This grant came at a time of great financial depression, and when the territory was about to change its dependent condition for that of a sovereign state in the Union. It was greeted as a means of relief that might lift the territory out of its financial troubles, and insure its immediate prosperity. The people did not take into consideration the fact that the lands embraced in the grant, although as good as any in the world, were remote from the habitation of man, lying in a country absolutely bankrupt, and possessing no present value whatever. Nor did they consider that the whole country was laboring under such financial depression that all public enterprises were paralyzed; but such was, unfortunately, the monetary and business condition.
On the twenty-third of February, 1857, an act had pa.s.sed the congress of the United States authorizing the people of Minnesota to form a const.i.tution preparatory to becoming a state in the Union. Gen. Willis A. Gorman, who was then governor of the territory, called a special session of the legislature to take into consideration measures to carry out the land grant and enabling acts. The extra session convened on April 27th. In the meantime Governor Gorman"s term of office had expired, and Samuel Medary of Ohio had been appointed as his successor, and had a.s.sumed the duties of his office. He opened the extra session with an appropriate message. The extra session adjourned on the 23d of May, and in accordance with the provisions of the enabling act of congress, an election was held on the first Monday in June for delegates to a const.i.tutional convention, which was to a.s.semble at the capitol on the second Monday in July. The const.i.tutional convention is an event in the history of Minnesota sufficiently important and unique to ent.i.tle it to special treatment, which will be given hereafter.
An act was pa.s.sed at the extra session, on the 19th day of May, 1857, by which the grant of lands made to the territory was formally accepted, "upon the terms, conditions and restrictions" contained in the granting act.
On the twenty-second day of May, at the extra session, an act was pa.s.sed to execute the trust created by the land grant act, by which a number of railroad companies were incorporated to construct roads on the lines indicated by the act of congress, and to aid in the building of these roads, and the lands applicable to each were granted to it. The companies were to receive t.i.tle to the lands as the construction progressed, as provided in the granting act. They also had conferred upon them powers to issue bonds, in the discretion of the directors, and to mortgage their roads and franchise to secure them.
These railroad companies were organized upon the hope that the aid extended to them by the grants of land would enable them to raise money sufficient to build their several roads. They had nothing of their own, and no security but the roads and lands upon which to negotiate loans.
The times, and the novel idea of building railroads in unpeopled countries, were all against them, and, of course, nothing could be done.
The const.i.tutional convention met and framed an instrument for the fundamental law of the new state which was very conservative, and, among other things, contained the following clause, which was enacted in section 5 of article IX.:
"For the purpose of defraying extraordinary expenses the state may contract debts, but such debts shall never in the aggregate exceed two hundred and fifty thousand dollars." And another clause found in section 10, which is as follows: "The credit of the state shall never be given or loaned in aid of any individual, a.s.sociation or corporation."
It was the intention of the framers of the const.i.tution to prevent the legislature from ever using the credit or funds of the state in aid of any private enterprise, and these provisions effectually accomplished that end.
The people were deeply disappointed when they became convinced that the roads could not be built with the aid that congress had extended, and as this work was also looked upon as the only hope of financial relief, the case became a desperate one, which could only be remedied by the most extreme measures. The promoters of the railroads soon discovered one, in an amendment of the section of the const.i.tution which prohibited the credit of the state being given or loaned to anyone, and at the first session of the first legislature, which convened on Dec. 3, 1857, an act was pa.s.sed proposing such amendment, to be submitted to the people for ratification. The importance of this amendment, and its effect and consequences upon the future of the state, demands that I give it nearly in full. It changed section 10 as it was originally pa.s.sed, and made it read as follows:
"Section 10. The credit of that state shall never be given or loaned in aid of any individual a.s.sociation or corporation, except that, for the purpose of expediting the construction of the lines of railroads, in aid of which the congress of the United States has granted lands to the Territory of Minnesota, the governor shall cause to be issued and delivered to each of the companies in which said grants are vested by the legislative a.s.sembly of Minnesota the special bonds of the state, bearing an interest of seven per cent per annum, payable semi-annually in the city of New York, as a loan of public credit, to an amount not exceeding twelve hundred and fifty thousand dollars, or an aggregate amount to all of said companies not exceeding five millions of dollars, in manner following, to-wit:"
The amendment then prescribes that, whenever ten miles of railroad was graded so as to be ready for the superstructure, it should receive $100,000 of the bonds, and when ten miles should be completed with the cars running, the company so completing should receive another $100,000 of the bonds until each company had received its quota. The bonds were to be denominated "State Railroad Bonds," for the payment of which the faith and credit of the state was to be pledged. The railroad companies were to pay the princ.i.p.al and interest of the bonds, and to secure such payment they were to pledge the net profits of their respective roads, and to convey to the state the first two hundred and forty sections of land they received, and to deliver to the state treasurer an amount of their first mortgage bonds equal to the amount of bonds received by them from the state, and mortgage to the state their roads and franchises.
This was all the security the companies could give, but the underlying difficulty was that it had no value whatever. There were no roads, no net or other profits. The lands had no value whatever except such as lay in the future, which was dependent on the construction of the roads and the settlement of the country. The bonds of the companies, of course, possessed only such value as the property they represented, which was nothing, and the mortgages were of the same character. The whole scheme was based upon hopes, which the slightest application of sober reasoning would have p.r.o.nounced impossible of fulfillment. But the country was hungry, and willing to seize upon anything that offered a semblance or shadow of relief.
The proposed amendment was to be submitted to the people for adoption or rejection, at an election to be held on the fifteenth day of April, 1858. In order to fully comprehend the condition of the public mind, it should be known that the const.i.tution, with all the safeguards that I have mentioned, had only been in force since Oct. 13, 1857, a period of about six months, and had been carried by a vote of 30,055 for to 571 against its adoption.
The campaign preceding the election was a very active one. The railroad people flooded the state with speakers, doc.u.ments, pictures, glee clubs singing songs of the delights of "Riding on the Rail," and every conceivable artifice was resorted to to carry the amendment. It was carried by a vote of 25,023 in favor of its pa.s.sage, to 6,733 against.
To give an idea of the intense feeling that was exhibited in this election, it is only necessary to state that at the city of Winona there were 1,102 votes cast in favor of the amendment and only one vote against it. This negative vote, to his eternal honor be it said, was cast by Thomas Wilson, afterwards chief justice of the state, and now a citizen of St. Paul.
In the execution of the requirements of the amendment, the railroad companies claimed that they could issue first mortgage bonds on their properties to an indefinite amount and exchange them with the state for its bonds, bond for bond, but the governor, who was Hon. Henry H.
Sibley, construed the amendment to mean that the first mortgage bonds of the companies which the state was to receive must be an exclusive first lien on the lands and franchises of the company. He therefore declined to issue the bonds of the state unless his views were adopted. The Minnesota & Pacific Railroad Company, one of the land grant corporations, applied to the supreme court of the state for a writ of mandamus, to compel the governor to issue the bonds. The case was heard, and two members of the court holding the views of the applicants, the writ was issued. I was a member of the court at that time, but entertaining opposite views from the majority, I filed a dissenting opinion. Anyone sufficiently interested in the question can find the case reported in Volume II. of the Minnesota Reports, at page 13. This decision was only to be advisory, as the courts have no power to coerce the executive.
The railroad companies entered into contracts for grading their roads, and a sufficient amount of grading was done to ent.i.tle them to about $2,300,000 of the bonds, which were issued accordingly, and went into the hands of the contractors to pay for the work done. It, however, soon became apparent that no completed railroad would ever result from this scheme, even if the whole five millions of bonds were issued. What should have been known before was made clear when any of these state bonds were put on the market. The credit of the state was worthless, and the bonds were valueless. The people became as anxious to shake off the incubus of debt they had imposed upon their infant state as they had been to rush into it.
Governor Sibley, in his message, delivered to the second legislature in December, 1859, said, in speaking of this issue of bonds:
"I regret to be obliged to state that the measure has proved a failure, and has by no means accomplished what was hoped for it, either in providing means for the issue of a safe currency, or of aiding the companies in the completion of the roads."
At the election, held on Nov. 6, 1860, the const.i.tution was again amended, by expunging from it the amendment of 1858 authorizing the issue of the state railroad bonds, and prohibiting any further issue of them. An amendment was also made to section 2 of Article IX. of the const.i.tution at the same time, by providing that no law levying a tax, or making any other provisions for the payment of interest or princ.i.p.al of the bonds already issued, should take effect or be in force until it had been submitted to the people, and adopted by a majority of the electors.
It was very proper to prohibit the issuance of any more of the bonds, but the provision requiring a vote of the people before those already out could be paid was practically repudiation, and the state labored under that damaging stigma for over twenty years. Attempts were made to obtain the sanction of the people for the payment of these bonds, but they were defeated, until it became unpleasant to admit that one was a resident of Minnesota. Whenever the name of Minnesota was heard on the floor of congress as an applicant for favors, or even for justice, it was met by the charge of repudiation. This was an era in our history very much to be regretted, but the state grew steadily in material wealth.
On March 2, 1881, the legislature pa.s.sed an act, the general purpose of which was to adjust, with the consent of the holders, the outstanding bonds, at the rate of fifty cents on the dollar, and contained the curious provision that the supreme court should decide whether it must first be submitted to the people in order to be valid or not, and if the supreme court should not so decide, then an equal number of the judges of the district court should act. The supreme court judges declined to act, and the governor called upon the district court judges to a.s.sume the duty. Before any action was taken by the latter, the attorney general applied to the supreme court for a writ of prohibition to prevent them from taking any action. The case was most elaborately discussed, and the opinion of the supreme court was delivered by Chief Justice Gilfillan, which is most exhaustive and convincing. The court holds that the act of 1881 is void, by conferring upon the judiciary legislative power, and that the amendment to the const.i.tution providing that no bonds should be paid unless the law authorizing such payment was first submitted to and adopted by the people was void, as being repugnant to the clause in the const.i.tution of the United States, that no state shall pa.s.s any law impairing the obligation of contracts. With these impediments to a just settlement of this question removed, the state was at liberty to make such arrangements with its bond creditors as was satisfactory. John S. Pillsbury was governor at that time. He had always been in favor of paying the bonds, and removing the stain from the honor of the state, and finding his hands free, it did not take him long to arrange the whole matter satisfactorily, and to the approval of all the parties. The debt was paid by the issue of new bonds, at the rate of fifty per cent of the princ.i.p.al and interest of the outstanding ones and the surrender of the latter. This adjustment ended a transaction that was conceived and executed in folly, and was only prevented from eventuating in crime by the persistent efforts of our most honorable and thoughtful citizens throughout the state. The transaction has often been called by those who advocated repudiation, "An old Territorial fraud," but there was nothing in it but a bad bargain, made under the extraordinary pressure of financial difficulties.
THE FIRST RAILROAD ACTUALLY BUILT.
The state was restored to all the lands and franchises of the various companies by means of foreclosure, and on March 8, 1861, pa.s.sed an act to facilitate the construction of the Minnesota & Pacific Railroad, by which act the old railroad was rehabilitated, and required to construct and put in operation its road from St. Paul to St. Anthony on or before the first day of January, 1862. The company was required to deposit with the governor $10,000 as an earnest of good faith. Work was soon commenced, and the first ten miles constructed as required. This was the first railroad ever built and operated in Minnesota. The first locomotive engine was brought up the river on a barge, and landed at the St. Paul end of the track in the latter part of October, 1861. This pioneer locomotive was called the "William Crooks," after an engineer of that name who was very active and instrumental in the building of the road. This first ten miles of road cost more energy and brain work than all the rest of the vast system that has succeeded it. It was the initial step in what is now known as the Great Northern Railway, a road that spans the continent from St. Paul to the Pacific, and reflects upon its enterprising builders all the credit due to the pioneer.
It was not long before the Northern Pacific Railroad Company was incorporated by act of congress, pa.s.sed on July 2, 1864. This road was to extend from the head of Lake Superior to Puget Sound, on a line north of the forty-fifth degree of north lat.i.tude, with a branch via the valley of the Columbia river to Portland, Ore. The company had a grant of land of twenty alternate sections through the states. It was commenced shortly after its incorporation, but met with financial disaster, and was sold under foreclosure of a mortgage, and underwent many trials and tribulations, until it was finally completed on the eighth day of September, in the year 1883, and has been in successful operation ever since. As the Northern Pacific has its eastern terminus and general offices in St. Paul, it is essentially a Minnesota road. The same may be said of the Great Northern, although both are transcontinental roads.
From the small beginning of railroad construction in 1862 have grown thirty-seven distinct railroad corporations, operating in the state of Minnesota 6,062.69 miles of main tracks, according to the official reports of 1898, with quite a substantial addition in course of construction. These various lines cover and render accessible nearly every city, town and village in the state.
The method of taxation of railroad property adopted by the state is a very wise and just one. It imposes a tax of three per cent upon the gross earnings of the roads, which, in 1896, yielded the comfortable sum of $1,037,194.40, the gross earnings of all amounting to $36,918,741.71.
This plan of taxation gives the state a direct interest in the prosperity of the roads, as its taxes are increased when business is good and the roads are relieved from oppressive taxation in time of business depression.
The grading which was done and for which the bonds of the state were issued was, as a general thing, utilized in the final construction of the roads.
THE SPIRIT LAKE Ma.s.sACRE.
In 1842 the country north of Iowa and west of the Mississippi as far north as the Little Rapids, on the Minnesota river, was occupied by the M"day-wa-kon-ton and Wak-pe-ku-ta bands of Sioux. The Wak-pe-ku-ta band was at war with the Sacs and Foxes, and was under the leadership of two princ.i.p.al chiefs, named Wam-di-sapa (the "Black Eagle") and Ta-sa-gi.
Wam-di-sapa and his band were a lawless, predatory set, whose depredations prolonged the war with the Sacs and Foxes, and finally separated him and his band from the Wak-pe-ku-tas. They moved west towards the Missouri, and occupied the valley of the Vermillion river, and so thorough was the separation that the band was not regarded as part of the Wak-pe-ku-ta when the latter, together with the M"day-wa-kon-tons, made their treaty with the government at Mendota in 1851.
By 1857 all that remained of Wam-di-sapa"s straggling band was about ten or fifteen lodges under the chieftainship of Ink-pa-du-ta, or the "Scarlet Point," or the "Red End." They had planted near Spirit lake, which lies partly in d.i.c.kinson county, Iowa, and partly in Jackson county, Minnesota, prior to 1857, and ranged the country from there to the Missouri, and were considered a bad lot of vagabonds.
Between 1855 and 1857 a small settlement had sprung up about forty miles south of Spirit lake, on the In-yan-yan-ke or Rock river.
In the spring of 1856 Hon. William Freeborn of Red Wing (after whom the county of Freeborn in this state is called) had projected a settlement at Spirit lake, which, by the next spring, contained six or seven houses, with as many families.
About the same time another settlement was started some ten or fifteen miles north of Spirit lake, on the head waters of the Des Moines, and a town laid out which was called Springfield. In the spring of 1857 there were two stores and several families at this place.
These settlements were on the extreme frontier, and very much isolated.
There was nothing to the west of them until you reached the Rocky Mountains, and the nearest settlements on the north and northeast were on the Minnesota and Watonwan rivers, while to the south lay the small settlement on the Rock river, about forty miles distant. All these settlements, although on ceded lands, were actually in the heart of the Indian country, and absolutely unprotected and defenseless.
In 1857 I was United States Indian agent for the Sioux of the Mississippi, but had lived on the frontier long enough before to have acquired a general knowledge of Ink-pa-du-ta"s reputation and his whereabouts. I was stationed on the Redwood and Yellow Medicine rivers, near where they empty into the Minnesota, and about eighty miles from Spirit lake.
Early in March, 1857, Ink-pa-du-ta"s band was hunting in the neighborhood of the settlement on the Rock river, and one of them was bitten by a dog belonging to a white man. The Indian killed the dog. The owner of the dog a.s.saulted the Indian, and beat him severely. The white men then went in a body to the camp of the Indians and disarmed them.
The arms were either returned to them or they obtained others, I have never ascertained which. They were probably given back to them on condition that they should leave, as they at once came north to Spirit lake, where they must have arrived about the 6th or 7th of March. They proceeded at once to ma.s.sacre the settlers, and killed all the men they found there, together with some women, and carried into captivity four women, three of whom were married and one single. Their names were Mrs.
n.o.ble, Mrs. Marble, Mrs. Thatcher and Miss Gardner. They came north to the Springfield settlement, where they killed all the people they found.
The total number killed at both places was forty-two.
I was the first person to receive notice of this affair. On the 9th of March a Mr. Morris Markham, who had been absent from the Spirit lake settlement for some time, returned, and found all the people dead or missing. Seeing signs of Indians, he took it for granted that they had perpetrated the outrage. He at once went to Springfield, and reported what he had seen. Some of the people fled, but others remained, and lost their lives in consequence. It has always been my opinion that, being in the habit of trading with these Indians occasionally, they did not believe they stood in any danger; and, what is equally probable, they may not have believed the report. Everyone who has lived in an Indian country knows how frequently startling rumors are in circulation, and how often they prove unfounded.
The people of Springfield sent the news to me by two young men, who came on foot through the deep snow. The story was corroborated in a way that convinced me that it was true. They arrived on the 18th of March, completely worn out and snow-blind. I at once made a requisition on Colonel Alexander, commanding at Fort Ridgely, for troops. There were at the fort five or six companies of the Tenth United States Infantry, and the colonel promptly ordered Capt. Barnard E. Bee of Company "A" to proceed with his company to the scene of the trouble. The country between the fort and Spirit lake was uninhabited, and the distance from eighty to one hundred miles. I furnished two experienced guides from among my Sioux half-breeds. They took a pony and a light traineau, put on their snowshoes, and were ready to go anywhere. Not so with the soldiers, however. They were equipped in about the same manner as they would have been in campaigning in Florida, their only transportation being heavy wheeled army wagons, drawn by six mules. It soon became apparent that the outfit could not move straight to the objective point, and it became necessary to follow a trail down the Minnesota to Mankato and up the Watonwan in the direction of the lake, which was reached after one of the most arduous marches ever made by troops, on which for many miles the soldiers had to march ahead of the mules to break a road for them. The Indians, as we expected, were gone. A short pursuit was made, but the guides p.r.o.nounced the camp fires of the Indians several days old, and it was abandoned. The dead were buried, and after a short stay, the soldiers returned to the fort.
When this affair became known throughout the territory it caused great consternation and apprehension, most of the settlers supposing it was the work of the Sioux nation. Many of the most exposed abandoned their homes temporarily. Their fears, however, were allayed by an explanation which I published in the newspapers.
I at once began to devise plans for the rescue of the white women. I knew that any hostile demonstration would result in their murder. While thinking the matter out an event occurred that opened the way to a solution. A party of my Indians had been hunting on the Big Sioux river, and having learned that Ink-pa-du-ta was encamped at Lake Chan-pta-ya-tan-ka, and that he had some white women prisoners, two young brothers visited the camp and succeeded in purchasing Mrs. Marble, and brought her into the Yellow Medicine agency, and delivered her to the missionaries, who turned her over to me. I received her on the 21st of March, and learned that two of the other captives were still alive.
Of course, my first object was to rescue the survivors, and to encourage the Indians to make the attempt, I paid the brothers who had brought in Mrs. Marble $500 each. I could raise only $500 at the agency in money, and to make up the deficiency I resorted to a method, then novel, but which has since become quite general. I issued a bond, which, although done without authority, met with a better fate than many that followed it,--it was paid at maturity.
As it was the first bond ever issued in what is now Minnesota, the two Dakotas, Montana, and, I may add, the whole Northwest; it may be interesting to give it in full: