On May 4, 1919, Cape Girardeau was abuzz with plans to welcome home the 140th Regiment.
The same citizens, who saw train car after train car of young men depart from Jackson to take up arms in the defense of their country, were preparing to welcome home the soldiers of the 140th, many of them hometown boys.
At the same time, County Court judges in Jackson were making plans for a celebration of a different sort: The burning of $438,400 in canceled railroad bonds. In 1869 voters in Cape Girardeau city and township approved bonds in the amount of $150,000, the money to be used to bring a railroad here. But the bond money was frittered away in mysterious fashion, leaving Cape Girardeau city and township with a massive, crippling debt, a debt that was finally paid off a century ago this month.
Here is the Southeast Missourian's coverage of the bond-burning, as well attorney Robert Whitelaw's history of the 1869 events.
Posing on the steps of the county courthouse in Jackson May 9, 1919, county officials and interested citizens prepared to burn $438,400 in railroad bonds paid off after a long, bitter struggle. Front row, from the left, are Sheriff Jeff Hutson, Judge P.C. Kasten, Presiding Judge William B. Paar and Judge Jacob Keller; back row, from the left, County Clerk Blucher Sperling, Louis Houck, Col. L.M. Bean and, leaning against the pillar, Charles G. Moeder. (Southeast Missourian archive)
Published April 5, 1919, in the Southeast Missourian:
CAPE TOWNSHIP RAILROAD BONDS TO BURN MAY 8
15 Members of Committee Appointed By County Court to Start the Fire.
JACKSON — From the proceedings of the County Court it can be seen that a committee of 15 has been appointed by the court, which committee is to formally burn or otherwise destroy $150,000 worth of Cape Township Railroad Refunding Bonds, which have been paid off and canceled. The statutes provide that three freeholders be appointed as such committee, but the court figured that a larger committee (would) be more appropriate. Arrangements as to any formalities or demonstrations in connection with this duty, is left to the committee, but the day fixed by the court is Thursday May 8. There is no mention of the place where this celebration is to be held.
This committee, composed of citizens of Cape Girardeau, may make the occasion as elaborate as desired. The court, the sheriff and the clerk of the court must be present.
It is an occasion for rejoicing for the citizens of Cape city and township. For 50 years this debt has rested upon every piece of real and personal property in the township and city, and at one time the tax rate was a real burden. Had it not been for the fact that one of the members of the Legislature several years ago had succeeded in having a special bill passed, providing that two-thirds of the dramshop (saloon) licenses in Cape Girardeau must be paid into the Railroad Refunding Tax Fund instead of to the County Revenue Fund, the tax would have been much greater. But as it was, since the passage of this act, the dramshops paid thousands upon thousands of dollars into the fund, thereby materially reducing the burden.
One peculiar incident connected with this bonded indebtedness is that one $1,000 must have been lost or destroyed, as it was never presented for payment. The payments were always made through the Mississippi Valley Trust Company in St. Louis, and that institution has never been able to locate this particular bond. Should it ever show up, it would be worth $1,000 and no more as the interest stops on the day when the County Court "called in" the bond by publication.
The personnel of the committee, it will be seen, includes some of the older men of Cape Girardeau. These were named by Presiding Judge Paar with special reference to the part they had taken in the settling of the debt during the last half century.
No man is better acquainted with the whole transaction than is Mr. (Louis) Houck, and it is hoped that he will be present at the jubilee. Messrs. Willeke, Bergmann, Willer, (Joel T.) Nunn, (D.A.) Glenn, (Robert) Whitelaw and Vogelsang are among those who saw Cape Girardeau come out from under this fearful burden, and are justly entitled to places on this committee.
The younger men of the committee are placed thereon as recognition for the part taken by them in public affairs in the city in later years: William H. Willer, Fred Naeter, M.A. Dempsey, Dr. W.C. Patton, H.H. Haas, R.G. Whitelaw, Richard Carroll and Charles T. Lewis.
Published May 7, 1919, in the Southeast Missourian:
RAILROAD BONDS WILL BE BURNED FRIDAY, MAY 9
Event Postponed Because of the Coming of the 140th Regiment Thursday.
JACKSON -- The County Court this morning rescinded its order for the burning of the Cape Girardeau Township railroad bonds from Thursday until Friday, May 10, because many persons from Cape Girardeau who wanted to be present when the bonds are burned could not be in Jackson Thursday owing to the coming of the 140th Regiment for a parade and reception.
Published May 10, 1919, in the Southeast Missourian:
RAILROAD BONDS BURNED FRIDAY
County Court Consigned $438,400 Worth of Canceled Bonds to Flames.
JACKSON -- Unknown to the majority of the people of Jackson and the county generally, a most important and historic event took place at the courthouse on Friday afternoon, May 9, when the County Court, its clerk, the sheriff and a committee of citizens formally burned $438,400 worth of canceled bonds.
This tremendous indebtedness has all been paid off, after having been a fearful burden for years upon the city of Cape Girardeau and Cape Girardeau Township since the year 1869.
To understand the above amount of bonds it must be understood that at no time was the township and city of Cape Girardeau in debt to any amount like $400,000, but the bonds destroyed last Friday represented the accumulation of bonds which were paid off and those which were from time to time refunded or redeemed by the issuance of new bonds.
In the year 1896, $150,000 worth of bonds were issued, and in the year 1889 the indebtedness had grown to $180,000... In the year 1899 the bonds were again refunded, and by that time the debt had been reduced to $108,000. The extra $400 listed above were the results of an attempt to issue new bonds at one time when only $400 worth were taken and the rest could not be sold.
While the court was in session yesterday afternoon, the delegation of citizens from Cape Girardeau, Louis Houck, C.G. Moeder, George H. Meyer and J.T. McDonald, took their place in the court room.
Louis Houck, being not only a historian but having been closely identified with the affairs of the county for 50 years, was called upon to say a few words, and he responded with a most interesting review of the whole transaction, from the year 1869 to the present date.
County Clerk Sperling then read a similar statement from the pen of Judge William Paar, who is known among his friends as the walking encyclopedia. The judge being nearly 70 years old, can remembers a good deal of the history of the bond issue and subsequent adjustment of the debt. (The remarks of Mr. Houck and Judge Paar will be published in The Missourian next week.)
The party then proceeded to the basement of the courthouse, where the beautifully lithographed papers were consigned to the furnace.
Published May 10, 1919, in the Southeast Missourian:
HON. ROBT. H. WHITELAW GIVES HISTORY OF TOWNSHIP RAIL BONDS
At the burning of the Cape Township railroad bonds in Jackson Friday, Hon. Robert H. Whitelaw, who represented Cape Giraredeau County in the Legislature and secured the enactment of the laws compromising the debt, submitted the following statement covering the matter from beginning to end. Mr. Whitelaw is probably better prepared than any other citizen to review this most important proposition and this article should prove of historical interest and value to all citizens of Cape County.
Railroad Bonded Debt
Just after the Civil War, the people all over this country became obsessed with the idea that the question of transportation was the most important one confronting the various communities throughout the country and every community was ambitious to secure such transportation, by means of the railroad. Railroad construction was the craze of the hour and the various communities strained every effort and offered every inducement within their power to secure such communication with the outside world.
The little city of Cape Girardeau was no exception and it grabbed at every straw that even pointed towards the building of a railroad.
This city in 1869 had a population of less than 3,000 inhabitants, but its commercial interests extended south for over 100 miles distant.
The Mississippi River was the only avenue of communication with St. Louis or Memphis and in the winter time it was sometimes frozen over so the boats could not run. Before the Civil War there was not a railroad to the south of it on the river.
On the 31st day of December, 1859 the Legislature passed an act to incorporate the "Pilot Knob, Cape Girardeau and Belmont R.R. Co.," which authorized the construction of a railroad from Pilot Knob in Iron County to the city of Cape Girardeau and thence on to Belmont. On Feb. 18, 1869, the above Act was amended by changing the name to the "Cape Girardeau and State Line Railroad Company."
In 1868 the Legislature passed what was known as the "Railroad Enabling Act" authorizing townships in the state to vote bonds to aid in the construction of railroads.
In 1869 the St. Louis and Iron Mountain Railroad Company had with an evident purpose of injuring this county and especially the citizens of Jackson and Cape Girardeau, built a railroad 16 miles south of them. We in the city of Cape Girardeau were compelled to patronize the Iron Mountain Railroad during the winter months when the river was frozen over and the boats could not run, and the drive from here to Allenville, 16 miles away, in a hack was something always to be dreaded and never forgotten
Cape County Wronged
The people were determined to have a railroad and in order to encourage the construction of one, the city of Cape Girardeau and the township of Cape Girardeau held an election to vote bonds amounting to $150,000 for the city and $150,000 for the township or in all $300,000 for both city and township to aid in the construction of the Cape Girardeau and State Line Railroad, which had been organized by some imitation capitalists. (Emphasis added. - Sharon)
The bonds issued by the city and township, amounting to $300,000, were turned over to the parties representing this corporation and were sold on the market and the money squandered or pocketed by the parties.
They did, however, acquire the right of way for a railroad, for which they paid absolutely nothing for a distance of about 40 miles, running from this city in the southwesterly direction toward Poplar Bluff, and they did build a dump for some miles and put up some bridges and build some culverts, etc., and laid about two miles of rails.
They bought an old worn out locomotive and several cars, and I remember that on one occasion they gave an excursion from the city down to what was called "The Blue Hole" about a mile below town.
The people were intoxicated over the prospects of having a railroad. In a short time the money was all squandered and the contractors commenced to demand their pay for the work and material that entered into the road. Liens were filed and suits brought to collect the money and judgments were obtained; executions were issued and levied on the right-of-way and it was sold to satisfy them.
Little Engine Away on Boat
The little old engine was loaded on a flat boat and taken somewhere up the river, I suppose to St. Louis. The right-of-way was bought in by J. and S. Albert and Col. P.R. Van Frank, the judgment creditors. I do not remember how much it brought. The matter remained in abeyance for a number of years, when Mr. Louis Houck one of our enterprising citizens, and whose real estate holdings and the holdings of Mrs. Houck were very large, prompted by the ambition which has ever characterized his citizenship, determined to make an effort to extricate the city from its lethargy and threatened destruction, made a proposition to the citizens that if they would make some arrangement by which he could acquire the right-of-way that he would build the railroad.
The claims of the Alberts and Van Frank amounted to about $7,000 and they agreed to take that for their title to the road-bed. A collection was taken up among the citizens and that amount was raised by private subscription and paid to the Alberts and Van Frank, and they conveyed their interest in the road-bed to Mr. Houck, or to a corporation organized by him which I believe was called the Cape Girardeau Railway Co., which was afterwards changed to the Cape Girardeau Southwestern Railway Company.
It was said that Mr. Houck pledged not only all the real estate that he owned, but some that was owned by Mrs. Houck to raise the money to commence to build the railroad. It was certainly one of the most heroic acts ever performed by any one man in this part of the state. The road was many years thereafter acquired by the Frisco Railway Company which extended it south, one line to Poplar Bluff and the other to Memphis, Tennessee, and north to St. Louis from this city.
Out in Bates County, a situation similar to ours arose, and the people out there refused to pay the taxes levied to pay off the bond. Suit was filed on the bond and the county defended on the ground that the law under which the bonds had been issued was unconstitutional and void. The constitution of this state required that the bonds could only be issued by a two-thirds vote of the voters casting their vote for issuing the bonds, while the statute under which these bonds had been issued simply required a majority of the qualified voters, voting in the affirmative in order to issue the bonds. The Supreme Court of the United States, in the Bates County case, held that the bonds were illegal and the law under which they were issued was unconstitutional
Published May 12, 1919, in the Southeast Missourian:
HON. ROBT. H. WHITELAW GIVES HISTORY OF TOWN RAIL BONDS
(Continued from Saturday)
People Rudely Awakened
After the decision was rendered by the highest judicial tribunal in the world, the Supreme Court of the United States, no effort was made by our County Court to levy and collect this tax from our people, believing that the decision of the Supreme Court was a final adjudication of the matter, and not having received any valuable consideration for the bonds issued for this township, the consciences of the people were not even disturbed by the supposed loss of the bond-holders. But they were destined to be disappointed.
Gen. John B. Henderson, who at one time represented this state in the United States Senate, had a father-in-law by the name of Foote, who it was said furnished him with the money, and he went around and bought up all of the bonds that he could at 10 cents on the dollar, and at the proper time made a motion for a rehearing in the Bates County case.
The matter hung fire for several years, but one beautiful day, that august tribunal, the Supreme Court of the United States, rendered an opinion, which in effect destroyed its previous judgment, by holding that the bonds were valid and binding so far as innocent holders and purchasers were concerned.
Of course no one who in any way was either a purchaser or holder of any of these bonds had any notice of any defect in the law and all were innocent purchases for value, etc.
Some years afterwards, Gov. Thomas T. Crittenden told me that he happened to be in Washington City after Gen. Henderson had submitted his motion for a rehearing to the Supreme Court in the Bates County case. Gen. Henderson and Gov. Crittenden had been friends for many years and they met there. Gen. Henderson told Gov. Crittenden that he was expecting an opinion from the Supreme Court the next day, on his motion for a rehearing in the Bates County case, and that if he lost it he was a busted individual, but that if the decision was in his favor he would be a wealthy man. He said he had just $20 left, and proposed to Gov. Crittenden that they go to the theater that night and blow in the 20, which they proceeded to do. The next day the Supreme Court decided the case in Gen. Henderson's favor, and he became a very wealthy man.
Our township indebtedness had accumulated until the interest was sky high, something like $300,000 and with our city indebtedness on which we were paying, the whole amount must have been about $600,000, which by the decision of the Supreme Court was a binding obligation on this city to pay, because the city was the principal part of the township, so far as taxes were concerned.
With this indebtedness of approximately $600,000 hanging over us the bottom dropped out of the value of real estate. The people lost hart, and many of them sold out for whatever they could get for their property and moved away. It was indeed a dark and dreary outlook for our little city. During this period some public sales took place. That then magnificent property, the Riverview Hotel, which had cost Thomas Rodney about $50,000 to remodel and furnish, was sold in partition, with a clear title for the pitiful sum of $2,600.
The St. Charles Hotel fared a little better. It brought about $6,000, when it was worth about $25,000 in ordinary times. Other property was sold at the same reduced rates.
Blight on the Town
Grass was actually growing in the main streets of the city and hogs and cattle roamed around unrestrained, at their sweet will. It was simply terrible. No one living here now who did not live here then can appreciate the situation that existed. Cut off from the outside world by a railroad having been built 16 miles to the south of us and with an indebtedness of over half a million dollars to pay, which was a lien upon every foot of real estate in the city and township, the stoutest heart lost all hope of ever redeeming the city from its bondage or restoring it to its past glory.
Mr. Henderson, out of the kindness of his heart, made a proposition to the property owners that if they would issue new bonds and take up the old ones he was willing to accept 50 cents on the dollar in full payment of the indebtedness. Even with this apparent generous offer we could not at first see our way clear to accept the offer, but it was the very best that could be done at the time, and after the law hereinafter mentioned was passed, the offer was finally accepted.
In the year 1887 I became a member of the state Legislature from this county, having previously served as a member. It was absolutely necessary to do something to save the city and the township of Cape Girardeau from bankruptcy. At that time our county was entirely out of debt and had over $60,000 in the permanent school fund loaned out at interest. We had about 25 saloons in this city that paid a license tax to the county of $350 per year each. The county did not need this money and this township did and that very badly. Before going to Jefferson City I discussed with my friends the best method, if any could be devised, of helping the city and township, and to save it from bankruptcy.
How Revenue Was Obtained
I discussed the matter with Louis Houck, who was a very warm friend of mine at that time, and I think Mr. Houck suggested the dramshop license to me. I have always thought that the city owed more to Mr. Houck than to any other man dead or alive for the interest he had taken in its affairs, and it is more than likely that I submitted my plans to him.
I drew up the bill that eventually emancipated the township from the bonds that had been issued to aid in the construction of the road that we never got. And as soon as the Legislature met in January I introduced the bill that gave to the township the benefit of two-thirds of the revenue collected by the county from the dramshops in the township, for the purpose of paying off our railroad debt.
The bill provided that two-thirds of the revenue derived from the licenses for county purposes collected in the township, etc., should be appropriated by the County Court toward the payment of the debt contracted in aid of the construction of the railroads where it had been or was compromised in the future.
It passed the Legislature and became a law after which the proposition made by Gen. Henderson was submitted to a vote of the people and the debt compromised. It was an unusual bill and applied to every county in the state similarly situated. I left no stone un-turned to get the bill passed. Southeast Missouri had some very able representatives in that Legislature, both in the senate and in the house, and they all to a man helped me out. They were loyal to their section, and loyal to their friends, and some of them have made their mark in the world. Most of them -- thank God -- are still living.
Those Who Helped
On the north Perry County was represented by Edward Robb, Washington County by Dr. (William) Goodykoentz, Madison by Dr. F.R. Newberry, Ste. Genevieve by Henry S. Shaw, Bollinger by Dr. John I. Ellis, Scott by Dr. T.F. Frasier, Mississippi by Joseph J. Russel, New Madrid by A.R. Hunter, Pemiscot by H.C. Garrett, Stoddard by Dr. Joseph S. Richardson and Dunklin by T.R.R. Ely. In the senate Hon. William Hunter and Hon. Madison R. Smith represented this immediate part of the state. What a galaxy of grand and noble men. Shaw, Newberry, Richardson and Ellis have paid the debt that we will all be called upon to pay sooner or later, but they have left behind them records that have indelibly stamped their value upon the history of Southeast Missouri. No truer friends ever lived or died, and they always had the very best interest of Southeast Missouri at heart.
The bill was referred to the judiciary committee, of which I was a member. In due time it was reported out favorably. Even in those days some of the members of the Legislature, looked upon the existence of the dramshop in a community as some do now, as a curse to the community in which they were allowed to exist. I took the position that if they were a curse the community that put up with and suffered the curse to exist should received the benefits, if any, that were derived from the presence of the saloon.
The bill was called up for final passage and passed by a large majority. Rather an amusing thing occurred when it was passed. I had a very deer friend George A. Mahan, who represented Marion County Mahon voted for the bill. After having cast his vote he came over to my desk and told me that he would have to move over to Illinois from Hannibal on account of his vote for my bill; that the people of Marion County would give him fits for his vote, etc. I was on very friendly terms with the chief clerk, John A. Hanney, and I at once went up to the clerk's desk and asked John if he would not please let the record show that George Mahan had voted against the bill, which I think he did, but of this I am not certain. At any rate some time after that I met the sheriff of Marion County on the train and he told me that the people up there understood that Mahon had voted for this bill. I told him that the record did not so show, but he said they had heard all about it and that George Mahan had actually voted for the bill. However, Mr. Mahan did not have to leave Missouri, but is today one of the most highly respected and honored citizens of Marion County. When the bill reached the senate it received the warm support of not only our senators, Hons. William Hunter and M.R. Smith, but was also championed by that prince of gentlemen, Hon. David A. Ball of Pike County.
New Law Great Help
Well, the bill became a law and those who are not familiar with the situation cannot realize what an important effect it had on the future of Cape Girardeau. Mr. Henderson made a formal proposition to accept 50 cents on the dollar for the bonds, an election was held as soon as it could be and the people voted to compromise the indebtedness and it was compromised and the new bonds were issued. Two-thirds of the saloon licenses arising in this township were appropriated toward the payment of the indebtedness and now without the people having felt the burden, it has been lifted from their property and has been forever paid and canceled.
After the enactment of the law, property took a rise; the city has quadrupled in population and vacant lots that you could hardly give away have been selling for from $50 to $75 a front foot, and it all comes about by the enactment of that little law. And we have railroads running to this city from every direction without having had to contribute one cent to induce them to come here.
During that session of the Legislature, Lowndes H. Davis, who had formerly been a member of the Legislature from this county, and who had always been a warm personal friend of mine, and who was at one time a member of Congress from this district, sent me a U.S. map. Upon the back of this map was written in his handwriting the following inscription: "To my friend, Robert H. Whitelaw, the best representative his township ever had in the Missouri Legislature." I do not know whether Lowndes intended it as a compliment or otherwise.
I did not take offense at him for the inscription but let it go for what it was worth. If it suited him, it did me and I let it go at that.
And now the final act of the tragedy is about to be performed. The debt that came so near wrecking one of the finest and best little cities in the state of Missouri has been paid off, without having been a burden upon the taxpayers, and the evidence of that debt, the bonds, are to be canceled and forever destroyed.
And the citizens of this city should see to it that in the future no more obligations are ever issued, unless we get value received for them. My advice to them, however, is to beware of issuing bonds, as ordinarily they have to be paid in full and nothing detracts from the prosperity of a city like a bonded indebtedness.