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SKETCH OF THE LIFE

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J. F. D. LANIER

(Printed for the use of his family only.)

NEW YORK.
1871.

IIOBFORD & SONS, PttlNTEKS
56 Cedar Street,

TO MY CHILDREN.

In the following pages T have prepared for you a
brief sketch of soms of the leading events of my Zsife,
believing that I can leave to you no legacy tnore accept
able.

I was -born in Washington, in the County of Beaufort, in
the State of North Carolina, on the 22d day of November,
1N00. My father was Alexander Chalmers Lanier. His
mother's maiden name was Sarah Chalmers. She was
nearly allied to the family of Chalmers in Scotland, of
which Dr. Chalmers, the celebrated divine, was afterward
a member. It was this connection that gave my father his
middle name. My mother was a native of Virginia. Her
maiden name was Drusilla Doughty.
My first paternal ancestor in this country was Thomas
Lanier, a Huguenot of Bordeaux, France, who was driven
out of that country by religious persecution, near the
middle of the seventeenth century. He went first to Eng
land, and came from that country to this, either in com
pany with, or about the time that John Washington, the
ancestor of George Washington, emigrated to it. He
subsequently married Elizabeth, a daughter of John Wash
ington, and ultimately settled in North Carolina.* In his
native country he was a man of high social position, and
possessed a large estate, a considerable portion of which he
contrived to bring away with him, although confiscated by
law. He also brought with him a portion of the family
furniture, which was long retained by his descendants as
interesting and valued heirlooms. His children were
Richard, Thomas, James, Elizabeth and Sampson Lanier.
It was from the first named that our branch of the family
descended. His children were Lewis, Buckner, Burrill
and Winifred. Lewis, our ancestor, married a Miss Ball, a
sister of the mother of General Washington. He was my
* The old Colonial Records at Richmond, Va., show several grants of land to Thomas
Lanier by the Crown, in the Counties of Brunswick and Lunenburg, in that State, to the
extent of about three thousand acres.

great-grandfather. His son, James Lanier, was my grand
father. My account of the emigration of our ancestor
to this country, and of his marriage into the Wash
ington family, is derived from a statement of the late
George Washington Parke Custis, the grandson of Mrs.
General Washington, taken from the records of the
Washington family in his possession. The marriage of my
great-grandfather with a sister of the mother of General
Washington is a well-established tradition in our family,
but I possess no authentic record of the fact.
My grandfather, James Lanier, was a planter. He was
well educated, a cultivated gentleman, energetic and public
spirited, and took an active part in the war of the Inde
pendence, serving through the whole of it as captain in
Colonel William Washington's regiment of light cavalry.
which was particularly distinguished for its efficient service.
He was in the battles of Eutaw Springs, Guilford Court
House, the Cowpens, and, I believe, of King'* Mountain.
These were among the most brilliant achievements of the
war. lie also served as captain in General Wayne's ex
pedition against the Northwestern Indians, in 17! >L which
not only avenged the defeat of General St. Clair, but com
pletely destroyed their power, and for the first time gave
peace to, and prepared the way for the future settlement of
the great Mississippi Valley.
In ITS!), I think, my grandfather moved to Nashville,
Tennessee. The South-west was then just coming into
notice. Among the immigrants into that section was
General Andrew Jackson, afterward so famous in the his
tory of the country. For some time after his arrival at
Nashville he was an inmate of my grandfather's family.
My grandfather, subsequently, about 1791, removed to
Bourbon County, Kentucky, of which he was soon ap
pointed Prothonotary, or County Clerk. From thence he
moved to Pendleton County, Kentucky, where he passed
the remainder of his clays.

Soon after my birth, my father moved to Bourbon
County, Kentucky. He invested his property in lands,
and lost it by defect of title, with which much of the real
estate of that State was tainted, and which produced wide
spread disaster and ruin. In consecpience of these losses,
he moved in 1807, to the town of Eaton, in Preble County,
Ohio. Upon reaching this State, he manumitted two valu
able family slaves, the only ones he held, being prohibited
from doing so in Kentucky by the laws of the latter. 1 J e
had the satisfaction of seeing them both useful and respected
in their new condition of freedom. I have always greatly
valued this act of my father, as these slaves constituted
(mite a portion of his property. The act was, however,
only in harmony with his whole character.
For a considerable portion of the time that my father
resided at Eaton, he was clerk of the courts of the county.
Upon the breaking out of the war of 1S12, he entered the
army and served during the whole of it. He served under
General Harrison, with the rank of major, in his north
western campaigns, and had in charge a long line of de
fences, extending westerly from Lake Erie, and following
up the valley of the Maumee, the most important of which
was Fort Wayne, situated on a narrow neck of land separat
ing the waters flowing into Lake Erie from those flowing
into the Gulf of Mexico, and named in honor of General
Wayne, and in commemoration of his celebrated north
western campaign, in which my grandfather served. Upon
the site of the fort, erected in the last century for the puiv
pose of preventing the incursions of hostile savages, has
grown up one of the most flourishing toMrns in the West,
which has now become the centre of a vast system of rail
roads, the most important of which is the Pittsburg, Fort
Wayne and Chicago. By a singular coincidence, the very
ground -which my father and grandfather periled their
lives to wrest from savage tribes, I have labored long and
earnestly, though in a different way, to improve and enrich

s

by the ara of peace, and thus to complete their work. The
territory, once so remote and inaccessible, and whose forests
were the covert for the treacherous Indian, has, through the
instrumentality ot^the railway, been brought within easy
distance of Eastern markets, and is now one of the most
populous, flourishing and prosperous portions of the West.
While at Eaton I attended the village school for about
eighteen months. It was kept, by a Mr. Stevens, who taught
only the rudiments of an English education. While there
I served as clerk in the store of a Mr. Cornelius Van Aus-
dall, an immigrant of Dutch descent from Hagerstown,
Maryland, and a very worthy man. I believe he is still
living. I have always looked upon my service with him as
one of the most valuable periods of my early life. It taught
me to be industrious, active, methodical, and the value, if I
may use the word, of small things. I was brought into
contact with all varieties of people, had to turn my hand to
every kind of work, and learned how to be respectful and
obliging to all. The stock in the store consisted chiefty of
light cotton goods, twists, buttons, and the smaller articles
of hard and tin ware, and other articles suited to the primi
tive condition of the people with whom we dealt. The
greater part of the trade consisted of barter. The most
valuable articles received in exchange for goods were pel
tries of one kind or another. The route to the Eastern
markets was up the Ohio Liver to Pittsburg and Wheeling,
in keel-boats ; thence by wagons to Philadelphia or Balti
more. There were in those days neither roads nor steam
boats in the A\rest. The cost was too great to allow the
transportation of the produce of the AVestern country to
market, except a small amount of flour, corn and provisions
sent down the river in arks, or iiatboats, to New Orleans.
Nearly everything was produced in the family that was
consumed in it. The only money then in circulation was
silver — Spanish coins chiefly, received by way of New Or
leans. This was packed on horses when the merchant went

9
East to make his purchases, and the lighter kinds of goods
brought back in the same manner. The trip to and from
the Eastern States was then an affair of greater magnitude
and peril, and required a greater length of time than that
at present between New York and San Francisco; or, be
tween New York and Europe. The country was wholly
without good roads, and almost the only mode of travel, as
as of transporting merchandise, was upon the backs of
horses and mules/"'
In IS 15 I attended, for about a year and a half, an acad-
* Only six years before my grandfather moved to Tennessee, General Washington crossed
the Allegheny mountains for the purpose of ascertaining the practicability of construct
ing a navigable water line from the Potomac to the Ohio. The report of his journey and
observations describes so accurately the condition of the Western country at the time,
and the necessity of improved highways to unite it firmly with the Eastern States, that I
cannot refrain from copying a portion of his communication addressed to the Governor of
Virginia :
"I need not remark to you," said Washington in the communication referred to, "that
the flanks and rear of the United States are possessed by other powers, and formidable
ones too, and how necessary it is to apply the cement of interest to bind all parts of the
Union together by indissoluble bonds — especially that part of it which lies immediately
west of us — with the Middle States. For what ties, let me ask, should we have upon those
people (in the Mississippi Aralley) ? How entirely unconnected with them shall we be, and
what troubles may wc not apprehend, if the Spaniards on their right and Great Britain on
their left, instead of throwing stumbling-blocks in their way, as they now do, should hold
out lures for their trade and alliance? What, when they gain strength, which will be
sooner than most people conceive (from the immigration of foreigners who will have no
predilection for us, as well as the removal of our own citizens), will be the consequence of
having formed close connections with both or cither of these powers, in a commercial
way? It needs not, in my opinion, the gift of prophecy to foretell.
"The Western States (I speak now from my own observation) hang upon a pivot. The
touch of a feather would turn them anyway. They have looked down the Mississippi till
the Spaniards, very impoliticly, I Lliink, for themselves, threw difficulties in the way ; and
they looked that way for no other reason than becauso they could glide gently down the
stream, without considering, perhaps, the difficulties of the voyage back again and the
time necessary to perform it ; and because they had no other means of coming to us but
by land transportation and unimproved roads. These causes have hitherto checked the
industry of the present settlers; for, except the demand for provisions, occasioned by the
increase of population, and the little flour which the necessities of the Spaniards compel
them to buy, they have no incitements to labor But smooth the road, and make easy
the way for them, and then see what an influx of articles will be poured upon us, how
amazingly our exports will increase, and how amply we shall be compensated for any
trouble and expense we may encounter to effect it."
It has been reserved to tlie present generation, by the construction of railways, to
" smooth the road and make easy the way " for the West. The results have vastly more
than fulfilled the anticipations of the Father of his Country. These works have not only
rendered the country indissoluble, but have created a commerce the magnitude of which
really exceeds belief.

' 10
emy taught by Messrs. Morse and Jones, at Newport, Ken
tucky. They were excellent teachers, and I derived great
benefit from their instruction. In 181T my father moved
to Madison, Indiana. This State was admitted into the
Union the year previous, and contained about 60,000 in
habitants scattered very sparsely over the southern portion
of it. At that time the Indian titles were extinguished only
twenty miles north of Madison. At this place my father
opened a dry-goods store. The town at that time contained
about one hundred and fifty people. It had been so re
cently settled that it was still a forest — the trees that were
not standing almost covered the ground where they fell.
It was wholly without streets, or any improvements fitted
to make it an attractive or agreeable place. After our re
moval to Madison I had, for a year and a half, the almost
inestimable advantage of a private school taught by a very
superior person from the Eastern States. "When not at
school I assisted my father in his store. At this period,
General Harrison, afterward President of the United
States, and who was a warm and life-long friend of our
family, procured for me a cadetship at West Point. I was
very eager to accept the appointment, but relinquished it,
seeing that my mother was greatly distressed at the thought
of my leaving home, I being her only child.
In March, 1820, my father, who had long been ill from
diseases contracted while in military service under General
Harrison, died. My father, from his infirm health, was not
successful in his business in Madison, and died insolvent.
1 settled up the estate, and, ultimately, as I acquired pro
perty of my own, paid all his debts in full.
In 1819 I commenced the study of law in the office of
Gen. Alexander A. Meek, of Madison. I finished my legal
course by graduating at the Transylvania law school in
Kentucky, in 1S28. 1 immediately commenced the practice
of law in Madison, which at that time had a population of
about 800. I was diligent, strove to be respected, and made

11
it a point to be punctual in every duty and appointment.
It was early my purpose of life to respect scrupulously the
rights of others, but always to be firm in the assertion of my
own. It was the rigid adherence of this plan of life, if it
may be so called, that I owed my success. My diligence
and fidelity in every engagement gave me the command of
whatever money I wanted, as it was well known that I would
never allow my liabilities to exceed my means. While in
the practice of the law I made the cause of my clients my
own. Success or defeat, consequently, gave me more plea
sure or pain, than it did them. I was, for this reason, very
successful ; but I found the labor and anxiety of my profes
sion too much for my strength, which led ine to give it up
as soon as other satisfactory openings for business presented
themselves. While in the practice of the law, I traveled
what was called the South-eastern District of Indiana, prac
ticing in a large number of counties. The only mode of
traveling in those days was by horseback. On most of the
routes traveled we were guided by trails or blazed lines,
which were often preferable to what were called roads which,
from the friable nature of the soil, were speedily so cut up
as to be almost impassable, particularly in the wet seasons of
the year. The rivers were crossed in log canoes, and by
swimming our horses, when they could not be forded.
In 1S21 I was appointed assistant clerk of the House of
Representatives of the State, at the last sitting of the Legis
lature at Corydon. The next meeting was at Indianapolis,
the present capital. I continued assiistant clerk until 1827,
when I was elected chief clerk. My compensation was §3.50
per day. I kept the journal in which was entered all the
proceedings of the House, and did the reading. My duties
required the greatest diligence and the closest attention. I
soon became master of the rules and modes of conducting
business, and was in this way enabled to be of service to
members, many of whom, although men of sense and ability,
often found themselves in positions of embarrassment from
want of familiarity with legislative proceedings. My good

12
offices were often availed of in the drawing up of motions
and bills, and in guiding the conduct of members on the
floor. I regard my office of clerk of the House as one of
the chief causes of my future success. It enabled me to form
an intimate acquaintance with all the leading men of the
State, many of whom, in after life, were not slow to recipro
cate the good offices I had done them.
With my practice and my salary as clerk of the House, I
was in receipt of quite an income, for those days, in the
West. My habits were simple and economical, at the same
time I studied to make every one dependent upon me, among
whom was my mother, comfortable and happy. My surplus
means were, as fast as acquired, invested in real estate, which,
as in all new States, rose rapidly in value.
When clerk of the House, the trip from Madison to
Indianapolis required three days of fatiguing travel on
horseback. It is now performed by railroad in about four
hours. In 1833, upon the chartering of the State Bank of Indi
ana, I retired from the practice of the law, and took a prom
inent share in the management of that institution. I held a
larger amount of the stock first subscribed than any other
individual. This bank consisted of a Central Bank, located
at Indianapolis, with ten branches in as many leading towns
of the State. I was the first President of the Madison
branch. The Central Bank was not one of discount or is.me.
Its functions were a general supervision of the branches, be
ing a Board of Control, of which Mr. McCulloch, afterward
Secretary of the Treasury of the United States, and myself,
were among the leading members. Notwithstanding the
managers of the bank, at the time it went into operation,
were wholly without training or experience in such matters,
many of them never having been inside of such an institu
tion, it proved a model of success, and consequently most
beneficial lo all the interests of the State. The capital was
almost wholly borrowed from abroad, and through the credit

13
of the State, which took $1,000,000 of the stock, and loaned
its credit to individual stockholders to the extent of one-half
the stock subscribed by them, taking as security therefor,
real estate at one-half of its unimproved value. The credit
of the State was high, its five per cent, bonds selling at a
premium averaging from twelve to fifteen per cent. It may
seem incredible that a bank, based almost wholly upon capi
tal borrowed, and that too through the instrumentality of
the State, should have proved such a success. It would ap
pear to have been almost inevitable that in a country lack
ing in commercial training, where the demand for capital is
always excessive, where the managers of trust funds have
every inducement to make a reckless use of them, and
where, among the great mass, there is very little idea of the
importance and value of promptness in the payment of ob
ligations, that the bank, if it did not lose its capital, would
soon find it converted into_various kinds of property taken
in payment of loans, or in the overdue notes of its borrow
ers. The bank commenced business at one of the most
critical periods of the history of the country — at the very
beginning of that great era of speculation which nearly
bankrupted the whole nation, and which culminated in the
terrible catastrophe of 1837. At this disastrous crisis nearly
every bank in the Western and South-western States failed,
with the, exception of that of Indiana. A very large num
ber of those of the Eastern States wx've totally ruined. It
would seem to have been almost impossible that the bank of
Indiana, then one of the newest of the Western States,
should not have become involved in the general catastrophe.
So far from this being the case, the hank not only paid divi
dends averaging from twelve to fourteen per cent, annually,
but returned to its stockholders nearly double the original
investment, when it was wound up at the expiration of its
charter in 1854. For the $1,000,000 invested by it in this
institution, the State received, in- profits alone, fully
$8,000,000. These, profits now constitute the- school fund

14
of the State, the increase of which, being invested in the
State indebtedness, is rapidly converting the whole of it
into an irredeemable fund to be devoted to educational pur
poses. The bank was the only one of the numerous enter
prises in which the State embarked that did not prove an
almost total failure.
As we had always intended to keep our banks in position
to meet any emergency that might arise, we had not in the
least anticipated the general suspension, in 1887, in the
Eastern States, till that event happened. Our Board of Con
trol were then in session at Indianapolis. We were at the
time the depository of $1,500,000 of Government funds. I
was instructed by the Board to proceed immediately to
Washington to represent our condition, and to confer with
the Secretary of the Treasury as to what we, in the emer
gency, should do. I took with me $80,000 in gold. I went
up the Ohio River in a steamboat to Wheeling, and thence
by stage, chartered for the purpose, alone across the moun
tains to Frederick, at that time the Western terminus of the
Baltimore and Ohio Railroad, and 61 miles west from Bal
timore. I suffered not a little anxiety on account of the
treasure I carried more than 300 miles, through a wild and
comparatively uninhabited region, and was not a little re
lieved on reaching the safe conduct of a railroad. On ar
riving at Washington I obtained an interview with the Sec
retary' of the Treasury, the Hon. Levi Woodbury, explained
to him the position and the entire solvency of our bank, and
delivered to him the gold I had brought with me, in part
payment of our balances. He received me with irreat cor
diality, and said that our bank was the only one that had
offered to pay any portion of its indebtedness in specie. We
were allowed to retain the Government deposits till they
were drawn in its regular disbursements. At his solicita
tion I consented to act as Pension Agent for a portion of the
Western States. For the pensions I paid, drafts were made
upon the Government deposits in our bank. Drafts were

15
also made upon us in payment of troops, transportation of
the mails and other services. In all these payments our
bank-notes, from our well-known credit, were received
equally with specie. In such payments all the balances
against us were liquidated in a manner entirely satisfactory
to the Government, and greatly to our convenience and ad
vantage. In April, 1838, a convention of the officers of the banks
of the United States was held in New York, for the purpose
of considering the subject of resuming specie payments. I
attended the convention as the representative of our bank.
In the debates that took place I earnestly favored the propo
sition for immediate resumption. The position I took greatly
pleased the venerable Albert Gallatin, who, aged as he was,
was the leading spirit of the convention, and who was much
gratified in finding himself earnestly supported from a quar
ter from which he had not expected aid. He took occasion
to thank me personally and warmly for the grounds I took.
I recollect my interviews with him on this occasion with great
pleasure. At the period of which I have been last speaking, nearly
all the Western States, Indiana among them, embarked in
elaborate systems of internal improvements. These were
entered upon without proper reference to the wants or con
ditions of the country, and embraced extensive water lines,
which were either impracticable or of little value when com
pleted. The different States assumed to provide, by an issue
of their bonds, the means for their construction. These,
proving wholly inadequate, failure on a gigantic scale was
inevitable. For such works the State of Indiana incurred
a debt of about $10,000,000, without realizing any substan
tial benefit therefor. It was still without the works neces
sary to give, value to its products, by opening to them the
markets of the East. Wheat raised in the interior of the
State at the period referred to, would not bring more than
25 cents the bushel. Indian corn would not bring more

16
than one-half this amount. The chief value of the latter
was to feed it to live stock. Tliere could be no substantial
recovery till the works were constructed, which have since
quadrupled the value of these as well as of all other pro
ducts of the States. But years had to elapse before their
construction could be undertaken with any hope of success.
The people were too poor to construct them. The credit of
the States was destroyed : and if it had not been, constitu
tional provisions were enacted by most of them forbidding
them to create a debt for any work ol internal improvement.
A paralysis for a long time seemed to rest upon the wdiole
country. After the resumption of specie payments in 1838-0,
most of the banks of the country again suspended in 1841.
In fact, no decided recovery took place till the acquisition
of, and discovery of gold in, California, in 184s, from which
event may be said to date the physical development of the
country, which is now the marvel of the world.
One of the most important branches of our banking busi
ness was the purchase and sale of exchange made by the in
ternal commerce of the country. At that time the only out
lets of the interior, as far west as Indiana, were the Ohio
and the Mississippi Rivers. New Orleans was the sole port
of export. We purchased largely bills drawn against ship
ments of produce to this port. As these bills were about to
mature, it was my custom to go to New Orleans to invest
their proceeds, and such other means as our bank could
spare, in the purchase of bills drawn in New Orleans upon
shipments of produce from thence to the Eastern States.
The proceeds of the latter bills, at their maturity, supplied
us amply with exchange for our Western merchants, in pay
ment of their purchases of merchandise. In this way we
were enabled to turn our capital several times each year, and
at a good profit, without the loss, I believe, of a single dol
lar in any transaction.
I continued in the management of the Madison Branch
Bank and a member of the Board of Control till 1840, when

17
the subject of railroad construction again began to excite
general attention and interest. During the twelve years
that had elapsed since the great calamity of 1837, the West
had increased rapidly in population and wealth, and the ne
cessity for improved highways was felt to be more impera
tive than ever. The acquisition of California, and the dis
covery of immense deposits of gold within it, gave to the
whole nation an impulse never before felt. Numerous rail
way enterprises were again proposed in the West, and I felt
that the time had at last come when they could be safely
undertaken as remunerative investments for capital. Re
siding at Madison, Indiana, I had been instrumental in the
resuscitation of the Madison and Indianapolis Railroad, orig
inally a part of the system of public work which the State
had attempted to construct, and had learned from the early
success of that road what might be expected of other lines
more favorably situated. For the purpose, therefore, of
embarking in the construction of railroads on a wider scale,
I went to New York in the latter part of 1848, and on the
first clay of January, 1849, I formed a copartnership with
Mr. Richard II. Winslow, the chief object of which was the
negotiation of railway securities, although we contemplated,
in connection therewith, a general banking business. At
that time there were in operation in the West only about
600 miles of line.* These roads were chiefly the remains
of the old State systems which had been sold out to private
companies, and were almost without exception badly located

* On tlie first day of January, 1849, tbe following lines of railroad were in operation in
the States north and west of the Ohio TCiver : Len^lli of Lhif.
Onio. — Little Miami   si mile:,.
Mansfield and Sandusky  56 "
Mad liiver  (K> '¦
Indiana. — Madison and Indianapolis  J Mi *¦
Miohigan. — Michigan Central  146 "
Michigan Southern  TO '¦
Erie and Kalamazoo  S3 u
Detroit and Pontiae   25 "
Illinois.— Sangamon and Morgan  58 "
Total  655 miles,

18
and imperfectly built. They were in all cases laid with the
light flat bar, upon longitudinal sills, and were utterly in
capable of sustaining heavy trains, high speed, or a large
traffic. They had, consequently, involved in heavy loss all
who had been engaged in their construction. I felt, how
ever, their want of success to be no argument against lines
properly constructed upon good routes. I undertook to de
monstrate this in every way in my power, particularly in
newspaper articles and pamphlets, of which I published great
numbers in connection with the negotiation of the securi
ties of various companies which we undertook. The result
of our efforts soon far exceeded our expectations. Although
we began in a very small way, every step we took gave us
increased business and strength, and we soon had all the
business we could attend to. Commencing with the bonds
of the Madison and Indianapolis Railroad, which were the
first securities of the kind ever brought out in the New York
market, we followed them with the bonds of the Little
Miami ; Columbus and Xenia ; Cleveland, Columbus and
Cincinnati ; Cleveland, Painesville and Ashtabula ; Ohio and
Pennsylvania (now a part of the Pittsburg, Fort Wayne and
Chicago) ; Michigan Southern, and other important lines.
We not unfrequently negotiated a million of bonds daily.
The aggregate for the year -was enormous. We were with
out competitors for a business we had created, and, conse
quently, made money very rapidly. The commissions for
the negotiation of bonds averaged at first five per cent.
sVith their negotiation we often coupled contracts for the
purchase, at a large commission, of rails. Our business soon
became so great that it was a question with us, not so much
what we would undertake, as what we would reject. We
not unfrequently took, on our own account, an entire issue
of bonds of important lines.
The negotiation of the securities of companies was fol
lowed by arrangements that made our house the agent for

19
the payment of interest accruing on them, as well as trans
fer agents. Such arrangements naturally led the way to
the banking business to which we afterward chiefly confined
ourselves. The extent of our business as well as of our suc
cess exceeded all expectation. During the period of six
years, from 1849 to 1854 inclusive, in which we were actu
ally engaged in the negotiation of railway securities, 10,724
miles of line were constructed, nearly one-half of which were
in the Western States. With all the more important lines
we were in one way or another connected. At one period
we paid the interest on fifty different classes of securities.
These facts will convey some idea of the magnitude of our
business and the vigor and energy with which it was con
ducted. The uniform success of the enterprises in behalf of which
we acted was something remarkable, and has since been a
source of great satisfaction. I feel that investors, as well as
the country at large, have been greatly benefited by my
labors. The interest on almost all the securities brought out
by us has been regularly paid, while, in not a few instances
there has been an enormous profit upon the prices paid. Our
house was the first to bring out county and city securities,
issued for the construction of railroads. These securities
were instrumental in the construction of an immense extent
of line, which, but for them, could not have been built,
while they have proved a most excellent investment. In no
instance, I believe, have the counties and cities, the bonds
of which we negotiated, made default, either in principal or
interest. Rapid as lias been the progress of railroads since we first
engaged in their construction, that of their commerce is a
matter of still greater surprise and wonder. Considered in
reference to its magnitude, they have created the present
immense wealth of the nation. Previous to their construc
tion, the products of the interior, only a short distance re-

20
moved from navigable water-courses, had no commercial
value. The greatest abundance of the peculiar products of
a section might give only an inconsiderable amount of com
fort, and no wealth. With such works, the whole natural
wealth of the country became at once available to the uses
of man. When we consider that the commerce of the coun
try, borne upon railroads, dates from a period considerably
subsequent to the time I left the West for New York to em
bark in these enterprises, and that this commerce to-day
measures, in bulk, 100,000,000 tons, having a value of
$10,000,000,000, and that the earnings of our railroads equal
ed $400,000,000 in 1868, against $40,000,000 in 1851, and
that the investment in them, now amounting to $1,800,000,-
000, has increased to like ratio, the vastness and rapidity of
this development will be in some degree appreciated. I have
not only been contemporaneous with all this growth, and, to
some extent, instrumental in promoting it, but I reach far
beyond its first inception. In one respect, therefore, my life.
as does, in fact, that of every middle-aged man, covers a
wider experience than that of all the generations of men
from earliest history to the present time.
In the West, twenty years ago, precisely the same means
were used for the transportation of persons and property
that were used in the very infancy of the race. So, too,
nearly all the other methods of domestic economy were en
tirely similar for the two widely-separated periods. When
a child, and till I reached manhood, the clothing I wore was
made up at home, and by the members of the family. The
present generation, consequently, have, in all that relates to
the economy of life, what might be termed an universal ex
perience. The coming one will have only that which be
longs to itself.*

* As already stated, the number of miles of raihvay in operation in the Western States
in 1849, the year I removed to New Vork, was 655. On the rir.->t day of January, IS69. twen
ty yoars thorealler, thore were 16,ssit miles in operation. Tho number in eueh State, at th©

21
At the close of 1854. we withdrew from the negotiation
of railway securities, and confined ourselves chiefly to Bank
ing, for which our previous success had opened a wide field.
We, however, continued to be the financial and transfer
agents of a large number of railway companies whose secu
rities we had negotiated.
In 1857 the health of Mr. Winslow began to fail. In
consequence of this he retired from our firm in 1859. He
died on the 14th of February, 1861. He was a man of rare
force and energy of character, and, by thoroughly compre
hending the value of railways, admirably adapted to the
business in which we embarked. He had, above all men I
ever knew, the faculty of inspiring others with the zeal and
confidence which he himself felt. Whatever he undertook
was certain to be accomplished. When we consider the re
sults that railroads secure — that every mile of line built
adds, immediately, fourfold its cost to the aggregate value
of the property of the country, and that the traffic which it
creates and which passes over it exceeds annually six times
dates named, is shown in the following table :

Ohio 
Michigan . .
Indiana . . .
Illinois 
Wisconsin . ,
Minnesota.Iowa KansasNebraska.. Missouri .

242

3,398

2T4

1.199

86

2.IRMI

m

3.44(1

—

1 ,2:',ft

-

,712
1.523 648

_

—

920

—

1,354

Totalmilcs  055 16kb9
Tho increased railroad mileage in these States, in twenty years, was 16,234 miles, or an
average of 812 miles annually. The capital invested in them on the first day of January,
1869, at tho rate of $40,000 per mile, equaled $675,556,000— the increase in the twenty years
being fully $665,000,000. The aggregate tonnage of the roads, for 1809, equaled 1,500 tons
to the mile, or an aggregate of 25,333,000 tons, of which the increase exceeded 25,00 ',000
tons. The value of this tonnage, at $150 per ton, equaled $3,750,000,000, nearly the whole
of which was a creation of the period named. These illustrations will show how rapid has
been the growth of the West for the past twenty years. When I compare its present con
dition with what it was forty years ago, I am at a loss for language to express adequately
the change.

such cost, we can form some idea of the services rendered
to society by a man whose energy and influence was instru
mental in the construction of an immense extent of line.
He was one of the leading spirits that inaugurated and sus
tained the great movement that led to the construction of
the vast system of works that are now spread, like a net
work, over the whole country, and which now embraces
nearly 50,000 miles of line. He never ceased from his la
bors till compelled to do so by his declining health. All
my relations with him were of a most harmonious character,
and it gives me great pleasure to pay this tribute to his
memory. Although our firm did not, after 1854, negotiate railway
securities to any considerable extent, we continued to cher
ish a lively interest in those enterprises in behalf of which
we had acted, and frequently rendered them pecuniary as
sistance in emergencies in which they not unfrequently found
themselves placed. The great movement which commenced
in 1848 culminated in 1857, in a suspension of specie pay
ments by the banks, and in an excessive prostration of busi
ness throughout the country. No interest suffered so se
verely as the railroads. Nearly all of them had been con
structed upon borrowed capital, and most of the companies
owed large floating debts. All wanted large additional
means, either to complete their works or to discharge press
ing liabilities. Even so late as 1858 the earnings of roads
were not one quarter their present amount. These earnings,
owing to the embarrassments into which every kind of in
dustry and business had fallen, decreased largely lor several
years, and in many cases proved wholly inadequate to meet
even the calls for interest. Many of our most valuable en
terprises were forced into bankruptcy, and had to be reor
ganized by new adjustments of interests, and, in most cases,
by large sacrifices on the part of the stock and bondholders.
A period of great general depression and discouragement
followed one of previous confidence and hope. In this crisis

23
it devolved naturally upon parties who had been instru
mental in providing the means for the construction of roads
to raise them from their depressed condition, and place them,
if possible, in a position in which they could be successfully
worked and realize the expectations formed of them. Among
the companies that yielded to the financial storm was the
Pittsburg, Fort Wayne and Chicago — a company with which
I had been early identified, whose securities we had nego
tiated, and for whose good name and success I was most
solicitous. To its restoration I consequently devoted no
small portion of my time, till all its embarrassments were
happily surmounted, and the road placed in a position of
perfect independence, in which it proved itself to be one of
the most valuable enterprises of the kind in the United
States. Perhaps I cannot better show the difficulties into
which this work, in common with many others, had fallen,
and of its subsequent recovery, than by copying the follow
ing article in reference thereto from the New York Times
newspaper, under date of July 21, 1869.
" In 1859 the Pittsburg, Fort Wayne and Chicago Eailroad,
in common with most other lines, was overwhelmed in the
financial revulsion which had swept with resistless force over
the whole country. The road had been just opened to Chi
cago. The line was originally undertaken by three companies,
none of which possessed means at all adequate to the construc
tion of their several links. The road when opened was hardly
more than half completed. Its earnings, not equaling one quarter
their present amount, were wholly insufficient to meet current ex
penses and the interest on its funded debt. Default, by necessary
consequence, was made on all classes of its securities. Bank
ruptcy stared the concern full in the face, threatening the loss of
nearly the whole amount invested.
In this crisis a meeting of its creditors, chiefly first mortgage
bondholders, was called at the office of Winslow, Lanier & Co.,
to consider what was to be done. This class of creditors, of
course, had the precedence. If they insisted upon the letter of
the law, they would inevitably cut off all subsequent parties in

24
interest, who represented an amount of capital invested in the
road twice greater. After much deliberation, it was decided to
raise a committee to 'be invested with full power, and, if possible,
save the interests of all. This committee consisted of Mr. J. F.
D. Lanier, who was appointed by the creditors its chairman; Mr.
Samuel J. Tilden, Mr. Louis H. Meyer, Mr. J. Edgar Thomson,
President of the Pennslyvania Eailroad, and Mr Samuel Hanna
of Fort Wayne. To give some idea of the chaos existing in the
affairs of the company, we may state that there were outstanding,
at the time, nine different classes of bonds, secured in one way or
another, upon the different portions of the road; two classes
secured by real estate belonging to the Company, and several
issued in the funding of coupons. Upon all these, interest for
several years, amounting to many millions of dollars, was overdue.
The principal sums of several of the first mortgages were speedily
to mature. The Company also owed more than $2,000,000 of
floating debt, portions of it in the form of judgments recovered in
the State courts. The road was in extremely bad condition, and
required the expenditure of a large sum to enable it to conduct its
business with any degree of economy or dispatch.
Such was the condition of affairs when the Committee commenced
work. The value of the securities of the Company was merely
nominal. Its stock would not sell for five cents on the dollar.
Each class of creditors was striving to gain some advantage at the
expense of the others. The first step of the Committee, conse
quently, was to put the property beyond the reach of .individuals
and in the custody of the courts. An order for this purpose was
obtained in the United States District Court for the Northern
District of Ohio, on the 17th of January, 1860, and Mr. Wm. B.
Ogden was appointed receiver.
The Committee set out with the determination of preserving, if
possible, the rights of all the parties in interest — not alone those
of the first mortgage bondholders. It was hoped that when the
property was put beyond the reach of individual creditors, an
arrangement might be effected and the rights of the various parties
preserved ih the relations they had previously maintained. But
such an adjustment required the assent of each creditor and stock
holder. This, in the multiplicity and conflict of interests, it was

25
found impossible to obtain. The next, and only remaining course,
was to sell the road and property of the Company by an order of
Court in behalf of the first mortgagees. Such sale would vest
absolutely the title to the road in the hands of the purchasers, who
would thus be in position to make such disposition of it as in their
view equity and justice might demand It would also enable them
to apply the net earnings to the construction of a good road, with
out which the investment itself would be of no value.
With this purpose, a full plan of reorganization, such as was
finally adopted, was prepared and published, and brought, as far
as possible, to the attention of every party in interest. Decrees
for sale had to be obtained in the Courts of the United States for
four different States. The time required for this purpose was
occupied by the Committee in incessant efforts in removing one
impediment after another thrown in their way by importunate and
dissatisfied creditors, who were indifferent to the fate of the con
cern, provided they could get their pay. All difficulties were at
last overcome, and on the 24th of October, 1861, the road and
property was sold at auction, and purchased by Mr. Lanier, in be
half of himself and his associates, for the sum of $2,000,000.
The Courts, we are happy to say, facilitated legal proceedings as
far as this could be properly done. They had full confidence in
the Committee, and sympathized with the unfortunate creditors of
the concern, and not, as at the present day, in our State, with
bands of conspirators against the public welfare, who seek the con
trol of great lines with no other purpose but to plunder them.
Eight years ago, measured by what has since transpired, was a
golden age of judicial purity.
By the sale of the road a most important step was gained. The
title to it vested, absolutely, in the purchasers. They could con
vey it to whom, at what price and upon what terms they pleased.
What followed was more a matter of detail, though involving great
patience and labor. For the creation of a new Company, accord
ing to the original plan of reorganization, legislation had to be
obtained in tbe States of Pennsylvania, Ohio, Indiana and Illinois.
Such legislation was at last secured, a new company formed, to
which was conveyed the railroad and everything appertaining
thereto, the Committee receiving therefor, first, second, and third

26
mortgage bonds, in amounts sufficient to meet the sums due the
different classes of creditors in the old Company ; and also certifi
cates of Stock corresponding in amount to that outstanding in the
old. First mortgage bonds, to the amount of $5,200,000, were
issued to the first mortgage bondholders of the old Company, and
of the several links of which its road was composed, and for
accrued interest. The bondholders were also required to fund, for
two years, the interest accruing on the new bonds, so as to allow,
for such a period, the application of the net earnings to construe
tion. The second mortgage bondholders received, in the same
manner, and subject to similar conditions, second mortgage bonds
to the amount of $5,250,000. The unsecured creditors were
paid off in third mortgage bonds to the amount of $2,000,000.
The shareholders received new certificates in exchange for the
old. By such means each class of creditors, without the abate
ment of a dollar, were fully and completely reinstated in the new
Company in the order they stood in the old. The proper trans
fers and exchanges were made, and on the 1st day of May, 1862,
two years and six months arter the road was placed in the hands
of a receiver, and six months after the sale, the trust, so long
held and faithfully executed, was brought to a virtual close, to the
entire satisfaction of every party in interest in the road.
During the period of reorganization the road was operated,
under the general direction of the Committee, by Geo. W. Cass,
its former and subsequent President. His well-known abilities as
a railroad manager were never more conspicuously displayed than
in this service. He had every difficulty to contend with — an im
poverished and half-completed road, with clamorous creditors at
every turn. The Chairman of the Committee was not unfrequently
called upon to advance, from his private funds, considerable sums
in aid of the operations of the road. Such advances were, of
course, repaid, but only with simple interest. The good name
and financial strength of Mr Lanier, joined to his well known
prudence and caution, tended to inspire great confidence in the
action of the Committee in which ho justly exerted great influence.
Mr. Thomson's position as chief of a great and successful enter
prise, enabled him to render very great aid to the Committee in
the operations of Ihe road. Indeed, it was through his instru-

27
mentality that the old company was enabled to push its line
through to Chicago. Mr. Tildeu was the chief legal adviser of
the Committee and Company throughout. He had charge of the
proceedings, not only for the winding-up of the old, but for the for
mation of the new Company, and for the recent transfer of the road
to the Pennsylvania Company, and drew up all the documents
and guarantees relating to the same. The proper discharge of his
duties involved the fate and security of the whole investment.
Not a suggestion has been ever raised that they were not ably
and faithfully performed. The directors of the Company, pending
its reorganization, rendered valuable assistance. Many of them
resided upon the line of the road, and wore enabled to exert a
salutary influence, not only among the creditors of the Company,
but in securing the legislation required. But it is, perhaps, in
vidious to particularize when all worked faithfully and well. Not
a dollar was ever paid to secure the legislation required for the
formation of the now Company ; not a dollar to buy off importu
nate or unreasonable creditors. The < 'ommittee never had a
secret which they turned to account at the expense of the stock
and bondholders. Their plans were prepared and published in the
outset, and scrupulously adhered to.
Soon after the new Company commenced operations it was seen
the enterprise had passed its darkest days. For the year ending
December 31, 1862, the net earnings of the road equaled nearly
$2,000,000, all of which were applied to construction. The Com
mittee was enabled to add largely to its available means by the sale
of property purchased with the road, but not needed in its future
operations, and which, in fact, they were not, by the terms of the
trust, to account for to tho new Company. The sums realized
from these sources, and paid over to the Company, equaled about
$600,000, of which some $400,000 was saved by a compromise
which the Committee were enabled to make with European holders
of bonds secured by real estate. All the advantages gained by
such settlements were given to the new Company.
In 1863 the net earnings equaled nearly $3,000,000. These
sums enabled the Company to place its road in first-rate condi
tion ; and on the 1st day of April, 1864, it commenced the pay
ment of dividends at the rate of 10 per cent, per annum, free of

28
Government tax, in quarterly payments of 'l\ per cent. each.
These were continued regularly to the 1st day of July, 1869, when
the road was leased to the Pennsylvania Railroad Company for
999 years, at an annual rental of 12 per cent, on its share capital.
In this lease the Pennsylvania Company assumes every obliga
tion or charge for which the Fort Wayne Company are, or may be,
liable. It pays the sum of $19,000 annually for the maintenance
of the organization of the former. It keeps up the annual contri
butions to the sinking fund. These contributions will, in twenty-
six years, wholly pay off the bonded debt of the Fort Wayne Com
pany, leaving the stockholders the sole owners of the road ; and,
in conclusion, it agrees to pay an annual rental of $1,380,000, a
sum which equals 12 per cent, annually upon the stock, free of
Government tax, or of any other charge. The terms of the lease
also allow the Fort Wayne Company to increase its share capital
seventy-one and three-sevenths per rent., and to issue certificates for
the whole capital, upon which, for the entire period of the lease,
seven per rent, ayear, in quarterly payments of one and three quarters
per cent, free of Government tax, is to be paid. , All these pay
ments, as well as the accruing interest, are to be made directly to
the agency of the Fort Wayne Company, in New York. When
we consider that the net earnings of the road largely exceed the
rental paid, and that this rental is guaranteed by the most power
ful and successful railroad corporation on this Continent, and that
the lease will inure even more to its advantage than to that of the
lessors, in placing a common line under a common head and man
agement, certainly it is not within the power of man to make a
better security, or one in which trust funds can be more securely
placed. We have thus put on record a, detailed statement of the resus
citation and success of a great enterprise, as an example of what
has been and may be accomplished by upright, able and public-
spirited men. In no country do railways bear a relation to the
internal economy ofa people so intimate as in ours. No invest
ments, consequently, can be so productive as those made in good and
well-managed lines. There is no doubt that the gross earnings of
the railroads of the Northern States equal fully 30 per cent, an
nually of their actual cost. One-third of this, at least, should be

29
net, and we take pleasure in placing an illustration before our
readers, where the best possible net result has not only been
secured, but secured as it should be, to those who are and have
been the owners of the property."
I have given this statement as an example of what patient
labor and watchfulness may accomplish under similar cir
cumstances. We not only saved a vast property, at one
time, to all appearances, wholly wrecked, but made it one
of the most productive railroads in the country, and finally
leased it in perpetuity to one of the richest and most pros
perous corporations in the United States — the Pennsylvania
Railroad Company — at an annual rental of 12 per centum
per annum, after making full provision for the principal and
interest of its debts. An immense investment was not
only saved, but rendered productive almost beyond prece
dent; and with it, great numbers of persons wdiose means
were invested in the road saved from poverty ano want.
In their comfort and happiness I am well repaid for the
toil and anxiety which I underwent on account of this
work. In I860, the election of Mr. Lincoln to the Presidency of
the United States, an event which I earnestly desired, was
followed by mutterings of the coming storm, which soon
hurst upon the country with resistless violence. I was too
old to take the field, but I gave whatever aid and encour
agement I could to the cause of the Union. It was not
long, however, before I was called upon to assume more res
ponsible duties, on account of the relations which I had
sustained for the State of Indiana. That State voted for
Mr. Lincoln, and at the same time elected State officers in
political sympathy with him. The lion. Henry S. Lane,
who had been elected Governor of the State, was chosen by
the Legislature, upon its assembling, as Senator in the Con
gress of the United States. 15y this event, the Hon. O. P.

30
Morton, Lieutenant Governor, became the chief Magistrate.
The war found the State almost wholly without means for
arming, equipping or sending into the field the quota of
troops required of it. It had no money in its treasury, and
in the general distrust which prevailed, and in the universal
scramble for money, for all the loyal States, as well as the
Federal Government, were in the market for it, it was found
impossible to sell its bonds, or to provide in season, from its
own resources, the means required. In this dilemma Gov
ernor Morton applied tome for a loan of money to arm and
equip the quota of troops required of his State. I complied
with his request, and continued such advances as they were
required, till the whole amount reached $400,000. With
this sum he was enabled to arm and equip his quota in a
most satisfactory manner, and despatch it to the field more
promptly than that of any other Western State. Indiana
at all times was nearly equally divided upon the subject of
the war. Whatever, consequently, tended to inspire the
confidence and raise the spirits of the Union party within
it, greatly strengthened the hand of the Executive, and had
a most important and favorable influence upon the great
contest. In 1862, owing to the reverses that had befallen the Union
arms, the elections in many of the States went adversely to
the National cause. In Indiana a majority of the members
returned to the Legislature for that year were bitterly op
posed to the war, and to all measures necessary for its vig
orous prosecution. They were determined, if possible, to
take the State out of the Union ranks, and place it in direct
antagonism to the Government at Washington. The success
of their disloyal schemes might have proved fatal to the
great cause. None understood this better than themselves.
Indiana was not only one of the leading States of the West,
but in many respects it occupied a position of first-rate im
portance. It was centrally situated, and extending from
Lake Michigan to the Ohio, it would, in disloyal hands,

31
have been in a position to cut off all communication between
the West and the East. Its southern border rested upon
territory where the great mass of the people were strongly
infected with the spirit of rebellion. This State, conse
quently, became emphatically the battle-ground of the con
test in the North. If its influence had been arrayed
against the Union, the infection might have spread to other
States, as there were in all abundant material eager to take
advantage of any event that might embarrass or defeat the
action of the Government. A united front on the part of
all the Northern States was absolutely essential to suc
cess. Such a front, happily, was preserved throughout the
whole war.
The plan adopted by the disloyal members of the Legis
lature of Indiana Mas to divest the Governor of all power
over the militia, and to vest the control of. the same in a
committee of their own creatures. They refused to pass
the necessary appropriation bills till their schemes should
become a law. To defeat their plans the only course left to
the loyal members was to retire from the Legislature, which
they did. That body, consequently, was left without a
quorum. Their retirement put an end to the iniquitous
projects, but it left the Governor without the means of
preserving the credit of the State. It was held by the Su
preme Court of the State that without a special act he could
not pay the interest accruing on the State debt, although
it had been previously supposed that the Constitution of
the State had provided for such a payment without any
special law.
In this emergency Governor Morton, most anxious to pre
serve the honor and credit of the State, applied to me to ad
vance the sums necessary for the purpose. Unless this could
be done he felt that he could not justify, before his own
State and tlie country, the position which his friends in the
Legislature had taken through his council and advice. The

32
application was made at the darkest period of the whole
war. I could have no security whatever, and could rely for
reimbursement only on the good faith of a Legislature to be
chosen at a future and distant day, and upon the chances of
its being made up of more upright and patriotic members
than those composing the one then in existence. If the
great contest should turn out disastrously to the cause of the
Union and of freedom, I could never expect to be repaid a
dollar. I felt, however, that on no account must the debt of
a great State be discredited, nor the position of its Chief
Magistrate, the ablest and most efficient of all the loyal Gov
ernors, and who of all contributed most to our success, be
compromised or weakened. No alternative was left to me
but to advance the sums required. I would not allow my
self to be responsible for the consequences of a refusal of
his request. If the credit of the State in such a critical
period should be destroyed, that of the other States, and
even the Federal Government, might be so impaired as to
render it impossible for them to sustain the immense burdens
of the war. Anotlier influence of very great weight with
me was an ambition to maintain the credit of a State with
which I had so long been identified, to which I was in
debted for my start in life, and for whose credit in former
times I had earnestly labored. The last, perhaps, was the
ruling motive. I accordingly addressed a note to the agent
of the State for the payment of the interest, ottering to pay
that falling due July 1st, 1863, and requesting him to sup
ply me with a list of the holders of the State stocks. He
peremptorily refused to furnish such list, being himself one
of the conspirators in destroying the State credit. A list
had to be procured from other sources of information. As
soon as this was obtained, I commenced the payment of in
terest, which was thereafter promptly paid by me on the
days it fell due. These payments were continued two years.
The whole amount advanced by me on this account was
$640,000. In the meantime the State was practically with-

33
out a Legislature. The disloyal members were constantly in
the expectation that the Governor would be compelled to
call them together, as the only means of enabling him to
carry on the government. The Governor well knew that
if they were called together, they would take from him the
power to control the militia of the State, and he determined
to hold out, which he did, till a new Legislature should he
chosen. The following extracts taken from the message of Gov.
Morton, made to the General Assembly of Indiana, Jan. 6,
1865, gives a brief and succinct history of the efforts made
to destroy the credit of the State, and to embarrass its ac
tion in the war, and of the aid rendered by our house in
defeating them :
"Shortly after tbe Legislature adjourned, the question was
sprung as to the existence of legal appropriations for the payment
of the interest upon the public debt, and the opinion of the Attor
ney General was published, denying their existence and any
power to withdraw the money from the Treasury to pay the in
terest, which opinion was indorsed and acted upon by Mr. Bistine,
the Auditor of State. Believing that the question had its origin
in political considerations, and that there was little room to doubt
as to the legal right and duty of the Treasurer to remit the money
to New York to pay the interest, I at once took issue with these
gentlemen. The State had failed to pay the interest upon her
bonds from 1841 to 1847, during which time she acquired a repu
tation for repudiation and bankruptcy, from which she only re
covered after many years of faithful discharge of her obligations.
The dark cloud which had thus been placed upon her financial
character had seriously retarded her growth in wealth and popula
tion, deterring emigration from other States. In 1846, she effected
a compromise with most of her creditors, by the transfer of the
Wabash and Erie Canal for one-half of her debt, and issuing new
stock for the other half, upon which she solemnly pledged herself
to pay the interest semi-annually.
This pledge, and the legislation had in pursuance of the com-

34
promise, was treated by Governor Whitcomb and the various officers
of State, as a valid appropriation of the money necessary to pay the
interest under the old Constitution, which upon this subject is like
the present. In 1850, the framers of the new Constitution, by the
twentieth section of the tenth article, solemnly ratified this contract
with the bondholders, by appropriating all the revenue of the State,
derived from taxation for general State purposes, after defraying the
ordinary expenses of the State government, to the payment of the
interest and the liquidation of the principal of the public debt. It
was clearly the purpose of the new Constitution to place the credit
of the State beyond the contingency of dishonor by acts of omis
sion or prohibition on the part of the Legislature. Under the new
Constitution, further legislation to pay the interest was not
deemed necessary, and this construction was acted upon by all
administrations down to 1863; although, perhaps, in one case, a
formal appropriation was made without any definite purpose. An
action for a mandamus against the Auditor was commenced by
Mr. W. H. Talbott, President of the Sinking Fund Board, for the
avowed purpose of having the question settled, which was carried
through the Circuit and Supreme Courts, and resulted in a decision,
by the latter, against the existence of an appropriation. Without
intending any disrespect to the eminent tribunal by which this
case was decided, I must be permitted to observe that the history
of its origin, progress and conclusion was such as to deprive it of
any moral influence, and that the principles upon which the deci
sion was made have been since openly disregarded by the Auditor
and Treasurer of State in the payment of large sums of money to
the Public Printer. But leaving out of view wholly who was
right or wrong upon the legal question, it was a matter of the first
importance that the obligations of the State should be promptly
met, and her credit rescued from the disaster of a new dishonor.
It had received a shock in the discovery and exposure of the
Stover forgery of our State stocks amounting to nearly three
millions of dollars, from the evil consequences of which it was re
lieved only by a determined effort on the part of the State authori
ties to bring the criminals to justice. No argument was required
to prove that, should it .again become impaired by a serious failure
upon the part of the State to meet her engagements, it could not
be restored during this generation, and the progress of the State,

35
in wealth and population would receive a serious check. Deter
mined, if possible, to avert the threatened calamity, I went to
New York and laid the whole matter before the house of Messrs.
Winslow, Lanier & Co., with the request that they should advance
the amount necessary to pay the interest, until such time as the
Treasury might be unlocked, and the money obtained therefrom.
My request was generously met, and, after full consideration,
acceded to, provided a correct list of the stockholders could be
obtained. It is proper to state that, in making this arrangement,
no stipulation was asked for or given, in regard to the compensa
tion they should receive for the use of their money, and the risk
and trouble they should incur ; but the whole matter was referred
to tho future action and good faith of the State. They at once
notified John C. Walker, Agent of State, of their readiness to pay
the interest, and asked him to furnish, from his books, a list of the
Stockholders, for the making out of which they offered to pay.
This he peremptorily refused, and denied access to his books,
from which they desired to copy the list. They then proposed to
him that he should pay the interest in the usual way upon his own
books, agreeing to honor his checks issued therefor, at the same
time exonerating him from all personal liability for any moneys so
paid. This offer was likewise refused. The correspondence be
tween Winslow, Lanier & Co. and Walker upon this subject, is
herewith submitted for your consideration.
As Messrs. Winslow, Lanier & Co. would not take the respon
sibility of paying, in the absence of a correct list, owing to the
existence of a large amount of spurious stock, which otherwise
they had no means of detecting, the interest which fell due on the
first day of July, 1863, went unpaid. Determined not to be de
feated, if possible, in tlie effort to preserve the credit of the State,
1 attempted to secure from other sources a correct list of the stock
holders, and in this attempt succeeded, in November. In the
meantime the necessity for action had become more manifest and
imperative than before. While the American stockholders had a
correct knowledge of the state of affairs, and but few stocks were
changing hands or being offered in the market, the case was quite
different with our stockholders in Europe. In Europe, American
politics are always badly understood, and the principal fact, which

36
they clearly comprehended, was, that they did not receive their
interest. They associated this failure with that of 1841, and be
gan to say that there was some strange fatality attending Indiana
securities, and declared their intention of sending them back to
America and getting clear of them at once and forever. Such a
measure would have given the State a bad name abroad, seriously
affecting emigration to her borders, and would have been followed
by great depreciation and loss of credit throughout the United
States. Having presented the list to Messrs. Winslow, Lanier & Co.,
they promptly renewed their offer, and gave public notice that
they would pay the back interest which fell due in July, and
afterward gave further notice that they would pay the interest
accruing on the 1st day of January, 1864; the 1st day of July,
1864, and the 1st day of January, 1865 ; and up to the 31st of
November last, as I am advised, had paid out four hundred and
sixteen thousand six hundred and seventy-seven dollars and eight
cents. How much they have paid since the 1st of January, 1865, I am
not advised, but presume it will make the aggregate as much as
five hundred and seventy-five thousand dollars. The noble and
generous conduct of this house should and will be appreciated by
the people of Indiana ; and Mr. Lanier, in his clear comprehen
sion and able management of the affair, has displayed not only
financial ability, but a broad statesmanship not often exhibited in
financial affairs.
I trust that the generous confidence which he has reposed in
the good faith of the people of Indiana will uot be disappointed,
and that the Legislature will hasten to reimburse him for the
money he has expended, and indemnify him for the use of it, and
for the trouble he has incurred.
In conclusion, upon this subject, I am glad to be able to say,
that the credit of the State has been fully preserved ; and that her
stocks now command a higher price, relatively, in the market,
when compared with stocks of other States, bearing like interest,
than at any former period in her history."

37
In 1864 the Presidential election again took place. Mr.
Lincoln was a candidate for re-election to the Presidency of
the United States, as was Mr. Morton for the governorship
of Indiana. This State was one of the first to vote in the
fall elections of that year. Its action, in view of the events
that had occurred in it, could int fail to be regarded as the
key-note of the campaign, if not conclusive of the great con
test that was speedily to follow. In that State the canvass
necessarily turned upon the extraordinary condition of
things that had existed in it for two years ; upon the policy
of the Union party in breaking up the Legislature ; the re
fusal of the Governor to re-assemble it, and upon the re
sponsibility he assumed of paying the interest on the State
debt without provision of law. One of the ablest men in
the State was nominated as his opponent. The two can
vassed the State, Governor Morton in vindication, and his
competitor in condemnation, of the policy and course that
had been pursued. It was a contest in which Mr. Lincoln
took a very deep interest, not only from its significance in
reference to his own election, but from the interest he took
in that of Mr. Morton, who, of all the civilians in the United
States, probably rendered the most efficient and valuable
service in putting down the great rebellion.
In the canvass before the people, Mr. Morton acquitted
himself with transcendent ability. Mr. Lincoln, in reading a
report of the speech of Mr. Morton, by which it was opened,
said, " That settles the Presidential election." The result
fully justified his expectation. Mr. Morton everywhere car
ried the people with him, and upon no issues more heartily
than in their approval of the policy of the Union party,
which, to avert a greater evil, had left the State without
a Legislature for two years, and of the sleps by which its
faith and good name had been maintained. He was
elected by more than 20,000 majority, in the most heated
canvass ever known in the State. The result there turned
public sentiment everywhere in favor of the Adminis-

38
tration ; and in the following month, Mr. Lincoln was
elected to the Presidency by the almost unanimous voice of
the North.
At the State election for 1864 a majority of Union mem
bers were returned to the Legislature, by whom provision
was made for the repayment of the sums I had advanced,
with no other compensation than interest on the amount,
which was all I desired or would have received. I had,
however, the most gratifying proofs of the esteem which my
action had secured for me throughout the State. Every
loyal man felt that I had averted a disgrace in which he
must have shared. The effect upon the politics of the State
was decisive. It has ever since been a steady supporter of
the Union cause. At the next vacancy occurring in the
Senate of "the United States, Mr. Morton was chosen to fill
the place, which he now holds in a manner both honorable
to himself and the State.
I omitted to mention, in its proper order, 1113' connection
with the adjustment of the debt of the State of Indiana in
1847. As already remarked, that State had previously
embarked in elaborate systems of public works, the means
for the prosecution of which were wholly raised by sales of
bonds. In the embarrassments which followed, the State
made default in the payment of interest 011 these bonds, and
remained in default till the amount due reached the sum of
about $12,000,000, of which sum $4,000,000 were for inter
est. At the session of the Legislature of the State for
1846-7, an act was passed for an adjustment of the debt,
commonly called the " Butler Act," authorizing an issue to
the holders of the old bonds, of a five per cent, inscribed
State Stock, to an amount equaling one-half that of said
bonds ; and a transfer, to Trustees, for the benefit of the
bondholders, of the Wabash and Erie Canal, with the lands
belonging to the same, upon the condition of the surrender

39
of the old bonds — the payment of the other half of these
bonds being chargeable upon the canal and its revenues.
It became necessary, therefore, that some person should
visit Europe for the purpose of explaining the financial con
dition of the State, to secure the assent of such bondhold
ers as had not acceded to the proposition made them, and
to make the exchanges of securities. I was appointed to
this mission, and pioceeded to Europe early in the summer
of 1847. The new securities to be issued, viz. : the certifi
cates of State stock, and of ownership in the canal, were
placed in my hands fully executed, with the exception of
dates, amounts, and names of parties to whom they were to
be issued. These I was authorized to insert on making the
exchanges. I was accredited to Sir J. Horsley Palmer, then
Governor of the Bank of England — a staunch friend of the
United States, and whose jflace of business in London I
made my headquarters ; to Baron N. M. Rothschild, of Lon
don ; to Baron James Rothschild, of Paris ; to the house of
Hope ifc Company, of Amsterdam — these parties, or the
houses with which they were connected, holding or controll
ing large amounts of the bonds. Immediately upon my
arrival in London, I prepared and published a statement
embodying the plan of settlement proposed, and urging, with
what arguments I could adduce, its acceptance. My du
ties brought me into intimate contact with the gentlemen
named, and also with Mr-. Labouchere, then manager of the
house of Hope & Co., of Amsterdam. I had occasion, in
the execution of my mission, to visit, several times, the cities
named, and also Geneva, Switzerland, where some of the
State bonds were held. The result was, that I was enabled
to get up nearly all the outstanding bonds, and was in this
way instrumental in placing the credit of the State on the
firm basis upon which it has ever since rested. The State
immediately entered upon a career of prosperity, which has
never fiagged to the present moment. A virtual repudiation

40
had destroyed its public spirit, and had been a bar to capital
and immigration coming into it. Since the funding of the
debt, no state in the Union has made more rapid progress
than Indiana. It has constructed 3,000 miles of railroad.
These works now penetrate every portion of its territory.
Its debt has been almost wholly paid to the holders, by tax
ation, or from the proceeds of the school fund arising from
the profits accruing from the interest of the State in the
State Bank. The benefits resulting from the adjustment of
this debt have been almost incalculable.
I was not only successful in my mission, but I had a most
agreeable visit — my first to Europe. I was most kindly re
ceived by all the parties to whom I was accredited, and by
others. Mr. Labouchere's ancestors, like my own, were Hu
guenots, and were driven out of France about the same time
that mine were, and for a similar cause — adherence to the
principles of the Reformation. His ancestors fled to Hol
land ; mine to America. A kindred ancestry, as it were,
and a kindred experience brought us into close sympathy.
Sir Horsley Palmer also treated me with gratifying atten
tion, and invited me to his princely country seat at Ful-
ham, on the Thames, a few miles from London. The ac
quaintances I then made were of immense service to me in
the business in which I subsequently engaged, and have
added greatly to the pleasure of subsequent visits to Eng
land and to the Continent.
On my return home I delivered up the bonds I had taken
up, together with the unused certificates of State and Canal
Stock. My accounts were settled most satisfactorily, and I
received the thanks of the State authorities for the manner
I had executed the trust confided to me.
In 1865, as I was about to visit Europe, I received com
munications, copies of which I gave elsewhere, from the
Secretary of the Treasury and the Secretary of State of the
United States, requesting me to act, in its behalf, in ex-

41
plaining to capitalists abroad the character of our public
debt and the means and disposition of our people for its
payment. This mission 1 undertook with earnestness, be
ing fully persuaded that no better securities could be made
than these of the United States. This conviction I sought,
with whatever power I possessed, to impress upon others.
At Frankfort-on-the-Maine, I was formally invited to ad
dress a public meeting of Bankers and Capitalists upon the
subject of my mission. It was largely attended, and I had
an opportunity not only to submit some detailed remarks,
but for a free and full conference with gentlemen compo
sing the meeting, nearly all of whom could speak my native
tongue. My remarks were published in German and Eng
lish, and freely distributed, through the Consulates, through
out the Continent and England. I believe they were in
strumental of much good as they embodied the arguments
in favor of our securities in a concise form, and in one that
had not been previously presented, and one that could be
used by others, particularly my own countrymen, equally
with myself. Of these I annex a copy :
" Remarks of Mr. J. F. D. Lanier, made at a Meeting of
Bankers and Capitalists, at Frankfort-on-the-Maine,
on the 14th day of September, 1865.
The national debt of the United States, on the first of August
of the present year, was, in round numbers, $2,720,000,000, to
wit: Debt bearing interest payable in gold - - $1,108,000,000
in currency - 1,053,000,000
no interest - 559,000,000
It is estimated, upon the most competent authority, that the
national debt, after all the expenses of the war are finally liqui
dated, will not exceed $3,000,000,000.
The revenues of the Government for the fiscal year ending June
30, 18G5, were $318,251,589 10, of which $82,000,000 were in
gold, from Customs.

42
The revenues for the fiscal year ending June 30, 1866, were
estimated at $396,000,000, of which $80,000,000 will be in gold
from Customs, $300,000,000 from internal taxes, and $16,000,000
from lands and miscellaneous sources.
The interest on the entire national debt of $3,000,000,000 is
estimated at $165,000,000, leaving $231,000,000 for the expenses
of the Federal Government and other purposes.
These estimates were made in June last, at the commencement
of the fiscal year. Since that time the receipts from customs have
increased so rapidly, that instead of $80,000,000, as estimated,
the revenue from this source, in gold, may reach $130,000,000.
This increase is largely owing to the trade which has been
opened up at the South since the suppression of the rebellion.
Although the war destroyed for a time the commerce and industry
of this section, and deprived the people of the ability to maintain
their railroads and to navigate their rivers, and left them little but
the cotton which had been accumulated, this is found to be suffi
cient to furnish a very large amount of means with which to sup
ply their wants, and lay, anew, the foundations of their prosperity.
The receipts of cotton from the South, at New York, equal 20,000
bales weekly, and have been followed by corresponding exports to
that section of supplies, and whatever is necessary to the restora
tion and development of its resources.
The national debt of England at the end of the war with France,
in 1816, amounted to $4,205,000,000. It has since been reduced
only $250,000,000. It equaled $218 20 to each individual, and
40,40 per cent, of the aggregate value of the whole property of the
Kingdom. Since the battle of Waterloo her wealth has grown at
a slow but steadily increasing rate — from 20 per cent, in the first,
to 41 per cent, in the last ten years, thereby reducing the burden
of the debt from 40,40 per cent, on the national wealth, to 12 per
cent. The census of 1860 showed the wealth of the loyal States to be
$10,716,000,000, and a yearly product $2,870,000,000 in value,
or 26-J- per cent, of their aggregate capital.
The wealth of the loyal States increased, in the ten years be
tween 1850 and 1860, at the rate of 126 per cent., or 8£ per cent.

43
per annum. Assuming these amounts and rates as a basis, we
have for June, 1865, a wealth of $16, 1 12,000,000, and an annual
product of $4,318,000,000, without making any estimates on ex
ports. In 1833 the national wealth of England was estimated at $17,-
200,000,000. For the United States the figures given are by no
means estimates, but are results accurately obtained through the
Census Bureau. These results enable us to estimate the amount
of the national wealth at the close of future periods, to wit :
In 1870 the national wealth will equal - - $24,218,000,000
In 1880 " " " - -48,436,000,000
Iu 1881 " " " - - 51,516,000,000
In the last-named year, consequently, the' interest on the national
debt of $3,000,000,000, will equal only 3^ per cent, of the national
wealth. This estimate of the reduced percentage of the interest of the
national debt in ratio to the national wealth, is made upon the
rate of increase of national wealth prior to the rebellion.
' On this calculation, what will be the increase for the next six
teen years ? Let us look a little more carefully into this question.
During the last ten years the increase of wealth in nine of the
North-western States and Territories of the United States was not
less than 41 1£ per cent. — the aggregate increase being from
$452,500,000 to $1,862,000,000. Four new Territories, which
did not appear in the census of 1850, had a valuation in 1860 of
$98,000,000. Those, since organized — Dacotah, Nevada, Colo
rado, Arizona and Idaho — are not embraced in this estimate.
These last named States and Territories are as rich in precious
metals of all kinds as was California.
As another important source of wealth and revenue, the United
States still holds 950,000,000 of acres of unsold lands which, now
that the war is closed, will soon come into market, and which
should bring $1,000,000,000 into the public Treasury.
But what is of vastly greater importance is the rapidly increased
value of these lands, consequent upon their occupation and settle
ment. The taxable value of property in the North-western States,
,as has been shown, increased at the rate of 411-J- per cent, from

44
1850 to 1860. In 1880 this value will be thirty times greater
than it was in 1860, and form the basis of a revenue infinitely
greater than what could be derived from the sale of their lands ;
so that if every dollar derived from this source should be bestowed
upon the new States by the Federal Government, in aid of in
ternal improvements and for educational purposes, their taxable
wealth and the revenue derived from them would soon exceed
many times the sums so bestowed. It is not only in what we now
possess, but what we are capable of accomplishing, that our
strength lies.
Our minerals are another vast source of yet undeveloped wealth.
At least 1,000,000 square miles of our territory are surpassingly
rich in gold, silver, copper, lead, quicksilver, coal, gypsum, salt,
etc., etc. From their recent discovery our gold and silver deposits,
except in California, have hardly begun to be worked. Were they
worked even to the extent that they are in that State, they would
produce, it is estimated, at least $200,000,000 annually, while the
other minerals named would yield at least one-half this sum, were
proper means of transportation and communication provided. Such
results are not probabilities of a far distant future; their accomp
lishment is sufficiently near to be an all-important element in
enabling the country to bear the burdens imposed upon it. They
are, in fact, the necessary and inevitable consequence of the pro
gress of a people who already number 34,000,000 souls — who
double their population every twenty-three and a half years — who
possess every implement aud contrivance that science and art have
contributed in aid of labor — who are urged forward by a resistless
spirit of enterprise, confident of their future, and of their ability to
surmount all obstacles that may oppose their way. Such a people
may be safely entrusted with the greatest responsibilities, and are
equal to any emergency in which they may be placed.
But upon the future growth of these undeveloped territories we
by no means place our confidence of the ability of our people to
bear the burdens imposed upon them. The aggregate increase of
the wealth of the older States has been vastly greater, though the
ratio of the increase may not have been so great. That of Ohio has

45
increased within ten years at the rate of 126 per cent., although
the State was founded 77 years ago ; that of the States of New
Jersey and Connecticut, though founded more than two centuries
ago, increased in a like rate ; that of Pennsylvania increased, with
in the same period, at the rate of 96 per cent, upon the already
large aggregate of $722,000,000.
For the last four years the Northern States supplied all the
means for carrying on the war, and for defraying the expenditures
of Government. We are fast being relieved of the former, at the
same time that the States recently in rebellion are now contribut- '
ing their proportion to our ahead}'- diminished burdens. These are
soon to be reduced more than one-half, while our increased means
from an united country must exceed by at least one-third what
they have been. By the census of 1860 the wealth of the Southern
States equaled $3,467,000,000. In the period of five years, from
1855 to 1860, they doubled the value of their products. They will
in a very short time, be restored to a condition of prosperity far
exceeding anything in their former experience. The great draw
backs to the proper development of their resources have been re
moved. They possess all the blessings and advantages — which
cannot be over estimated — of a temperate zone and of a semi-
tropical climate. What they have lacked have been population)
skilled labor, a spirit of enterprise, and the manifold industries of
free institutions ; all these essentials to prosperity have been
secured to them by the war.
A short period, therefore, only is required for the realization of
the promise which our natural wealth and resources afford. Taking
the past as a basis of calculation for the future, the United States,
in 1880, will have a population of 60,000,000, and a national
wealth of $60,000,000,000. It, will then not only be able to meet
the interest on the public debt, but will be able to discharge it with
entire ease— and, true to our historic policy, will undoubtedly do
so. The national wealth of Great Britain, in 1816, was only half as
great as is that of the United States at the present time, yet its debt
hasalreadybeen reduced from 40 to 12 per cent, of its wealth. That
of the United States in 1880, will be only 5 per cent of its wealth,
should the amount of the debt, in the meantime, remain unreduced"

46
Should revenues additional to these already provided be re
quired, they may be easily raised by taxes levied upon cotton and
tobacco and other articles of the re-established Union, of which we
monopolize the production of the world. It is estimated that our
revenue may be increased from these sources from $60,000,000
to $100,000,000, without any diminution in the consumption of
the articles taxed, and without injury to our commerce or to any
domestic interest.
The manner in which the obligations of the United States are
held should add greatly to the confidence of foreigners in them.
Of the whole amount outstanding, not more than $300,000,000, or
one-tenth of the whole, are held abroad. All classes at home, poor
as well as rich, have invested their savings in them. Very large
amounts are held in sums not exceeding $50. Preference is uni
versally given to them over all other kinds of investment. No
national loan was ever so universally distributed. Each citizen
felt himself a party to the contest, and contributed to it according
to his ability. All, consequently, are directly interested in main
taining inviolate the public faith.
It is a great error to suppose that the Northern States have been
exhausted in consequence of the war. There is most convincing
proof to the contrary in the ease and readiness with which they
have supplied the Government with money, and whatever was
necessary for its prosecution, and have absorbed the vast debt
that has been created. The Government has neither directly nor
indirectly borrowed a dollar in Europe. The bonds that have
found their way there have gone in the regular course of trade.
The vast demand created by the war for munitions, materials
and supplies of all kinds, gave to the agriculture of the West and
the manufactures of the North a wonderful impulse, which still
continues. The resources of those sections remain not only unim
paired, but have been greatly augmented. Great as are their bur
dens, the people feel themselves perfectly able to bear them, and
that they fiave an ample equivalent for them of a nature far tran
scending mere material advantages. They have for the first time
established their nationality upon an immutable basis. They have
removed the great source of discord and alienation — slavery —
and they are infinitely stronger and more united than ever before.

47
Under the able and judicious administration of our affairs, the
nation has started anew on a career of growth and prosperity un
exampled in its own history, or in that of any other people.
The nation has pledged its honor for the fulfilling of all its obli
gations. Success has given a full equivalent for them. Its wonder
ful experience has served to give confidence in and ability for the
future, and no one who considers our means, our present position,
or the guarantees of the past, can doubt the payment of o :<r national
debt." On my return home I received not only the thanks of
the Government for the services I had rendered, but grati
fying evidences of appreciation of them from private indivi
duals. I annex the following Associated Press Report of
my interview with the President and Secretary of the
Treasury, on presenting my report :
"Washington, Friday, Nov. 3, 1865.
Mr. J. D. F. Lanier, the well known banker of New York, who
recently returned from Europe, whither he went some time
ago on a confidential mission for the Government in connec
tion with the national, finances, yesterday had an interview with
the President and the Secretary of the Treasury, to whom he
submitted a report of the results of his mission. Mr. Lanier every
where found the best of feeling prevailing, in financial circles, with
relation to the United States, particularly on the Continent, and
great confidence in our public securities. At Frankfort-on-the-
Maine he addressed, at length, a large meeting of capitalists, em
bracing representatives from nearly every leading house in Ger
many. The complete and utter overthrow of the rebellion was a
matter of equal surprise and congratulation, and the demonstration
made of the power and wealth of the North was a subject of un
usual admiration. But the war being ended, the expectation was
confidently expressed by tho European holders of our securities,
that we would immediately commence a return toward. specie pay
ments, however gradual the progress in such direction might be.
Such a step, it was represented, was absolutely necessary to the
maintenance of confidence in our securities and in the policy of the

48
Government. The ability of the country to bear all the burdens
of the war was not questioned, especially with the rapid progress
of the work of Reconstruction, which bids fair to restore political
and social amity to every portion of the country. With a wise
and correct policy, there will be no limit to the demand for our
securities, not only on the Continent, but in England, where our
military successes were fast opening the eyes of their people as to
the value of our bonds. But the feeling against any further in
crease, and in favor of a steady contraction of the currency, was
universally expressed as the sole condition on which our credit
abroad could be maintained. It is understood that the views of
Mr, Lanier were heartily responded to, both by the President and
the Secretary of the Treasury.''
I also annex a copy of a letter received from Hon. Samuel
Hooper, M. C. : Thirty-eighth Congress, |
House of Representatives,
Washington City, Dec 24, 1865.
My Dear Sir — I have to thank you for your kindness in send
ing me a printed copy of your remarks recently made at a meeting
of European capitalists at Frankfort on-the-Maine, which I have
read with much interest and with most hearty approval of them.
I consider you entitled to the thanks of all loyal men for them ;
and I congratulate you on the results which so soon after added
confirmations to your statements.
With great respect, I am,
Your ob'd't servant,
J. F. D. Lanier, Esq. (Signed) S. Hooper.
Since the date of the above remarks, I have had, in
common with every American citizen, the gratification of
witnessing an uninterrupted improvement of our national
credit. All that I, or others, could do was to present the
evidence upon which this appreciation has been based, and
show what we were and what the future must do for us.

49
But even my anticipations have been far exceeded by the
result. In this connection I also copy the following article from
the New York Times newspaper, of January 19, 1866:
" OUR FINANCIAL POSITION ABROAD.
The effects of our great struggle are beginning to be felt in
Europe at the moment we are emerging from them here. The
wave set in motion is moving round the world, uniform in its course
and resistless in its power. We have demonstrated that the
nationality of a Republic, based solely upon the conviction of its
value, is far more firmly grounded in the hearts of the people than
institutions based upon tradition, and fortified by pride of ancestry
and the recollection of great deeds; or by that uniformity of life
and character which ages alone can produce. Foreigners, for the
first time, realize that we are a nation, with an ideal palpable to
the meanest citizen — that chaos has no place in our system, and
that we have the will and the power to reduce to obedience every
refractory element ; and that the strongest of all governments is
that in which each citizen has an equal share, and is an equal par
taker in the advantages which it secures.
The first sentiment developed toward us is that of respect.
Close upon that follows confidence in our material and financial
condition. We have provoked a spirit of inquiry which cannot be
set at rest. We no longer lack friends to sympathize with us, but
hosts are coming forward to share our burdens and our prosperity.
Our securities are eagerly sought for investment, particularly on
the Continent, at the same time that a new impulse is given to
emigration to our shores. The interest felt in us in Germany can
not be better described than by giving an extract from a letter re
ceived from Frankfort-on-the-Maine, where a large number of
capitalists was recently addressed by our citizen, Mr. Lanier,
whose remarks have been circulated, by our Consuls, throughout
Europe. It says:
' Gold or paper dollar is the question which agitates the German
press and financiers. The more they discuss your financial pros-

50
pects, the more they invest in your securities. On all 'Changes,
the transactions in them are enormous. Since the receipt of the
President's Message and the Report of the Secretary of the
Treasury, the United States securities rule the market, almost to
the exclusion of every other loan. The Wirtemberg official paper
has brought out a long article warning the excessive investment
in your bonds; over 100,000,000 of guilders having been invested
in them, to the detriment of other interests. But to the disappoint
ment of the Government, your bonds next day rose two per cent.,
the Liberal press taking the ground that the people could do noth
ing better than invest in American securities, as the saftest loan
offered in an age. These bonds are the most powerful and influ
ential emissaries you could have sent over to the Old Continent.
to convert the masses to republican principles. They never be
fore heard so much talk about America ; your means and re
sources, your future and your prospects, are discussed everywhere,
and in such favorable terms that emigration is the leading topic
among the sturdy masses ; and the next year will bring you, for
every $1,000 of your bonds taken in Germany, at least one of her
industrious sons.'
A similar feeling is rapidly developins: itself towards us in Eng
land, as shown by the operations of the London Stock Exchange.
Our securities are constantly forcing their way there, in spite of
the efforts of the Bank of England and of the public press to decry
their value, and to point out the danger to that country from a
large investment in them.
Such a result is not only most gratifying to our national pride,
but is the proper reward of our efforts and successes, and proper
homage to our national character. It is due very largely to a
public-spirited gentleman who has visited Europe for the purpose
of placing before the people, there, the ground and method of our
strength and prosperity, and who supplied the data by which
foreigners themselves could arrive at satisfactory conclusions in
reference to them. His success was complete. The sentiment
everywhere felt toward us is all we could wish. it has increased
enormously, not only our political influence and power, but it goes
far to solve any financial embarrassments that might threaten,

51
The way being prepared, should it be thought advisable, we could
have, any day, a draft upon Europe honored for almost any amount.
The object of the bill now in the hands of the Committee of Ways
and Means is to place such power in tho hands of the Secretary of
the Treasury, should its exercise over be deemed to be expedient.
It is not probable, however, that any such necessity will occur.
Our own people are abundantly able to absorb all our securities,
while the amounts going abroad, daily, will fully equal all we
should wish to see placed in foreign hands. Our military suc
cesses, together with the' material strength we have displayed,
have settled our financial difficulties; and though these have in
times past been great, every day lessens the burdens they im
pose." In 1S68, being again about to leave for Europe, I re
ceived from the Treasury Department the following com
munication : Treasury Department, }_
April 20, 1868. \
Dear Sir — Understanding that you arc about visiting Europe,
I take the liberty of requesting that you will, as a friend of the
Department and as a representative of it without compensation,
avail yourself of such opportunities as may be presented to you to
ascertain what is the sentiment of capitalists in regard to United
States securities ; what would be the prospect of negotiating a five
per cent, loan — principal and interest, by express provision of law,
payable in coin ; and whether or not such bonds could be exchanged,
at par, for the Five-Twenty six per cents, now held in Europe ?
I will thank you also to make, from time to time, such sugees-
tions as you may think proper in regard to the finances of the
United States, and the best steps to be taken to place the credit
of our securities on the most satisfactory basis.
With many thanks for the very valuable service rendered by
you to the Government when you were last in Europe,
I remain, very truly,
Your ob'd't servant,
(Signed) H. McCulloch,
J. F. D. Lanier, Esq., Secretary of the Treasury.
New York.

52
My health during this visit to Europe was such that I
could not give the attention to the requests in the foregoing
letter that I desired. I, however, caused the remarks I had
made at Frankfort on a previous visit, to be re-printed, with
some additional matter, and circulated, widely, through the
Consulates and other channels. I also conferred, sufficiently,
with leading bankers abroad to satisfy myself that, in a
comparatively short period, 2, five per cent, long bond, pay
able, principal and interest, in gold, in New York, could be
made to take the place of the six per cents, outstanding,
and without loss to the Government — which conviction I
communicated to the Secretary of the Treasury. Every
thing that has since transpired has tended to confirm such
conviction. At the close of the war it was estimated that the funded
debt of the Government, when all the outstanding claims
should be included, would reach $3,000,000,000. It would
have reached this amount, but for the vast sums which our
immense revenues enabled us to pay. At the close of the
fiscal year of 1866, the ascertained debt amounted to
$2,784,073,379. By the statement made March 1, 1870,
and the last made previous to the preparation of this sketch,
it amounted to $2,464,390,348, as follows :
Debt bearing coin interest  §2,107,939,650
Debt bearing currency interest  124,012,320
Debt bearing no interest  440,442,851
Debt matured and not presented for payment  3,973,346
Total debt  $2,676,368,173
Less in the Treasury :
Coin  $102,400,739
Currency  10,280,746
Bonds purchased  99,287,800
 $211,968,285
Debt less cash and bonds  $2,464,399,888
Of the debt bearing currency interest, ^64,457,320 is for
bonds issued on account of the Pacific Railroads, and which
were issued subsequently to July 1, 1866. Deducting

53
these from the above statement the total will be $2,399,420,-
028, or $384,653,351 less than it was three years and eight
months previous The rate of payment has exceeded $ 1 00,-
000,000 annually.*
The average market value of the 6 per cent. 1881 bonds
of the Government, in 1864, was 110 ; that of gold, for the
same year, 220. The value of the bonds in 1865 equaled
106 per cent, ; that of gold 138. The market value of the
1881 bonds on the 10th of March, 1870, equaled 114 ; that
of gold, 111. These figures express, better than any lan
guage, the rapidity with which the credit of the Govern
ment has appreciated.
Since the close of the war I have not taken any active
part in public affairs, but have devoted myself to banking —
a business which our house has followed for the past fifteen
years. We have retained a connection with several of the
enterprises which we helped into existence, and have fre
quently extended to them aid in their financial affairs. I
am a business man, from taste as well as from long habit.
The period of my business life has probably been the most
remarkable one in all history. Steam was first successfully
applied to locomotion in the latter part of 1820 — only forty
years ago ! Since then the progress made in the physical
sciences and in the material prosperity of the world has been
beyond all precedent. The most sanguine imagination could
not have pictured one-half the results that have been realized.
The Electric Telegraph followed speedily upon the inven
tion of the railroad, as the necessary condition to the high
est value of this wonderful contrivance. In this short period
50,000 miles of railroad have been opened in the United
States. A great and unbroken line extends across the Con
tinent from ocean to ocean, traversing, without inconven-

* Note.— For the year ending 1st March, 1871, the debt had been reduced about one hun
dred and ten millions more.

54
ience or interruption, the most formidable mountain bar
riers. The terminus of this line upon the western slope
of the Continent, the City of San Francisco, now contain
ing 200,000 people, existed only in name when I removed,
from Indiana to New York. The railroad, everywhere,
has become the common highway of the people. Xor
have other countries, though far distanced by our own, been
idle in the great race of social and material progress. The
same year that witnessed the completion of the Pacific Rail
road has also been distinguished by the opening of a ship
canal from the Mediterranean to the Red Sea, thus realizing
the dreams and hopes of the merchant, as well as the great
rulers, for thousands of years. At the moment that this is
being written, the great pageant of the opening of this new
highway, which shortens by thousands of miles the routes to
the Indies, is reported to us, word by word, as it proceeds,
by lines of telegraph, wholly submerged beneath the seas!
The period which embraces my business life has been one of
intense activity, and of wonderful and beneficent achieve
ments ; and it is a source of the highest gratitude and satis
faction to me to have witnessed the great movements that
have taken place, and to have been identified with their
progress. I hope my children will be equally fortunate and
happy by being equally favored with opportunities for use
ful and valuable labor, and to see, as I have seen, the fruit
of it spring up on every hand.
I now conclude this brief sketch of some of the leading
events of my life. Although I have, throughout, been an
active business man, I have been subject to but few vicissi
tudes of fortune. I have been almost uniformly successful.
I have, as a rule, enjoyed excellent health. For all these
blessings bestowed by a kind Providence, I am, I trust,
truly grateful. It has been my good fortune not only to
have had a wide acquaintance with the leading men, and
with various portions of this country, but to visit other
lands, to return from them only to value more highly our

55
people and our own institutions. As I grow in years the
more am I drawn to my family and children. I trust that
my example will not be without its uses in teaching my
children the worth of industry and prudence in whatever
walk of life they may find themselves cast. They may be
assured that with these qualities, joined to integrity of char
acter, they can never be unhappy, and never be without a
reasonable share of this world's goods, nor without the
confidence and respect of their fellow-men.

56

TEE LATE RICHARD H. WINSLOW.
[From the American Eailroad Journal, March 2, 1861.]
This gentleman, so well known in the business circles of this
city, and for many years a leading mind in the great movement
that covered our country with railways, died at his residence at
Westport, Connecticut, on the 14th ult. He was born at Albany
about fifty-five 3rears ago, and was a direct descendant of Governor
Winslow, of Plymouth Colony. He came to New York about
thirty years since, and immediately went into business in Wall
street. His prominence, however, as a public man, commenced
with the great railway era of the country, which almost immediately
followed the discovery of California. On the 1st of January, 1849,
he formed a copartnership with J. F. D. Lanier, Esq., many years
a resident of the West,and who brought to the firm not only all
the qualities that can command affection and respect, but a very
wide and intimate knowledge of the public men, and the wants and
resources of the West. Mr. Lanier brought with him the first
Western Railroad bond ever offered in this market, and the firm
soon turned its attention to the negotiation of this kind of securi
ties. At that time, Western railroads hardly existed, even in
idea. There were no precedents to inspire confidence or to guide
in framing a system or plan for presenting these enterprises to the
public. Before anything could be accomplished a favorable
opinion had to be created — a formidable undertaking where mone
tary co-operation was to be secured. For this office Mr. Winslow
was peculiarly fitted. He was a man whose earnest convictions
and great energy seldom failed to impress his own views upon all
with whom he came in contact. The commencement made by the
firm, however, Was in a very small way. It was compelled to take
a portion of loans offered, and divide the balance among a very
limited circle ; the firm, even in such cases, being frequently called
upon to guarantee prompt payment of interest on the loans.
The bonds of the Madison and Indianapolis Eailroad were first
brought out, followed by those of the Little Miami, Columbus and
Xenia, Cleveland, Columbus and Cincinnati, Lake Shore, and other
Western railroads. The immediate success of these works fully
vindicated the representations made in reference to them, and
realized large profits to the purchasers of their securities. Thence
forward the operations of this firm were distinguished rather for
their magnitude than for the difficulties to be surmounted. For

57
several years nearly every loan brought upon the market was prof
fered it, securing to it a selection of the best offered. In a short
time its operations extended to almost every State in the Union
where railroads were in progress, and a very long list of our best-
paying projects might be named, for the construction of which this
firm was instrumental in securing the means. So thoroughly had
this firm become established in public confidence, that in the years
of 1852, 1853 and 1854, it was no unusual affair for it to make
negotiations equaling $1,000,000 in a single day; while sales
varying from $100,000 to $500,000 a day were of common occur
rence. In 1852, the firm was enlarged by the addition to it of
Mr. James Winslow, brother of the deceased.
Considering the immense number of securities negotiated, the
firm was very fortunate in the enterprises selected. This was in a
great measure due to Mr. Lanier, whose thorough and intimate
acquaintance with the West enabled him to foresee with great ac
curacy the works likely to be successful. Nearly all the securities
negotiated have had their interest promptly paid, while many of
them rank among the very first class. This firm were also the first
to introduce County bonds of the State of Ohio upon this market,
and negotiated the greater portion of these, which are still regarded
as one among the most reliable Western securities.
After 1854 the firm gradually withdrew from railway negotia
tions and confined itself almost entirely to banking, in which it
transacted a large business. About eighteen months since Mr.
Winslow retired from it on account of his health which continued
steadily to decline till his decease.
What these gentlemen actually accomplished, however, is to be
looked for in the results rather than in the magnitude of their opera
tions. The credit they early established for Western securities,
spread till it extended over the whole of Europe as well as of this
country. The capital of both was freely proffered to our enterprises.
A similar spectacle was never seen. Railroads were commenced
simultaneously in every part of the Union, and in the decade just
closed 25,000 miles were constructed In one or two years 4,000
miles were opened each year. The whole system sprang as if by
magic into existence, stretching from Quebec, in Canada, to New
Orleans, 2,500 miles apart, and from the eastern part of Maine to
the western part of Kansas, penetrating every portion of our wide
domain. The whole of Europe has yet hardly constructed the ex
tent of mileage opened in the United States within the past ten
years. The commerce of a country like the United States is mainly a
creation of its public works, as these are essential to give a com
mercial value to the products of the interior. A person who pro-

58
vides the means for the construction of a railroad is a publi
benefactor. Its results are the measure of good he has accom
plished. But such persons are often the unseen spring in th
mechanism, while the one who superintends the execution of
single piece of the work becomes the conspicuous object. But fo
the former, thelatter could have had no function or name. Now, i
we take the results that followed the efforts of the pioneers in tb
great railway movement, we shall have nothing in history to com
pare with them. In the Western States, where these have beei
the most conspicuous, there are now 10,500 miles of railroad, con
structed at a cost of $400,000,000, carrying freight to the amoun
of 7,500,000 tons annually, and having a value of at leas
$500,000,000. The population of these States increased Iron
4,72.1,554 in 1850, to 7,797,528 in 1860, or at the rate of abou
seventy per cent. Their wealth is increased in threefold ratio
First-class cities have sprung into existence, and the whole face o
the country presents the scene of a numerous, active and thrivinj
population, with a vast commerce, nearly all the creation of it:
public works.
In the Eastern States, the most striking effect of these works ii
seen in the progress in population and commerce of the city o
New York. The population of this city and its environs has in
creased from 645,000 in 1850, to 1,155,000 in 1859. Its exports
in 1850, were $47,580,357; in 1859, $146,683,450. Its imports
in 1850, were $116,667,558; in 1859, $229,408,130. Its wealtl
in the same time has more than trebled. This advance is
tho real measure of the results of the construction of Westerr
railroads, as New York has reaped the same advantage as if eacl
had been constructed for its particular benefit.
Such results, the firm of which Mr. Winslow was an active
member was greatly instrumental in achieving, and it is propei
that the occasion of his decease should not be passed by without s
reference to them, as they are certainly the proudest monument
ever erected to the memory of man.

59

SNOW-STORM IN THE ALPS.

The following account, written soon after the events de
scribed, will interest my children in showing them how
narrowly I escaped with my life, in a great storm which I
encountered in crossing the Alps in the winter season :
Genoa, Friday, Jan. 23, 1863.
I left Paris on Saturday. I had an agreeable journey by rail to
3an Meichel, at the foot of Mount Cenis. At San Meichel we
were transferred to sleighs, or rather to diligences placed on run
ners. At 3 P. M., Sunday, we began the ascent of the mountain. ^
The day was a pleasant one — calm, with sunshine. We reached
the summit about 12 1-2 o'clock at night — the weather still con-'"
tinuing calm and pleasant, the stars shining brightly — and we con
gratulated ourselves on the prospect of so pleasant a passage over
this Alpine region. We had descended on the Italian side about
half an hour, when the wind began to blow, drifting the snow across
our route, which impeded our progress. As we continued to
descend, the wind increased in violence, making it more and more
difficult for us to proceed.
At 3 o'clock in the morning, having reached a point more than
half-way down, he ga1^ became terrific, roaring like a thousand
Niagaras, dashing and whirling the fine dry snow so as to darken
the atmosphere.
By this time the drifts had become deep, and it being dark our
progress was stopped On our left was a precipice of a thousand
feet or more deep. The sleigh next in front of ours had upset with
the passengers, and was only prevented going over the precipice
by its lodging in the soit snow within a few feet of the edge. The
conductor now came and told us we would have to sit in the sleigh
where we were, until daylight ; that he must seek the protection
of the lee of some rock with his horses to save himself and them
from perishing from cold. This announcement, you may imagine,
was anything but agreeable to us. Here we sat until about 9
o'clock Monday morning.
About 5 o'clock we heard the fall of an avalanche across the
road before us, and soon after the fall of another in our rear ; this

60

greatly increased our alarm, as we did not know what moment
another would sweep us over the precipice in its course. It was
truly a night of horror. After daylight we anxiously awaited the
return of the conductor to know our fate; he came after 9 o'clock
and informed us that he would endeavor to draw the sleigh a little
nearer the avalanche, to shorten the distance we should have to
walk to reach it.
We had advanced but a few rods when we came to a stand, the
drifts preventing our progress. Our only chance of safety was to
walk to the " Cantano," or house of refuge, about four hundred
yards off, the avalanches fifteen to twenty feet deep and more
than one hundred wide, lying in the way. Each one had to take
care of himself.
I was tlie last to leave the sleigh. With difficulty I reached
the avalanche, and in attempting to walk over it I sank, half my
length, in the soft snow. I became completely exhausted; the
terrible wind took my breath away. I fell on the snow, unable to
speak or rise. One of the passengers happened to see me fall, and
after reaching the "Cantano" sent up two of the Cantoniers,
who carried me to the house nearly in an insensible state. By
dint of rubbing with spirits I revived in about half an hour.
The storm continued with unabated fury until about ten o'clock
Tuesday morning, when it began to subside a little. In the after
noon of Tuesday, the chief of the Cantoniers, an active, eilergetic
fellow, came from below with twenty-five of his men; these, added
to about ten at the " Cantano," made thirty-five men. The sleigh's
having been brought down, the joyful order was given to mount,
which was readily complied with.
At this place I made the acquaintance of the Marquis D'Azeglio,
the Italian Minister at the British Court, then on his way to Lon
don. At his request, I gave him a copy of this letter, which he
said he would lay before his Government of Turin, that they might
consider the subject of providing better accommodation for trav
elers at these " Cantanos."
I had read in my early years of the fury and power of these
Alpine storms ; how unfortunate travelers were suddenly overtaken
and lost in the drifts and avalanches of snow, but never before did
I realize them. The tunneling of Mount Cenis is progressing as
fast as the nature of the case admits of; they have penetrated
about one mile at each end ; the blasting is through a rock of the
hardest kind ; the progress is about five feet a day at each end,
and when completed will be over eight miles long. The comple
tion of the tunnel is greatly to be desired ; it will make the shortest,
most direct, and far the most agreeable route from Paris to Italy.
This work is being done by the Italian Government.

61
Copies of letters addressed to me by the Hon. Hugh
McCulloch, Secretary of the Treasury, and Hon. William
H. Seward, Secretary of State of the United States, as I was
about leaving for Europe in 1865 :
Tkeasdhy Department, )
Washington, May 29, 1865. j
Dear Sir — Although you are about to visit Europe for the
benefit of your health, and desire to be relieved from all cares
and responsibilities, I cannot permit a gentleman of your distin
guished and well-merited reputation as a financier to visit Europe,
without asking of him the benefit of his services in explaining to
Capitalists in that country the condition of our financial affairs,
and in giving to me the benefit of such suggestions as he may be
able to make in regard to the condition of American credit in the
countries he may visit, and in the transaction of any business
which the Treasury Department may wish to commit to his care.
I inclose herewith a statement of our national debt. You are'
well advised of our national resources.
I will thank you, while in Europe, on behalf of the Treasury De
partment, to explain the character of this debt and the extent of
the resources of the United States, to gentlemen with whom you
may come in contact, and who may be interested in these sub
jects. I will from time to time communicate with you upon these sub
jects, and ask of you to perform specific duties, if I should be
under the necessity of requiring your particular services.
Trusting that your journey will be a pleasant one, and that you
will return to the United States re-invigorated by relaxation and
travel, I am, very truly, your ob'd't servant,
(Signed) H. McCulloch,
J. F. D. Lanier, Esq., Secretary of the Treasury.
New York.

62 Department of State,
Washington, 2d June, 1865.
To the Diplomatic and Consular Ayents of the United States in
Europe :
Gentlemen — It is my pleasing duty to introduce to you J. F.
D. Lanier, Esquire, a distinguished banker of the City of New
York, and a most estimable gentleman.
Mr. Lanier has been requested by the Secretary of the Treasury
to look after the financial interests of this Government while in
Europe, and he has kindly consented to do so.
I commend him to your friendly attention and consideration, and
bespeak for him such facilities as may contribute to the effective
discharge of the duties confided to him.
I am. gentlemen, Your very obedient servant,
(Signed) William H. Seward,
Secretary of State.