Chapter XVIII


During the past few months I had several overtures made me for going into business, one from Mr. Abram Hewitt, who proposed that I should take a position in his Trenton Iron Works; another by Mr. Lord, who offered me a place on the Cincinnati, Hamilton and Dayton Railroad, which resulted in my declining both.

My sister Emilie's marriage with Dr. Humphreys took place; it was the last time my father was out of his room or bed, and he soon after succumbed and passed away most peacefully, with all of his children by his bedside, except my brother Will, then in California; a noble life well spent, leaving behind a most cherished memory. His business affairs were in some confusion. He left me with my dear mother, his executor, and gave me another reason for desiring to return to civil life.

Getting a leave of absence from the Academy, upon the plea of the necessity of looking after my father's affairs, I visited my sister Susie, Mrs. Henry M. Baker, then residing in Elizabeth, New Jersey, and there met Mr. John S. Kennedy, Mr. Baker's brother-in-law, a successful man of business, who had just severed his partnership with Mr. Morris K. Jesup, with whom his personal relations were decidedly unpleasant - so much so that personal contact was impossible in the adjustment of the partnership accounts of the firm in liquidation. Mr. Kennedy was ill, and a trip abroad was advised. Old Mr. Cornelius Baker, his father-in-law was ill at Mentone, and Mrs. Kennedy was anxious to join him. My smattering of legal knowledge appeared to impress Mr. Kennedy in discussions over his affairs with Baker and me, and resulted in his offering me a salary, and relegating to me the winding up of the affairs of the late firm of M.K. Jesup & Company. This offer I eagerly accepted. Mr. Kennedy left for Europe. Baker and I took an office in the Trinity Building, and under Powers-of-Attorney from Mr. Kennedy, I introduced myself to Mr. Jesup. This business and my father's estate matters, kept me busily employed. My salary, together with my leave-of-absence pay, and the income from my invested prize money was ample, so that when my leave expired, and I was ordered to the Brazil Squadron for duty on the flagship "Guerriere" - Commodore C.H. Davis - I was quite prepared to again resign my commission as Lieutenant-Commander, signed by Abraham Lincoln. A further leave was however granted me, on my stating that compliance with the order was impossible, but finally in February 1869, I sent in my formal resignation, which was accepted, and I was again a citizen. Meantime, my family was moved to Elizabeth, New Jersey, where I rented a small house, and I settled down to business, and for many years became a "Commuter" on the Jersey Central, getting up early, coming home late, running to catch trains and working steadily in my office, and often at home, until late at night.

In my very pleasant interviews with Mr. Jesup at the commencement of our relations, I found amongst the unsettled accounts, one with the firm of Quilter Ball & Co. of London, liquidators of the bankrupt Aberdare Iron Co. This firm had deposited with M.K. Jesup & Co. several hundred thousands of dollars of First Mortgage Bonds of the Texas and New Orleans Railroad Co. The bonds had been taken by the Aberdare Company in payment for iron rails, delivered in Texas just before the outbreak of the rebellion. Mr. Jesup considered them worthless, proposed that a charge for their keeping and the firm's services should be made, and Mr. Kennedy's account credited with his share of the charge. As no report or information as to the condition of this railroad was obtainable, I packed up my traps and went to Texas, to look the ground over. The only way to Texas was via New Orleans, Charles Morgan's railroad to Brashear City, and thence by steamer to Galveston. I found on arrival at Houston, that there were only fragments of the railroad in existence, broken by streams over which no bridges passed. The fragments were laid with rails on rotting ties; the roadbed overgrown with weeds and shrubs - in many places impassible through swamps; no cars or locomotives. Many of the iron rails delivered by the Aberdare Company had been seized by the Confederates, and used in their extemporized gun boats and batteries for armor plating, and a large portion had sloughed off into the Trinity river, undermined by floods. A carpet bagger named Barr had practically squatted upon what there was of a railroad, and with a hand car, mules and canoes, was running the mails with occasional passengers and light merchandise from Houston out to Sabine Pass, making the round trip about once a week. He did not have, nor claim any rights or authority. It was a simple private venture, and he readily assented to take me over the right of way, upon my paying the expenses of the trip. It was the toughest journey I ever made, occupied me a week in going as far as Beaumont where I gave up going further. The prairie country was absolutely unsettled. We passed several unburied bodies or skeletons of men; pushed, in canoes, through swamps alive with big alligators; saw flocks of wild turkeys and grouse and many herds of deer.

At Trinity river there was a small settlement, the houses mere shanties, and at Beaumont, a harder looking lot of citizens cannot be imagined, nor a community having a harder struggle for life. I believe I could have bought for a few dollars per acre, the whole of the vast prairies thereabouts, where have since been developed the valuable oil fields of Texas; the presence of oil at that time was not suspected. On our return to Houston, satisfied that as a railroad, the property in sight was of little worth, I examined the Charter, had a conference with Mr. Gentry, the nominal President of the company, and finding that the liberal land grant of lands owned by the State had nominally lapsed through failure to complete and operate the line within a prescribed period; still, if it could be revived or renewed, our bonds which were a lien upon the lands, might be valuable. It was furthermore the opinion of some lawyers, that as the lapse was caused by the rebellion, and that Texas had been an active party to it, the years of the civil war could not operate to deprive the company or its bondholders of its chartered rights, so that if the road should be built within a reasonable time the land-grant would hold good.

On my return to New York I made my report to Mr. Jesup, who expressed surprise and satisfaction at my journey and conclusions, and offered to pay my expenses, which I declined.

I went at once to the Cunard steamship office and bought my passage to London on the "Scotia," sailing the next morning early. I kept myself in my cabin until outside Sandy Hook, when going on deck I encountered Mr. Strang, Mr. Jesup's partner in his new firm, a pleasant, amiable gentleman, with whom I had agreeable relations. I surmised his, or no doubt he surmised my, errand. Our intercourse was agreeable throughout the voyage, without exchange of confidences.

On arrival at Queenstown very early on a Sunday morning, I bundled into the mail tug boat alongside, followed at the last moment by Mr. Strang. On reaching Cork, instead of going as he did to a hotel, and awaiting the regular night train to Dublin, I drove at once to the railroad station, where I was informed a special mail train was to be made up for Dublin, whence the mails were to be transshipped to Holyhead and London. By dint of persuasion, etc., I induced the station master to permit me to accompany the mail bags, and without stop was carried at seventy miles the hour to Dublin. Taking the steamer to Holyhead I was in London that night, and the next morning at an early business hour, I gained entrance to the presence of Mr. Quilter by sending in my card and a short note, explaining my errand. Mr. Quilter was a short, stout irascible Scotchman, afflicted with gout, his swollen foot resting on a stool. I recalled the Texas and New Orleans bonds business; stated the present relations of the former partners; gave him a verbal and written report of my trip to Texas, and after a discussion of the situation in all its bearings, came to the real object of my call, which was of course that the bonds be turned over to the keeping of Mr. Kennedy as his agent. Mr. Quilter assented, and directed me to write a cable message to Mr. Jesup, requesting the transfer of the bonds to Mr. Kennedy. This cable was sent, and I was preparing to leave, when Mr. Strang's card was placed in Mr. Quilter's hands. I had previously told him that Mr. Strang had crossed with me, probably on the same business. Mr. Quilter told me to go up a spiral stairway, leading to offices above his private room, saying: "You can hear what I shall say to him." I did so. Mr. Quilter greeted Mr. Strang cordially, as he presented his credentials, looked them over, and said: "Oh! you have come over about those Aberdare bonds; why, I have just ordered your firm to turn them over to my friend, John Kennedy, to whose direction I originally gave them." Some further conversation ensued Mr. Quilter saying that he had already seen a Mr. Barnes, representing Kennedy, and Strang withdrew. I go into the details of this, my first essay in a business matter of importance, because as "there is a destiny in our ways, rough hew them as we may," the results of it formed the foundation of my future business career, not unsuccessful.

I returned home immediately, having been absent in all about three weeks. The bonds were transferred to Mr. Kennedy; the entire issue were subsequently acquired by him through purchases made by me at very nominal prices. Mr. Hayes, my brother-in-law, was employed to go to Texas and take charge as Receiver of the road. Foreclosure proceedings were instituted, legislation renewing the land-grant obtained, and finally I sold all the bonds to Governor E.D. Morgan and a Syndicate for so good a price, that from what was thought a worthless, turned out one of the most valuable of the Aberdare Company's assetts, while Mr. Kennedy's profit on the outside bonds bought for his account, was very large.

Mr. Kennedy's idea of my usefulness to him was soon after my return expressed, by his tendering me a partnership in a new firm to be formed of J.S. Kennedy & Company, in which he should furnish the capital, retaining one half interest, the other half to be divided, one quarter to his and my brother-in-law, Baker, and the other one-quarter to me. Kennedy also offered me a handsome sum for my services which I declined. The partnership seemed the "ultima thule" of my ambition. I bought - what to me, with my very reasonable ideas - was a beautiful residence in Elizabeth, on North Broad Street, and for upwards of twelve years, lived there, where all the other children were born and brought up - busy, travelling all over the country on business connected with the firm's affairs, and living a happy, contented and prosperous life.

Of course, the Texas and New Orleans Railroad occupied my special attention, taking me frequently to Texas. I also became the General Manager of the Cedar Falls & Minnesota Railroad, of which Mr. Kennedy was President, built the greater part of the road, negotiated its lease to the Dubuque & Sioux City, in its turn leased to the Illinois Central Railway. These railways, through the leases, became valuable properties, adding largely to the fortunes of Kennedy, James Roosevelt, Willis James, George Forrest and Charles Frost, their principal owners. Railroad building enterprises in those days were financed by the issue of bonds for the entire cost and dividing the stock as a bonus or profit. Seldom was a penny paid for it. My frequent trips to Texas brought me into contact with the Texans, who owned, controlled and were building the Houston & Texas Central Railroad; House, Rice (afterwards murdered by Patrick), Baker, and other notable men, identified with the state awakening from the stupor following the war. They had enlisted the interest and financial aid of Messrs. Phelps, Dodge & Co., of New York, and Mr. William E. Dodge was largely interested in the enterprise. I sold to the Railway Co., five thousand tons of English Rails, to be delivered at Galveston, taking payment in their first mortgage, 7 percent Land-grant Bonds. There were no railways in Texas then except the road between Galveston and Houston and the Texas Central line to Bremond, but projected and under construction to Austin and northward without precise objective.

In pursuit of legislation, I visited Austin, met Governor Edmund J. Davis, and was encouraged by him to seek Capitalists interests in the construction of a grand International Railway, which should transverse the State from Arkansas to Mexico. To such a railway he promised his influence, to have the State grant a subsidy of $10,000 per mile in five percent State bonds. A Texan, one General James W. Barnes, had already taken the project in hand, and with him I had constant intercourse on the subject, brought him with me to New York, introduced him to Mr. Kennedy who quickly interested a number of Capitalists in the enterprise: Mr. Dodge, Mr. James, Mr. Roosevelt, Mr. Moses Taylor, Spofford Teleston & Company and Henry G. Marquand, the latter then engaged in financing the Cairo & Fulton Railroad, now the Iron Mountain Railway, part of the Missouri Pacific System.

I drew up the proposed charter of the International Railway myself without assistance of lawyers, just as it is today, went again to Texas, and at Austin, after a hard fight with the opposing interests of the Missouri, Kansas & Texas Railway and Texas people, which cost our friends much money in hard cash, secured the passage of the Act incorporating the International Railway of Texas, with a subsidy of $10,000 per mile in State bonds. A picture of the Texas Legislature of that period, composed of negroes, carpet baggers and impecunious natives, all openly demanding pay for their favor, and votes, their exaggerated ideas of northern capitalists, and their want of any possible moral views upon the questions involved in legislation desired for their profitable exploitations, would be interesting, if not edifying. Such men as Mr. Flannigan, the "what are we here for Senator", Mr. Parsons implicated in the Chicago riot and murders and executed there, with a number of men utterly without civic virtue, were the leaders, orators, and heads of legislative cliques which controlled the representatives and senate. All of them bargained and put a price upon their favor of any bill before them, not secretly but as a matter of course, and a bill for giving a subsidy to a lot of rich Northerners without their share in what they euphoniously called the "Chicken Pie", was simply ridiculous.

I was staggered by the openly made demands, which, justified by their previous experiences, seemed to them perfectly reasonable, pure and honest, while to me, unused to such things, I was disgusted when my arguments as to the great benefit to the State and its citizens, the philanthropic efforts of my noble friends, in taking such risks in forcing an iron pathway through the vast unsettled wilderness, and other glittering generalities of like nature, would be laughed at. Old General Barnes - no relative, I am happy to say - figured extensively in lobby, committee rooms, taverns and grog shops. He was furnished with a few hundred dollars for expenses; spent it liberally in treating, ran up bills when his money gave out, and would have exhausted the treasury of the nation in promises, had the noble army of legislators accepted them. They knew him of old; he was one of them, kindly disposed towards ex-confederates like himself without a surplus dollar to his credit any where. They all derided his promises, carpet baggers and negroes as well, but would take a small percentage of his promises in hard cash. The Speaker of the House - a carpet bagger, but the only really honest man I knew - Ira H. Evans, kept me pretty well posted as to the conditions, which he deplored, but could see no way out of. He was a bright, clever, and a remarkably good parliamentarian, ruling as disorderly heterogenious a crowd as were ever assembled in the guise of statesmen.

Used up by the heat, the exciting rows and fights, I abandoned the job, returned to New York, and my place was taken by a gentleman when I made my report to the associates, [who said] that he knew those people and how to deal with them, and he did. The charter was granted at last, and if the books of that company are accessible, they would show a charge to "Charter Privileges" which might require explanation if submitted to the modern inquisitions.

The company was formed, bonds and stock issued, and I was elected President of the Company, and for the next year or two, passed much of my time in Texas. Remembering the activities of Mr. Hoxie on the Union Pacific Railroad, and learning from General Granville Dodge that Hoxie was out of employment, I telegraphed him, offering him the superintendence of the International Railroad if Texas was not too hot a country for him. He replied briefly that it was not too hot for him, and I appointed him General Superintendent.

My brother-in-law, Somers Hayes, still running the disjointed Texas & New Orleans road, then under the control of Mr. Morgan's syndicate, I selected as the first assistant engineer, under a Mr. Evans, who was recommended by General Dodge as one of his best locating engineers on the Union Pacific. I also, with the approval of the Directors, let a contract to the firm of Reynolds & Brown, for the building of the first fifty miles as it should be located. I had known them as the contractors for the Cedar Falls & Minnesota road. They had a large plant "in being", and at once started it through Kansas to Texas, for some objective not decided upon, and with Evans and Hoxie I was soon in Texas.

We fixed upon Hearne, a cluster of a half dozen shanties, as the intersection of our road with the Houston & Texas Central. Evans & Hayes started on the location, the Contractors plant, and gangs of workmen arrived like an army of invasion; work commenced and the fifty miles was completed to Palestine within the time prescribed by our charter, was inspected by a commission appointed by the Governor, was reported upon favorably as to its quality. I had the coveted Texas Bonds engraved and printed by the American Bank Note Company in form approved by Governor Davis, and went with them to Austin, handed them over to him - $500,000 of them - for his signature. This he promptly gave, and the precious lot was sent by him to the Comptroller of the State to be countersigned. The Comptroller and the Governor were at odds over political questions, and he with equal promptness utterly refused his countersign, alleging that the issue was illegal and void, having been procured through corruption and bribery and other wickedness, issuing a most scathing pronunciamento against the governor, the company and everybody connected with the enterprise. Of course, we never received the bonds, but the legislature, possibly with some qualms of conscience, later substituted a grant of State Lands, in place of the bonds, which many years later proved more valuable than the original subsidy. The road passed through many tribulations before completion - foreclosures, receiverships, reorganizations.

I got out of it as President, my brother-in-law becoming successively Receiver and President.  It was merged with the Great Northern, becoming the International and Great Northern Railway. Honorable Galusha Grow was President of the Great Northern Railway, employed by his intimate friend, William Walter Phelps, who with Mr. William E. Dodge, Sr., were the principal promoters of that enterprise, and both roads finally became merged in the Missouri Pacific system by Mr. Jay Gould, who bought us all out, "hook, bob and sinker," but employed Hayes, Hoxie and Dr. Smith, as Vice-President, General Superintendent and Treasurer of his entire South Western system, they all moving to St. Louis, where Mr. and Mrs. Hoxie opened a house, and all of them lived together there very comfortably for some years.

The business of J.S. Kennedy and Company increased by leaps and bounds. Our small office was exchanged to a larger one. We transacted a banking and foreign exchange business, generally based upon Railway affairs, dealt in bonds, stocks and loans. We imported large amounts of new and old rails, selling the new to railroads; the old doubleheaded rails to our own manufacturers to be worked over. Our importation of Bessemer and Scotch pig iron were also large and profitable. We took on a number of agencies: The Bowling Steel Company, The Cambria Iron Company, The West Moreland Iron Company, The Scottish-American Investment Company, and others. Our London Correspondents were Robert Benson & Company. Mr. Kennedy was an active director in banking and managing railway companies, and I, also, in several, including the Rome, Watertown & Ogdensburg, the Central R.R. of New Jersey, the Lehigh & Wilkes-barre Coal Company, the St. Louis, Alton & Terre Haute Railway Co., in which Mr. Samuel Tilden was the leading man, and with whom I had pleasant, and for me, profitable lessons in railroad and corporation law and practice. We were principals in the management of several railroad re-organizations, and besides those attending the re-organizations of the International & Great Northern Railroad, managed several foreclosure suits, and I think I acquired a fair reputation, not only as a business man, but as a Railroad lawyer. Indeed, it was owing more to the smattering of law gained before the war in Albany, rather than my attainments as a Naval officer, that I owed my reputation and success, although my education at Annapolis played its share.

In a suit by the liquidators of the celebrated bankrupt Glasgow Bank in which we had been their agents, Mr. Kennedy, as will be seen in the printed testimony-- preserved by me - as a witness testified regarding some disputed point, that the course adopted was advised by me, whom he "considered as good a railroad lawyer as could be found in the city." This may not be a particularly modest quotation, but the quotation is correct if the fact is dubious, and when my testimony was asked, I had to assert my regular admission to the bar as an attorney and Counsellor-at-Law.

During this period I made a number of trips to Europe on business, always short but full of rest and pleasure. Mr. Kennedy's health, at no time very robust, called him away frequently for short rests abroad with his family in Edinburgh and Glasgow, where invariably he took on some new business for the firm. Mr. Baker ran the office detail, oversaw the books, attended to the exchange business, bank loans and accounts, and with able bookkeepers the internal machine ran smoothly and accurately; while I had charge of the general correspondence, the negotiations and outside work. We made money and some losses, but on the whole the business was very profitable, so that at the end of each year I found my capital account credited with a considerable profit which accumulated to a sum far beyond my expectations. My father's death, and later, my dear mother's, also placed a considerable patrimony in my possession, so that I felt myself pretty well off, and for those days, I might have been justly called a "wealthy-male-factor," and retired at my ease; indeed, I should have been satisfied to do so had it been possible. The material things constituting a comfortable, if not a luxurious life, I had. I owned my pretty residence in Elizabeth, bought additional land there, increased the size of the house, built a stable, had horses and dogs. My children - increased in number to six -  had all possible advantages of education. I bought a farm in Vermont, remodelled the little farmhouse upon it; I had few and short vacations which I passed there, fishing Coldbrook and the trout streams in the region; joined the Carrolls Island ducking Club, shot birds at odd times when West on business, worked hard early and late in my office; commenced making the collection of Naval and Marine memorabilia, which has become the joy and pleasure of my present life. As I review those days and years, now that my activities have come to an end, filled as they were with labor, anxieties and responsibilities, compensated for most amply, I can truly say that fortune was kind to me, and my life at home and outside of it a very happy one.

The panic of 1871-2, however, worked some disastrous changes. Robert Benson & Company, our London correspondents failed. We had sight and 30-days bills out, drawn on them for a large sum, nearly a million dollars. Mr. Kennedy was recuperating in Switzerland. Duncan Sherman & Company failed, owing us large amounts, as agents for one of our foreign clients, so that Baker and I were put to it to maintain our credit. somewhat shaken by Robert Benson's failure. Owing to Mr. Kennedy's most energetic work in England whither he went, revived as he always was, by any real emergency, and a free and unlimited use of the contents of his personal strong box, we tided over the emergency with flying colors, but I found, on making up our balance sheet, and re-valuation of our assets, that my capital account was sadly reduced, and my visions of independence somewhat dimmed. All our bills of exchange were not only met at maturity, but Mr. Kennedy advertised in London, that the sixty-day bills would be paid at sight by Messrs. Glynn, Mills and Curry. Our account with Duncan Sherman & Company was settled by Mr. Alexander Duncan of London, who came to the temporary relief of his son's firm, and we were once more on our feet with increased business pouring in upon us from all quarters; some of it became the absorbing interest of our career. On Mr. Kennedy's return he, for reasons best known to himself, became dissatisfied with his brother-in-law, Mr. Baker, which brought about unpleasant relations, and Mr. Baker retired from the firm. A new firm was created, consisting of Mr. Kennedy and myself, share and share alike for the new business. Kennedy offered to make the name Kennedy & Barnes, but the former firm name was so well known, that I declined the honor of my name being so prominent, and always have regretted it.

At about that time there came to us, with letters of introduction, a tall, handsome courtly gentleman named Wilmar, a Belgian, speaking little English and that badly, so that my equally indifferent French was useful in our interviews. He came as the representative of a banking firm in Amsterdam, who had bought from the Litchfield Brothers, and sold to their clients, a series of mortgage bonds of the St. Paul & Pacific Railroad in process of construction in Minnesota. The bonds had been sold in advance of construction; the proceeds wasted, the road only partly built, in disjointed fragments, the coupons unpaid for more than a year, and Lippman, Rosenthal & Co., the Amsterdam Bankers, had formed a committee of bond-holders, received deposits of their clients' bonds, of which they were the managers, issued Committee's Certificates against the deposit of bonds, and employed Mr. Wilmar to go to America and see what could be done. Mr. Wilmar had been largely instrumental in negotiating the bonds for the Litchfield Brothers, who now, the owners of all the stock issue of the Company, were directing its affairs, a Mr. Becker being their agent and nominal President of the Company at St. Paul.

Of course I had to go there in company with Mr. Wilmar, and after some mishaps through which Mr. Wilmar got into the wrong train at the passing point where supper was served, and was carried back to Chicago to his great consternation. He joined me the following day at St. Paul in a bewildered state of mind.

I put myself at once into communication with Mr. Becker, Mr. Litchfield's agent and President of the Company, and for a week or more endeavored to get all possible information regarding the actual condition of the property. Nothing could be more deplorable for the bond-holding interests.

There were a few miles running out from St. Paul, spasmodically operated to a village called Litchfield. A short piece ran northerly to no place; most of the iron rails sent out by Litchfield from England, bought with bond-holders money, had been appropriated and sold by Litchfield to the then bankrupt firm of Jay Cook & Co., and used in the building of the Northern Pacific. The road was hardly earning the expenses of its intermittent operation. The contractors for the grading - miles of which, half constructed, stretched out over bald, desolate and uninhabited prairies -  were unpaid and were suing the bankrupt company in the local courts. There was practically no property in sight which the bond-holders could look for any fractional return for their investment except the value of the large land-grant, only partly earned, pledged for their security. Foreclosure of the mortgages, re-organization, receiverships, raising large sums for the completion, seemed the only and inevitable course. Even the land-grant was thought to have lapsed and been forfeited, by the lawyers I consulted.

Old Mr. Wilmar, I found, had an interest in the contractors' claims, through a son, a settler on a large tract near the end of the finished line, where a little village named Wilmar was established. We met DeGraff and Colonel Crook, the contractors. Mr. Wilmar had an idea that the money should be raised to pay their claims, and with a new contract, the construction should go on, under the existing regime, he to secure from the Dutch Committee such postponement of their claims, or abatement, as would enable the money needed to be secured by a preferment on the road built and to be built. This idea was instigated by the advice of Becker and his lawyers, representing the Litchfields’ interests in the stock and also holding a large line of second mortgage bonds wholly owned by Litchfield, which he had caused to be issued to himself, for no consideration whatever. I returned to New York, leaving Wilmar in St. Paul. Following my report and upon consulting with Lippman, Rosenthal & Co., proceedings in foreclosure of all the mortgages were commenced, resisted at every point by the Litchfields. We succeeded in having a Mr. J.P. Farley appointed Reciever by Judge Dillon, obtained authority for the issue of Receivers' debentures, the proceeds to be applied to construction of important links. We obtained legislation by which the land-grant was kept alive, and for more than a year were plunged in law suits and work which entirely absorbed my attention, almost to the exclusion of other business. Mr. Litchfield finding that a decree of foreclosure and sale was impending, opened negotiations for a settlement of his claims as Stockholder, proposing some modification of the plan of Re-organization we had in view, and in furtherance of it offered to turn the management and control over to us. This was done and I was appointed the President of the Company, went to St. Paul and took possession of Mr. Becker's office. Mr. Wilmar had retired, indignant that his views had not obtained, and we heard no more of him. His contractors' attachments and suits were set aside or abandoned; another plan of re-organization was under consideration, but when Mr. Litchfield's claims were formalized they were so preposterous that we rejected them in toto. Pending their negotiations, the foreclosure suits, instituted by the several trustees, under the different mortgages, deeds of trust were held up, but the agreement, under which I had been made President of the Company, had a stipulation that in case we did not come to an agreement with Litchfield, the management of the road should be restored to Mr. Becker. I was prepared to do so, and go ahead with the foreclosure suits, when acting under a clause in the mortgage deeds, the trustees demanded possession of the property, and Mr. Farley, the Receiver, without consulting me, turned the property over to the trustees, who took possession of the offices and records of the company. As Mr. Kennedy was one of the trustees, having been appointed to fill a vacancy by the bond-holders represented by our firm, at a meeting regularly called at which Mr. Baker and myself alone were present; the chairman, and I the bond-holders, under our Power-of Attorney from the Dutch Committee, also as the actual holder of the bonds which were all in our possession in our vaults,  the company was in the legal and actual possession of Mr. Kennedy, Trustee, and his partner, myself, as President. Mr. Litchfield naturally complained, called it "a trick," and otherwise expressed himself, but submitted to the rather singular proceeding, and the foreclosure suits were resumed and went on with resistance, delays and the resort to every expedient to postpone the final decree.

When I went to St. Paul, as President of the Company and took possession of the office, I appointed Mr. Farley, then Receiver, also the General Manager. Going one day to the terminus of the operated road, between the village of Litchfield and St. Paul - there was no station house, the trains being unloaded and receiving freight on the open wharf, I found a gang of laborers shifting freight from the cars to a steamboat, and heading them a man who seemed to me particularly bright, active and a leader. He was dressed in a woolen shirt, had a letterpad upon which he checked the packages and barrels handled, occasionally lending a hand. I asked Farley who that man was; he called out "Jim, come here, I want to introduce you to our new President", and I then and there became acquainted with Mr. James J. Hill. He had a contract with Mr. Becker for transferring freight. Hill explained his contract, said he was making a little money out of it, as well as from a contract for supplying his St. Paul customers with fire wood, cut and delivered on the cars at Litchfield. His real business was a coal and wood dealer. He offered at once to give up his contracts if I wished it, expressed the hope that the St. Paul and Pacific road would go ahead and complete its lines, and generally impressed me favorably as a stirring, energetic individual of the better sort. Farley told me more about him - what a pushing, driving, busy sort of a fellow he was, ready to do anything that came in his way; that he had been a pioneer in the northwestern part of the state, a mail carrier, was interested with Mr. Kittson, agent of the Hudson Bay Company in trading with the settlers and Indians, in the Red River of the North country, and Manitoba, adding some further statements of his general usefulness.

On one of my subsequent visits I again came in contact with him. The Princess Louise, daughter of Queen Victoria, came to St. Paul with the purpose of reaching Winnipeg, then an advanced settlement of the British Provinces, to hunt the game then so abundant. She was a devoted sportswoman, had fished for salmon, and hunted for moose and deer in the Province of Quebec, and under the auspices of Donald A. Smith, the manager of the Hudson Bay Company, was determined to see the wild regions in Manitoba. She was accompanied by the Duke of New Castle, Lord Elphenstone, Colonel McNeal of the British Army, Mr. Donald A. Smith and George Stephen of Montreal. Mr. Kittson was consulted; he took into his confidences, his intimate friend, Mr. Hill.

A train was made up, consisting of our best cars, which took the entire party to the nearest point, on our completed road, to the Manitoba line, whence they proceeded under the guidance of Mr. Kittson and Mr. Hill - who knew the country thoroughly - to their destination. During that trip Mr. Hill succeeded in impressing upon Mr. George Stephen and Mr. Donald A. Smith the prospective value of the St. Paul and Pacific Railroad, the enormous value of the vast unsettled country in Minnesota, if immigration could be directed to it, as a wheat-growing country - the ultimate value of the liberal land-grant - also the very nominal prices then ruling on the Amsterdam Exchange for the mortgage bonds of all denominations, as represented by the committee's certificates.

On the return of the party to St. Paul, there was with us a visitor, Mr. Johan Carp, a member of the Dutch Committee, a bright, clever young man, sent to us as a special representative of Messrs. Lippman, Rosenthal, with the request that he be permitted to inspect the property, and generally to advise with us as to the condition of the business and its prospects. He was thoroughly posted as to the Amsterdam Market, the prices of the several issues of bonds, as well as to the general feeling of discontent and desire of the bond holders' committee to close up the business and turn it over to some others, to work out its future; in other words the committee were anxious to sell out their holdings ‘en bloc'  if any responsible party or company could be found to purchase their holdings. Indeed, for some months, this desire on their part had been made known to us, and some overtures and negotiations had taken place with the Chicago, Milwaukee & St. Paul, and the Chicago and Northwestern people looking to such a transfer of the bonds, but they had come to nothing definite. Mr. Carp, it seemed, had this object specially in mind as the principal object of his visit to America.

After several interviews with Mr. Hill and Mr. Stephen, who remained in St. Paul while the Princess Louise and her retinue continued on their journey east, at which Mr. Farley and Mr. Carp were usually present; Mr. Hill, basing his figures upon Carp's statement of the market prices of committee's certificates, made a cash offer for all the bonds in the committee's holdings on an average of 3 to 5 percent higher than the then market or Exchange quotation. This offer, signed by Hill and Kittson, was simply marked "Approved, George Stephen and Donald A. Smith." Hill and Kittson were well known to be without means or credit. Mr. Stephen was President, or rather chairman of the Board of Managers of the Bank of Montreal, and supposed to be a capitalist; Mr. Smith as agent of the Hudson Bay Company, was thought to be a man of large means, and had a high reputation. Besides his influential position in the Bank of Montreal, Mr. Stephen had gained some influential consideration from the fact that his adopted daughter had married Mr. Harry Northcote, the eldest son of Sir Stafford Northcote, then Chancellor of the British Exchequer, a relationship which was not without weight, in the value ascribed to his endorsement of the offer of Messrs. Hill & Kittson, in the estimation of Mr. Carp, as well as his apparent intimacy and connection with Royalty in the presence of the Princess and the noblemen of her train.

A long cable message was concocted by Mr. Carp and myself, sent to our New York office for transmission to Amsterdam, conveying the terms of the offer. I communicated with Mr. Kennedy and left at once for New York with Mr. Carp. On arrival, I found there a return message from Messrs. Lippman, Rosenthal, in effect that if we approved, and the offer was genuine, from thoroughly responsible parties, they were disposed to accept it, and that the offer should be formally drawn, under legal advice, signed by Mr. Stephen and Mr. Smith as principals, together with a number of other requirements suggested by the astute minds of Lippman & Rosenthal, which if followed would make of us practically the guarantors of any contract. I remember the cable as the longest and most costly of any I had ever known.

Amongst them, we were requested to inform ourselves and the committee as to the personal and pecuniary responsibility of the parties making the offer. As no precise information was obtainable in New York I went to Montreal and passed several days. Mr. Stephen had called Mr. Hill there. I made inquiries, and so far as I could learn, Mr. Stephen who was a drygoods, or woolen merchant, personally had no means beyond his salary in the Bank of Montreal. His commercial business was embarrassed owing to ventures in the Picton Coal Mines, but his store or warehouse was in evidence, still a going concern, doing a profitable business. He was an exceedingly pleasant man, of fine appearance, rather distinguished manners, jovial and greatly esteemed, a Scotchman from Aberdeen, bold in enterprises and proficient in business affairs, notwithstanding the unfortunate condition of his Picton mining interests. He was very popular in Montreal, and his reputation for fair dealing most excellent. Mr. Donald A. Smith, also a Scot, stood very high in the community, not as a capitalist or man of large means, but as a man of the highest personal character, and of the first order in his business capacity. Of course I knew that Hill and Kittson - beyond Hill's individual force and energy - amounted to nothing in the matter of financial strength, and probably had not a dollar to spare from the result of their daily work, which afforded them only a modest livelihood. I think I also was impressed by Mr. Stephen's high connections abroad and his probable influence in the Bank, and possible backing from that institution and his numerous friends, while his and Mr. Smith's personality had a great and favorable effect upon me. Mr. Hill privately assured me that behind Mr. Stephen stood an array of capitalists who could, and would surely stand by him in this venture.

At all events, a formal contract was made for the purchase of the Dutch Committee's bonds, signed by Stephen, Smith, Hill, Kittson and by myself, for J.S. Kennedy & Company as agents, subject to ratification by the Dutch Committee, and with it I returned to New York, after a really delightful visit. This contract was transmitted to Amsterdam and ratified by the Dutch Committee, and in due course of mail returned in triplicate, and thereafter our intercourse with Stephen and associates became close and intimate; Mr. Kennedy especially forming a close intimate friendship for his brother Scots, Mr. Stephen and Mr. Smith.

By the terms of the agreement, payment for the bonds at the prices stipulated, was to be made within two months from its date, with interest, either in Sterling Exchange on London at New York, or in Sterling in London, the total sum being about $1,250,000. The bonds themselves had been sent to us, as agents for the committee and were deposited in a special vault, to be delivered to the associates upon payment.

As the time approached for this, it became apparent that Stephen, upon whom the task of raising the money rested entirely, was unable to do it on this side of the water. We were anxious that it should be done, and helped all in our power. The times were unpropitious for all new railroad enterprises. Many defaults had occurred and were occurring. The money market everywhere was disturbed, rates of interest high. The reputation of our securities abroad, as well as that of our railroad financial men, was not favorable. The schemes of Jay Gould Fish; the failure of Jay Cook & Co., still hung about with an unsavory odor. There was never a more unfortunate time to launch such an enterprise, while the disastrous St. Paul & Pacific bond matter had made the railway itself a notoriety amongst financial circles at home and abroad. In this plight, Mr. Stephen came to us, announcing his inability to raise the money, and asked that I go to London, see some of his friends there, explain the situation, describe the present condition of the property, its prospects, the country through which it ran, and was projected, the land grant, etc., etc. He thought I was the only one thoroughly enough informed to do this satisfactorily. There was no time to lose, and furnished with proper letters of introduction to various banking houses in London, and personal friends of Mr. Stephen, I sailed from New York, and in due time was in London, presented my letters and did my best to enlist the interest of several banking houses in Mr. Stephen's scheme, which was - avoiding details - the practical pledge of the Dutch Committee's bonds and the sale contract, for the advance of the money required for the first payment due in London within the next thirty days. I was also authorized to offer a share in the result of the contract.

I interviewed Morton Rose & Company, the Barings, Glynn, Mills & Curry companies, and met a number of bankers interested in American investments. Sir John Rose, an intimate of Mr. Stephen, during a long talk over the matter exclaimed: "What! George Stephen, expects to raise 250,000 pounds? Why, he hasn't 1000 pounds to his name. It is impossible for him to raise a shilling upon such a scheme." Old Mr. Russel Sturges of Baring's, also, but in a dignified way rejected it. There was no encouragement anywhere, and I abandoned all hope for it, and returned to New York, after a short trip to Amsterdam, where I endeavored to secure a postponed date of settlement from the committee, on the score of the prevailing disturbed money conditions in New York and London. Lippman, Rosenthal & Co., were very considerate, but could promise nothing, felt that they must stand to the agreed payment and evidently counted upon the powerful aid of the Sir Stafford Northcote influence, actually of no possible account, but an idea which I did not think it proper to disabuse their minds of. Indeed, I had met Sir Stafford, residing in Government house. He was in utter ignorance of his son's father-in-law's circumstances and projects. Harry Northcote was then the private secretary of Lord Beaconsfield, a fact well known to the Amsterdam people, and also contributed to their confidence.

On my return home the impossibility of raising the sum required became a fixed fact. During this time we had been busy in forming a scheme of reorganization of the St. Paul & Pacific Railway, to be put in operation after decree of foreclosure, sale, and purchase for account of the bond holders, who were to be George Stephen and associates. It provided for the issue of new bonds and stock, the former of course to be sold, and the proceeds devoted to the cost of the Dutch bonds. The outlines of this plan I had of course shown to and explained to the London bankers, with additional offers of participation if they would make the necessary advances. The time for the first payments came and passed. The Dutch committee were indignant at the failure, declared the agreement void, and directed us by cable to commence suit against Mr. Stephen and associates for damages for a large amount. We succeeded in pacifying them for the time, knowing full well that a suit for damages would be useless.

I do not wish to take any special or undue amount of credit to myself, but as this affair had, to a great extent, been my personal charge, nearly all the negotiations, correspondence and contact with both parties having been conducted by me, I took hold of a new reorganization plan, rewrote and newly modeled it into the form in which it now stands, and was, after some months of negotiation, during which I made repeated visits to Amsterdam, accepted by the Dutch committee.

This plan provided for the payment of an increased price for each of the several issues, in the first mortgage 7 percent  land grant sinking fund bonds, with a bonus of 7 percent preferred stock; the issue to also provide payment for the Receivers' debentures outstanding, of which Lippman & Rosenthal held a large amount, all the expenses incurred by them, our commissions and charges, the lawyers' and trustees' fees and the estimated cost of a settlement with the Litchfields, which would enable us at once to secure our decree and carry out the reorganization of a new company, to be called the St. Paul, Minneapolis & Manitoba Railway Company. Although I consulted with and discussed with Mr. Kennedy and Mr. Stephen, the various provisions of this plan, I can truthfully assert that nearly every line of it and the entire scheme was drawn by, and generally originated from, me. Mr. Kennedy had little belief that it would be acceptable to the Dutchmen; Mr. Stephen also doubted it. Neither Mr. Hill, Mr. Kittson nor Mr. Smith were consulted, nor so far as I know had anything to say or do about it. When it was perfected and after some revision as to the technicalities by a Mr. Scott, a lawyer of Mr. Kennedy's, who had from time to time been employed in some of the phases of the litigations in which we were involved, I went to Amsterdam, had long interviews with Messrs. Lippman & Rosenthal and with the committee, explaining its features, and urging its acceptance.

Lippman, Rosenthal & Co., who on account of the committee, had advanced large sums for the expenses attending the litigation, had taken a large part of the Receivers' debentures, were tired of the business and anxious to be relieved from further commitments, and being fully advised of the situation, urged the acceptance of the plan, which was finally with a few changes, accepted and formally executed by the committee. I should here state that throughout this business, from the beginning to the end, this firm impressed me most favorably from every point of view - shrewd and clever in business, generous and appreciative of our work, devoted in their efforts for their clients, having a proper regard for their responsibility in having bought out the disastrous loans of the Litchfields, and placing the bonds on the Amsterdam market. To them personally, I owe much for their uniform, cordial receptions and kindnesses and attentions, both in a business way and socially. I dined, lunched and passed many very delightful evenings with each partner, in their magnificently furnished and decorated residences in the Herringstrasse. Mrs. Rosenthal was a charming, exceedingly handsome, intelligent woman, presiding with dignity and grace over a household and family, remarkable for elegance and refinement. She had that indescribable manner which placed me at once as amongst friends; informed herself of all my antecedents, my family, my wife, my children, their names and ages; appeared interested in my previous naval career, asked many questions regarding the civil war and my connection with it, showing an intimacy with the war events that surprised me. She interdicted talks on business in her presence; corrected - laughingly - my errors in French; showed and described to me the very beautiful and valuable collection of the paintings of the old Dutch and Flemish artists; the magnificent collection of Oriental and Delft porcelains and priceless bric-a-brac with which her house was filled. She offered me the free use of her carriage, often sending it to me at my hotel with a note, placing it at my disposal for the day. Altogether, she made of my frequent visits to Amsterdam - outside of my business hours - a delightful sojourn, and I retain of her the most charming recollection.

The business methods prevailing in Amsterdam were peculiar. The Banking offices were placed in large, commodious buildings, in the rear of their residences, reached by a special corridor or passage from their residences, reached by a special corridor or passage from their fronts, the facades of which were simple brick without ornamentation. Business was conducted on the Exchange during the forenoons, after which the men returned to their residences and offices, attended to their correspondence and closed up the business initiated on the Exchange. This system gave me my forenoons to myself. A room and desk was placed at my disposal at Lippman & Rosenthal's office, where I wrote my letters and dispatched my cables, the latter being frequent and costly, while long letters were sent to my firm on the business matters entrusted to me.

I found time, however, to visit the picture galleries, the Zoological Garden, the diamond polishing works, the old book shops, notably that of Frederik Muller & Son, where I found numerous, rare and interesting memorabilia connected with early American history and discovery - commencing, or rather adding to the important collection now owned by me. Of course I visited the Hague, and made short trips to Dortrecht, Rotterdam and Antwerp, during the several visits in those years - lasting from one to several weeks each - and although on business bent, I had always at Amsterdam, a truly delightful time, increased of course by the uniform successful results of the business part.

I returned home with the assented agreement which gave intense satisfaction to all concerned, all the more because of the doubts held by Mr. Kennedy and Mr. Stephen as to its acceptance. Matters now progressed rapidly. Negotiations with Litchfield were reopened, ending in promising to pay him the sum of $250,000 for all his stock and second mortgage bonds, upon the reorganization of the company. Decrees of foreclosure and sale under all the mortgage deeds were entered by consent, and on the 28th day of April, with Mr. Stephen, I went to St. Paul, taking with me, packed in a valise, almost the entire issue of the $2,800,000 issue of bonds upon the Branch line, and on the 10th of May, 1879, the only bidder, I bought at public auction on the Court House steps, the railroad and property covered by these bonds for the sum of $200,000, paying in cash into the hands of the sheriff, the sum of $25,000, for which, and expenses I drew at sight upon my firm. I bought the property in the names of George Stephen, Donald Smith, James J. Hill, Norman Kittson and John S. Barnes. The Court allowed $17,436 [?] for expenses, chargeable to this mortgage. Altogether, I drew upon J.S. Kennedy & Company upwards of $50,000, with which I settled all claims of trustees, lawyers, sheriffs fees for every and all services connected with this mortgage, presented to the court and received our distributive shares of proceeds of sale as bond holders, thus closing to a point all matters connected with the "Branch Line”, leaving the branch in the ownership of the purchasers, absolutely free from all incumberances and debts to outside parties, save to the very few bond holders whose bonds had not been deposited with the Dutch committee. As to these, nearly all, except a few held by unknown parties, had been bought at very nominal prices by my firm on joint account with Mr. Stephen during the course of the proceedings. I remained in St. Paul, busily occupied in these details, throughout that month. The St. Paul, Minneapolis and Manitoba Railway Company was organized on the 23rd of May; George Stephen, President, Norman Kittson, Vice-President, James J. Hill, General Manager, Mr. Sawyer, Secretary & Treasurer. Its capital stock was fixed at $15,000,000, of which five shares each was issued to Mr. Stephen and associates, and the balance 19,965 shares to me, as trustee; only $2,000,000 being issued at this time - $13,000,000 to be issued upon the acquisition of the entire line, after sales under the other mortgage deeds. The stock issued to me as trustee was to be held until the payments to the Dutch committee were completed. The future purchases under the other mortgages, were to be made by the St. Paul, Minneapolis, and Manitoba Railway Company. All these and other points were covered by a formal agreement.

In due course, the programme as arranged, was carried out, and the entire line of railroad, as projected and constructed, of the former St. Paul and Pacific, with its great land-grant, passed into the possession of the St. Paul, Minneapolis & Manitoba Railway Company, and upon this property was duly issued $5,000,000 of seven-percent land-grant sinking fund bonds, of which about $2,500,000 went to the Dutch bond holders, the balance of the issue being sold and the proceeds used in payment of the expenses of the previous proceedings, the Receivers' debentures, and the advances made by the firm of J.S. Kennedy & Co., which on July 1, 1879 amounted to $116,121,148  [?] , including interest at seven-percent, for which our notes were held by the Bank of Montreal. The Bonds and preferred stock due the Dutch committee, having been transmitted to them, and the agreement in all respects fulfilled and full and satisfactory settlements made with Lippman, Rosenthal & Co., and the committee, the total stock [of] $15,000,000 was distributed; $3,000,000 each to Mr. Smith, Mr. Hill, and Mr. Kittson, and $6,000,000 to Mr. Stephen, he to take and hold for the time being, one-fifth  of the two-fifths coming to him, for account of J.S. Kennedy and Company, an agreement to that effect having been made by him with us, and covered by the original articles of the agreement between George Stephen, Norman Kittson, James J. Hill and Donald A. Smith.

The seven-percent preferred stock issue, small in amount, was an embarrassment, and all desired to withdraw and cancel it; few of the Dutch bond holders had elected to take the part of their pay in this stock under the option given by the agreement. Although there remained in the Treasury, about one million of the seven-percent Land-grant bonds, new money was needed to prosecute construction as proposed by the active Mr. Hill, now the manager in fact, as in name, and his schemes were hindered by this preferred stock, which had some additional security by some of the provisions attending its issue, which might possibly be construed as preventing a legal and desired issue of second mortgage bonds.

Again I left New York for Amsterdam, with the purpose of inducing the preferred stock holders there to accept, in lieu of their stock, the seven-percent Land-grant bonds, or failing in this, to buy their stock outright for cash at the best price obtainable. I picked up young Oliver Northcote (who later married Miss Edith Fish of New York) in London, and at Mr. Stephen's request, took him with me to Holland - a quiet, gentlemanly youth of no possible use or service beyond the prestige of his name. Lippman, Rosenthal & Co., apparently greatly pleased at the termination of their and our mutual labors, received me most cordially. The seven-percent bonds and the pre-ferred stock had been distributed to their clients and their advances and expenses paid; they held a contingent account open against a settlement with J.S. Kennedy & Company for our services, for which we had made claim of $100,000 - quite moderate we thought - but which I settled readily for $80,000. The fact that we were or would be interested in the future manage-ment of the company, was very agreeable to them, and had been one of the reasons - so they alleged - that had caused the committee to accept the second argument. I did not of course go into any particulars regarding our interest with Mr. Stephen, but they knew that we had come under large advances, like themselves, and congratulated me upon the outcome. I then brought up the real object of my coming, the substitution of bonds for the preferred stock, or its purchase, representing the necessity of new capital, and the obstacle of the preferred stock. They fell in with my views, offered their good services, and after consultation with others, consented to put an advertisement in the finance column of the principal newspaper in Holland, explaining the offer and advising its acceptance; the matter to pass through their office as a regular piece of business, for which of course they were to be compensated. The result was successful, for in due time all of the preferred stock was retired. My mission thus accomplished, I took a short holiday, visited Paris, and spent a few days in London, where I was entertained at dinner by Harry Northcote and others. Mrs. Northcote, Mr. Stephen's daughter by adoption, was a charming, enthusiastic woman; young, pretty and graceful; her house small, but prettily furnished. I gave her Mr. Stephen's message, that if all went well she should "set up her brougham." At the dinner the gentlemen waited on the table; there were no servants visible, and after dinner all sat on rugs, including the ladies, smoking cigarettes. There were several titled men and women present, and the evening was the most "free and easy" one that I had ever been a guest at - full of fun, personalities, anecdotes and games, during which my repertoire of anecdotes of Yankee flavor was in request.

I went to Edinburgh and Glasgow to see Mr. Kennedy's relatives - his father and brothers - also his brother-in-law, Mr. Todd, the father of a numerous family, who had a small tobacco shop in Glasgow, with a gorgeous wooden Highlander taking a wooden pinch of snuff from a wooden 'mull', keeping guard at the door. The worthy gentleman served me with a cigar, and remonstrated at my extravagance at paying a six pence for it, when a "thripenny" one was just as `gude.' Mr. Kennedy's father was a "Conveyancer". All were in very moderate circumstances, and I gathered that John S. was the real head of the family, whom they looked upon with grateful awe. Mr. Walter Kennedy kept a stationery shop, was very bright and cheery. From him, our firm had, for some time, purchased our office stationery in block - very excellent it was too, but not cheap. I also visited Mr. Menzies, our correspondent, as agent for the Scottish-American Investment Company, in which our firm was a stock holder, and was a very successful going concern; met at a lunch at the Edinburgh Club, all the directors of the company, including Sir George Warrender, a wealthy Scot, very bumptious and overbearing, got into rather a heated argument with him over the merits of some investments made by him and the company, during which he made so bold and untruthful statements, that I felt called upon to politely question their accuracy. The others remained dumb, and it was evident that Sir George was too big a gun for them to stand against. They were very subservient, but Menzies and another remarked to me later that they all knew he was wrong in his assertions, and that I was not to mind him - it was his way. However, Sir George's frothiness subsided, and he invited me to visit him and dine at his magnificent country place in Morning Side, where I was taken all over one of the best specimens of a very old ancestral house - park, gardens and stables - to be found in Scotland, and had a very pleasant visit with his charming daughters, both admirable horsewomen, who took me through the stables, and showed the paces under the saddle of their favorites.

On my return to New York Mr. Kennedy was absent. He had attended the last foreclosure sale at St. Paul, and had there bought in the name of the St. Paul, Minneapolis & Manitoba Railway Co., the last fragment of the old road, completing the title to the entire line, and had made the present journey to attend to some details connected with the purchases, and some law suits commenced by a certain Sahlyard et al., outside holders of bonds not embraced in the Dutch committee's holdings, and who were dissatisfied with their small distributive share in the net proceeds of the sales under foreclosure suits of the mortgages, in which Mr. Kennedy had been substituted as Trustee. The suits were against him personally, as well as against George Stephen and associates, charging constructive fraudulent collusion, in that he, Kennedy, was interested as a co-partner with George Stephen as a purchaser, being a Trustee. The plaintiffs asked for injunctions, resale and other relief. Edmund Rice of St. Paul, a former Trustee, also commenced suit, in behalf of himself and other bond holders similarly situated, alleging similar complaints and asking similar relief. Of course, the object of the suits was to so embarrass matters, as to compel the purchase of these few outstanding bonds, at prices that the holders demanded - no less than par and interest. Of all the “outstanding” bonds, we had already acquired possession, except the few now held by the plaintiffs in these suits, either by direct purchase, on joint account, or by fresh adhesions to the Dutch committee's holdings since the signing of the sale agreement of March 13, 1878.

It being the fact that of the total issues of bonds of all classes by the St. Paul & Pacific Railroad Company amounting to $28,000,000, there were less than $300,000 outstanding and not controlled and owned by the associates.

Mr. Kennedy was much disturbed mentally, and as a result, physically, by these suits, not allayed by advice of prominent lawyers in St. Paul and New York who were consulted, that it was not `de facto' illegal for a mortgage trustee to be a holder of bonds under a mortgage in which he was a Trustee; that a Trustee with an avowed interest was compatible with the law, nor did the earnest statement of Mr. Stephen, that if it should be necessary, or desired, we would satisfy the suits by paying in full the price demanded. He seemed to think his personal and business integrity had been attacked and dwelt upon the phrase "Constructive fraudulent collusion" as an insult, and was deeply concerned, going to St. Paul to give his personal attention to the suits.

Meantime, indeed before this phase of the business developed, the new bonds for the Dutchmen were despatched to Amsterdam, and the provision for payments to them completed, leaving in the Treasury of the Company, a large surplus of these bonds, which were sold to a syndicate under a subscription contract. The preferred stock being retired, an issue of $8,000,000, Second Mortgage Bonds was made. Under Mr. Hill's energetic lead, construction progressed rapidly. Emigration, largely from Norway and Sweden flowed into Minnesota; the enormous tracts of land belonging to the company advanced rapidly in value. Settlements and town sites were laid out, business on the railroad increased to such extent, that the prospects of the company grew brighter with every mile of track laid during the first six months of the reorganized company's life. At the latter part of the year 1879, the situation of the enterprise was this:

The St. Paul, Minneapolis & Manitoba Railway had been extended -  its fragments connected - and was in full operation, throughout its originally contemplated length, from the proceeds of sale of surplus seven percent bonds and new bonds issued at the rate of $12,000 per mile as per agreement with the Dutch plan upon new road.

The $8,000,000 Second Mortgage Bonds were divided as profit, $1,000,000 to each associate, reserving $3,000,000 for subsequent disposition. The entire $15,000,000 of capital stock was divided, 28,000 to each associate, 10,000 shares being given to Messrs. Angus, Smithers & Watson, Agents of the Bank of Montreal in consideration of their services.

Thus, without ever advancing a penny, without the payment or risk of a dollar, Messrs. Hill, Stephen, Kittson and Smith, received at one fell swoop, each of them, $3,800,000 and J.S. Kennedy & Company who had practically financed the enterprise - their obligations all repaid with interest-  received a similar sum in stock and bonds, and thus were born the great fortunes of the men which have become famous!

I remember my sensations at this reward for all our labors, as dividing our stock and bonds in the proportion agreed between Mr. Kennedy and myself in our Articles of Co-partnership, as to this particular and specified interest, which was in the proportion of our former partnership agreement. I tucked the bonds and certificates of stock into our respective vaults at the Safe Deposit Company; I was tolerably well off before this dividend was declared. Our business apart from this venture had been very profitable; an important sum stood to the credit of my capital account; I felt ready to retire from business altogether.

The only disturbing elements were those Sahlyard & Rice suits, which annoyed and disturbed us, particularly Mr. Kennedy. In the late fall he went to St. Paul on business connected with them and other matters, returning much upset by occurrences there. Our contract with Stephen he destroyed, declaring that we should consider that it had never been made.

I objected to the act, or his conclusion. Mr. Stephen was called in and asserted that, contract or no contract, he considered himself our Trustee for our one-fifth interest, and upon Mr. Kennedy's insistence and Mr. Stephen's acquiescence, I turned back to him our share of bonds and stocks already in our possession, on Mr. Stephen's assurance that he had or would make such arrangements regarding them, that if anything happened to him, our property in them would be provided for. It is needless to go into the details of events, which produced a rupture of Kennedy's and my relations as partners and friends, growing out of this affair. My refusal to accept his views and the contrariety of testimony given by each of us under the interrogatories addressed to each by the court in the suits at St. Paul - our intercourse became strained and our views so different that separation was inevitable, and desired on both sides, and by mutual assent was severed in February, 1880, I starting in business on my own account, while Mr. Kennedy formed a new firm, composed of his nephew, J. Kennedy Todd and young Ollie Northcote. Our firm business was promptly settled, leaving out entirely our interests in the St. Paul, Minneapolis and Manitoba Railway, which each of us was free to settle with Mr. Stephen as an individual affair on the basis of our Articles of Co-partnership: five-eighths to Mr. Kennedy and three-eighths to me. Many negotiations followed, the result of which was that I sold out my entire interest to Mr. Kennedy for a sum in cash, and withdrew from all further business connections with the Railway and its owners. The Sahlyard & Rice suits were so adjusted that judgments in favor of the defendants were rendered, thus freeing Mr. Kennedy's mind; in fact the plaintiffs were paid the full amount of their bonds and interest, as had been proposed; the slight cloud upon the proceedings were cleared away and all was serene, except that old Mr. Farley instituted a suit against Mr. Hill personally, claiming that he had a joint interest in his share of the profits, in which he was nonsuited on the score that as a Court officer, Receiver, he had no right to make such a contract with the purchasers at the foreclosure sale.

This suit developed some interesting conditions, which an examination of the court records would show to any one curious in such matters. Of course my testimony was called for, but as this affair is not pertinent to my story, I drop it.

The future conduct of the affairs of the Railway now rested almost wholly upon Mr. Hill, who pushed construction, issued millions of new securities, bonds and stocks, and finally crossed the continent with his railroads and became the "Railway King" of the West, with a fortune which must reach much over the $100,000,000 limit.

The old bankrupt St. Paul & Pacific Railway, changed to the St. Paul, Minneapolis & Manitoba Railway, again absorbed with its numerous branches and extensions into the Great Northern Railway, capitalized at nearly $500,000,000, manipulated and owned by a few individuals, who in the vast financial deals, connected with the control, and management of competing and connecting companies and landed properties, is a notable example, in its way, how out of nothing the world was created. I am not far out of the way, when I assert with some confidence, that the millions of stock issues of the Great Northern Railway, has not cost its principal owners a penny, nor has the railway itself received into its treasury a penny from its stock issue. The original issue of $15,000,000 divided as profit sold later on at $368.00 per share [!], the premium representing extra stock and cash dividends. The original seven-percent bonds were all retired long before maturity through proceeds of sales of only a part of the land-grant, while the $8,000,000 second mortgage bonds divided as profit, after selling at 130 percent have come due and been paid, and four percent consolidated bonds now constitute the funded debt to the amount of $250,000,000. It is doubtful if the cost of the entire line with its equipment equals that sum.

Truly, "Tall oaks from little acorns grow!" However, hospitals, museums, eleemosynary institutions, churches and colleges, come in at last and share in these profits; the money goes back to the people through them and sometimes spendthrift heirs; the men and their works are forgotten, and the world moves on.

Mr. George Stephen, with Mr. Smith, launched out into the Canadian Pacific enterprise, much against the advice and wishes of Kennedy and Hill, who took little or no part in it, as rather conflicting with the extended Manitoba projects. They worked it out under the paternal government of Canada to a successful end, were knighted by the British government, and again raised to the Peerage under the titles of Lord Mount Stephen and Lord Strathcona, abandoned Canada as their homes and took up their residences in England. Old Mr. Kittson, who from first to last, was a silent and utterly useless partner of Mr. Hill, overcome by his sudden accession of wealth, branched off into horse breeding, racing and wilder schemes, died later on, leaving several separate and contesting families for his estate, and his interests were acquired by Mr. Hill.

Mr. Kennedy continued for thirty years in close connection with all Mr. Hill's great enterprises, and his great fortune recently distributed to charitable public institutions and relatives, had its principal source from the operations of the business herein sketched and his intimate association in all Mr. Hill's projects and enterprises.

I have dwelt upon this Railway venture at some length, and somewhat exclusively so far as my business career is concerned: first, because it was the principal event of it and from which I derived the major portion of my fortune, such as it is; secondly, because it is an exposition of the methods, ways and conditions existing at the time, by which large, individual fortunes have been accumulated in the manipulations of corporate properties.

That four unknown and - so to speak - penniless men, all foreigners (if Canadians are such), should within the space of two or three years, without the payment or investment of a dollar or risk of any sort, except that of possible failure of success, been converted into multi millionaires, seems incredible. They had nothing to lose; everything was gain. Hill saw his opportunity and eagerly embraced it, bringing to his aid men nearly as poor as himself, whom accidental circumstances threw in his way, and rapidly grew out of his humble occupations, and without previous education, training or experience, soon reached the very top of the ladder, as a practical Railroad builder and expert, known all over the business world.

While we have another and similar example of individual effort and attending results, in the career of the late Mr. Harriman, as well as in those of a number of the immensely rich men and families whose fortunes are marvelous in extent and methods of acquirement, I believe that none of them are more wonderful than those of the five men herein named, nor so easily traced to their immediate source.

I naturally carried with me, on separation from Kennedy, considerable business with which I had been particularly concerned. I had ample capital and many friends. I bought a seat on the stock exchange, but rarely visited the floor, confining my business to bond investments, not stock speculations.

I bought a house in New York City, 22 East 48th Street, where we resided for twenty-five years. It was during this year that our great grief came to us, in the death of our eldest child and daughter, Susie, who died suddenly at New London, Connecticut on the 26 day of August 1881, where we were passing the summer months.

My father's death was followed by that of my dear mother, who had passed away after a brief illness in Springfield, on the __  day of  _____   1879.

For some years we had passed our summers at our little mountain home "Coldbrooke," in Vermont. In 1881, after making a winter visit to Lenox with my wife, we bought a farm there, and built our present summer home, naming it after our little Vermont place. There we have lived during the summer months ever since, and there all our children have grown up to manhood and womanhood, and our lives have passed with great domestic happiness ever since, going there in the early summer, and returning to the city in the late autumn.

There also our daughter Edith was married to Mr. S. Warren Sturgis, of Boston and Groton, and her three charming children cause us to renew our youth. To Edith I have given our Vermont farm, where she is going through the same happy experiences with her little ones that we have with ours.

With the family we visited Europe in 1890-1, and with that exception our mutual lives have rolled on without break or incident, alternating between town and country.

I gradually withdrew from active business, although keeping an office downtown for some years, during which I was uniformly successful in various undertakings which were not absorbing or demanding great labor or attention on my part, giving me ample time at my command for indulging my taste for sports and out-of-door exercises and amusements; shooting in the South and West; fishing in Canada; riding, golfing, and having what may be called a good time generally; free from care, or the anxieties of money grubbers in Wall Street, and with a wholesome pity for men who keep at it, never satisfied with enough, but stretching out for more for the mere satisfaction of an appetite for a gain that they have no use for, and has to be left when their time comes, to be scattered, and oft times squandered by others.

In my present dwelling in New York, we are all living together, except Edith who resides in Groton, happily married, and fulfilling with eagerness and enthusiasm the duties of a wife to one of the Head Masters of the Groton School.

In building our house, completed October 1903, we made provision for the comfortable housing of my four unmarried children; they are all busily engaged in their social and eleemosynary work, but we are a united and happy family, always company for each other, with mutual hopes and wishes, and as my life draws to a close, I have little to complain of and few regrets.

The world has treated me kindly, and is beautiful in all its aspects, but I shall not be sorry to leave it, as most of my old friends have done and are doing almost daily.

Another generation is rapidly coming to the front, to work out their own fortunes under new systems, new laws, while wonderful inventions, discoveries and new ideas in religion, governmental policies and intricate social problems perplex the thinkers of the old school, and one wonders what will be the status of the world fifty years hence, and are unable to form any opinion about it.

One thing strikes me clear, that the new laws and government policies in regard to corporate management will forbid, and make impossible hereafter, such railroad exploitations as I have only sketched, and the sudden accumulations of vast fortunes, which owe their source to the issue of securities, which of comparatively small value at first, increase in value with the development of the country with such amazing personal results. Still, as an offset it may be true, that for every dollar of personal gain the country at large has benefitted ten fold, from the personal work of the few fortunate and able minds who have been the instruments of progress.
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