Minnesota

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 On February 13, after seventeen ballots, Ramsey and Davis were withdrawn, but it was not till the 19th that the eighty-two Republican votes could be concentrated on the Hon.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.

CHAPTER XVII

CLEARING UP

When the Republican state convention assembled on July 28, 1875, its first informal ballot virtually selected the successor of Cushman K. Davis in the governorship. The distinction fell on John Sargent Pillsbury, who had proved his capacity for public affairs by ten years’ service in the state senate and on the board of regents of the university. A successful business career, a reputation for inflexible integrity, a power to select from varied propositions the one which could be carried and worked, and a keen insight into human nature gave him an influence with legislatures and the people rarely equaled. Two reëlections were accorded him as by common consent. The varied events and incidents of his six years’ service are so related that, while forming a whole, they may be thrown into convenient groups.

After the harvest of 1875 Governor Davis appointed a commission to investigate the locust devastations, and placed on it Allan Whitman of St. Paul, a man of science. The report, by giving in simple language an account of the vermin, their manner of propagation, and the stages of their growth, suggested the principles upon which their ravages might be restricted, and, when new invasions did not take place, actually repressed. Early in the season of 1876 Governor Pillsbury issued a proclamation commending to the farmers of the infested districts the advice of the commission to attack the “hoppers” immediately after hatching. By digging ditches around fields and gardens not infested, the vegetation could be protected. For the rescue of crops somewhat grown he recommended a simple apparatus which got the popular name of “hopperdozer.” It consisted of a piece of sheet-iron twelve feet long or more, turned up on the back edge and ends. By means of ropes attached to the front edge, at or near the ends, it could be hauled by men or animals over the surface of the field. The upper surface of the pan, smeared with coal tar, imprisoned the insects till they could be scraped out at convenient intervals. By such simple devices considerable areas of crops were rescued from total destruction. They were of course useless after the appearance of wings on the creatures; and the havoc of the previous season was repeated, particularly in the southwestern counties. These Governor Pillsbury visited in person, and, after witnessing the ruin and distress going on, called for contributions in relief. The response was immediate and generous, and with the aid of his wife the governor attended personally to the distribution. The damage extended in this year to twenty-nine counties south of Otter Tail Lake and west of the watershed of the Mississippi. The worst of all was that at the close of the season these counties were “literally peppered” with locust eggs. The outlook for the coming season caused deep anxiety. The legislature of 1877 authorized a loan of $75,000 to be advanced to farmers for seed, and empowered county commissioners to levy a tax for the destruction of locusts and their eggs. In the spring the hatching began in alarming volume. Governor Pillsbury, in the expectation that the expense would be reimbursed, distributed 56,000 pounds of sheet iron and 3000 barrels of coal tar for “dozers.” Where these were diligently operated the damage to crops was reduced.

On April 10, 1877, in response to an expressed desire of various religious bodies, Governor Pillsbury appointed the 26th of that month as a day of fasting, humiliation, and prayer: “In the shadow of the locust plague,” said he, “whose impending renewal threatens the desolation of the land, let us humbly invoke for the efforts we make in our defense the guidance of that hand which alone is adequate to stay the pestilence.” The day was observed in a goodly number of congregations, but there was no great and general humiliation of the people, and there was no immediate evidence of supernatural interference. The infernal brood grew wings and began their aerial excursions in various directions. In the last days of June the swarms began rising high in the air and taking flight on different bearings. In the course of sixty days all had so risen and flown out of the state to unknown destinations. Although they had wrought damage equal at least to that of any previous year of their residence in Minnesota, the state as a whole harvested the greatest wheat crop in her history, – 30,000,000 bushels, of sixty-three pounds to the bushel.

In spite of the ruin wrought in so large a portion of her territory, and of minor and ordinary losses, the period in view was one of prosperity. The population, which had risen from 439,706 in 1870 to 597,407 in 1875, increased to 780,773, according to the census of 1880. The wheat crop, which had been 30,000,000 bushels in 1877, touched 40,000,000 in 1880. The most striking evidence of material development is seen in railroad building. In the four years 1873-76 but 87 miles had been added to the 1900 miles of construction in the eleven years ending with 1872. This mileage was increased in the six years beginning with 1877 to 3278; 446 were added to the St. Paul and Pacific (now Great Northern) system.

How a corporation left in the panic year 1873 in a condition of hopeless bankruptcy was resuscitated and put into vigorous life is a story which the reader will be interested in. The “Division roads,” the main line from St. Paul to Breckenridge and the branch to St. Cloud, had gone into a receiver’s hands in August, 1873. The “Extensions” to St. Vincent and Brainerd, of which 140 miles in detached portions had been built, remained in the control of the stockholders till October, 1876, when they were turned over to trustees of the bondholders, according to the terms of the company’s contract with them. These trustees employed as their general manager the same gentleman who for three years had been receiver of the Division roads. The stockholders having given over the task of completing the roads and retaining ownership, it remained for the bondholders to decide between putting in several more millions of dollars to complete and equip the roads, or giving up and letting the property go to sale under pending foreclosure proceedings. Had they taken the former course and selected honest and capable agents, they would have not merely escaped great losses but realized large profits. The greater portion of the bonds of the system, over $17,000,000, were owned in Holland, and they had been placed by their holders in the hands of a syndicate of Dutch bankers to be controlled for the common interest.

The drift of affairs had been watched by three deeply interested persons. Donald A. Smith, residing at Winnipeg and representing that city in the Dominion parliament, was chief commissioner of the Hudson’s Bay Company. That company had many millions of acres of land in Manitoba, and was desirous to obtain railroad connections through Minnesota with the outside world. He particularly desired the completion of the St. Vincent Extension. Another was Norman W. Kittson, an old associate of Sibley in the fur-trade and politics, still interested in the Red River trade. The third was James J. Hill, who had come from Canada to Minnesota as a boy of eighteen in 1856. He had been in Mr. Kittson’s employ in his Red River business, had built up a rival line of steamboats and barges, and made it for Mr. Kittson’s interest to take him into partnership. These three men had journeyed up and down the Red River till they knew every foot of the stream and the lands drained by it. Early in 1874 Mr. Smith asked Messrs. Kittson and Hill to collect for him all the information accessible in regard to the St. Paul and Pacific system, its lines completed or unfinished, its terminals, equipment, land grants, and in particular the stock and bonds. The consultations which followed were fruitless. “There seemed no way to get in.”

Two years later, when it became evident that the Dutch bondholders were bound to realize what they could and let the properties go, there appeared a way to get in. 1876 was one of the grasshopper years in Minnesota. The crop was light and prices were low. Rates and fares were so high as to discourage railroad traffic. The net earnings of $300,000 on the system were a drop in the bucket compared with the interest charges of nearly $2,000,000. In March, 1876, Mr. Hill and Mr. Smith were again in consultation, and resolved on an effort to obtain control by buying all, or nearly all, the bonds held in Holland. Delays and discouragements postponed action. It was not till May, 1877, that Mr. George Stephen, president of the Bank of Montreal, was induced to consider taking a hand in the deal. In September, after a visit to Minnesota, he went to England in full expectation of enlisting the necessary capital, the Dutch committee having accepted a conditional offer of cash for their holdings. To his surprise Mr. Stephen found no English capitalists willing to send good money where so much bad money had gone. To all appearance the project was a failure. The associates, however, learning that the Dutch were still fierce to sell, submitted to them in January, 1878, a proposition to buy their bonds at agreed prices and pay in the bonds of a new company to be formed, which should buy the properties at the now impending foreclosure sales. As a “sweetener” they were willing to throw in $250 of six per cent. preferred stock with every $1000 bond of the new company.

In the articles of agreement signed March 13, 1878, the Dutch committee agreed to this proposition and consented to extend the time of payment for their bonds six months after the last of the six foreclosure sales. For their 17,212 one thousand dollar bonds, including coupons for unpaid interest, they accepted $3,743,150. The associates bought large amounts of “minority bonds” at similar figures. As they agreed to pay interest on the bonds of the new company at seven per cent., they were empowered to take immediate control and operation of the completed lines and to resume construction on the St. Vincent Extension, whose completion was greatly desired. On May 23, 1879, the St. Paul, Minneapolis and Manitoba Railway Company was organized, and at the foreclosure sales in the following month bought all the franchises and assets of the expiring St. Paul and Pacific Railroad Company, including those of the Division lines. Mr. James J. Hill at once became the general manager of the roads, and began a career of railroad operation with few if any equals in the country. Better times had come, but it was mainly the vigor, economy, and discipline of the management which soon swelled the earnings into millions.

The great financial exploit of the “associates” was followed by tedious, exasperating, and costly litigation. About the time of the foreclosure sales in June, 1879, Jesse P. Farley, who had been receiver of the Extension roads and general manager of the Division lines, brought suit in the district court of Ramsey County against Messrs. Kittson and Hill to recover from them one third of all moneys, securities, and effects which were accruing to them from the operation. In his complaint Mr. Farley alleged that “in the summer of 1876” a parol agreement had been made by the defendants and himself to undertake jointly the purchase of the bonds of the two railroad companies, the three to share equally in the net proceeds. In his testimony, he deposed that the two defendants had no knowledge of the great opportunity until revealed by him at the time mentioned. It was because of his intimate knowledge of the affairs of the companies, of his understanding of railroad finance, and his long experience as a railroad manager, that they were unwilling to make any adventure without his coöperation; and, to induce him to enter into the contract, they agreed to consider his knowledge and skill equivalent to the money they would severally procure. This part of the bargain was to remain a secret. The defendants denied that any such contract had been made, or that any conversation in relation to such an agreement had ever been had. They had been familiar with the condition and finances of the companies long before the time of the alleged contract. The district court found in favor of the defendants, as also did the Supreme Court of Minnesota on appeal. The Supreme Court, however, appears to have considered that there was a contract between the parties, but that it aborted when in the late fall of 1877 the “associates” were balked in the effort to borrow money in England with which to buy the bonds for cash.

Encouraged by this recognition of a contract, Mr. Farley brought suit in the United States District Court for Minnesota in December, 1881, setting up substantially the same allegations. Defeated here, he took an appeal to the Supreme Court of the United States, which in 1887 remanded the suit to the Circuit Court for a novation of proceedings. The printed pleadings, testimony, exhibits, and arguments fill more than five thousand octavo pages. The Circuit Court held with the defendants that no contract had been made, and that the plaintiff, standing in the relation of a trustee, could not honorably or legally have embarked in any such enterprise.