual Report, Illinois Central Railroad, 1855-1870. 
 
 129 The main items in general expense were : salaries general officers, 
 salaries clerks, general office expense, insurance, legal expense, miscel- 
 laneous. 
 
 130 In 1861 there is an item of $81,822 for miscellaneous, in 1868 insur- 
 ance was $48,513, and in 1869 general office expense and salaries totaled 
 $137,586.
 
 435] FINANCES, 1851-1870 151 
 
 complaint about the service, but this belongs to another period. 131 
 Up to 1862 both maintenance of equipment and road- 
 way charges were low, but this did not result in depreciation 
 of the property. This conclusion is borne out by the following 
 considerations: (1) Most of the equipment was from one to 
 five years old and heavy repairs were not as necessary as later. 
 (2) The roadway was also new and the small number of trains 
 passing over the tracks did not wear out the rails or affect the 
 condition of the superstructure. During these years rails, ties 
 or bridge materials did not need replacement and labor on track 
 was almost the only charge. "Wages for efficient trackmen were 
 low, and moderate expenditures kept the permanent way in ex- 
 cellent condition. (3) The traffic was abnormally light and the 
 cars and locomotives were worked only a part of the time. In 
 fact, a considerable proportion of the equipment purchased in 
 1856 and 1857 was not used until 1862 and did not require exten- 
 sive repairs. 132 Thus, the locomotive and freight car repair 
 charges were distributed over a smaller number of units than the 
 reports would indicate, and repairs on locomotives in actual use, 
 considering the light service and their recent purchase, were 
 fully as heavy as after the Civil War. 133 
 
 From 1863 to 1870, the road was taxed to its utmost capac- 
 ity and both roadbed and equipment depreciated rapidly. The 
 demands upon the rolling stock were so great that proper atten- 
 tion to repairs was impossible, and consequently, much larger 
 expenditures were necessary when shopped. This condition was 
 aggravated by high cost of labor and supplies. The hard service 
 had a similar effect on superstructure, rails and ties. More- 
 over, beginning with the Civil War, an increasing amount of tie 
 and rail replacement was necessary on account of a larger num- 
 ber of trains and natural deterioration. Despite this large in- 
 
 13L From about 1871 until after 1880 the railroad was forced to retrench 
 heavily and it is probable that conditions during that period are confused 
 with conditions before 1870 when there was no financial necessity for cur- 
 tailment in service or insufficient maintenance charges. 
 
 132 With the light traffic the average life of the ties, iron rails, and 
 bridge materials used on the Illinois Central was at least ten years. As 
 most of the track was not laid before 1854, no important replacements 
 were necessary until about 1864 or 1865. Moreover the quality of all 
 materials put in the road was first class and repairs were not as common 
 as on other roads which were built with cheaper materials. Cf. Acker- 
 man, Early Illinois Railroads, p. 42. 
 
 133 Annual Report, Illinois Central Railroad, 1855-1870. The cost of 
 repairs to each locomotive is given in the annual reports.
 
 152 HISTORY OF ILLINOIS CENTRAL RAILROAD [436 
 
 crease in the necessary maintenance charges the expenditures 
 were more than sufficient to keep the property in first-class con- 
 dition, and the railroad was in much better working condition 
 in 1870 than thirteen or fourteen years earlier. It is also rea- 
 sonably certain that a considerable amount of money was ex- 
 pended on maintenance which a more conservative system of 
 accounting would have charged to capital. 134 
 
 Taxes, with the two minor exceptions mentioned below, were 
 confined to the payment of seven per cent of the gross earnings, 
 as provided for in the charter. By interpretations of the courts 
 and of the state auditor this amount was fixed as both maximum 
 and minimum after the full payment became due with the com- 
 pletion of the railroad. No other taxes of any kind were as- 
 sessed in Illinois. In addition, however, there was a slight 
 federal tax on earnings and dividends under the war legislation 
 of the government. In Iowa, the leased lines were subject to 
 the usual state taxes, which were quite light. Up to about 1863 
 the seven per cent tax was a heavy burden on the company, but 
 with increased revenues later it ceased to be burdensome. 
 
 Net earnings, over and above expenses of operation and 
 taxes, increased rapidly ,with the growth of earnings. From 
 $424,613 in 1858 (the net income previous to that year being 
 carried as a capital account in this monograph) the amount rose 
 to a maximum of $3,429,838 in 1870. To this strictly operating 
 income should be added miscellaneous receipts, mainly from the 
 sale of lands. This total of gross income increased from $581,- 
 
 13 *Annual Report, Illinois Central Railroad, 1862-1870. 
 
 This matter of maintenance of the property is one which is involved in 
 considerable dispute. In the report of the Delegates appointed by the 
 committee of English and Dutch stockholders, made in 1877, and in the 
 President's special report of 1897, it is asserted that the property was 
 allowed to deteriorate after the Civil War. The investigating committee 
 undoubtedly viewed the property from the English standpoint and natu- 
 rally expected to have the railroad kept in better condition than it was. 
 The report of 1897 made a contrast of conditions in the latter year with 
 earlier periods and there was an unintentional bias against reporting the 
 property in as good condition as it really was. Moreover, the standards 
 of maintenance have advanced very rapidly and the property has been 
 built up to a large extent out of maintenance expenses. Furthermore, as 
 stated in the text, the maintenance of way and equipment charges were 
 very heavy, considering the amount of traffic, and it is difficult to see how 
 the property could depreciate, provided reasonable care was exercised in 
 the disbursement of the money.
 
 437] FINANCES, 1851-1870 153 
 
 732 in the earlier year to $4,043,705 in the later (a maximum 
 of $4,184,661 in 1869). 
 
 Against this gross income there was a charge for the fixed 
 items of expenditure, i.e. interest on funded and floating debt, 
 miscellaneous fixed charges on the bond account, and rental of 
 leased lines. With the reduction of the funded debt interest 
 charges steadily decreased from $1,340,997 in 1858 to only $622,- 
 053, in 1870, or only 18% of the gross income of the charter 
 lines. Including rentals, the item of fixed charges amounted to 
 $1,194,570 in 1870, or not quite 30% of the gross income. Since 
 nearly $500,000 of this amount, representing the lease of the 
 Iowa lines, was only incidental to the financial operations of the 
 Illinois Central proper, the company was in a very strong posi- 
 tion so far as income account was concerned. Moreover, since 
 the bonds were bearing only six and seven per cent, while divi- 
 dends were ten per cent, the fixed interest charge was in the 
 nature of an asset, rather than a drain upon net revenues 
 applicable to dividends. 135 
 
 The amount available for dividends and surplus, after all 
 charges for operation, taxes, interest, and rentals had been pro- 
 vided for, varied from a deficit of $759,265 in 1858 to a surplus 
 of $2,849,135 in 1870 ($3,997,070 in 1869, the maximum). From 
 1861 on, the income was sufficient to provide for dividend pay- 
 ments, with a small surplus during most of the years. However, 
 if the dividends be set off against the net income from operation, 
 less fixed charges, i.e. omitting payments from the land account, 
 there would have been a heavy deficit in every year. In fact, 
 there was a deficit of $1,908,717 in dividend payments over 
 
 135 The operation of the Iowa leased lines from 1867 to 1870 yielded 
 a slight profit to the Illinois Central and, therefore, the rentals paid were 
 not a liability upon the finances of the company. Aside from these rentals, 
 the fixed liabilities of the company towards the close of the period were, 
 as the text indicates, unimportant. They were amply covered by the 
 receipts from the Land Department and, therefore, left the railroad prac- 
 tically an unencumbered asset of the stockholders. With this high security 
 for any funded debt it became possible for the company to borrow at 
 interest rates lower than the dividends, and from this period dates the 
 policy of the Illinois Central of carrying a large funded debt bearing an 
 interest rate lower than the average returns on the investment, thus per- 
 mitting the payment of dividends higher than this average return. The 
 financial strength of the company rests on its wise application of this 
 policy.
 
 154 HISTORY OP ILLINOIS CENTRAL RAILROAD [438 
 
 income applicable to dividends for the period, and, had the net 
 income from land sales not been included, as they should have 
 been according to a strict interpretation of the mortgage, there 
 would have been an additional deficit of over seven million 
 dollars.* 36 
 
 After 1861 there was a surplus of net earnings above fixed 
 charges and by 1863 the amount was large enough to justify the 
 directors in declaring a regular semi-annual, four per cent cash 
 dividend, instead of the four per cent interest on full paid stock 
 given before that date. 137 In 1865 the annual dividend rate was 
 increased to ten per cent and was made payable on all stock 
 outstanding, including the scrip distributed prior to that time. 138 
 This rate was continued until 1874 and was equivalent to 10.8% 
 in 1864 and 1865 ; to 12% from 1866 to 1868, and to 13% from 
 1869 to 1874, on the actual cash invested by the shareholders. 13 * 
 During the period, the Illinois Central stock was distinctly a 
 good investment, as evidenced by the stock quotations, which, 
 in July, 1868, reached a high mark of 159. 140 Including cash 
 and stock dividends and rights, the shareholder received from 
 1863 to 1870, on an investment of $100, a return of $106.30, 
 equivalent to 15.18 per cent a year. Moreover, at the end of 
 this time his stock was worth forty dollars a share more than 
 in I860. 141 This certainly was a handsome return on such a safe 
 investment. 
 
 Nor, as seen above, was there any question about the 
 justification of these dividends from the standpoint of net 
 
 136 These statistics bring out forcefully the statement of Richard 
 Cobden that the strength of the railroad lay in the land grant. However, 
 the directors of the company must be criticised for their lavish use of 
 this reserve during the years from 1863 to 1870. In the language of Wall 
 street they were simply "cutting a melon" when a much more conservative 
 use of the reserve formed by the land grant would have saved the com- 
 pany much difficulty later on. In this connection it is interesting to com- 
 pare the policy of the Canadian Pacific Railroad in the use of funds 
 obtained from its land grants. 
 
 137 Annual Report, Illinois Central Railroad, 1863. 
 
 138 Ibid., 1865 ; i.e., eight per cent in 1864 and ten per cent in 1865. 
 
 139 /&uf., 1863-1870; i.e., if the stockholder of record of 1862 had kept 
 all stock distributions this would have been his return per $100 share. 
 
 140 Ibid.; Commercial and Financial Chronicle, VIII, 9 (Jan. 2, 1869). 
 This includes "rights". 
 
 141 Commercial and Financial Chronicle, X, 9 (January 7, 1871).
 
 439] FINANCES, 1851-1870 155 
 
 earnings, other than distribution of land office receipts. In 
 only one year, viz. 1866, did the dividends exceed the reve- 
 nue applicable to dividends and then to only a .slight ex- 
 tent. 142 In the other years, there was no question about the 
 ability of the company to maintain the dividend. However, the 
 directors did not always pursue a conservative course and ex- 
 penditures from 1863 to 1870 were almost too near receipts for 
 perfect safety. In 1870, the year when net earnings were the 
 most satisfactory, the fund applicable to dividends amounted to 
 only 11.4% against requirements of 10.4%. 143 Omitting receipts 
 from the land department, necessarily only a temporary source 
 of income, the net earnings applicable to dividends ranged from 
 5.4% in 1866 to 8.6% in 1870. 144 According to the company's 
 books, the high dividend rate was guaranteed by a large surplus, 
 but this was merely a bookkeeping account and was not repre- 
 sented by available assets. 1 * 5 By paying, say nine per cent 
 instead of ten per cent, a large cash surplus could have been 
 accumulated which would have allowed a continuance of eight 
 or nine per cent dividends over a much longer period. 146 
 
 Prior to 1870 the company pursued a conservative policy 
 in regard to extensions involving any financial risk. From the 
 completion of the road to the Civil War several traffic arrange- 
 ments with connecting or branch lines were made, but in no case 
 was the financial responsibility large. Bonds of the Ohio and 
 Mississippi and the Peoria and Oquaka, to the extent of approx- 
 imately $100,000 each, were purchased, but were not retained 
 for any length of time. 147 No other important agreements were 
 made except with the Dubuque and Sioux City Eailroad Com- 
 pany. As stated in Chapter IV, the Illinois Central, in 1867, 
 
 ^-Annual Report, Illinois Central Railroad, 1866. 
 
 143 /fotW., i.e., ten per cent cash dividend and about .4 per cent federal 
 war tax. In other years the dividend and war tax were barely earned. 
 
 * 44 Ibid., i.e., excluding receipts from the land department and miscel- 
 laneous sources of income. 
 
 145 The surplus was obtained by adding all interest payments to cost 
 }f construction and depreciation on construction and free land bonds and 
 deducting from it net receipts to 1863. This account was not only not 
 represented by cash assets, but was incorrect. 
 
 146 From 1874 to 1905 the dividends were reduced to a four to six per 
 cent basis and the accumulation of a large surplus in 1870 might have 
 improved this condition. 
 
 147 Annual Report, Illinois Central Railroad, 1855-1862 ; Fisher Report, 
 Railway Times, June 19, 1858.
 
 156 HISTORY OP ILLINOIS CENTRAL RAILROAD [440 
 
 leased the property of the Dubuque and Sioux City and its 
 subsidiary lines, the Iowa Falls and Sioux City and the Cedar 
 Falls and Minnesota, for a period of twenty years. 
 
 The calendar year 1870 was the most successful year for 
 the Illinois Central railroad to that time. Gross revenue was 
 large, and the net earnings were sufficient to pay all fixed 
 charges, a ten per cent dividend and provide a surplus of a 
 quarter of a million dollars. The financial policy pursued by 
 the company in the construction and operation of the railroad 
 had proved entirely satisfactory to the promoters and owners 
 of the stock. The construction work was carried on without 
 serious financial difficulty, and after the first few years of oper- 
 ation the net earnings were all that could have been reasonably 
 desired. The land grant was managed well and by 1870 had 
 paid off most of the indebtedness. While the sanguine prospects 
 of the promoters were not completely fulfilled, the investors in 
 the property were amply rewarded, as illustrated by the follow- 
 ing table : 
 
 Total cost of construction, 
 
 equipment, net cash assets 
 
 and supplies, Dec. 31, 1870 $36,242,203.82 
 
 Funded debt (net) _ $ 6,869,500.00 
 
 Cash paid on stock (net). 19,726,700.00 26,596,200.00 
 
 NET SURPLUS $ 9,646,003.82 
 
 At the same time the affairs of the company were handled in a 
 conservative manner, and only a part of this surplus, not quite 
 six million dollars, was distributed to the shareholders in stock 
 dividends. The remainder was invested in the railroad and 
 added to the real value of the property.
 
 CHAPTER VII. 
 
 CONCLUSION. 
 
 The Illinois Central Railroad has always occupied a unique 
 position among the railroads of the country. From the inception 
 of the project it had been primarily a government enterprise. 
 It was the first important railway project in Illinois, and for 
 twenty years its construction was the ambition of the state and 
 its citizens. Moreover, it was also fostered by the federal gov- 
 ernment. The first land grant ever given by Congress to assist 
 in the construction of a railroad was given to the state of Illi- 
 nois to complete this undertaking. The legislature turned over 
 the grant to a private corporation and the Illinois Central Rail- 
 road became the first important land grant railroad. Finally, 
 fhe Illinois Central was the only company of any size in the 
 Northwest, or upper Mississippi valley that followed the lines 
 of longitude instead of latitude. The other great transportation 
 systems of the country, the New York Central, Baltimore and 
 Ohio, Pennsylvania, Erie, Northwestern, Burlington, and Rock 
 Island, extended west from the Atlantic seaboard or east from 
 the Mississippi River. The "Central", on the other hand, was 
 built to retain the commerce of the Mississippi valley along 
 north and south lines. 
 
 At the same time, though in this respect the railroad was 
 similar to most of the large roads of the West, the Illinois Cen- 
 tral was built through territory very thinly settled and was 
 created with the definite object of developing the otherwise dor- 
 mant resources of such region. In 1850 the central counties of 
 Illinois were undeveloped, and the railroad was constructed 
 through that part of the state in order to provide cheap trans- 
 portation for their grain and live stock. The land grant and 
 special privileges given the company were merely the necessary 
 inducement to private capital to take up the undertaking. 
 
 From any view point, the construction of the Illinois Cen- 
 tral must be regarded as a success. After four successive fail- 
 
 iS7
 
 158 HISTORY OF ILLINOIS CENTRAL RAILROAD [442 
 
 ures by the state itself and private individuals a group of Bos- 
 ton and New York capitalists built the road without receiving 
 one cent of help from the state, other than the land grant and 
 privileges granted in the charter, and without throwing any 
 financial liability upon the government. The financial problems 
 connected with construction were met, and the enterprise was 
 carried through in a more economical manner than was any 
 other similar undertaking of the period. At the same time the 
 promoters constructed the railroad according to the best stand- 
 ards of the period. When finished it was the best built road of 
 its size in the central West. Its operation, after the first four 
 years, was also successful and accomplished what the early advo- 
 cates of the scheme desired. 
 
 This success was accompanied by direct financial benefit to 
 the federal and state governments. By the terms of the land 
 grant act the alternate odd numbered sections not turned over 
 to the state were sold for not less than $2.50 an acre, double the 
 former price, and the government lost nothing by giving half 
 the land away. In fact, the construction of the railroad mate- 
 rially hastened the sale of all lands in central Illinois. Fur- 
 thermore, the Illinois Central was of almost incalculable value 
 to the country during the Civil War. The least important 
 service was the reduced rates for troops and army supplies. Of 
 far greater influence was the fact that such troops and supplies 
 could be transported at all. The railroad provided an easily 
 guarded connection between the federal armies in the West, and 
 the loyal states of the union. Hundreds of thousands of men 
 and tens of thousands of tons of supplies were carried over the 
 line and placed quickly and safely near the base of active mili- 
 tary operations. Had it not been for the Illinois Central the 
 vast resources of the central West could not have been placed 
 at the disposal of the government as easily as they were, the 
 operations of the army would have been hampered and re- 
 stricted, and the ultimate success of the national cause delayed 
 that much. 
 
 The direct influence of the railroad on the state of Illinois 
 was also of great importance. In the charter the state wisely 
 exacted from the company a consideration of seven per cent of 
 the gross earnings in return for the land grant. This is almost 
 the only instance where either the state or national governments 
 received any immediate compensation for lands surrendered to 
 a private corporation. The development of a system of internal 
 transportation was the primary cause of the state debt, and, by
 
 443] CONCLUSION 159 
 
 the foresight of the legislature, the land grant was made the 
 means of paying off the indebtedness, but without further risk 
 on the part of the state. It might almost be said the present Illi- 
 nois Central corporation was created for the purpose of increas- 
 ing state taxes. 1 The results were all that the public could have 
 asked. Including the year 1870, the seven per cent tax on the 
 gross earnings of the company amounted to a total of four mil- 
 lion six hundred thousand dollars, or nearly a third of the 
 obligations of the state when the charter was granted. The 
 large annual receipts permitted the prompt payment of the 
 interest and the retirement of a portion of the principal of the 
 state debt without the imposition of heavy taxes upon the indus- 
 tries of the state. Moreover, the building of the road opened 
 up to settlement thousands of farms, and the increased taxes 
 were also an important consideration in placing the state on a 
 good financial standing. Through the cash payments into the 
 state treasury and the increased valuation given the property 
 of the citizens the Illinois Central placed the state of Illinois 
 upon a firm financial basis and made its credit as good as that 
 of any commonwealth. 
 
 The construction of the Central meant more to Illinois than 
 the payment of half a million dollars of taxes a year. When 
 Lieutenant Governor Jenkins and Sidney Breese first suggested 
 a central railway, the interior of the state from Chicago to 
 Du Quoin and from Danville to Springfield was an unoccupied 
 wilderness. When Colonel Mason and his engineers surveyed 
 the route of the railroad most of this territory was still unsettled 
 and its resources practically untouched. The important influ- 
 ence of the Illinois Central came in the development of this part 
 of the state. 
 
 Twenty years later there had taken place a transformation 
 in the interior counties of Illinois. One-fifth of the entire popu- 
 lation of the state was living in these counties, and their prod- 
 ucts formed one-fourth of all those raised by Illinois. Slightly 
 more than one-half the people of the state were within twenty 
 miles of the Illinois Central, and their wealth and prosperity 
 was equal to that of any portion of the commonwealth. Early 
 travellers declared the prairies could never be anything but a 
 desert, but in 1870 they were the granary of the north Atlantic 
 states. Nor was the development of the territory tributary to 
 
 iPersonal Statement of Mr. Head, clerk of the House during the 
 passage of the charter.
 
 160 HISTORY OF ILLINOIS CENTRAL RAILROAD [444 
 
 the railroad confined to material things. Towns and cities were 
 numerous; churches, schools, and colleges were as common as in 
 other parts of the state; and the people were prosperous and 
 contented. 2 
 
 This development of central Illinois was brought about, 
 almost entirely, through the efforts of the Illinois Central. There 
 were other roads through the region, but until after the close 
 of the war their influence was slight compared with that of the 
 " Central". Not another railroad crossed its line from Cairo to 
 Centralia, and there were only five from La Salle south. 3 More- 
 over, during the first ten years of the company's history the 
 transverse lines were merely feeders for the north and south 
 road, so far as local territory was concerned. Thus, the full 
 credit for the development of the central counties of Illinois must 
 be given to the Illinois Central Railroad. 
 
 Furthermore, the construction of the Illinois Central had a 
 far-reaching influence on the growth of the country. In the sixth 
 and seventh decades of the nineteenth century there took place 
 an important expansion in the production of food stuffs due to 
 the increasing demands of Europe and the eastern states. Most 
 of this development, as shown in the preceding pages, occurred 
 in the central West, and the Illinois Central Railroad and the 
 country dependent upon it were the most prominent single fac- 
 tor in increasing the movement of western grain to the north 
 Atlantic seaboard. Next to the Chicago, Burlington and Quincy 
 Railroad the Illinois Central handled more wheat and corn than 
 any other road in the West and, if the total tonnage of all grains 
 is considered, it surpassed even that road. In the four years of 
 the Civil War there was no other portion of the country which 
 increased its production of grain to as great an extent as did the 
 central counties of Illinois. By 1870 the agricultural territory 
 directly dependent on the "Central", including the Iowa leased 
 lines, supplied a larger share of the western grain forwarded 
 to the Atlantic coast than any other area of similar size in the 
 United States. 
 
 The Illinois Central was built with the definite object of 
 building up the interior of Illinois and the results amply justi- 
 fied all the efforts expended in securing the road. Instead of 
 being isolated from the leading markets and forced to be largely 
 
 2 Cf. Chap. v. 
 
 3 Viz., Ohio and Mississippi, Terre Haute, Alton & St. Louis, Great 
 Western, St. Louis, Alton & Chicago and Peoria & Oquaka. Cf. Chap. iv.
 
 445] CONCLUSION 161 
 
 self sufficing, the people in that part of the state had become an 
 essential factor in the . economic organization of the country. 
 They were no longer self sufficient, but produced commodities, 
 principally grain, needed by the eastern States and, in turn, 
 consumed the manufactured goods of that section. Instead of 
 being a drawback to the other portions of the state they occupied 
 a leading position in its economic, as well as political and social 
 advancement. 
 
 Thus, the construction of the Illinois Central may be re- 
 garded as the most important industrial undertaking ever com- 
 menced in the state of Illinois. The promoters of the enter- 
 prise, the investors in the securities of the company, and the men 
 who managed its financial, traffic, and operating affairs after 
 completion, deserve great credit for their efforts in making it 
 an actual reality, even though they did so with the purpose of 
 making handsome profits for themselves. At the same time, the 
 real success of the railroad was based on the federal land grant. 
 It was not the capital behind Robert Schuyler and the other pro- 
 moters that gave the company its standing, nor was it the busi- 
 ness ability of the directors that induced capitalists to purchase 
 the stock and bonds of the corporation. The enormous extent 
 of the land grant was the primary cause of the financial stabil- 
 ity of the company. Had it not been for the land, the promoters 
 could never have obtained the funds to build the road. 
 
 Moreover, after the enterprise was completed, it was the 
 receipts from the land grant which kept the corporation from 
 going into insolvency. From 1855 to 1861 there was not a year 
 in which the net earnings from the operation of the railroad paid 
 even the fixed interest charges. Without the receipts from the 
 land department the railroad would have been foreclosed before 
 it was finished. Even after 1862 the operation of the lines did 
 not give sufficient profit to pay a regular eight per cent dividend 
 on the actual cash invested in the stock. As a matter of fact, the 
 average dividend for this period would have amounted to six 
 per cent, instead of twelve, had it not been for the earnings of the 
 land department, and there would have been no stock distribu- 
 tions nor surplus at the end of the period. Investors in other 
 corporations which were managed as well as the Illinois Central 
 were making ten and twelve per cent or even more on their 
 actual investment, and the actual returns to the owners of the 
 Illinois Central, so far as the operating accounts were con- 
 cerned, were below a reasonable standard. In other words the 
 land grant subsidized the railroad. It was an arrangement which
 
 162 HISTORY OF ILLINOIS CENTRAL RAILROAD [446 
 
 benefited both parties, and while the promoters of the Illinois 
 Central made handsome profits on the operation of the road, the 
 state of Illinois, its citizens, and the people of the country as a 
 whole received equal advantages through the development of 
 the territory near the railroad. 
 
 It is one of the ironies of the economic history of the United 
 States that the Illinois Central Railroad, which was constructed 
 to develop traffic along north and south lines, should be the 
 foremost influence in changing the commerce of Illinois into east 
 and west lines. The Civil War and the changed economic con- 
 ditions following the struggle forced the company to send the 
 grain of central Illinois to Chicago, and prevented its develop- 
 ing a profitable market in the south, although the former policy 
 was clearly against its best permanent interests. As a result, 
 the people were accustomed to ship their grain, live stock and 
 raw materials east to the Atlantic seaboard and after the Civil 
 War the company was unable to bring about any change. So 
 long as the cost of carrying freight by railroad was high, and 
 there were no strong east and west lines entering the state below 
 Chicago, the Illinois Central did not lose much by this diversion 
 of traffic. It obtained almost as long a haul from the central 
 part of the state to Chicago as it would have to Cairo and the 
 return freight was greater. Up until 1870 the east and west 
 lines were not powerful enough to interfere with the business 
 of the north and south trunk line and the grain traffic of the 
 latter was reasonably profitable. 
 
 However, in the closing years of the seventh decade the 
 trunk lines, especially the Pennsylvania, New York Central, 
 Baltimore and Ohio, and Wabash, extended their tracks into 
 central Illinois, and one by one they gained complete possession 
 of the connecting and feeder lines which formerly had turned 
 their freight to the Illinois Central. The latter company, instead 
 of seeking to retain them even to the extent of purchase or lease, 
 pursued the ultra-conservative course of neglecting them entirely. 
 Thus, the company was practically isolated in 1870 and did not 
 have an important connecting or branch line directly under its 
 control. 
 
 As a result of the changed conditions in the movement of 
 grain and the expansion of the east and west railroads the Illinois 
 Central was gradually being forced into an awkward position. 
 Its natural business along north and south lines was hampered 
 and almost destroyed by the prostration of the South. The traffic 
 which it had built up from central Illinois to Chicago was being
 
 447] CONCLUSION 163 
 
 cut into by east and west railroads, which were each year becom- 
 ing better able to compete with their rivals. Finally, the branch 
 and connecting lines dependent upon it were now being pur- 
 chased or leased by strong companies whose interests were 
 diametrically opposed to those of the Illinois corporation. By 
 1870 these forces opposed to the Illinois Central had not made 
 themselves evident, but they were steadily gaining strength and 
 placing themselves in a better position for the conflict. On the 
 other hand, the Illinois Central neglected to better its position 
 and allowed important connections to slip from its control. When 
 the conflict did break out the latter company was unprepared and 
 suffered accordingly. Thus, the year 1870 represents the high 
 tide of prosperity for the Illinois Central Railroad, and not again 
 for some thirty-five years did it hold as strong a position from 
 the financial and traffic standpoint.
 
 APPENDIX. 
 
 LAND GRANT ACT OP SEPTEMBER 20ra, 1850. 
 
 Be it enacted by the Senate and House of Representatives of 
 the United States of America in Congress assembled: 
 
 That the right of way through the public lands be, and the 
 same is hereby, granted to the State of Illinois for the construc- 
 tion of a railroad from the southern terminus of the Illinois and 
 Michigan Canal to a point at or near the junction of the Ohio 
 and Mississippi rivers, with a branch of the same to Chicago, on 
 Lake Michigan, and another via the town of Galena, in said 
 State, to Dubuque, in the state of Iowa, with the right also to 
 take necessary materials of earth, stones, timber, etc., for the 
 construction thereof: Provided, that the right of way shall not 
 exceed 100 feet on each side of the length thereof, and a copy 
 of the survey of said road and branches made under the direction 
 of the Legislature, shall be forwarded to the proper local land 
 officers, respectively, and to the general land office at Washing- 
 ton city, within ninety days after the completion of the same. 
 
 Sec. 2. And be it further enacted, That there be, and is 
 here granted to the State of Illinois, for the purpose of aiding in 
 making the railroad and branches aforesaid, every alternate sec- 
 tion of land designated by even numbers, for six sections in 
 width on each side of said road and branches ; but in case it shall 
 appear that the United States have, when the line or route of 
 said road and branches is definitely located by the authority 
 aforesaid, sold any part of any section hereby granted, or that 
 the right of preemption has attached to the same, then it shall 
 be lawful for any agent or agents to be appointed by the Gov- 
 ernor of said State, to select, subject to the approval aforesaid, 
 from the lands of the United States most contiguous to the tier 
 of sections above specified, so much land in alternate sections, 
 or parts of sections, as shall be equal to such lands as the United 
 States have sold, or to which the right of preemption has attached 
 as aforesaid, which lands being equal in quantity to one-half of 
 six sections in width on each side of said road and branches, the 
 
 165
 
 166 HISTORY OF ILLINOIS CENTRAL RAILROAD [450 
 
 State of Illinois shall have and hold to and for the use and pur- 
 poses aforesaid : Provided, that the lands to be so located shall 
 in no case be further than fifteen miles from the line of the 
 road : And, further provided, the construction of said road shall 
 be commenced at its southern terminus, at or near the junction 
 of the Ohio and Mississippi rivers, and its northern terminus 
 upon the Illinois and Michigan Canal, simultaneously, and con- 
 tinued from each of said points until completed, when said 
 branch roads shall be constructed, according to the survey and 
 location thereof : Provided further, that the lands here granted 
 shall be applied to the construction of said road and branches, 
 respectively, in quantities corresponding with the grant for 
 each, and shall be disposed of only as the work progresses, and 
 shall be applied to no other purpose whatsoever : And provided, 
 further, that any and all lands reserved to the United States 
 by the Act entitled ' ' An Act to grant a quantity of land to the 
 State of Illinois, for the purpose of aiding in opening a canal 
 to connect the waters of the Illinois river with those of Lake 
 Michigan" approved March second, eighteen hundred and 
 twenty-seven, be, and the same are hereby reserved to the United 
 States from the operation of this Act. 
 
 Sec. 3. And be it further enacted, That the sections and 
 parts of sections of land which, by such grant, shall remain to 
 the United States within six miles on each side of said road and 
 branches, shall not be sold for less than double the minimum 
 price of the public lands when sold. 
 
 Sec. 4. And be it further enacted, That the said lands 
 hereby granted to the said State shall be subject to the disposal 
 of the Legislature thereof, for the purposes aforesaid and no 
 other; and the said railroad and branches shall be and remain 
 a public highway, for the use of the Government of the United 
 States, free from toll or other charge upon the transportation 
 of any property or troops of the United States. 
 
 Sec. 5. And be it further enacted, That if the railroad 
 shall not be completed within ten years, the said State of Illinois 
 shall be bound to pay to the United States the amount which may 
 be received upon the sale of any part of said lands by said State, 
 the title to the residue of said lands shall reinvest in the United 
 States, to have and hold the same in the same manner as if this 
 Act had not been passed. 
 
 Sec. 6. And be it further enacted, That the United States 
 mail shall at all times be transported on the said railroad under
 
 451] APPENDIX 167 
 
 the direction of the Post Office Department, at such price as the 
 Congress may by law direct. 
 
 Sec. 7. And be it further enacted, That in order to aid in 
 the continuation of said Central Railroad from the mouth of the 
 Ohio river to the city of Mobile, all the rights, privileges, and 
 liabilities hereinbefore conferred on the State of Illinois shall be 
 granted to the states of Alabama and Mississippi respectively, 
 for the purpose of aiding in the construction of a railroad from 
 said city of Mobile to a point near the mouth of the Ohio River, 
 and that public lands of the United States, to the same extent, 
 in proportion to the length of the road, on the same terms, 
 limitations, and restrictions in every respect, shall be, and is 
 hereby, granted to said states of Alabama and Mississippi 
 respectively. 
 
 MEMORIAL OP DECEMBER 28TH, 1850. 
 
 To the honorable the Senators and Representatives of the 
 people of Illinois in General Assembly convened: 
 
 The memorial of Robert Schuyler, George Griswold, Gouver- 
 neur Morris, Jonathan Sturges, Thomas W. Ludlow, and John 
 F. A. Sandford of the City of New York; and David A. Neal, 
 Franklin Haven and Robert Rantoul, Jun., of the City of Boston 
 and vicinity, respectfully represents : 
 
 That having examined and considered an act of Congress of 
 the United States, whereby land is donated by the United States 
 for the purpose of insuring the construction of a railroad from 
 Cairo, at the mouth of the Ohio River, to Galena and the north- 
 western angle of the State of Illinois, with a branch extending 
 to Chicago on Lake Michigan, on certain conditions, therein ex- 
 pressed ; and having also examined the resources of the tract of 
 country through which it is proposed that the said railroad shall 
 pass, and the amount of cost, and the space of time necessary 
 for constructing the same, the subscribers propose to form a 
 company, with such others as they may associate with them, 
 including among their number persons of large experience in the 
 construction of several of the principal railroads of the United 
 States, and of means and credit sufficient to place beyond doubt 
 their ability to perform what they hereinafter propose, make the 
 following offer to the State of Illinois for their consideration : 
 
 The company so formed by the subscribers will, under the 
 authority and direction of the State of Illinois, fully and faith- 
 fully perform the several conditions, and execute the trusts, in 
 the said act of Congress contained. And will build a railroad
 
 168 HISTORY OF ILLINOIS CENTRAL RAILROAD [452 
 
 with branches between the termini set forth in said act, with a 
 single track, and complete the same, ready for the transportation 
 of merchandise and passengers, on or before the fourth day of 
 July, which will be in the year of our Lord eighteen hundred 
 and fifty-four. And the said railroad shall be, in all respects, as 
 well and thoroughly built as the railroad running from Boston 
 to Albany, with such improvements thereon as experience has 
 shown to be desirable and expedient, and shall be equipped in a 
 manner suitable to the business to be accommodated thereby. 
 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 ; provided, 
 that the State of Illinois will grant to the subscribers a charter 
 of incorporation, with terms mutually advantageous with powers 
 and limitations, as they, in their wisdom, may think fit, as shall 
 be accepted by said company, and as will sufficiently remunerate 
 the subscribers for their care, labor, and expenditure in that 
 behalf incurred, and will enable them to avail themselves of the 
 lands donated by the said act to raise the funds, or some portion 
 of the funds, necessary for the construction and equipment of 
 said railroad.
 
 BIBLIOGRAPHY 
 
 Abbreviations : C H, Chicago Historical Library ; I C, Illinois Cen- 
 tral Library, Chicago, 111. ; U I, University of Illinois Library ; W H, 
 Wisconsin State Historical Library; U C, University of Chicago Library; 
 C P, Chicago Public Library; I H, Illinois State Historical Library, 
 Springfield, 111. 
 
 SOURCES 
 
 PUBLICATIONS OF THE ILLINOIS CENTRAL RAILROAD COMPANY. 
 
 Annual Report of the President to the Directors for the year ending 
 December 31, 1855. Gives itemized cost of construction to date. [U.I., 
 C.H.] 
 
 Annual Report of the Directors and President to the stockholders for 
 calendar years., 1856 to 1870, inclusive. These reports are very full and 
 contain a great mass of detailed information relating to the traffic and 
 financial history of the company. Except for occasional misprints and 
 certain mistakes in accounting the statements are entirely correct. [C.H., 
 I.C.] 
 
 Annual Report of the Directors to the stockholders for calendar and 
 fiscal years, 1871 to 1907, inclusive. Contain considerable detailed mate- 
 rial, but not as much as in the earlier reports. With a few exceptions 
 statements and statistics are perfectly correct and no attempt is made to 
 misrepresent affairs. [U.C., I.C.] 
 
 Special Reports of the President to the Directors and Stockholders, 
 1890, 1897, 1906, October 30, 1895, December 19, 1895, January 11, 1896. 
 Contain considerable miscellaneous information. The report for 1897 is 
 especially valuable as it contains resumes of operating conditions, etc., 
 before 1887. [Reports of 1897, U.C. ; Reports of 1895, 1896, W.H.; all, I.C.] 
 
 Land Pamphlets, 1855 to 1870 (two or three missing). These are 
 pamphlets issued by the Land Department soliciting immigration into the 
 state of Illinois. There is some important information, but most of the 
 statistics are worthless. [C.H.] 
 
 Report on the Mineral Resources of the Illinois Central Railroad. 
 J. W. Foster. An accurate report of mining conditions along the Illinois 
 Central in 1857. Gives statements concerning cost of mining, etc. Pub- 
 lished by the company, 1857. [C.H.] 
 
 Documents Relating to the Organization of the Illinois Central Rail- 
 road Company. Contains Act of Congress, charter and amendments to 
 1852, mortgage of 1851, letters of President Schuyler, Robert Rantoul, and 
 D. Neal, miscellaneous correspondence between the company and the Gov- 
 
 169
 
 170 HISTORY OF ILLINOIS CENTRAL RAILROAD [454 
 
 ernor, etc., and a copy of a bond. 2nd Edition, 1852. Published by the 
 company. [C.P., U.I.] 
 
 Map of Railroads in Illinois in 1855. Accompanies annual report of 
 the Illinois Central Railroad, March, 1856. Shows lines built and under 
 construction at that date. [C.H.] 
 
 Laws and Documents of the Illinois Central Railroad. Contains text 
 of charters, mortgages, etc., etc. (Incomplete set in Howard Library, 
 New Orleans, La.) 
 
 Letter from Richard Cobden to Sir. Joshua Walmsley, September 18, 
 1858. Relates to land grant and price of Illinois Central securities. 
 (Original in office of the President of the Illinois Central Railroad; pho- 
 tographic copy in possession of Stuyvesant Fish, Esq., New York.) 
 
 Fiftieth Anniversary of the Chartering of the Illinois Central Rail- 
 road. Collection of speeches at banquet in celebration of the Fiftieth 
 Anniversary of the Company. Published by the company, 1901. [U.I.] 
 
 Abraham Lincoln as Attorney for the Illinois Central Railroad Com- 
 pany. Contains original documents relating to the McLean County Suit 
 Published by the Company, 1905. [U.I.] 
 
 Report of the Committee of English and Dutch Stockholders, etc. 
 This pamphlet contains the conclusions and recommendations of the inves- 
 tigating committee. Sir. Douglas Galton and Mr. H. de Marez Oyens 
 made a thorough investigation of the books, property, and general condi- 
 tion of the company in the winter of 1876-1877. The pamphlet contains a 
 resume of the cost of construction, general receipts, etc., prepared by the 
 delegates from the books of the company. (Cf. Fisher Report of 1858 
 Railway Times, November 7, 1858.) (Published by the company, 1877.) 
 [C.P.] 
 
 Documents relating to the Lake Front Cases. Collection of court 
 decisions, briefs, etc., relating to the suits brought by the City of Chicago 
 and the State of Illinois against the Illinois Central. [C.P.] 
 
 Miscellaneous official and semi-official statements and reports, including 
 
 reports of meetings of the Board of Directors, statements of the treasurer, 
 
 proceedings of English stockholders, etc., published in Railway Times 
 
 (London), American Railway Journal, and the Chicago Daily Democrat 
 
 PUBLICATIONS OF MISCELLANEOUS RAILROAD COMPANIES. 
 
 Report of the Dubuque and Sioux City Railway Company, May 31, 
 1864. Gives statements as to cost of construction, capitalization, etc. of 
 the company. [W.H.] 
 
 Report of the St. Louis, Alton & Terre Haute R. R. (Terre Haute 
 and Alton), 1854, 1855. [W.H.] 
 
 Report of the Dubuque and Sioux City R. R., December 31, 1887. 
 Contains references to organization of the Dubuque & Sioux City and 
 lease of the Iowa Falls & Sioux City. [I.C.] 
 
 PUBLICATIONS OF THE UNITED STATES GOVERNMENT. 
 
 Journal of the Senate, 1843 to 1850 (28th to 3ist Congresses). 
 
 Journal of the House of Representatives, 1843 to 1850 (28th to 3ist 
 Congresses).
 
 455] BIBLIOGRAPHY 171 
 
 Congressional Globe, 1843 to 1850 (28th to 31 st Congresses). Con- 
 tains speeches in Congress in regard to the various grants proposed for 
 the Illinois Central, votes on bills, etc. 
 
 Seventh, eighth, and ninth censuses, 1850, 1860, 1870; also Kith cen- 
 sus, volume on Agriculture; ibid., volume on Transportation; nth census, 
 volume on Land Transportation. Contain detailed information in regard 
 to crop production, population, manufacturing, and social conditions in 
 various counties of Illinois ; also information in regard to agricultural 
 conditions in 1850 to 1870; also rates of transportation on products from 
 West to Atlantic coast. 
 
 Transportation Routes to the Seaboard, ist sess. 43rd Cong. Senate 
 Reports, serial numbers 1588 and 1589. Report of Senate committee on 
 rates from the West to the seaboard ; also rates on grain from various 
 local points to distributing centers ; also movement of crops, prices, cost 
 of transportation, testimony of railroad men and grain merchants, etc. 
 It is almost invaluable in the treatment of the traffic of the Illinois 
 Central. 
 
 Report on Wholesale Wages, Prices, and Transportation. Report 
 by N. W. Aldrich from the Senate Committee on Finance, March 3, 1893 
 (Senate Report No. 1394, Finance Committee, 2 sess., 52 Cong.) 4 vols. 
 Washington, 1894. Used for prices on wheat, corn, oats, and meat at 
 Chicago and New York from 1840 to 1870 inclusive. 
 
 PUBLICATIONS OF THE STATE OF ILLINOIS. 
 
 Journal of the Senate, 1830 to 1851. 
 
 Journal of the House of Representatives, 1830 to 1852. (State 
 Printer, Springfield, 1830 to 1852.) 
 
 Session Laws of Illinois, 1837 to 1851 inclusive. (State Printer, 
 Springfield, 1837 to 1851 inclusive.) 
 
 The State of Illinois vs. The Illinois Central Railroad, W. H. Stead, 
 Attorney General, In the Supreme Court of the State of Illinois, Feb- 
 ruary term, A. D. 1907. (State Printer, Springfield, 111., 1907.) Con- 
 tains charter of the Illinois Central Railroad, all amendments thereto, 
 and gross earnings of the charter lines from 1870 to 1906, with other 
 miscellaneous information in regard to suit for back taxes.) 
 
 Report of the Illinois Railway and Warehouse Commission, 1871, 1872, 
 1873. Statistics of the Illinois Central and remarks of the commissioners. 
 (State Printer, Springfield, 1871, 1872, 1873.) 
 
 Proceedings of the Constitutional Convention of 1869. Remarks of 
 members and action of the Convention in regard to the Illinois Central 
 and the railroads of the state. (State Printer, Springfield, 1870.) 
 
 NEWSPAPERS. 
 
 Chicago Daily Democrat, January ist, 1849 to December 3ist, 1853. 
 Contains numerous articles in regard to the charter and construction of 
 the road. [C.H.] 
 
 Illinois State Journal, January 1st, 1849 to December 3ist, 1851. 
 Contains a large number of letters, speeches, etc., in regard to the Hoi-
 
 172 HISTORY OF ILLINOIS CENTRAL RAILROAD [456 
 
 brook companies, the passage of the charter, and the character of the in- 
 corporators. [I.H.] 
 
 Illinois Daily State Register, January ist, 1849 to December 3ist, 
 1851. Supplements the Illinois State Journal. [I.H.] 
 
 Egyptian Republican, July 30, 1859 to July 6, 1861. (Centralia Daily 
 Sentinel Office Centralia Daily Sentinel, Centralia, 111.) 
 
 Mound City Journal, 1859 to 1861 calendar years. (Cairo Arfgus 
 Office of the Cairo Argus, Cairo, 111.) 
 
 Cairo Delta, April 13, 1848 to September 20, 1849. (Office of the Cairo 
 Trust Company, Cairo, 111.) 
 
 Cairo Sun, April 10, 1851 to April 10, 1852. (Office of the Cairo Trust 
 Company, Cairo, 111.) 
 
 Cairo Times, May 3ist, 1854 to April, 1859. (Office of the Cairo Trust 
 Company, Cairo, 111.) 
 
 Urbana Union, September 2ist, 1853 to July, 1855. (Urbana. In 
 possession of Mr. J. O. Cunningham, Urbana, 111.) 
 
 Belleville Advocate, September, 1849 to September, 1869. (Belleville 
 Public Library, Belleville, 111.) 
 
 Cairo Mirror and City Directory, 1864, 1865. (Cairo Public Library, 
 Cairo, 111.) 
 
 The above newspapers contain information in regard to the construc- 
 tion and operation of the Illinois Central, 1851 to 1870. Most of the 
 material is fragmentary and is of little historical value. 
 RAILWAY AND FINANCIAL PERIODICALS. 
 
 Hunt's Merchant's Magazine and Commercial Review, New York, 
 1850 to 1870. Of comparatively little value, especially after 1855. 
 
 Commercial and Financial Chronicle, New York, 1865 to 1870. Con- 
 tains abstracts of annual reports, miscellaneous items, editorials, statistics 
 of stock and bond quotations, and resume of crop and financial conditions. 
 
 Railway Times, 1850 to 1870. (London, Eng.) Contains extracts 
 from proceedings of the Board of Directors, etc., of the English stock- 
 holders, etc. Practically all letters or statements published by the com- 
 pany from 1851 to 1870 are contained in this series. It is the most impor- 
 tant single reference used for the period from 1851 to 1858. Practically 
 all statements are official or semi-official. (John Crerar Library, Marshall 
 Field Building, Chicago, 111. The set is complete.) 
 
 Railway Journal, 1854. (Philadelphia, John Crerar Library, Marshall 
 Field Building, Chicago, 111.) Of very little importance. 
 
 American Railway Journal, 1850 to 1860. (New York, 1850 to 1860.) 
 Contains a great many statements, notices, advertisements, reports, edito- 
 rials, etc. in regard to the Illinois Central. The references to the Dubuque 
 and Sioux City Railway are especially important. A large number of offi- 
 cial statements of this company are included. (James Hill Railway Col- 
 lection, University of Wisconsin Library, Madison, Wis.) 
 
 Railroad Record, 1849 to 1853. (Cincinnati, 1849 to 1853.) Duplicates 
 material in American Railway Journal and adds some additional informa- 
 tion of slight importance. (Mercantile Library, St. Louis, Mo.)
 
 457] BIBLIOGRAPHY 173 
 
 MISCELLANEOUS PUBLICATIONS.* 
 
 Illinois Monthly Magazine, complete. (Vandalia, 111., 1830.) Contains 
 some interesting information in regard to early plans for building a rail- 
 road or canal through the state. [C.H.] 
 
 Fergus Historical Series, Nos. 17 and 24. (Publications of the Chi- 
 cago Historical Society.) Personal reminiscences, etc. 
 Regan, Wilds of America. [C.H.] 
 J. M. Peck, Gazeteer of Illinois, 1837. [C.H.] 
 
 H. S. Tanner, Views of the Valley of the Mississippi River. [C.H.] 
 Publications of the Cairo City and Property Company. [I.H.] 
 Anon., The Past, Present and Future of the City of Cairo. [I.H.] 
 Henry Long, Report on the Condition and Prospect of Cairo. [I.H.] 
 Annual Reports, Chicago Board of Trade, 1858 to 1870. (Chicago, 
 1858 to 1870.) Give statistics of the city of Chicago, including receipts 
 over various railroads, the canal, and the lake. Of special importance in 
 traffic chapter. [U.I.] 
 
 SECONDARY AUTHORITIES.** 
 
 W. K. Ackerman, Early Illinois Railroads. (Fergus Historical Series 
 No. 23, Fergus Printing Co., Chicago, 1884.) Contains some valuable in- 
 formation, but on the whole is of little historical importance. 
 
 Davidson and Stuve, A Complete History of Illinois from 1673 to 
 1884. (2nd Edition, Springfield, W. H. Rokker, 1884.) Treats the Illinois 
 Central from a biased point of view. 
 
 J. Moses, Illinois Historical and Statistical (Fergus Print, Chicago, 
 1889-1892.) Gives some interesting information, but not of great historical 
 value. 
 
 Hinsdale, The Old Northwest. (New York, 1888 T. MacCoun.) 
 
 A. T. Andreas, History of Chicago. (A. T. Andreas, Chicago, 1884- 
 1886 3 v.) Fairly accurate and contains some valuable information on 
 the relations of the city of Chicago and the Illinois Central. 
 
 Sidney Breese, The Early History of Illinois. (E. B. Myers & Co., 
 Chicago, 1884.) The Appendix contains correspondence between Sidney 
 Breese and Senator Douglas in regard to their respective influence in secur- 
 ing the federal land grant act. 
 
 Helper, The Impending Crisis of the South. (A. B. Bufdick, New 
 
 *The above miscellaneous pamphlets were used in chapters I and II. Specific 
 references are not given to any of them in the text, but the writer's views are based 
 very largely on material found in these publications. They are all rare books without 
 dates in many cases, but they can be obtained at the libraries referred to by use of 
 the author and title only. 
 
 **Aside from the books and articles by Fite, Sanborn, and Ackerman, the sec- 
 ondary material relating to the Illinois Central is practically worthless. With slight 
 exception all published material relating to the history of the company is based on 
 Mr. W. K. Ackerman's paper on Early Illinois Railroads, read before the Illinois 
 Historical Society. The paper is excellent so far as it treats of events coming under 
 Mr. Ackerman's personal observation, but the remainder is merely a collection of 
 interesting incidents. Very little secondary material is absolutely inaccurate, but at 
 the same time, an equally small portion is of real historical value.
 
 174 HISTORY OF ILLINOIS CENTRAL RAILROAD [458 
 
 York, 1860.) Treats of conditions in the South at the commencement of 
 the Civil War and shows the relation between the West and South. (Cf. 
 Olmsted's various travels in the South.) 
 
 G. Gale, Upper Mississippi. Clark & Co., Chicago, 1867.) Refers to 
 early history of Galena, but is of little value. 
 
 J. B. Sanborn, Congressional Grants of Land in Aid of Railways. 
 (University of Wisconsin Publications, Madison, 1899.) Chapter II gives 
 a summary of Congressional legislation respecting the Illinois Central. 
 An accurate treatment of the subject. 
 
 Newton, Railway Legislation in Illinois, 1828 to 1870. (Mss. thesis in 
 University of Illinois Library.) Gives a summary of legislation by Illinois 
 on railroads and canals from 1828 to 1870. Of fair historical value. 
 
 H. W. Quaintance, The Influence of Farm Machinery on Production 
 and Labor. (University of Wisconsin, Madison, Wis., 1904.) 
 
 Fite, The Agricultural Development of the West during the Civil War. 
 (Quarterly Journal of Economics, XX, 259-278.) Treats of prices of 
 western produce in relation to freight rates and the inflation of the 
 currency. (Cf. Mitchell, History of the Greenbacks.)
 
 INDEX. 
 
 Adams Express Company, granted monopoly by Illinois Central Rail- 
 road, 65. 
 
 Agriculture, in Illinois, the leading industry in 1850, 12; retarded by lack 
 of good transportation, 13; in 1870, 90; improvements in, 90; profits 
 from, 1861 to 1870, go, 92; growth, 1850 to 1870, 92 f., 138, 159; 
 influence on growth of Illinois Central Railroad, 90-92, 95, 138, 160; 
 decline in Atlantic states, 76. 
 
 Arthur, Mr., general superintendent of Illinois Central Railroad, 64. 
 
 Baltimore and Ohio Railroad, 83, 162. 
 
 Baltimore and Ohio Southwestern Railroad, see Ohio and Mississippi 
 Railroad. 
 
 Belleville, Southern Illinois and Du Quoin Railroad, traffic alliance with 
 Illinois Central Railroad, 69. 
 
 Benton Standard, defends Great Western Company, 36. 
 
 Bissell, Colonel, aids in preparing measure favoring eastern promoters, 
 38 ; solicitor of Illinois Central Company, 49 ; presents petition of 
 Illinois Central Company to Chicago council for terminal facilities, 
 
 49 f. 
 
 Bloomington, manufacturing center, 108. 
 
 Breese, Sydney, urges building of Illinois Central Railrooad, 17; urges 
 
 grant of pre-emption rights to a central Illinois railroad, 23, 24, 26; 
 
 ends term as senator, 28; defends Great Western Company, 36; 
 
 speaker of House, 37. 
 
 C. C. C. & St. Louis Railroad, see Terre Haute, Alton and St. Louis 
 
 Railroad. 
 Cairo, specified point on route of proposed railroad, 43, 75 and note ; 
 
 receipts of grain at, 98-100 and notes, (tables). 
 Cairo City and Canal Company, 20, 26, 34; incorporated as Great Western 
 
 Company, 21 ; fights incorporation of rival company, 36 f. 
 Cairo Short Line, see Belleville, Southern Illinois and Du Quoin Railroad. 
 Cairo Times, defends Great Western Company, 36. 
 Champaign county, growth of agriculture from 1850 to 1870, 93. 
 Chicago, 
 
 specified point on route of proposed railroad, 43, 74; public opinion 
 divided on grant of lake front franchise, 51 ; importance of lake 
 front franchise grant, 54 f; trade connection with Iowa, 70; as 
 market, 81, 92; influence of Illinois Central Railroad on rise of, 
 95; receipts, grain, 96; live stock, 103; lumber, 105 f; packing 
 center, 102; as industrial city, 108; effect of extension of eastern 
 railroads on, 115. 
 
 175
 
 176 HISTORY OP ILLINOIS CENTRAL RAILROAD [460 
 
 city council of, attitude towards Illinois Central Railroad, 50; dis- 
 putes over lake front right of way, 51 ; votes franchise to Illinois 
 Central Railroad, 51 ; votes franchise over mayor's veto, 52 ; 
 reconsiders and votes new franchise, 52; reenacts ordinance of 
 first franchise, 54; opposes legislative grant to railroads of sub- 
 merged land along lake front, 72. 
 
 Chicago and Northwestern Railroad, connection with Illinois Central 
 Railroad, 68, 113; shipment of grain on, 97; of live stocky 102. 
 
 Chicago, Burlington and Quincy Railroad, granted right to submerged 
 land along lake front, 71 f . ; connection with Illinois Central Railroad, 
 95, 113; shipment of grain on, 97; of live stock, 102 f. 
 
 Chicago, Fulton and Iowa Railroad, see Chicago and Northwestern Rail- 
 road. 
 
 Chicago, Milwaukee and St. Paul Railroad, see Mineral Point Railroad. 
 
 Civil War, effect on Illinois Central Railroad, 66 f., 92, 112 f., 138, 151; 
 effect on southern trade route, 75, 76 n., 77 f., 87 n. 
 
 Coal, mining of, 14, 106 f. ; shipment on Illinois Central Railroad, 106 f. ; 
 market, 107. 
 
 Cobden, Richard, his estimate of land grant, 117, 129 n. 
 
 Coles, Edward, governor, 17. 
 
 Corn, chief farm product of Illinois, 92; shipments on Illinois Central 
 and other railroads, compared, 95, 97; receipts at Chicago an.d Cairo, 
 compared, 99 f. and notes (tables) ; effect of price on live stock 
 industry, 101 ; payment on railroad land, 137. 
 
 Crimean War, effect on Illinois Central Railroad, 123. 
 
 Crops, condition in Illinois, 1856 to 1870, 96. 
 
 Decatur, manufacturing center, 108; junction of Wabash and Illinois Cen- 
 tral railroads, 113. 
 
 Denny, representative, introduces resolution concerning charter of Great 
 Western Railroad, 37 n. 
 
 Douglas, Stephen A., advocates government assistance for Illinois rail- 
 road by direct grant of land to the state, 24; introduces a bill for 
 this purpose, 25 ; resorts to log-rolling to secure adoption of his land 
 grants, 29; urges acceptance of Great Western release, 37 n. 
 
 Dubuque, specified point on route of proposed railroad, 43, 74. 
 
 Dubuque and Sioux City Railroad, traffic alliance with Illinois Central 
 Railroad, 70; lease by Illinois Central Railroad, 70, 96; leases Iowa 
 Falls and Sioux City Railroad, 71. 
 
 Economic development, retarded by lack of means of internal transpor- 
 tation before 1850, n, 12. 
 
 England, in American grain trade, 77 and note; bonds of Illinois Central 
 sold in, 121 f . ; effect of Crimean War on money market in, 123 ; iron 
 for Illinois Central Railroad purchased in, 131. 
 
 Erie Canal, completed, 80; deepened, 82; freight rates on, 84. 
 
 Erie Railroad, 83. 
 
 Europe, in American grain trade, 77. 
 
 Freight traffic, competition between all-rail and water routes -outside Illi-
 
 461] INDEX 177 
 
 nois, 83-85; rates outside Illinois, 84-86; rates in Illinois, 87, 147; 
 earnings from, 146; light, 149. 
 
 French, Augustus C., governor, recommends acceptance of plan of east- 
 ern memorialists concerning railroad, 38; ex officio director of Illinois 
 Central Railroad, 42. 
 
 Fruit raising, in Illinois, 104. 
 
 Fuel, 107. 
 
 Galena, specified point on route of Illinois Central Railroad, 43 ; opposi- 
 tion to granting franchise to Illinois Central Railroad, 56, 57 n. ; 
 manufacturing center, 108. 
 
 Galena and Chicago Union Railroad, 10; traffic alliance with Illinois Cen- 
 tral Railroad, 68, 95 ; grain shipment on, 99 n. 
 
 Grain, production in United States, 1850 to 1870, 79 n. (table) ; increase 
 in production in Illinois, 92 ff . ; price of, 92; payment on land in, 137. 
 
 Granger movement, rise of, 112 n. 
 
 Great Lakes, as eastern trade route, 80, 81 ; improvement of harbors of, 
 83; freight rate on, 84. 
 
 Great Western Railroad (Wabash), assisted by Illinois Central Railroad, 
 68; traffic alliance with, 96; competition with, 162. 
 
 Great Western Railway Company, 19 f., 34; charter of, 20 f . ; purchases 
 internal improvement works of the state, 21; failure of, 22; charter 
 repealed, 22 ; reincorporated, 27 ; release accepted by House, refused 
 by Senate, 37. 
 
 Gridley, Ashael, introduces in senate bill to incorporate Illinois Central 
 Railroad, 38. 
 
 Gurnee, Walter, mayor, 51 ; vetoes lake front franchise of Illinois Cen- 
 tral Railroad, 52 f . ; signs second franchise, 53. 
 
 Holbrook, Darius B., incorporator of Central Railroad Company, 17; of 
 Cairo City and Canal Company, 20. 
 
 Illinois, economic development retarded by lack of good transportation 
 before 1850, n f., 79 f . ; conditions in 1850, 9 ff., 159; importance of 
 Illinois Central Railroad in development of, 56, 75, 79 f., 115, 159 f . ; 
 conditions from 1857 to 1859, 66, 137; early trade of, 74; grain pro- 
 duction in, 79 and note ; as natural trade center, 80 and note ; immi- 
 gration into, 1830 to 1850, 12 ; 1850 to 1870, 88 f . ; growth of agriculture, 
 1850 to 1870, 92-93 (table), 138, 160; conditions in 1870, 90, 115, 159; 
 live stock industry in, 100-102; fruit raising in, 104; lumber supply 
 in, 105, 107; coal mining in, 106 f . ; manufactures in, 108; price of 
 land in, 117; credit of, 159; taxes, 159. 
 
 Illinois Central Railroad, building by state urged in 1835, 17; incorpo- 
 rated, 1836, 17; first charter, 18; assistance to urged in Congress, 
 24-26; grant of public lands to, 31; various routes suggested, 35; 
 bill for incorporation passed, 38; terms of charter of, 39; difficulties 
 in construction of, 40, 46 f., 60; early financial support of, 40, 42; 
 formal organization of company, 42 f. ; stockholders, English and 
 Dutch, 42 n., 121 f., 129, 132, 159 n. ; commencement of construction 
 work on, 43, 47 f . ; route of preliminary survey, 43 ; sectional rivalry
 
 178 HISTORY OF ILLINOIS CENTRAL RAILROAD [462 
 
 over route, 43 f . ; conditions determining selection of route, 45 ; con- 
 tracts for construction of, 46 ff., 125; method of construction of, 
 47 n. ; controversy at Chicago over terminal facilities of, 48 ff . ; allied 
 with Michigan Central Railroad to secure entrance to Chicago, 49; 
 opposition in Chicago to, 50; proposed route of entrance to Chicago, 
 50 f . ; provisions of lake front right of way franchise, 51, 54; board 
 of directors refuses second lake front franchise, 52; construction on 
 Lake Calumet-Chicago division, 52 f . ; first completed section of, 53 ; 
 dispute with Southern Michigan Railroad over crossing, 53 and note ; 
 importance of lake front franchise to, 54 ; construction work on lake 
 front route, 55 f . ; St. Charles Air Line, branch, 56 ; difficulties in 
 fulfilling construction contracts, 58 f . ; Illinois Central Company en- 
 gages directly in construction work of, 59; engineering problems in 
 construction of, 60 ; table of dates of completion of construction work 
 by divisions, 61 n. ; formal opening of, 61 ; final completion of, 61 f . ; 
 character of construction wor kand equipment, 62 f., 131 f., 151 f . ; 
 problems in 1857, 64, 66, 131 f . ; organization of operating department, 
 64; transfer of offices of officials from New York to Illinois, 64 f. ; 
 New York, official meeting place of board of directors, 42, 64 f. ; 
 service of, 65 ; relation to Post Office Department, 65 ; grants mo- 
 nopoly to Adams Express Company, 65; prosperity of, in 1861, 66; 
 effect of Civil War on, 66 f., 92, 113, 138, 151, 162; prosperity of, 
 1866 to 1870, 67, 146; extensions and traffic alliances, 67 ff., 95 f., 155; 
 lease of Dubuque and Sioux City Railroad, 70 f . ; granted right to 
 submerged land along lake front, 71 f . ; decision of courts on this 
 grant, adverse, 72; physical development of, 72 f., 133-135; obstacles 
 to development of, 73 ; part of large railroad project, 74 f . ; place in 
 Mississippi valley trade route, 75, 76 n., 91, 114, 162; character of 
 country traversed by, 79, 92 ; extent of system, 80 and note ; relation 
 to economic development of Illinois, 56, 90-92, 95, 104 f., 115; influ- 
 ence on rise of Chicago, 95, 114; comparative value to northern and 
 southern Illinois, 95 ; value to government during the Civil War, 
 158; nature of traffic on, 90 f., 96 f., 100-109; effect of high price of 
 corn on, 102 f . ; shipment of grain on, 96 f., 106; of live stock, 100- 
 103; of garden and dairy products, 104; lumber, 105 f. ; of coal, 
 106 f . ; of factory products, 108 f . ; increase in general traffic on, 
 1855 to 1870, 108-112 (table, no) ; ratio of local to through traffic on, 
 no; comparison of northbound and southbound traffic on, 105 f., 
 in; immigrant use of, 112; passenger business, 112 f. ; railroad con- 
 nections with east and west points, 113; rivals of, 114 f., 162; factors 
 in success of, 114; tariff arrangements of, 65 f., 87 f., 90; fiscal 
 policy proposed by Schuyler, 117 f . ; fiscal policy, as carried out, 57, 
 58 n., 64, 72, 119, 124-128, 130, 132, 140-144, 153 n., 155, 161 f. ; assets 
 of, 120-127, 135 and note, 153 n., 156, 161 f. ; as land owner, 9, 135- 
 140, 153 n. ; stocks of, 42, 57, 119 f., 122 f., 128 f., 135 n., 144 f., 
 154. 156; bonds of, 59, 120-125; 128, 136, 140 f., 143; liabilities of, 
 120-127, 156; cost of, 46, 59, 62, 116, 118 f., 124 f., 131-133, 156;
 
 463] INDEX 179 
 
 expenditures of, 122, 124, 130 f., 133 and note, 141, 147 ff., 156; 
 assessments, 120, 122, 126, 128 f., 135, 143 f . ; earnings, 91 n., 103, 
 109, 126, 134 f., 142, 146 and note, 152 f., 155; dividends, 67, 129 f., 
 135, 142, 144, 153 ff. ; financial condition, 1853 to 1857, 123-128, 131 f. ; 
 in 1858, 128 f. ; traffic development, 1857 to 1870, 133; situation in 
 1870, isolation, 162 f. 
 
 Illinois and Michigan Canal, 9; southern terminus specified point on 
 Illinois Central Railroad, 43 ; shipment of grain on, 97. 
 
 Immigration, into Illinois 1830 to 1850, 12; 1850 to 1870, 80 n., 88 f. ; effect 
 of increase in Atlantic states, 76; relation of Illinois Central Railroad 
 to, 112. 
 
 Industries, development in Atlantic states, 76; condition in Illinois, 108. 
 
 Internal improvements, 10; need of, n; Act of 1837, 18, 116; failure of, 
 19. 
 
 Iowa, railroad development in, 70; settlement of, 88; wheat production 
 in, 96; expenditures on railroads leased by Illinois Central Railroad 
 in, 134 n., 152 f. 
 
 Iowa Falls and Sioux City Railroad, construction of, 71. 
 
 Iroquois county, growth of agriculture, 1850 to 1870, 93. 
 
 Jenkins, A. M., proposes a survey for a central railroad, 17. 
 
 Labor, price of, farm, 59, 92; railroad, 60, 124, 131, 151. 
 
 Lake Front Case, 71 f. 
 
 Lake Shore and Michigan Southern Railroad, conflict with Michigan 
 Central Railroad, 48 f . ; hostility to Illinois Central Railroad, 50 ; 
 completed, 83. 
 
 Land grant, urged for building a central Illinois railroad, 17 ff., 74; 
 urged by Breese, 22 f . ; by Senator Douglas, 24 ff. ; bill passed, 31, 
 74; importance to Illinois Central Railroad, 32, 117, 157, 160; differ- 
 ent plans for utilizing, 33 ff. ; sale of land from, 90, 135 ff., 139 and 
 note, 140; Cobden's estimate of, 117, 129 n. ; financial value of, 117, 
 136 ff. ; mortgage on, 125, 136; restraint on, 143; text of act, 165 ff. 
 
 Lead, mining in 1850, 14. 
 
 Legislature of Illinois, action in Lake Front Case, 71 f. 
 
 Live stock, character of industry in Illinois, 13, 101 ff. ; price of, 92; 
 shipment of, 91, 100 f. 
 
 Livingstone county, growth of agriculture from 1850 to 1870, 93. 
 
 Logansport, Peoria and Burlington Railroad, traffic alliance with Illinois 
 Central Railroad, 69; see Peoria and Oquaka Railroad. 
 
 Lumber, 105. 
 
 Mail, federal provision for transportation on Illinois Central Railroad, 65. 
 
 Manufactures, slight development before 1850, 14 f. ; 1860 to 1870, 108. 
 
 Markets, for early Illinois products, n, 15; southern, 74, 76 n., 77; 
 effect of Civil War on, 91, 160; eastern, 76, 79, 90, 160 f. ; European, 
 77 and note, 79, 160. 
 
 Mason, Roswell B., engineer in chief of construction work of Illinois 
 Central Railroad, 43; survey of route, 44; presents petition for en- 
 trance of railroad into Chicago, 50; general superintendent, 64;
 
 180 HISTORY OF ILLINOIS CENTRAL RAILROAD [464 
 
 resignation, 64; estimate of cost of Illinois Central Railroad, 118 f. 
 
 McClellan, G. B., general superintendent of Illinois Central Railroad, 64. 
 
 Memorial, plan of, 37; favored by governor and legislature, 38; fiscal 
 basis of, 116; text of, 167 f. 
 
 Michigan Central Railroad, conflict with Lake Shore and Michigan South- 
 ern Railroad, 48 f . ; allied with Illinois Central to secure entrance to 
 Chicago, 49; uses Illinois Central track, 53; granted right to sub- 
 merged land along lake front, 71 f. 
 
 Milwaukee, trade connection with Iowa, 70. 
 
 Mineral Point Railroad, assisted by Illinois Central Railroad, 68. 
 
 Mining, handicapped by high cost, 14, 106. 
 
 Mississippi Central Railroad, part of Mississippi valley trade route, 75. 
 
 Mississippi River, part of Mississippi valley trade route, 75, 76 n. ; freight 
 rate on, 85 f. 
 
 Mississippi valley, development of trade route of, 75 ; effect of Civil War 
 on trade route, 67, 75 ff., 87 n., 98; relation to Illinois Central Rail- 
 road, 1 60, 162. 
 
 Mobile, specified point on Mississippi valley railroad, 74. 
 
 Mobile and Ohio Railroad, 29; land grant to, 75; part of Mississippi val- 
 ley trade route, 75 ; effect of Civil War on, 87. 
 
 Morrill act of 1861, effect on industries, 76. 
 
 Morris, Gouverneur, member of board of directors of Illinois Central 
 Railroad, 40; bankrupt, 123. 
 
 Morrison, J. L. D., introduces substitute bill to incorporate Illinois Cen- 
 tral Railroad, 38. 
 
 Neal, David A., vice president of Illinois Central Railroad, agent to place 
 loan in Europe, 120. 
 
 New Orleans, shipping port of Illinois products, 74; decline, 78; rivalry 
 with New York, 85 ff. 
 
 New Orleans, Jackson and Great Northern Railroad, part of Mississippi 
 valley trade route, 75 ; effect of Civil War on, 87 n. 
 
 New York Central and Hudson River Railroad, competition with Penn- 
 sylvania Central Railroad, 83 ; freight rates on, 85 ; extension of, 162. 
 
 New York City, meeting place of charter company of Illinois Central 
 Railroad, 42; official meeting place of board of directors, 64 f. ; ship- 
 ping port, 78; rivalry with New Orleans, 85 ff. 
 
 Northern Cross Railroad, 23. 
 
 Oats, Illinois staple, 93 f. ; shipment, 97; receipts at Chicago and Cairo, 
 compared, 99 f. and notes (tables). 
 
 Ohio and Mississippi Railroad, relation to Illinois Central Railroad, 68, 
 96, 113, 155; completed, 1856, 83; sale of bonds, 123. 
 
 Osborn, William H., dominant figure in history of Illinois Central Rail- 
 road, 1853 to 1882, 41; control of financial affairs of, 124; financial 
 policy during panic of 1857, 127 f. ; English investors' criticism of, 
 128 n. 
 
 Packing industry, 1856 to 1870, 100.
 
 465] INDEX 181 
 
 Palmer, John M., governor, vetoes bill granting to railroads right to 
 submerged land on lake front, 72. 
 
 Panic, of 1857, 66, 127, 136 f., 146; of Wall street in 1853, 123. 
 
 Pennsylvania Central Railroad, completion to Chicago, 83; effect of 
 extension on Illinois Central Railroad, 162; see Logansport, Peoria, 
 and Burlington Railroad. 
 
 Peoria and Oquaka Railroad, assisted by Illinois Central Railroad, 96, 
 155', see Logansport, Peoria, and Burlington Railroad. 
 
 Population, increase in East, 76 ; in Europe, 77 ; in upper Mississippi 
 valley, 78, 88; effect of increase on agriculture, 78 f . ; distribution in 
 the United States, 1850, 1870, 79 (table) ; in Illinois, 1870, 89 (table), 
 159. 
 
 Promoters, eastern, present memorial of proposed railroad, 37. 
 
 Railroad materials, purchase and transporttation of, 60; cost of, 151; 
 quality of, 151 n. 
 
 Railroads, early, 10; inadequate service before 1850, 10; need of, 9 ff . ; 
 failure of efforts to build in Illinois, 1837 to 1845, 22; eastern, 83, 
 114, 162 f. ; southern, 75, 87 n., 98; Illinois, 81 and note, 95 ff., 102, 
 in, 113; see individual railroads. 
 
 Rails, cost of, 59 n., 133 n. ; quality of, 62, 72, 151 n. 
 
 Rantoul, Robert, presents memorial concerning proposed railroad in Illi- 
 nois, 37; aids in preparing measure favoring eastern promoters, 38; 
 member of board of directors of Illinois Central Railroad, 40; sketch 
 of public life, 41 ; his estimate basis of fiscal program of memorial- 
 ists, 116, 118. 
 
 Roads, poor condition of, early, 10. 
 
 St. Louis, place in Illinois Central system, 80, 81, 85 f. ; as market, 80. 
 
 St. Louis, Alton and Chicago Railroad, rival of Illinois Central Rail- 
 road, 69. 
 
 Schuyler, Robert, member of board of directors of Illinois Central Rail- 
 road, 40; sketch of public life, 41; president of board of directors 
 of Illinois Central Railroad, 42; report to board of directors on 
 fiscal plan of Illinois Central Railroad, 117 f. 
 
 Sheep raising, influenced by price of cotton, 101. 
 
 South, the, relation of to Illinois Central Railroad, 67, 86, 91. 
 
 Southern Michigan Railroad, see Lake Shore and Michigan Central 
 Railroad. 
 
 Springfield and Meredosia Railroad, 10. 
 
 Tariff, early arrangement on Illinois Central Railroad, 65 f . ; effect of 
 Civil War on, 67, 1 12, 147 ; eastern freight, 83 ff . ; southern freight, 
 85 f. ; ocean freight, 86 (table); regularized on Illinois Central Rail- 
 road, 91; low, impracticable, 104; on lumber, 105; on coal, 106; 
 passenger, 113, 147. 
 
 Terre Haute, Alton and St. Louis Railroad, assisted by Illinois Central 
 Railroad, 68; traffic alliance with Illinois Central Railroad, 69, 96, 
 in; shipment of live stock on, 102. 
 
 Trade, internal before 1850, n, 13, 15; retarded by lack of transporta-
 
 182 HISTORY OF ILLINOIS CENTRAL RAILROAD [466 
 
 tion, 15, 16, 74; effect of eastern industrial development on, 76; 
 increased European, 77. 
 
 Trade routes, effect of Civil War on, 67, 75 ff., 87 n., 98; effect of indus- 
 trial development on, 75 ; natural, of Illinois, 80 ; comparison of 
 advantages of rival, 85 f . ; part played by Illinois Central Railroad 
 in development of, 160, 162. 
 
 Transportation, water, improvements in, 82 f . ; factors in cheapening 
 cost of, 82 f. ; rail, eastern development, 83 f., 114, 160, 162; com- 
 petition between all-rail and water for Illinois exports, 83 ff. ; ocean, 
 rates, 86 (table); local, rates, 87 f., 147; rail, southern develop- 
 ment, 98. 
 
 Wabash Railroad, see Great Western Railroad. 
 
 Walker, Robert J., agent to place loan for Illinois Central Railroad in 
 Europe, 121. 
 
 Waterways, importance to Illinois trade, 80; relation to Illinois Central 
 Railroad, 81 ; improvement of, 82. 
 
 West Indies, in American grain trade, 77 n. 
 
 Wheat, Illinois staple, 93 f . ; rise in price of, 92 ; shipment on railroads, 
 95 f. ; Iowa staple, 96; receipts at Cairo, 98 f.
 
 UNIVERSITY OF ILLINOIS STUDIES 
 
 IN THE 
 
 SOCIAL SCIENCES 
 
 PUBLISHED QUARTERLY 
 
 BY 
 
 UNIVERSITY OF ILLINOIS 
 
 VOLUME IV 
 
 URBANA, ILL. 
 1915
 
 BOARD OF EDITORS 
 
 ERNEST L. BOGART JOHN A. FAIRLIE 
 
 LAURENCE M. LARSON
 
 TABLE OF CONTENTS 
 
 N0 - PAGES 
 
 1. The Illinois Whigs before 1846. By Charles Mans- 
 field Thompson, Ph.D 1-165 
 
 2. The Defeat of Varus and the German Frontier 
 Policy of Augustus. By William A. Oldfather, 
 Ph.D., and Howard V. Canter, Ph.D 166-284 
 
 3-4. The History of the Illinois Central Railroad to 
 
 1870. By Howard Gray Brownson, Ph.D 285-466
 
 UNIVERSITY OF ILLINOIS-URBANA 
 
 HISTORY OF THE ILLINOIS CENTRAL RAILROAD