The Hesperian / (Lincoln, Neb.) 1885-1899, April 15, 1891, Page 2, Image 2

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Puhlln AnilHtanra to ItnllroadH lu Nohrmtku.
In the early years of our national life it was the tendency
for the gcncial government to promote public improvements.
Washington advocated the Chesapeake and Ohio canal on the
ground of nationnl expediency. With the ascendency of democ
racy under Jefferson, came the tendency to remand to private
enterprise or the several commonwealths, the undertaking of
internal improvements. In 1S.11 congress not only ceased lo
aid further internal improvements, hut gave land to the several
states to he used for this purpose. New York, Pennsylvania
and Michigan were probably the most enterprising of the states
in this direction; the first in the Erie canal, and the two latter
in their railroads. State undertaking, however, did not prove
as successful as had been hoped for. Pennsylvania was obliged
to sell her roads at a great loss and quasi -public corporations
began to be chartered as freely as purely private ones. The
Eastern states for the most part acted under the idea that all
useful enterprises would be undertaken by private exertion
without the aid of the state. The western states, however,
decided from the cxpciience of their older sisters, that a direct
gift would usually prove cheaper than a share in an industrial
undertaking: and the federal government neted upon this same
principle when it gave such immense 'racts of land to aid in
the construction of the Pacific railways.
The railways in this state have received aid from the people
in three different forms: I, municipal and county bond sub
sidies; 2, land grants both from the state and federal govern
ment, and 3, terminal grants, which arc given either by cities
or private individuals, and consist usually of town lots and
depot sites.
The bond subsidies are granted under a law of this state
passed February 16, 1869, (Neb. Laws 1869 p 92.) which gives
the power to any county, city, village, or precinct to issue bonds
for the aid of any railroad or other internal improvement in
any amount so that the total indebtedness shall not exceed 10
per cent, of the assessed valuation, providing, however, that
the right to raise money to meet the interest and principle when
due, shall be distinctly specified. Under this law the people
of this state have given to the railroads $4,918,000 up to
November 30, 1890, which is divided among the several sys
tems in the following manner: C. IS. & Q., $2,059,300; E. E.
& M. V., $705,500; C. R. I. & P., $180,000; C. St. P. M. & O.,
$294,000; M. P., $390,000; Pacific Short Line, 58,ooo; S. C.
& P., $75,000; U. P., $1,056,200.
Many of the reasons for making these large donations are
obvious. The hi tory of this county, Lancaster, which has
already voted $625,000 of bonds to its different railroads will
give some of the reasons which come up where ever bonds are
issued. The IS. $ M. railroad received a land grant from the
United Stales by act of congress dated July 2,1864, to be given
on condition that the road would be built from Plattsnuntth,
Nebraska, to Kearney Junction, Nebraska, within ten years.
The state capitol was moved here in 1867 and Lincoln was
quite a thriving village in 1869 but it had no railroad and
everything, lumber included, had to be brought from Nebraska
City by wagon. The IS. & M. railroad had surveyed through
the city but were not obliged to build before 1874 in order to
receive the lands already set apart for its use by congress, On
the 19th of April, 1869, the county commissioners issued a call
for an election to be held on the 24th of May fpllowing for the
purpose of voting whether or not the county should issue $50,
000 in bonds to the 1S.& M. railaoad, provided they complete a
line of railroad to and from Lincoln on or before September
30, 1870. The bonds carried by a large majority and the
road built as required. The statement was made by Mr, Gar-
' 1 t .,. ...... 1........1 ..f iHAIlKllllulrtltllll ,ln ..,.. ft.... 11
lier OI IIIC sinic iiii.uii hi w.iiinjMiiituiiiu unu iiiu tiinmj .i.ivv-ii
over $50,000 on the bill for shipment of lumber alone. I have
not been able to obtain figures on that point, but it is well
known that the excessive cost of some of the older buildings
in the city, including the main building of the university, was
due principally to the enormous charges for hauling lumber
from Nebraska City by wagon. The only possibility against
this item being coirect would be that the transportation by rail
being so much more rapid than that by wagon that it would
obtain most if not all of the trnfiic.evcn though its charges
were the same or perhaps greater. This was the case in Col
orado between Colorado Springs mid Denver, and it is not
improbable that it was so in this case until, n second road was
built. One thing is evident, whether the bonds were thus
directly paid or not, the immediate increase in values of land
was more than sufficient to cover the cost of the bonds, so it is
apparent that the bonds could have been paid from the
immediate benefits instead of charging it up to posterity.
On the nth. of October, 1870, it was voted to issue $150,
000 in bonds io the Midland Pacific railroad, $100,000 to the
Nemaha Yalley, Lincoln, and Loup Fork railroad, and $125,
000 to the Omaha and Southwestern railroad. The Midland
Pacific fulfilled the terms of its contract and received its bonds
May 1, 1871. The other two loads ucie never built to Lin
coln. In the following November, $120,000 in bonds was
voted to the Atchison and Nebraska road which was completed
and received its bonds January 1, 1872. The reasons given
for this promiscuous voting of bonds was the need of com
peting lines. Put these competing lines soon combined, the
Midland Pacific with the IS. & M., August 1, 1876, and the
Atchison and Nebraska with the IS. & M. in 1880. At this time
the IS. & M. railroad owned a great deal of land in Lancaster
county, every alternate section within twenty miles of the
road, except what had been pre-empted before the survey of
the road; so the people grasped this opportunity to tax the
IS. & M. land in order to raise funds for competing lines, but
before long this land was sold to private owners who must
bear the tax. January 1, 1873, a second issue of $100,000 in
bonds was made to the Midland Pacific for building towards
the northwest. In this election notice was the following pro
vision "That, nt the time of the delivery of each and every
installment of said bonds, said railway company shall issue to
said county an equal amount of the capital stock of said com
pany." The last record of this railroad stock that I have
been able to find, is a receipt for deposit of the same in the
State National bank of this city. Under the constitution of
this state, adopted in 1875, no county, city, or precinct can
hold stock in any corporation. This provision in connection
with the present condition of the road make the stock owned
by Lancaster county rather inferior, in value.
Among the miscellaneous revenue laws of the state we find
one 1875 1,110) providing that the revenue derived from any
internal improvement aided by a county, city, village, or pre
cinct bonds, shall be set apart forever for the purpose of paying
the interest and principle of the bonds when due until paid.
1 have been unable to obtain the total revenue derived from
taxing these railroads since their building, but by taking as a
representative year, 1887, I find as follows:
IS. & M. K. R. K.$ 5,000 $ 7,118.125 $ $2,118,125
Midland Pac. R... 19,120 3,065.16 15,054.84
A. & N. R. R 12,000 1,984.73 10,015.27
This shows that in all, except the IS. & M., and in the.totals,
that the interest greatly exceeds the receipts from taxes. In
this respect Lancaster county cannot be considered a fair
J average county, .is this is the only county I have proved the
same tor; while in at least, Stanton and Rutler counties the