LEGISLATURE: 1850. { HOUSE DOC. [ No. 10.] REPORT of the Committee on Banks and Incorporations relative to the Michigan Southern and Erie and Kalamazoo Railroads. The majority of the Committee on Banks and Incorporations, to whom was referred the joint resolutions in relation to the Michigan Southern and Erie and Kalamazoo railroads, have authorized me to REPORT: That in 1833, the then territory of Michigan gave the Erie and Kalamazoo railroad company a charter for a railroad from Toledo with the right to unite with any other road of the kind in the territory. It will be borne in mind that at the time this liberal charter was granted Toledo was a part and portion of Michigan, or the act giving the company a corporate existence would never have been found upon our statute books. It was not supposed that Toledo would ever seek admission into Ohio, and the legislative council therefore gave the company a charter for a road in Michigan. This charter, however, was soon violated by the company, by their refusal to redeem the bills of the Erie and Kalamazoo railroad bank, and in other respects, and it was only at the earnest solicitation of the citizens of Adrian that its existence was longer tolerated, when, in 1846, the legislature was beseiged to renew its forfeited rights. It was with much reluctance that the legislature of that year allowed the longer existence of its charter, nor would they, until a portion of it was repealed to protect the rights and interests of Michigan. The legislature of that year repealed the charter so far as to prevent the road from penetrating Michigan any further than the village of Adrian, and also, that portion of it (the 19th section) which gave the company the right to connect their road with any other in the state; but they were permitted to cross the Michigan Southern Railroad in the same manner they then crossed it in order to reach the village of Adrian. The object of this amendment of the original charter, as avowed by the mover and understood by the two houses, was to prevent the union of the Erie and Kalamazoo and Michigan Southern railroads-a union which has since taken place in violation and in defiance of the laws of this state prohibiting it, and against the acknowledged interests and policy of the state since the first attempt to build the Southern road. This is clearly shown by the House journal of 1846, and by section six of the act of that year, which repeals the 19th section of the original act authorizing a union with any other railroad in the state. The company understood the conditions upon which their corporate existence was longer tolerated, and they accepted these conditions, which, under the circumstances, they were glad to embrace as very liberal on the part of Michigan. And what has been the policy of this state in regard to the Michigan Southern Railroad? Let us review it. We find when the state first decided upon building this road it was its policy to make it, as it should be, a Michigan road, not only in name, but in fact, for it was both the interest and object of the state to retain the road, its business and its profits therefrom within its own limits. To make this the more certain the legislature decided that the eastern terminus of the road should be on the navigable waters of Lake Erie, in the state of Michigan; and this determiniation of the state was not only just, but was such as common sagacity and ordinary foresight would dictate to those who, as representatives, were seeking the interests of their own state. They well knew that Michigan had but a small territory on Lake Erie, and that it was the true policy of the state to do as much as possible to profit by the harbor in this territory, and to make it the terminus of a road to do the business of Southern Michigan. They surely never intended that a rival town like Toledo, should be built up by our business and improvements, at the expense of the citizens of Michigan, who are taxed to pay for them. The legislature then very wisely consulted the interests of the state when they decided that the eastern terminus of the road should be on the navigable waters of Lake Erie, within its limits, and that the road should be continued west through the southern counties of this state instead of being diverged to Indiana, which would deprive our own citizens of its benefits, when they are taxed to pay for the road over half a million of dollars more than it was sold for to the company. And how was it when the road was sold by the state to the company? The same wise policy was pursued; and the legislature again made known its determination to make the Southern a Michigan railroad, well knowing the vast benefits of such a work if made to contribute to our own interests instead of those of Ohio ond Indiana. So important did they consider this that they received $100,000 less for the road from a Michigan company, than was offered by an Ohio or Toledo company, for the very reason that the foreign company wanted the privilege of forming the connection now existing between the Erie and Kalamazoo and Michigan Southern Railroads, and of diverting the road west of Hillsdale to Indiana, without accommodating the counties further west. To show more fully the pride and interest which the state took in this matter at the time, the select committee of the House, to whom this matter was referred, at the head of which was a prominent member from the county of Wayne, when the offer was made to give $100,000 more for the road than it sold for, with the privilege of running it into Indiana and connecting it with the Erie and Kalamazoo road, reported against accepting of the offer, and stated as a reason, that "the eastern termination of the road would then be at Toledo, and the road west of Hillsdale would undoubtedly be diverged into Indiana." And the committee added: This would in a great measure deprive all the southern tier of counties, except Hillsdale and Lenawee, of the benefits anticipated from this road. Your commiitee believe that the southern portion of the state would have just cause of complaint should such a proposition be favorably entertained by this House. Nor would our citizens at large be less indignant to learn that we would for a moment countenance a proposal to foster and cherish the interests and plans of neighboring states at the expense of our own. Even the gilded bait of $100,000 could scarcely be sufficient to induce our people so far to forget their self-respect, their interest and their true policy. For your committee deem it to be unquestionably true, as they have taken occasion to express themselves heretofore, and the dictates of a wise policy, that the Southern railroad should be kept within our own borders, and as near as may be upon the line which was originally projected for it, whereby the unmeasured agricultural riches of the country west of Hillsdale would be opened to a market, our resources be devoloped, and the wealth and taxable property of the state be greatly augmented. The profits to arise from the business upon the road should be made to build up and make towns and villages in our own state and not elsewhere. And even the tax upon the road, if extended in our own state, would. be of greater importance than the additional $100,000 proposed as the price of our being made forever tributary to, and dependant upon our southern neighbors"--Ohio and Indiana. This was the language and policy of Michigan in 1846, as expressed by the legislature. They possessed too much state pride to sacrifice the intercsts of the state for all time to come, to a soulless monopoly which has since, in defiance of the known laws and policy of the state, formed the very connection, and seek to carry out the very results, which Michigan has always condemned and refused to sanction. The legislature of that year understood and acted for the interests of Michigan. They refused, on any terms, to allow the connection now made, and the policy now pursued by these railroad companies. Then, as now, the true policy of the state was to retain within its limits, the business of our southern counties, and by so doing an important trade from northern Indiana would also be secured, to add still more to the resources and prosperity of our state and people, as well as to the taxable property of the state, by compelling the Southern Railroad Company to make its depots and other improvements here, which would relieve the other property of the state from taxation, just in proportion as the road and its business were extended, if retained within our own borders. It appears evident, then, that the policy of the state heretofore has been to make this road, in every respect, a Michigan Southern Railroad, as its name implies. This is evident from the history of legislation respecting it. And now the question presents itself whether this policy shall be continued-whether we will still maintain our rights and the legitimate business of our railroad,-built by Michigan enterprize, and at the expense of Michigan tax-payers, or whether we shall abandon them to Ohio and Indiana? The companies accepted of their charters understanding the policy of the state, and with the full knowledge that they were to make and operate the roads for the benefit of Michigan, and certainly cannot complain if the state compel them to carry outs its policy and intentions, which they proposed to do when they took possession of the roads. The act chartering the Michigan Southern Railroad Company makes the road and all its appurtenances, with the cars, locomotives, furniture, &c., the property of the state; or in other words, they are held by the state as security for the payment of the purchase money of the road, and are to continue to be so held until the whole amount due the state is paid. And though the company were authorized to use the road and all its appurtenances, yet the whole scope of the act goes to show that they were authorized to use them only on the Southern Railroad itself. The legislature never intended that the company should use this property on any other road, or remove it beyond the jurisdiction of Michigan. Yet it is a notorious fact that the company have connected the two roads in question, in defiance of law, and are constantly running the cars and locomotives which this state hold as security, beyond the limits of Michigan and out of its jurisdiction; and that a large portion of the stock is at all times to be found at Toledo, in the state of Ohio. All this your committee believe to be in direct violation of the charter of the company, subversive of the true policy and interests, and calculated to endanger the just rights and security of the state. Your committee believe that the railroad along the south shore of Lake Erie will soon be extended to the southern limits of Michigan, and if that road is allowed, by this state, to connect at Toledo with a road running through only two or three of our counties, and then into Indiana, that it will not be extended to Detroit, when it is evidently the true interest and policy of the state to bring it to, and have it connect with, the railroads within its limits. By destroying the illegal connection between the Michigan Southern and Erie and Kalamazoo railroads, the Lake shore road will undoubtedly be extended into Michigan and bring to our limits a vast amount of travel and business which much otherwise seek another channel, tố the serious detriment of our interests and prosperity. Every consideration connected with this subject, not only confirms your committee in the opinion that the best interests of the state demand that its past policy should be rigidly adhered to, but that its faith is sacredly pledged to carry it out for the benefit and protection of our own people. And in the opinion of your committee, we |