Statement covering the cost of constructing the Northern Pacific Railway from Ashland, Wis., to Wallula, Wash.; from Pasco, Wash., to Tacoma, Wash.; and from Portland, Oreg., to Tacoma, Wash.-Continued

? Cost of Snake River Bridge taken from Northern Pacific annual report, 1884. Cost of Columbia River Bridge taken from Northern Pacific annual report, 1887. • Cost of Missouri River Bridge taken from Smalley, p. 395.

NOTE. The road from Thompson Junction to the Msisouri River was constructed and in operation prior to December 31, 1872. The same is true of the 66 mile stretch from Kalama on the Columbia River toward Puget Sound. "Only 25 miles of the division were built in 1871. Next year 50 miles more were constructed. Work was begun anew in the spring of 1873, but the collapse of that year found the road still 22 miles from its terminus at Tacoma on the Sound." "By great effort the track was com pleted to the Sound just 24 hours before the time prescribed by Congress expired," December 31, 1873, Smalley, p. 427. Omitting the stretch from Portland to Hunters, 36.3 miles, December 31, 1873, would be the date for the completion of the road. Including the 36.3 mile streatch, December 31, 1874, was the date. It should be included. The stretch of road from Portland to Hunters (Kalama) was not constructed for many years thereafter, the map of definite location therefor not having been filed until September 22, 1882. The final date for the completion of the main line was July 4, 1879. More than 1,300 miles of the road were onstructed after this date, Northern Pacific annual report, 1884.

I might say in regard to the item "third crossing of Clarks Fork to point 8 miles east of Sandpoint, Idaho," 120.5 miles, apparently this was the most expensive piece of construction they had.

The figures covering the 12 miles from Ainsworth to Wallula ($281,329.68) are mine, and are based upon the average cost per mile covering the road from Sandpoint to Ainsworth. I could not find the figures on that piece of road.

This statement is keyed with reference letters and on the back of the statement is a reference to where I obtained those figures in each instance.

Senator NORBECK. Did I understand you to say that the road east of Bismark came to $30,000 a mile?

Mr. McGOWAN. Thompson Junction to Bismark, 425 miles, at a cost of $12,941,921.50, an average of $30,451.58 a mile. Those are the figures that were in the report. As to whether or not they were high, of course, I do not know.

Mr. RAKER. Building the road west of Bismark and over the Cascades, except a small stretch into Tacoma, was cheaper than the road east of Bismark, according to that? That would be the deduction. drawn from that report, would it not?

Mr. McGOWAN. There was considerable controversy at one time covering the cost of constructing that piece of road from Thompson Junction to Bismark, and the statement had been made that the

Northwestern Construction Co. made $5,000 a mile from building that Minnesota division.

Mr. RAKER. Well, it is wholly immaterial as to who made the money and how much they made out of it, taking those figures. Senator NORBECK. No; it is not immaterial. It depends on who

built it.

Mr. McGowAN. On who got the $5,000.

Mr. RAKER. Well, yes; I had not taken that into consideration. Mr. McGowan. That is one reason why I suggested that the committee might look into the Northwestern Construction Co.

Mr. RAKER. Well, put it the other way: That the report shows that the building of the line east of Bismark from Thompson Junction cost less per mile than west of Bismark and over the mountains to Portland, as well as Tacoma, except the short stretch into Tacoma.

Senator NORBECK. I only have two thoughts in connection with that. One is that for construction in that period $30,000 a mile seems high, and the other is that it seems that what apparently were harder, more expensive stretches to the west were built for less money per mile than those to the east. There might be a satisfactory explanation for all of that. I do not know.

Mr. KERR. Mr. McGowan shows that 120.5 miles in the west cost $61,000 a mile. That was the highest cost there was, was it not?

Mr. McGowan. The cost of constructing the road for 120.5 miles from the Third Crossing of Clark's Fork to a point 8 miles east of Sandpoint, Idaho, according to these figures was $61,622.55 per mile. With reference to that stretch of road, while I do not pretend to know anything about railroad engineering, it is a fact and I know this from personal observation-that it goes through a very rugged box canyon.

As far as the construction costs for Bismark east are concerned, I think Senator Norbeck will probably bear me out that that is mostly open, flat country.

Senator NORBECK. Yes; prairie country.

Mr. McGowan. Mr. Chairman, before taking up the 21 points there is one feature of this case that I believe should be called to the attention of the committee, and that has to do with the patriotic aspects of the Northern Pacific grant. If you recall, at the conclusion of the House hearings, the Northern Pacific Railroad Co. got out a pamphlet entitled "The facts about the Northern Pacific land grant," by Mr. Charles Donnelly, president of the Northern Pacific Railway Co. A copy of that pamphlet came into my hands, and I wrote a reply to it which was transmitted to the House committee by Colonel Greeley, the Forester. The pamphlet was printed as Part 5 of the House hearings, and quoting from that pamphlet, page 341 (p. 358 of the present hearings).

It is a mistake to regard the Northern Pacific grant as a mere private measure, taken for the promotion of private interests. It was made duringThe CHAIRMAN. It says "we do not believe it is a mistake"; it does not say "it is a mistake."

Mr. MCGOWAN. No; I was reading, Judge Sinnott, from what Mr. Donnelly said.

The CHAIRMAN. In the quoted part here?

Mr. McGoWAN. Yes.

It is a mistake to regard the Northern Pacific grant as a mere private measure, taken for the promotion of private interests. It was made during the Civil War, as a war measure, "to aid in the construction of a railroad," and "to secure the safe and speedy transportation of the mails, troops, and munitions of war"; and among the 134 eminent men from all parts of the United States, who in 1864 were named in the act as incorporators of the company, were men like Gen. U. S. Grant, then actively engaged in waging the war. The appeal was made not to any group of financiers but to the entire public, of which the incorporators were supposed to be representative; and it was especially provided in the act "that all people of the United States shall have the right to subscribe to the stock." The Government's gift, therefore, was made available to all; yet so little attraction did it then possess that it was found impossible to interest the public in the enterprise which it was to aid; they refused to take stock in it; and not until 1870, when an act was passed authorizing a mortgage, did it become possible to get it fairly launched. The support of the great banking house of Jay Cooke & Co. was then given to it, but such were its inherent difficulties even under these conditions and with this support that in 1873 it went down in failure, and the banking house of Jay Cooke & Co. went down with it.

Those who would view the Government's grant in is right perspective will bear these facts in mind. They will consider that it was made in aid of the construction of the railroad through what (in the language of the Supreme Court)" then consisted of great stretches of homeless prairies, trackless forests, and unexplored mountains"; and they will remember, first, that this gift (which, of course, no one would dream of disparaging) was made available to everyone; and, second, that those who did avail themselves of it were ruined in the attempt to carry the undertaking through.

In my reply to that memorandum, to that statement of Mr. Donnelly, I said the following, and I desire to repeat it (p. 359); and I desire to follow that further from Smalley's History to show just exactly what the nature of this enterprise was. I said:

We do not believe it is a mistake to regard the Northern Pacific grant as a private measure for the promotion of private interests. In this respect the Northern Pacific was no different from any other railroad company. It was promoted, financed, and constructed purely for private gain, in so far as the company itself was concerned. The mere fact that the sponsors of the act which resulted in the incorporation, of the company had included in the act provisions for the transportation of the mails and munitions of war did not in any way change the private nature of the enterprise. Mr. Donnelly says the act was passed during the Civil War as a war measure. The act was passed on July 2, 1864, yet the road was not opened to transcontinental business until the eighties. This being true, it is difficult to see just how the fact that it was passed during the Civil War as a war measure could have any particular bearing upon the matter.

Mr. Donnelly mentions the fact that the incorporators were from all parts of the United States and "were men like Gen. U. S. Grant, then actively engaged in waging war." It is safe to say that Gen. U. S. Grant's name, like the names of a number of the other incorporators, was used merely for promotion purposes, and that Gen. U. S. Grant had no more to do with the Northern Pacific Railroad or its real promotion than did George Washington. And the same may be said of most of the other 135 men whose names appear in the corporate act of July 2, 1864.

And right at this point I will ask Mr. Kerr if it is a fact that any of these men of the 135 whose names appear in the original act were stockholders in the Northern Pacific Railroad Co.; and if so, whether the stock was given to them; if not given to them, how much did they pay for it?

Mr. KERR. I would be glad to get the information on that subject if the committee desires it.

Mr. RAKER. Before you pass that, you will furnish that will you, Mr. Kerr?

Mr. KERR. Yes; I can furnish it if it is desired.

Mr. McGOWAN. My position on that is this, gentlemen: That any legitimate business is a justification for its own existence, but when you drape the mantle of patriotism around anything, certainly a committee of this sort is entitled to look under it to see whether there is patriotism there or not.

Mr. RAKER. Let me ask you now-it has been in my mind all the time and I have never had it divulged yet-just what did the 135 men do that are named in the act to incorporate this company?

Mr. McGowAN. So far as I have been able to ascertain, they did not do anything. I think the names of those men, prominent as they were at that time, were like merchant's goods in his store window; they were then solely for promotion purposes, but had no real connection with the Northern Pacific Railroad Co.

Mr. RAKER. After the act was passed and the company organized, they were supposed to subscribe to the stock required by the act, and the subscribers to the stock were the ones that met and organized by electing a president and officers? Is that the way they organized?

Mr. McGowAN. Well, may I touch upon that reading from Smalley?

Mr. RAKER. Certainly.

Mr. McGowan. I think it is profitable to give a little time to it, so that that phase of the case may be cleared up.

The CHAIRMAN. Well, Cassius says of Brutus, "His gray hairs will purchase other men's good opinions of ourselves."

Senator NORBECK. In other words, this is not a new scheme. Mr. RAKER. Yes; we have created three or four special acts since, of several corporations.

The CHAIRMAN. We have in the last two or three years.

Mr. RAKER. Yes; with a whole list of people, and I have never been able to find out whether they ever met or acted or participated. Then they provide another feature of the act that the stockholders shall meet and organize.

Mr. McGowAN. I am now reading from Smalley's History of the Northern Pacific Railroad, page 97, entitled, "Josiah Perham's People's Pacific Railroad":"

In the midst of the rampant sectional jealousies and the confusion of conflicting local projects for a railroad to the Pacific coast, which prevailed at Washington previous to 1860, there appeared upon the ground a man of definite purpose and strong will who knew exactly what he wanted to do, and who had sufficient earnestness and enthusiasm to convert other men to his views. This was Josiah Perham, who was destined to play an important rôle in connection with the Northern Pacific enterprise. Perham was a peculiar character. He was a good type of a class of men who have the genius and intelligence to conceive large projects, and the energy, honesty of purpose, and perseverance to enlist others in their support, but who lack the practical talent to carry them forward to completion. * * He made a fortune in what was known in Maine as the great Hallowell land speculation, in the days of President Jackson; but this he lost soon afterward by holding on to his investments until a crash came and made him a bankrupt. Going to Boston about 1842, he began business anew as a wool commission merchant. Fortune favored him again, and he was able to accumulate money and pay off in full, with interest, all the claims of his old creditors, amounting to $35,000. This honorable action gained him the confidence of the merchants of Boston, and enabled him in after years to enlist the support of many of them for his railroad enterprises.

Then it goes on to show that Perham failed a second time, and he became engaged in an enterprise of transporting people to Boston by the various railroads in New England and Canada, and in this he accumulated money.

In this business Perham again accumulated money, and possessed a comfortable fortune when the vision of the Pacific Railroad dawned upon him in 1853. From that time until his death the vision haunted him night and day, and he could talk of nothing else and think of nothing else. The idea took complete possession of him. He seemed to feel that he had a call from the unseen powers to build a railroad across the continent. He had unbounded faith in his ability to convey to others his own enthusiasm for the project, and spent much of his time in going from place to place and talking about the great scheme to everybody whose attention he could gain. In this respect he followed closely in the path of Whitney, but he did not at first, like Whitney, go to Congress for aid. His idea was that the people of the whole country were ready to come forward and subscribe small sums to the stock of the company, which in the aggregate would amount to enough to construct the road. This fantastic notion took such a strong hold upon him that the most discouraging experiences failed to dislodge it.

In order to remove a wrong impression generally entertained, let it be said here, at the outset of this account of Josiah Perham's career, that he was not in any sense the projector of the Northern Pacific enterprise. His first plan was to build a railroad from the Missouri River to the Bay of San Francisco, and to this he held firmly for nearly 10 years, until Congress, in chartering the Union and Central Pacific Cos. in 1862, left him, his project, and his friends entirely out of the bill. Only then did Mr. Perham turn to the northern route. which he regarded as the best alternative scheme. Asa Whitney proposed from the first to build to the mouth of the Columbia, and only changed his plan after the settlement of California so far as to include a branch from the Wind River Mountains to the Bay of San Francisco. Perham, although familiar with the claims made in behalf of the northern route and well acquainted with Governor Stevens, the most conspicuous champion of that route, whom he frequently met at Washington between 1857 and 1860, thought only of the central line until his efforts to obtain the indorsement of Congress for his original scheme proved abortive.

I do not want to read too much of that, but I want to get the background with reference to what led up to the Northern Pacific grant. Reading from page 113:

After the failure of his efforts to obtain for his People's company the charter from Congress to build the road to San Francisco, Josiah Perham made a stroke of genius. He transferred himself, his organization, his arguments, and his friends en masse to the northern route. This shifting of position was effected at a fortunate moment. The northern project had no conspicuous advocate. Governor Stevens had just perished upon a Virginia battle field. The influence of his remarkable report and of his vigorous and perservering presentation to the public of the merits of the northern route, year after year, had been almost sufficient to cause Congress to adopt it without any pressure from the lobby. When the Union and Central Pacific hill passed, there was a general understanding among the leading men in Congress that a road from St. Paul and Lake Superior to Puget Sound should be commenced at no distant day, with the aid of a liberal land grant. The time, therefore, was auspicious for Perham's movement. He had attracted considerable attention at Washington by his earnest arguments, repeated session after session, in favor of a line to California. He had the support of a chartered company, numbering among its directors men of substance and respectability. He wisely determined to ask for no subsidy in bonds, such as had been given to the companies building by the middle route. If Congress would give his People's company double the land grant given to the Union and Central Cos., he was confident that he could raise enough money by a popular subscription for stock to build the northern road.

I want to read this-it is rather long, but I want to read it for the purpose of showing that the real effort for the passage of the charter