STORM AND STRESS
Horace Austin was inaugurated governor January 9, 1870. A native of
Connecticut, who had lived and married in Maine, he had come to
Minnesota in 1855 at the age of twenty-five and settled at St. Peter.
He had studied law and taught school, but had taken no college course.
In the campaign of 1863 against the Sioux he commanded a company of
Minnesota Mounted Rangers and gave a good account of himself on the
march and battlefield. His neighbors had elected him a district judge
and were more than content with his wise and fearless conduct on the
bench. It was a piece of good fortune for the state that the warring
Ramsey and Donnelly factions of the Republican party in the convention
of 1869 compromised upon a candidate unobjectionable to both, but no
especial favorite with either. His majority was less than two thousand
over the popular candidate of the Democrats, George L. Otis. Ingenious,
hopeful, independent, Mr. Austin in successive messages showered upon
the legislatures projects of reform and development. In many of them he
was doomed to disappointment because he relied entirely on the merit of
propositions, and was not politician enough to understand that it is
only by timely and happy combination of interests that measures can be
carried in legislative bodies. Among these abortive recommendations may
be mentioned the one in his second message, urging a revision of the
state constitution, which he declared to be a motley of
inconsistencies. His desire was that a revised constitution should
contain such provisions as these: (1) Restriction of special
legislation; (2) prohibition of exclusive franchises; (3) limitation of
local taxation; (4) restriction of municipal debts; (5) ample power to
regulate railroads; and (6) abolition of the grand jury. Neither the
legislature to which the recommendation was addressed nor any
subsequent one has been willing to propose to the people a revision of
the constitution. Casual amendments have been frequent, but a late
amendment to the amending article, requiring an affirmative vote of a
majority of all the electors to adopt a proposed amendment, will
certainly render it difficult, and it may be impossible, to make
further casual changes in the state’s organic law. A happy illustration
of Mr. Austin’s independence may be found in his action on the
disposition of the so-called “internal improvement lands” of the state.
An almost forgotten statute of the United States, passed in 1841,
authorized the gift to any new state of five hundred thousand acres of
public lands for “internal improvements.” The claim of Minnesota to
this grant had been tardily conceded by the Secretary of the Interior.
In his inaugural address Governor Austin recommended that the
disposition of the lands should be submitted to popular vote. The
legislature then opening (1870) was of a different mind, and listened
to suggestions that the end of the law would be served if the lands
should be bestowed on certain railroad corporations willing to accept
them. When the legislature of 1871 convened that proposition seemed
much in favor, and a bill to divide the whole grant, then possibly
worth ten millions of dollars, in eleven parcels among seven
corporations was passed in so summary a manner as to suggest a careful
rehearsal for the purely formal proceedings. The support of the bill
was so evenly derived from the two political parties that neither of
them could claim the greater credit for guarding the public interest.
The veto message of Governor Austin will long remain a landmark in the
political history of the state. In the plainest of English he told the
legislators that they had been either cajoled or bullied into passing a
measure they dared not submit to the people, that the minute parceling
of the lands would be ridiculously ineffective, that they had no power
to divide the lands, but only the proceeds thereof, and that they had
voted to divert the national gift from its intended object. From this
date there was no question of a reëlection, should he desire it. In the
following year an amendment providing that no disposition should be
made of those lands until after the ratification of any proposed
measure by vote of the electors was submitted and, at the election,
adopted. The use to which they were put ten years later will be related
in its place.
For Minnesota as for the country at large, the early seventies belong
to one of the most notable “boom” periods in our economic history. The
census of 1870 verified the hopes of enthusiastic promoters in many
lines. The total population footed up 439,706. The native born in round
numbers were 279,000, of whom 126,000 had been born in the state. The
foreign born were 161,000, of whom the Scandinavian kingdoms had sent
59,000 and Germany 41,000. The English-speaking immigrants numbered
47,000. The swelling number of inhabitants was inspiring and the high
quality of the population was equally satisfactory. One hundred and
thirty-one thousand coming from the north Atlantic and north central
states had brought with them American traditions and culture, capital,
brains, and ambition for an enlarged career in a land of opportunity.
The foreign accessions were Christians, willing workers, and many of
them passionate lovers of free government.
The rapid extension of railroads was both a cause and a consequence of
this increase of people; of their distribution, their productive power,
and their demands for the comforts and luxuries of other skies. Rail
connection eastward by way of the head of Lake Michigan, established in
1867, had given quicker mails and shortened the passenger journey to
the seaboard. No produce save that of highest value in smallest bulk
could stand transportation charges to New York. The completion of the
railroad from St. Paul to the head of Lake Superior in 1870 brought
that city almost as near salt water as Chicago, and opened the great
waterway of the lakes for Minnesota’s grain and lumber, and returning
coal and merchandise. Later her annual millions of tons of iron ore
have passed down through “The Soo” to Lake Erie ports.
The year following (1871) was abundant in railroad extension. The main
line of the Great Northern was extended to Breckenridge on the Red
River of the North; the River division of the Chicago, Milwaukee and
St. Paul, prolonged to Winona, shortened the journey to Chicago by many
hours; and the Northern Pacific had reached the Red River at Moorhead.
Meantime the Southern Minnesota had been pushed out to the Blue Earth,
and the Winona and St. Peter to the Minnesota. The 350 miles built in
1872, though reaching no important terminals, brought the total mileage
at the close of the year up to an even 1900.
In those years of plentiful money and multiplying fortunes, railroad
building was rapid and easy in Minnesota. Investors were keen for bonds
secured by land grants of enormous extent, and bearing a liberal
interest, especially when offered at a seductive discount. The
controlling spirits of the companies found some profit in financing
construction companies, but more in town lot and land speculations.
Railroad building out on the open prairie far in advance of settlement
was a novelty then. The gentlemen whose privilege it was to determine
the lines and locate the stations were in position to make profitable
selections of lots and lands, and to let their friends “in on the
ground floor” for a consideration. Around the selected stations
considerable villages would arise in a single season. In some cases the
town would be built before the track had reached it. There were
instances in which settlements were made on mistaken calculations of
actual location, and then the houses and shops were literally put on
wheels and hauled over to the chosen spots.
The lands adjacent to the railroad lines, especially within a few miles
of the stations, were, of course, in great demand and rose rapidly in
price. Cultivation was no longer confined to the river counties, but
spread rapidly inland. It did not take a generation of the hardest
labor to make a farm on the Minnesota prairie. In the first season the
newcomer could win his subsistence, and in the second begin to build.
The cultivated area of the state, which was 630,000 acres in the
closing year of the Civil War, rose to 1,863,300 in 1870, and five
years later fell not much short of 3,000,000.
A large fraction of this area was devoted to a kind of cultivation
novel to this country, but which remained profitable only so long as
the virgin fertility of the soil survived, and that was rarely longer
than ten years. “Bonanza farming,” so called, was carried on by large
proprietors or lessees, owning or controlling many thousands of acres,
employing machines and large gangs of men and animals. For these
estates there were developed out of the petty apparatus suitable to the
little eastern farm, the sulky plow with its two mould-boards, the disk
harrow, the twelve-foot seeder, the self-binding reaper, and the giant
threshing machine. There was but one principal crop, spring wheat,
which was commonly threshed from the shock and immediately marketed. To
handle the great quantities, grain “elevators” were built at the
railroad stations, tall, ungainly structures with conveniences for
weighing in, lifting, weighing out, and spouting into waiting freight
cars. At terminals were erected elevators for cleaning and drying
grain, as well as for storage for many thousands or millions of
bushels. The country elevator was also convenient for the small farmer,
who was saved the cost of building a granary of high-priced lumber from
distant pineries.
Early settlers in the Northwest had found spring wheat, with its power
of rapid growth in the long sunshine of high latitudes, a better crop
than winter wheat, occupying the soil for two seasons and liable to
winter kill. But the spring wheat berry, although of higher nutritive
value than that of winter wheat, had a flinty envelope and yielded a
flour too dark in color to suit the market. A revolution in the process
of milling presently reversed the places of the two flours. Milling had
already advanced so far beyond the primitive separation of flour from
bran by hand sifting as to segregate a residuum of coarser granules,
called “middlings,” which, subjected to a second grinding, yielded a
low grade flour. It had been discovered also that these middlings
contained the more nutritive elements of the wheat berry, and it had
been a problem how to recover them. French millers were in possession
of a method for its partial solution. George H. Christian of
Minneapolis had long studied on the problem, and in 1870 employed a
French immigrant named La Croix to construct a rude apparatus in his
mill at Minneapolis. This was the germ of the “middlings purifier,”
soon developed and installed in all mills using spring wheat. Receiving
middlings from the first grinding, the machine by use of sieves and air
currents separated out the pure wheat granules. These were reground and
“bolted” into two or more grades of flour. The first grade was put on
the market as “Minnesota Patent,” and for a time commanded a price of
three dollars a barrel above any other. The same principles, refined
upon, have resulted in the more modern process of “gradual reduction”
by means of rollers, displacing the immemorial millstones.
The rapid development of a great milling centre at the Falls of St.
Anthony opened a market for the spring wheat, which could not otherwise
have been grown. The Minnesota crop of fifteen million of bushels in
1870 was to be doubled in 1875. The patent milling process gave to
Minneapolis an advantage soon apparent in the multiplication not only
of flour mills, but of industries ancillary thereto. The manufacture of
lumber out of logs from the pineries of the upper Mississippi and its
tributaries, which had been her leading industry, now took a second but
still important place. The city of Saint Anthony’s Falls had suffered
by the migration of many of her most capable men of affairs to “the
west side,” where Minneapolis sprang into being as by magic when the
military reservation was reduced in the middle of the fifties. The new
city soon outstripped the old in population, in manufacturing, and in
merchandizing. At length it became apparent that there was no propriety
in the maintenance of separate municipal organizations at the falls. By
virtue of an act of the legislature, approved February 28, 1872, the
older city lost its name and became the east division of Minneapolis.
The regrets of some of her oldest citizens were mitigated by the
suggestion that the Minneapolis thus enlarged might some day become the
rival of Minnesota’s capital city in wealth and numbers, if not in
political importance.
The land grant railroads, rapidly extended after the Civil War, had
occasioned the building of new towns, the opening of new farms, the
production of more millions of bushels of wheat, to be passed through
more elevators and carried in more freight cars to more mills, for
conversion into more thousands of barrels of Minnesota Patent flour.
All these called for more miles of railroad, and the revolving game
went merrily on for some years. So obvious were the advantages of
railroad transportation that every possible inducement was held out to
invite construction. Rights of way and bonuses in the shape of town,
county, and city bonds were willingly bestowed. State and municipal
authorities were so indulgent and generous that railroad “interests”
came to expect the fulfillment of any requisitions they should please
to make. A crowning example of this confidence has been given in the
so-called “land grab” of 1871, whose consummation lacked only the
approval of Governor Austin. But under this seeming of prosperity for
the public and the people whose wealth was going into the railroads
there was trouble brewing. Transportation did not come as cheap as the
public was expecting from corporations, which had received from
Congress public lands worth about $10,000 per mile at government
prices, to aid them in building. Five cents per mile passenger fare
seemed exorbitant, as did freight rates ranging from seven cents to
sixty cents per ton mile. The immense loans made by sale of bonds were
understood to be part of a policy of the corporation managers to get
their roads built on credit, and to hold the lands, released from the
primary mortgages, for speculation. There were abundant innuendoes
thrown out in political campaigns that public officials, especially
members of legislative bodies, national, state, and municipal, had not
been losers by the grants and indulgences showered on the corporations.
It is improbable that many individuals were thus persuaded or enriched
by large benefactions. When the whole community were ready to grant
everything a railroad company could ask, there was little need for
“graft.”
Chief, however, among all causes of exasperation were the frequent and
notorious discriminations in favor of some individuals, industries, and
places against others. By the connivance of one or more companies the
fuel supply of a city was put into the hands of a single firm or
clique. The big shipper generally was conceded a better rate than his
small competitors. But it must be said that at terminal points and
junctions, where shippers had the choice of two or more lines, they
sometimes forced the hungry traffic managers to offer rates by no means
agreeable or profitable. When the rate per hundred pounds on
merchandise from New York by way of the lakes to St. Paul, including
156 miles of railroad haul, was 35 cents, that from St. Paul to
Faribault, 56 miles, was 39 cents. The state constitution contained
(and still contains) the provision that all common carriers enjoying
right of way for public use shall carry the mineral, agricultural, and
other productions of the state “on equal and reasonable terms.” The
farmers could not see that a rate on wheat from Owatonna to Winona of
2.6 cents, and one of 6 cents from Rochester, 40 miles on the road
nearer Winona, were “equal”; nor could the people of Faribault and
vicinity see what justice there was in paying $29.50 freight per
carload of lumber from the falls, while residents of Owatonna, 15 miles
farther on, should enjoy a rate of $18.
As early as 1866, in his inaugural address to the legislature, Governor
Marshall had advised that body to be looking out “for the interests of
the people against possible oppression from these corporations, which
will soon be a power in the land.” In his message of 1867 he suggested
that it was time to attach proper terms and conditions to railroad aid.
He did not like the withdrawal of ten million acres of land from the
operation of the homestead act.
Governor Austin, in his inaugural address of 1870, went no further than
to ask the attention of the legislature to the complaints of railroad
extortions and discriminations, and the use of the constitutional
powers possessed by it for their abatement. His first annual message,
delivered one year later, is a notable document in the literature of
railroad regulation. It may be questioned whether there was another
state executive in the country ready at that time to nail any such
array of theses on the doors of the capitol. His propositions, briefed
out of his text, were: 1. All special railroad charters not put into
operation within ten days after consummation, to be void. 2. Every
railroad corporation doing business within the state to maintain a
public office within the state, and keep therein records of the
officials, capitalization, assets, and liabilities. 3. No new road to
be built parallel to an existing road. 4. All railroads in the state to
be public highways free to all persons for transportation at reasonable
charges. 5. No railroad company to issue any stocks and bonds except
for money, labor, or property actually received and applied to the
purposes of the corporation; all fictitious stocks and bonds to be
void, and no increase of either, unless in a manner prescribed by law.
6. The state’s right of eminent domain to apply to railroad as to other
property. 7. Adequate penalties, extending if deemed necessary to
forfeiture of property and franchise, to be provided for unjust
discrimination or extortion. 8. Finally, the creation of a national
railroad commission for the regulation of commerce by rail and
otherwise among the several states.
It is remarkable that the same legislature which passed the 500,000
acre land grab also enacted one of the first and most stringent acts
for railroad regulation. It is chapter 24 of the General Laws of 1871.
It classified all freight and fixed a maximum rate for each of the five
classes, according to distance. It determined a maximum passenger fare
of five cents per mile. It declared all railroads in the state to be
public highways, and fixed a penalty of $1000 for every denial of the
right of any person to travel or ship goods at the prescribed rates.
The law finally declared the rates therein established to be “maximum
reasonable rates,” and any corporation demanding or receiving more
should, on conviction, forfeit its charter.
The same legislature (1871) provided for the appointment by the
governor of a state railroad commissioner to observe the behavior of
the corporations under the new law. The first incumbent was General
Alonzo J. Edgerton, who had given proof of ability by gallant military
service and successful practice as an attorney. The three reports of
this official are a pitiful record of the unequal struggle of the
legislatures with their informally confederate creatures, the railroad
corporations. To the regulative act of 1871 the corporations gave not
the slightest heed, partly on the ground of their rights as
quasi-persons, partly because in their territorial charters they had
been authorized to make “reasonable charges” for services, and the
legislature had not reserved the right to determine what charges were
reasonable. If some of the roads somewhat abated their rates, it was
not because of the legal mandate. Gross discriminations continued to be
practiced. The evasion of taxes by the companies by various devices
added to public exasperation. The commissioner was gratified to have
exacted an increase of railroad taxes from $56,505.54 in 1871 to
$106,876.35 in the year after, and regretted his inability to reach
$250,000 more illegally withheld. One company, the Minnesota Central,
sold its entire railroad property to the Milwaukee interest, retaining
its unsold lands, and claimed to survive as a railroad company entitled
to hold its lands free of taxation. For lack of authority to make
personal inspections of company accounts and property the commissioner
could not verify their reluctant reports, which, because not made on a
prescribed uniform plan, were of slight practical service. In his
report for 1873 he reminded the legislature that the companies, which
had by the beginning of that year constructed 1900 miles of road, had
received from the nation, state, and municipalities, grants and gifts
to the value of $51,000,000, being about $27,000 per mile of completed
road. The average necessary cost of construction and equipment,
according to an expert computation, would have been a trifle over
$23,000 to the mile. In that year the bonded debt of the roads amounted
to $54,500,000. The aggregate of capital stock, $20,000,000, raised the
“capitalization” of the roads to $74,500,000; nearly $48,000 per mile.
Only nominal amounts of stock-proceeds had gone into construction and
equipment, and there were wide margins between the face value of the
bonds sold and the actual expenditures. In some instances, says the
commissioner, not more than forty per cent. went into construction. In
these years in which building was going on so swimmingly, operation was
far from encouraging. The managers had been more concerned to increase
mileage than to build substantially. Heavy grades, sharp curves, and
slight construction were the result. The iron rails weighed for the
most part but fifty pounds to the yard. Equipment corresponded, of
course, with track and rail. The amount of business obtained at the
fares and rates exacted was disappointingly small. After the grain crop
was moved the amount of paying freight was meagre and backloading
trifling in amount. Operating expenses rose to eighty per cent. of the
gross earnings. The balance of earnings and expenses for the year 1873
was but $1,400,000 for all the Minnesota roads, a sum which must have
seemed pitifully small in the eyes of the men whose money had built
them. The reader need hardly be told that the Minnesota railroad
corporations went down in the crash which came upon the country in
1873. Three defaulted in their interest, two borrowed money to pay it,
two went into receivers’ hands, and others attempted assessments on
their stockholders. In the next four years but eighty-seven miles of
new road were built.
When the roads refused to conform to the law of 1871 it became the duty
of the attorney-general to bring suit for forfeiture of charters, the
prescribed penalty for disobedience. John D. Blake and others sued the
Winona and St. Peter Railroad Company in the district court of Olmstead
County, alleging that said corporation had exacted for a certain
service one dollar and ninety-nine cents, whereas the statute had
determined the sum of fifty-seven cents to be the reasonable maximum
charge. This court held, with the defending company, that the
legislature had no power under the constitution to fix and determine
railroad rates. The state intervened and the case was appealed to the
Supreme Court of Minnesota, which reversed the decision of the court
below, thus sustaining the validity of the act of 1871. The case was
then carried to the Supreme Court of the United States and was numbered
among the well-known “granger cases,” held under consideration for four
years and disposed of according to the principles laid down by that
court in the case of Munn _vs._ Illinois. In the “Blake case,” decided
in October, 1876, it was held that the legislature of Minnesota was
within its constitutional powers in regulating and fixing railroad
rates and charges and prescribing penalties for violations of her laws
in that behalf.
In this interval the prostrated and nearly bankrupt corporations were
in no condition to conduct themselves offensively. In 1874 a state
board of three railroad commissioners was created. Mr. Edgerton was
retained as a member, with Ex-Governor Marshall as one of his
colleagues. Under their powers they made and published a complete
schedule of reasonable maximum fares and rates according to distances,
and reported at the close of the year a general and substantial
compliance on the part of the companies. Their representatives showed
such good nature and made such fair showing of their meagre profits
that the commissioners found good reason to allow them all they could
reasonably claim. This led to the suggestion that the commissioners had
been deluded or corrupted by the smart and able railroad men. The next
legislature (1875) accordingly replaced them with a single commissioner
to be chosen by the electors, with such meagre powers as to justify a
guess that some ingenious railroad attorney drafted the bill.
Ex-Governor Marshall held the office for six years, discharging the
duties with admirable discretion.
As an example of the liberality, not to say criminal recklessness, with
which railroad operators in the decade following the Civil War made use
of other people’s money, it will be well to follow the fortunes of one
of the great land grant companies. The Minnesota and Pacific Railroad
Company was one of the four corporations created by special act in 1857
to receive the colossal land grant made in that year to aid railroad
building in Minnesota. This company was obligated to build from
Stillwater via St. Anthony to Breckenridge, and from St. Anthony to St.
Vincent, a hamlet on the Red River near the crossing of the Canadian
boundary. Along with the rest it defaulted, and in the summer of 1860
its property and franchises were sold to the state upon foreclosure. An
effort to recover these by conforming to conditions imposed by the
legislature as already stated, proved abortive. In 1862, however, the
franchises, rights of way, the land grant, and other property thus
forfeited were bestowed upon a new corporation styled the St. Paul and
Pacific Railroad Company, which built ten miles of road that year and
opened business between St. Paul and St. Anthony. The year after,
seventeen and one half miles of track were added, and trains run to
Anoka. This rate of progress did not satisfy the corporation nor the
expectant people. Circumstances not now well known opened the way for
borrowing money in Holland. To give the great enterprise a less
tremendous aspect, it was resolved to separate it, so that the portions
of road lying in districts already settling up might be immediately
“financed,” while those running to distant regions known only to
hunters and Indian traders might be left to the future. Accordingly in
1864, under legislative authority, a new and separate corporation was
formed by the interests controlling the existing company, under the
name and style of “The First Division of the St. Paul and Pacific
Railroad Company.” To this new company was transferred the “main line”
from St. Paul to Breckenridge and the “branch” from St. Anthony to St.
Cloud. The early building of these lines within the bounds of
civilization would not, it was believed, appear a romantic undertaking
to investors. The scheme had its intended effect. Money poured in
galore. When the “branch” was finished to St. Cloud in 1866 (76 miles),
$7,000,000 of bonds had been sold. That amount of cash would have built
350 miles of road, as roads were then built in level regions. Five
years later (1871) the “main line” reached the Red River at
Breckenridge (217 miles), and the bond issue had been swelled to
$13,500,000. The two lines might have been built for much less than
half as many dollars. Upon the completion of the main line and branch
it was believed to be feasible and judicious to go on with the
construction of the remaining mileage retained by the original St. Paul
and Pacific Company. This consisted of the so-called “extensions”: the
“St. Vincent Extension,” from St. Cloud to the Canada line on the Red
River, and the trifling “Brainerd Extension,” from St. Cloud to Crow
Wing. To build these a loan of $15,000,000 was obtained in Holland. The
bonds were placed at seventy-five cents on the dollar, and twenty-one
per cent. of the proceeds were retained to meet three years’ interest.
These discounts left a little short of $9,000,000 in available cash.
This amount would have built and equipped both the extensions (about
470 miles) according to the building standards of the time. In
November, 1872, the money was all gone and there had been built 140
miles of road, 100 miles having no connection with the existing
portions of the system. Collections of rails, ties, and bridge
material, not actually paid for, remained on hand, a useless asset. In
his message to the legislature of 1873 Governor Austin characterized
the finance of the companies by implication as injudicious and
dishonest, and vaguely suggested that the just claims of the foreigners
should be consulted. The lawmakers, however, were disposed to allow the
foreign investors, who had placed their funds according to their own
judgment, to use their own wits to recover their losses. It is
difficult to see what relief the legislature could lawfully have
rendered.
That body had no sooner adjourned than in May (1873) the companies
defaulted on their interest. Two corporations, parent and child, owned
433 miles of railroad of light construction and equipment, on which
rested $28,000,000 of bonded debt running at seven per cent., and the
net earnings for the previous year had been $112,745.57. In August the
United States District Court for Minnesota put the mother corporation
into the hands of a receiver, but left the stockholders and bondholders
of the “First Division” company to wrestle with the business under
their legal and stipulated powers. The legislature had in separate acts
authorized the bondholders of that company to vote for directors, who
might be foreigners, any or all, and provided that meetings of
directors might be held abroad. The fact that the Northern Pacific
Railroad “interest” had held the major number of shares in both of the
Minnesota companies does not modify the foregoing account, but points
to the quarter in which to seek for the residence of responsibility, in
part at least, for a series of operations hard to account for on
presumptions of honesty and common sense. The reader may be curious to
follow further, on a subsequent page, the story of the St. Paul and
Pacific.
* * * * *
The panic of 1873 was a typical example. An era of great prosperity had
induced a fever of speculation which had spread through all social
strata. Not railroads only but ships, mills, factories, mines,
fisheries, farms had been built or bought with small sums of ready cash
and large sums in mortgage notes. A huge cloud of debt rested over the
land. Transactions were so rapid and enormous that bankers loaned out
their swelling deposits with a reckless eagerness. One fine morning
some conservative institution refused a new discount or declined to
renew a customer’s paper. That customer could not pay his creditors,
and those could not pay theirs. By nightfall alarm had spread wherever
the telegraph lines extended. The next day there were no bank deposits
of cash, and credit transactions ceased. Securities offered on the
market by hard pressed debtors began to drop, and presently all forms
of property depreciated. In the general distrust which ensued, all
kinds of industries and business languished, and months passed before
even the more modest of credit operations were adventured. Years passed
before the full tide of prosperity was again in flow. In a country
still new, where capital was small and opportunities for credit
operations great, the havoc wrought was extreme. Liquidation and
recovery were correspondingly tardy. In Minnesota the panic was
accompanied by two disasters which added much to the general
discouragement.
The morning of January 7, 1873, opened clear and bright over the south
half of Minnesota, with no signs of foul weather in the sky. The
country people had left their homes on their usual errands to mill, to
post-office, to town, to distant wood lots or fields, without thought
of danger. Soon after midday those who were still on the road were
overtaken by one of those terrible winter storms known to old voyageurs
as “blizzards.” The most learned authority in America on English usage
has recently made the statement that the word “blizzard” is not more
than twenty-five years old. It was in common use in Minnesota in the
fifties. In a true blizzard the air is so completely filled with a fine
granular snow as to cause absolute darkness. It is, as on this
occasion, frequently accompanied by a furious wind. The temperature may
or may not be excessively low. The voyageur did not attempt to travel
when a blizzard overtook him, but got behind and beneath such shelter
as he could find or make, and waited for it to blow over. These
inexperienced Minnesota settlers pressed on, wandered from the unfenced
roads, and if they found shelter it was by good fortune. Many perished
in the terrible gusts which swept the prairie. The weather did not
clear till the third day. The first accounts estimated the number of
lives lost at many hundreds, but when the state statistician collated
the local reports sent in he was happy to find that not more than
seventy persons had perished. A much greater number, of course, were
frost-bitten and maimed. There were cases in which farmers had been
either injured or destroyed while attempting to reach their houses from
their barns and fields. There has been no blizzard of any notable
severity in Minnesota since this of 1873.
In June of the same year a southwest wind brought over the western
border, south of Big Stone Lake, swarms of the Rocky Mountain locust
(_Melanoplus spretus_), which soon spread themselves over large parts
of fourteen southwestern counties as well as a considerable area of
northwestern Iowa. Because not learned enough in entomology to
distinguish, the people supposed these locusts to be grasshoppers, and
soon adopted the abbreviated form “hoppers.” The growing crops were
presently devoured. Settlers who had made their first plantings were
impoverished and had to accept the generous aid of neighbors. The area
visited was small compared with that of the state and its settled
portions, and it was not conceived that grasshoppers could survive a
Minnesota winter. The legislature of 1874 made an appropriation of
$5000 to relieve cases of complete destitution, and another of $25,000
to be advanced to the farmers for the purchase of seed.
In July of this year (1874), to the astonishment of all, innumerable
multitudes of “hoppers” suddenly appeared as if rising out of the
ground; and they did so rise. In the previous fall the female locusts
had deposited in cylindrical wells about an inch deep and one fourth of
an inch in diameter, hollowed out on high ground, clusters of eggs
inclosed in protecting envelopes and covered with soil. The midsummer
heat hatched these eggs, and the brood at once fell on the growing
crops. In a few days not a spear was left over large areas, and the
hoppers had grown wings. Taking wing as if by a common inspiration,
they flew over into Blue Earth, Sibley, Nicollet, and Renville
counties, where they repeated the devastation of the previous season.
But the counties thus abandoned were again in many places infested by
fresh swarms from the southwest. In all twenty-eight counties were
visited in 1874. Upon an appeal from the governor a subscription was
opened for the relief of stricken settlers. General Sibley, at his
request, undertook the disbursement, and later accounted for $19,000.
The legislature of the following winter set aside $45,000 for immediate
relief and $75,000 for seed, the latter sum to be repaid along with
taxes. The devastations of 1875 did not extend more widely and were
somewhat less damaging, but they added not a little to the
discouragement and gloom resulting from the panic.
* * * * *
The Republican party was so completely in the ascendant in the
seventies in Minnesota that the only political events of importance
were those which occurred in its ranks. United States Senator Daniel S.
Norton died July 13, 1870, and it fell to the legislature assembling in
the January following to elect his successor. It took but a single
ballot in the Republican caucus to decide who should be Senator
Ramsey’s colleague. William Windom had given such satisfaction by his
five consecutive terms as representative in Congress from the first
district that, Mr. Donnelly being out of the road, there was none to
dispute his claim to the promotion. Mr. Windom’s large acquaintance,
his long legislative experience, his sound common sense and Quaker
simplicity of manner at once gave him a standing at the other end of
the capitol not easily accorded to new senators.
President Grant in his message of 1872 advised the Congress to
authorize a committee to investigate the various enterprises for the
more direct and cheaper transportation of the products of the West and
South to the seaboard. The Senate responded by the appointment of a
select committee on transportation routes to the seaboard, with ample
powers for investigation. Senator Windom, as chairman of this
committee, devoted many months to the analysis and interpretation of
the great mass of information and counsel submitted, and to the
preparation of the report in two octavo volumes, printed in the spring
of 1874. Among the novel conclusions of this committee (and some of
them are after the lapse of a generation not familiar to all) were: (1)
that the power of Congress to regulate commerce among the several
states includes the power to aid and facilitate it by the improvement
or creation of channels and ways of transportation; Congress has the
same right to build railroads as canals: hence, (2) the ownership or
control of one or more double-track freight railways; (3) the
improvement of our great natural water ways and their connection by
canals; (4) particularly the improvement of four great channels at
national expense. These were the Mississippi River itself, a route from
the upper Mississippi by way of the great lakes, a route from the same
river by way of the Ohio and Kanawha, and, last, a route from the
Mississippi via the Tennessee; all to be pieced out either by canals or
freight roads. At the present writing Congress is just warming up to
attack the first of these four great enterprises.
As might be supposed, the committee incidentally suggested complete
publicity of all interstate railroad classifications and rates, the
prohibition of combinations with parallel or competing lines, the
receipt for and delivery of grain by quantity, the making it unlawful
for railroad officers to be interested in car or freight line
companies, and the absolute cessation of stock watering. The
proposition of a bureau of commerce to supervise all interstate
railroad operations bore fruit twelve years later in the interstate
commerce commission. Senator Hoar declared this report to be “the most
valuable state paper of modern times.”
The Minnesota Republicans from the beginning had been divided. Opposed
to the old “Ramsey dynasty,” which had controlled the distribution of
government appointments, there was at all times an array of patriotic
gentlemen quite willing to enter the public service, believing
themselves as deserving of party rewards as those on whom Fortune had
smiled. The Civil War liberated from military service many ardent young
Republicans desirous and capable of sharing in public affairs. Among
these was a St. Paul attorney, Cushman Kellogg Davis, a native of
Wisconsin, who had been graduated from the University of Michigan. He
had done good service as a line officer in a Wisconsin regiment and as
a staff officer under General Gorman. His ability and diligence as a
lawyer soon gained him prominence at the bar, and his personal
qualities attached to him a circle of influential friends. He was not
greedy for minor offices, but served in the legislature in 1867 and was
appointed, a year after, United States district attorney, at the
instance of Senator Ramsey. A lecture on “Modern Feudalism” first
delivered in 1870, in which he portrayed the growing dominance of
corporations, gave proof of powers of insight and analysis above the
ordinary. When the Republican state convention met in St. Paul on July
16, 1873, the old dynasty had no other expectation than that the
nomination for governor would fall on its worthy favorite, the Hon.
William D. Washburn. Few expected that Mr. Davis, whose loudest support
had come from an independent St. Paul newspaper, would receive more
than a complimentary vote. On the informal ballot he did not, nor on
the first formal ballot. Three more ballots followed, on the last of
which the favorite of the “young Republicans” was nominated by a vote
of 155 to 152, 154 being necessary to a choice. As Mr. Davis’s
nomination came by a slender majority, so also was his election secured
by a majority of about one fourth of the nominal Republican strength.
His friends had made no secret that the governorship was desired by
them merely as a stepping-stone to a national senatorship. The old
dynasty evidently did not expend much money or labor on that election.
Mr. Davis’s governorship during the years 1874-75, a period of
depression and discouragement, was not marked by notable events. His
messages were admirable for literary style, and, while counseling
economy in expenditure, advised liberality towards the schools and the
university. His radical suggestion as to the unfinished St. Paul and
Pacific Railroad was that the bondholders in control should presently
put up the money to complete the lines, or the state should have them
turned over to responsible parties who would do so.
Senator Ramsey’s second term was expiring in March, 1875, and it was no
secret that he desired and expected a reëlection. Mr. Davis was an
avowed aspirant, but there were other gentlemen who did not intend that
the choice should fall to him in case of Mr. Ramsey’s rejection. The
Republican caucus met on January 14, 1875. Mr. Ramsey’s friends were
far in the lead, and on the last vote of the session lacked but two
votes to nominate. Confident of success, they consented to an
adjournment demanded by the “field.” The field had but one desire in
common, to get Senator Ramsey out of their daylight. On reassembling
the following night one third of the members were absent or did not
vote. The two votes lacking to Mr. Ramsey on the previous evening
appeared, and he was formally nominated. But the vote did not compel
the unanimous support of the Republican members. On the separate voting
in the two houses on January 19, Mr. Ramsey had 60 votes, 74 being
necessary to elect. On the 20th the houses met in joint convention and
proceeded to ballot. Mr. Ramsey received 61 votes, his maximum. Davis
received 24, and at no time any greater number. Mr. Donnelly, the
nominee of the Democrats and “Greeleyized Republicans,” had 51 votes.
The balloting now proceeded from day to day, on most days but one being
had. On the 27th Mr. Donnelly withdrew, alleging that Democratic
members failed to give him the support he was entitled to as a regular
nominee. Hon. William Lochren, a Civil War veteran highly respected for
personal character and legal ability, was put in his place and
commanded the full strength of the opposition, sixty-four votes. On
February 13, after seventeen ballots, Ramsey and Davis were withdrawn,
but it was not till the 19th that the eighty-two Republican votes could
be concentrated on the Hon. S. J. R. McMillan of St. Paul, a highly
respected citizen and a judge of the supreme court. His career in the
national Senate, by no means brilliant, was characterized by such
diligence, good sense, and party fidelity that there was no notable
opposition to his reëlection six years later. Mr. Davis did not seek
reëlection as governor, but resumed his law practice, and not long
after published an ingenious essay on “The Law in Shakespeare.”
The ambition of certain young men, who could well afford to wait, and
who did wait for promotion, lost to the state and nation the services
of a wise and experienced legislator. President Hayes called Mr. Ramsey
into his cabinet as secretary of war, and temporarily devolved on him
the duties of secretary of the navy. Retiring from public life, he
continued for nearly a quarter of a century to enjoy the esteem and
gratitude of citizens of all parties and persuasions. For many years he
presided over the Minnesota Historical Society and its executive
council. He died April 22, 1902.
The legislature of 1860 in a spasm of retrenchment fixed the salary of
the state treasurer at $1000 a year, and it remained at that figure for
a quarter of a century. The business and responsibility increased from
year to year, but no addition was made to compensation. In the absence
of express prohibitory legislation a custom grew up of depositing the
state’s money in banks which paid an interest to the treasurer, the
bank proprietors becoming his sureties. No mischief resulted from this
arrangement. But in one case, at least, that of Emil Munch, a treasurer
did not content himself with merely depositing in banks, but in private
enterprises employed the state’s money to a large amount. By
contrivance or good fortune his brother-in-law, William Seeger,
succeeded him in office, rather than some stranger. This relative
obligingly took the promissory notes of his predecessor and other
“paper” and receipted for them as cash.
The treasurer’s report for 1872 showed a balance of cash in the
treasury of $243,000. A newspaper editor in St. Paul, with no other
motive than, in his own phrase, “to raise hell and sell papers,” gave
expression to the open secret that much of this money was not in fact
in the treasury, as reported, and challenged the Republican legislature
of 1873 to investigate the Republican treasurer. Nothing less could in
decency be done, and the investigation revealed a shortage of $180,000.
The house of representatives passed a resolution of censure and awaited
the resignation of the unlucky official. No resignation appearing, the
same body on March 4 made an “imperative demand” for one. Mr. Seeger
replied in writing, admitting that he had found a deficit on taking
office, but declaring that every dollar had been made good and the
state would suffer no loss. His bondsmen had raised and paid in the
money. The house, however, could not content itself with restitution
alone, and submitted articles of impeachment to the senate. After the
trial had begun, Mr. Seeger offered his resignation, which was accepted
by Governor Austin. The impeachment proceedings, however, went on and
resulted in a conviction. The legislature took the obvious lesson to
heart, and raised the salary of the state treasurer to $4000.
* * * * *
Public education made notable progress in Minnesota during the half
decade beginning with Governor Austin’s administration. The services of
Horace B. Wilson as superintendent of public instruction during the
period advanced the good work begun by his predecessor. Both felt
obliged to argue the cause of public schools to be kept free from
ecclesiastical meddling. It was not, however, till 1877 that the
amendment to the state constitution, forbidding the use of any public
funds or property for the support of sectarian schools was adopted by
the electors. Spite of much unreasoning prejudice against the state
normal schools, they prospered, but were inadequate to supply the
demands of over three thousand common schools for trained teachers.
The faculty of the University of Minnesota, who in September, 1869,
enrolled a small handful of freshmen, saw that dwindling till but two
survived at the end of the four-year course, to be graduated as
bachelors in June, 1873. The time of the teachers was spent and well
spent on the preparatory students who were later to fill the college
classes. The first commencement was celebrated with no little
circumstance, and had its effect on a public not yet certain that the
state had any concern with college education. That question was much
debated in those years, and there were plentiful outpourings of
orthodox denunciation of the state university as hopelessly and
necessarily “infidel” and “godless.” The regents were affected by this
respectable opposition, and unduly moderated their requisitions for
appropriations.
Upon the advice of the president of the university (the author of this
book), the regents in 1870 prematurely adopted a novel plan of
organization. The underlying principle was the fact that the work of
the first two years in American colleges is “secondary” in its nature,
and according to any scientific arrangement should be performed in
secondary institutions. They therefore merged the studies and exercises
of the freshman and sophomore years with those of the preparatory years
into a so-called “Collegiate Department.” The plan was approved by the
highest educational authorities of the country, but the faculty,
conservative and indisposed to break away from tradition, could not
give it a united support. There were but trifling difficulties of
operation, but when a new administration came in, with its differing
interests, the plan was allowed to lapse. The principle has since been
recognized by two leading American universities.
Account has already been taken of the first congressional land grant,
that of February 19, 1851, “reserving” for the support of a territorial
university seventy-two sections of public lands. When the enabling act
of 1857 was before the House of Representatives, Delegate Henry M. Rice
secured a modification of the traditional tender of lands for
university purposes. The enabling acts of Michigan, Wisconsin, and Iowa
had provided that the lands for university support previously reserved
from sale should be granted and conveyed to the respective states.
Delegate Rice quickly saw to it that the corresponding section of the
Minnesota act should read, “that seventy-two sections of land shall be
set apart and reserved for the use and support of a STATE university
_to be_ selected by the governor of the state....” Why no claim was
presented for the additional university reservation, apparently
authorized by the enabling act of 1857, till 1860 is not known, but
when then made, it met with no hospitality. No secretary of the
interior or commissioner of the general land office would construe the
paragraph as having any other intent than to guarantee to the state the
reservation of 1851 made to the territory. The correspondence revealed
the fact that the original reservation had not been “granted and
conveyed” to the state. The mortgages placed on the lands and the
devastations permitted had therefore been illegal. It took an act of
Congress, that of March 2, 1861, donating the lands reserved in 1851,
to remedy this omission.
Ten years ran by after the passage of the enabling act, and Minnesota’s
claim for a double portion of university lands had not been allowed. On
February 8, 1867, the legislature authorized the special board of
regents to employ counsel to prosecute the claim on “a contingent
compensation in land or money.” The person employed rendered such
effective aid to the member from the university district that Congress
was moved to direct the commissioner of the general land office, by an
act approved July 8, 1870, to ignore the reservation of 1851 and allow
Minnesota to take the seventy-two sections mentioned in the enabling
act of 1857. The successful counsel was voted by the regents a
compensation of 1950 acres of land. As these acres were promptly
located in the pine region of Itasca County it may be assumed that the
remuneration was satisfactory.
Upon the initiative of the president of the university the legislature
of 1872 authorized a geological and natural history survey of the
state, and placed the same in charge of the board of regents. In a
later year the twelve sections of land donated by Congress in the
enabling act of 1857 for the development of possible salt springs or
deposits, less some deductions for fruitless exploitations, were turned
over to defray the costs of the survey. Professor Newton H. Winchell
was appointed state geologist, and remained in office for twenty-four
years. The geological results of the operations conducted by himself
and assistants may be found in twenty-four annual reports, ten
bulletins, and a final report in seven quarto volumes. Two additional
volumes of botany and one of zoölogy were published. Much remains to be
done on the natural history branch, and important geological
investigations of scientific interest were left incomplete when that
work was suspended. The survey has been economically worth to the state
far more than it cost, and the reports will remain as a noble monument
to their authors.