KCS

Rails - To - Pork?
Those who do not learn from History, Etc.: “Rails-to-Trails” is Super-Porked , THE NEWS TRIBUNE, Tacoma, Washington. Cannibals Of Finance: FIFTEEN YEARS CONTEST WITH THE MONEY TRUST By Arthur Edward Stilwell Copyright, 1912 (Page 48.) When the Kansas City Southern was started, all agricultural industries in kansas and other western states were languishing; mortgages were being foreclosed all over the west. The Railroads were forcing the people of the West to ship all grain fourteen hundred miles to the East, in place of eight hundred and nine hundred miles to Southern ports; the rates on grain were twenty-one to twenty-six cents per hundred; corn was some years ten cents per bushel in Kansas, and people were using it for fuel. (Page 57.) CHAPTER V The Port Arthur Fight While the Kansas City Southern was building, the idea of making Galveston the deep water terminal was given up. I had read in some book that the Indians had said the island on which Galveston was located had twice been covered with water. Knowing full well the history of the destruction of the Sabine Pass in the early eighties, and knowing the destructive power of these Gulf storms, I made up my mind to build a storm-proof, land-locked harbor. I felt sure that sooner or later Galveston would again be visited by a great storm, and I did not wish to have our road there when it arrived. Soon after we had bought the Texarkana & Fort Smith Railroad, which afterward was made part of the Southern System, I made up my mind to locate a city on the Gulf where no storm could reach. I went to the Sabine Pass and looked it over. There I was given all the details of the different storms that had three times destroyed the tracks of the Southern Pacific leading to this place. I heard of the awful devastation of the storm of 1883 from one of the few men who were saved. I made up my mind that it was foolish to consider this point as a terminal of our road. I found that fourteen miles back on the north shore of Sabine Lake no storm had ever touched; that the storm waters spread all over the great lake and lost their power before the north shore was reached. There I found a cow pasture which I decided to buy, and through the land build a great canal and connect with the waters of Taylor's Bayou, and have it flow through the canal, keeping it scoured out by its current of about three miles an hour. My plan was outlined and perfected and the town site of four thousand acres was purchased at a cost of twelve dollars per acre, a total of forty-eight thousand dollars. This is the price today of a few hundred feet on the leading business street of Port Arthur. Had it not been for this trip, and seeing this need of a terminal city, Port Arthur would still be a cow pasture and its great land value would not have been created. I supposed when I had located this place that this was a free country. I supposed that when a company owned a railroad and terminal property, it would be free to construct and develop, unobstructed by outside influences. But now started one of the most bitter fights ever known to the southwest. We endeavored to buy the swamp land connecting this four thousand acre plot with deep water, but were thwarted in every way by injunction suits. We then went to the Texan legislature and got the right to condemn land for the canal. This bill was fought night and day by the owners of Sabine Pass, but my constructive work for Texas during the past five years, and the fact that the owners of Sabine Pass had never developed the land at all, were considered, and we won the right to condemn that bit of swamp between the site of Port Arthur and Deep Water. The land was condemned and brought a nominal price, as it was worthless. After my fight and victory in the legislature of Texas, after the United States Court had given a verdict in our favor, I received word that Mr. Luther Lountz wished me to call on him on a certain day at eleven o'clock. I called, and I will give you word for word the conversation; it is as clear in my mind as yesterday. I said: “ Mr. Kountz, I cannot understand this awful fight you are putting up. Our land is our own; our railroad is our own; this is a free country. We are fourteen miles away from your land. I would have been glad to buy it, but as it has all been under water three times in thirty years, I do not wish it.” “ Mr. Stilwell,” he replied, “ I will force you to buy it.” “ Force? ” I repeated. “ That's a strong word. No man can force me, Mr. Kountz.” But I thought I would find out the price he wanted for what I understood cost him fifty cents per acre; so I waited. “ I want one million dollars; This is my price. If you say you will recommend the purchase, I will at once give you personal credit for one hundred thousand dollars in our bank.” As he said this, he arose to go out into the banking room to give me the credit. His face grew dark. He said: “ No, I will not build a road in Texas. My terms are one million dollars. I will at once give you credit for one hundred thousand dollars. No one shall know it. If you do not accept, I will ruin you and your road and prevent your finishing the canal.” “ Mr. Kountz, I am not for sale. Do you think I would work night and day to build this great road; would work in an unselfish attempt to make a land-locked harbor; watch every dollar that goes into the road, and then, just as my honest endeavors are about to be crowned with success, sell my manhood to you for a hundred thousand dollars? Do you think I am going to put my hand into the treasury of our company and give you one million dollars for something I consider worthless? There could be only two reasons for my doing this: one, that I am for sale at one hundred thousand dollars, which I am not; the other, that I fear you, which I do not.” I left the bank, and then was started the great fight at Washington, a record of which has been published by the Government. Now remember, my dear reader, that Mr. Kountz sent for me; I did not ask for the interview. and notice from here on that in no case have I sought any of these people who have year by year followed me. You ask why they followed me? I will tell you. Each enterprise that I have started has had such great merit that it excited avarice in some rich man's heart. He wanted what I had created, as his own. He thought I was for sale - that I had a price. When he found I was not, he adopted the well-known method of ruin through his bank connections. The fight at Washington was fierce. The matter was brought to the Ways and Means Committee, and we were enjoined from cutting the forty feet that remained to connect with deep water. We were to be given a hearing before the Committee at a distant day. It finally arrived. Then Mr. Kountz's attorney made a long speech, telling the Committee that God made the harbors and He had not made one in my cow pasture; that I had located mine to give it my name, “ This great financier of the West,” he continued, “ has told you in eloquent words of the awful storms that have in times past wiped out the Southern Pacific [Railroad] that runs along his great canal. But, gentlemen, he has not told you what would happen to his canal if such a storm came again.” [ “ 9/28/05 Port of Port Arthur Port Director Floyd Gaspard said his port survived the 125-mph winds of Hurricane Rita ' just fine,' with only minor roof damage to some transit sheds, and no structural damage at all to critical infrastructure like the port's 75-ton, rail-mounted crane, and no damage to any stored cargo at the port.” ] I arose and said: “ Mr. Dingley, I was just going to tell you of the fourth storm last year, when you said my time was up. The same kind of a storm visited this section last year and again removed ten miles of Southern Pacific track.” “ Mr. Stilwell,” asked Mr. Kountz's attorney, “ what did the storm do to your canal? ” :It only wet the water,” I answered. There was great laughter. We left the committee room and in one hour the Ways and Means Committee, with a vote of one in our favor, gave us permission to proceed. I was waiting around, and as they came out, Congressman McMullin, I think it was, of Tennessee, came up and said: “ Stilwell, they had me lined up against you before your talk, but that ‘ wetting the water’ got my vote.” That evening President McKinley sent for me. He told me Mr. Kountz had about perfected papers for a new injunction, and asked, “ How long will it take you to make that connection? ” “ It will be done by daylight,” I replied; and it was, and when the Government officers went to serve the papers, the canal was connected. It is a great waterway, as you can see on the map. It is seven miles long, and the same width and depth as the Suez Canal. The grain elevator I built, started in one week to load steamers for Europe. During the two years' fight to build a waterway on our own land, every effort had been made to prevent us. A paper had been published each week at Sabine Pass, making fun of our canal, and these papers were given out at Port Arthur to all who arrived by train. Then notice the sequel. A few years later the same Government that Mr. Kountz had used as his tool took over this canal, agreed to maintain it free for ninety-nine years, and extended it, at the Government's expense, about ten miles to the Natchez River. This wild dream of Stilwell's, that he fought the Money Trust and the Government for, was not such a wild dream after all. Port Arthur has grown rapidly; its increase of tonnage for the year ending 1910 was thirty-five per cent. Some months its foreign trade is greater than that of Galveston, but the finishing of the Panama Canal will make it one of the greatest ports of the United States. (Page 72.) I was called West and while there, awoke one morning to find that Mr. Thalman had forced a receivership at midnight on a small printing bill. (Page 78.) CHAPTER VII The Gates Offer Later I went to Chicago to open the office there, and one day met my old St. Louis acquaintance, John Gates. (Page 81.) He said: “ Stilwell, do you want to make some big money? I want to make you rich.” “ Gates,” I replied, “ any honest way that I can make money, I shall be very glad to accept.” He said: “ Stilwell, your principles make me sick. I am after the stuff, and everybody knows it. Now, I am going tonight by the Alton special train to St. Louis. At two o'clock a receiver will be appointed for all four of our Northern roads. I want you to go with me. You shall be the receiver. Then you go to these bondholders of the Omaha and St. Louis road and the Quincy road, and tell them there is no future for the road. You know them all, as you got them to accept your plan of reorganization. They will do what you say and will accept any old price. I will supply the money, and we will divide the profits.” “ Mr. Gates,” I exclaimed, “ how dare you suggest such a thing! We have over three hundred thousand dollars in the treasury now, and this, Mr. Brimson says, is all we need to bring the roads up to fair condition. Why a receiver at two o'clock in the morning if it is an honest need? ” “ Stilwell,” he said, “ you are a fool. Who said it was an honest need? A receivership is to scare people out — that is what it is for. You are a fool if you do not accept. I can keep you from being re-elected president of the Southern. Do you wish to give up the presidency of this road, to also give up a big fee as receiver of the Northern roads, as well as the profit on the deal? Now, will you go or not? The time is up. Don't be a fool.” “ Mr. Gates,” I said, “ you say the Judge will appoint a receiver at two o'clock. You must have it fixed.” He flew into a rage, pounded the desk, and said: “ It is all fixed, and I did not let you know until too late to kick.” I said: “ Gates, I can not and will not do it. I started life at twelve hundred a year, and would rather end it that way than make money as you suggest.” At two o'clock the next morning the receivership was granted. Gates joined forces with Thalmann and Harriman to keep me out of the Southern road as president. I did all in my power to keep these bond and share holders from loss, and did prevent his making as much as he expected. Kountz, Thalmann, Gates and Harriman I now had on the warpath after me, but I did not regret any of my refusals to don their several yokes, and I would today rather be the business exile I am than to own Archbold's millions, and expect here or hereafter to reap his harvest. * [ Note: Full name — Charles G. GATES. ] Next: Birth of the Kansas City, Mexico, and Orient Railroad. KCS Mexico Legal Action Isonomia.US LandGrab.US

Rails - To - Pork?

Those who do not learn from History, Etc.:
“Rails-to-Trails” is Super-Porked ,
THE NEWS TRIBUNE, Tacoma, Washington.

Cannibals Of Finance:
FIFTEEN YEARS CONTEST
WITH THE MONEY TRUST
By Arthur Edward Stilwell
Copyright, 1912

(Page 48.) When the Kansas City Southern was started, all agricultural industries in kansas and other western states were languishing; mortgages were being foreclosed all over the west. The Railroads were forcing the people of the West to ship all grain fourteen hundred miles to the East, in place of eight hundred and nine hundred miles to Southern ports; the rates on grain were twenty-one to twenty-six cents per hundred; corn was some years ten cents per bushel in Kansas, and people were using it for fuel.

(Page 57.) CHAPTER V The Port Arthur Fight
While the Kansas City Southern was building, the idea of making Galveston the deep water terminal was given up. I had read in some book that the Indians had said the island on which Galveston was located had twice been covered with water. Knowing full well the history of the destruction of the Sabine Pass in the early eighties, and knowing the destructive power of these Gulf storms, I made up my mind to build a storm-proof, land-locked harbor. I felt sure that sooner or later Galveston would again be visited by a great storm, and I did not wish to have our road there when it arrived.
Soon after we had bought the Texarkana & Fort Smith Railroad, which afterward was made part of the Southern System, I made up my mind to locate a city on the Gulf where no storm could reach. I went to the Sabine Pass and looked it over. There I was given all the details of the different storms that had three times destroyed the tracks of the Southern Pacific leading to this place. I heard of the awful devastation of the storm of 1883 from one of the few men who were saved. I made up my mind that it was foolish to consider this point as a terminal of our road. I found that fourteen miles back on the north shore of Sabine Lake no storm had ever touched; that the storm waters spread all over the great lake and lost their power before the north shore was reached.
There I found a cow pasture which I decided to buy, and through the land build a great canal and connect with the waters of Taylor's Bayou, and have it flow through the canal, keeping it scoured out by its current of about three miles an hour. My plan was outlined and perfected and the town site of four thousand acres was purchased at a cost of twelve dollars per acre, a total of forty-eight thousand dollars. This is the price today of a few hundred feet on the leading business street of Port Arthur. Had it not been for this trip, and seeing this need of a terminal city, Port Arthur would still be a cow pasture and its great land value would not have been created.
I supposed when I had located this place that this was a free country. I supposed that when a company owned a railroad and terminal property, it would be free to construct and develop, unobstructed by outside influences. But now started one of the most bitter fights ever known to the southwest. We endeavored to buy the swamp land connecting this four thousand acre plot with deep water, but were thwarted in every way by injunction suits. We then went to the Texan legislature and got the right to condemn land for the canal. This bill was fought night and day by the owners of Sabine Pass, but my constructive work for Texas during the past five years, and the fact that the owners of Sabine Pass had never developed the land at all, were considered, and we won the right to condemn that bit of swamp between the site of Port Arthur and Deep Water. The land was condemned and brought a nominal price, as it was worthless.

After my fight and victory in the legislature of Texas, after the United States Court had given a verdict in our favor, I received word that Mr. Luther Lountz wished me to call on him on a certain day at eleven o'clock. I called, and I will give you word for word the conversation; it is as clear in my mind as yesterday.
I said: “ Mr. Kountz, I cannot understand this awful fight you are putting up. Our land is our own; our railroad is our own; this is a free country. We are fourteen miles away from your land. I would have been glad to buy it, but as it has all been under water three times in thirty years, I do not wish it.”
“ Mr. Stilwell,” he replied, “ I will force you to buy it.”
“ Force? ” I repeated. “ That's a strong word. No man can force me, Mr. Kountz.” But I thought I would find out the price he wanted for what I understood cost him fifty cents per acre; so I waited.
“ I want one million dollars; This is my price. If you say you will recommend the purchase, I will at once give you personal credit for one hundred thousand dollars in our bank.” As he said this, he arose to go out into the banking room to give me the credit.

His face grew dark. He said: “ No, I will not build a road in Texas. My terms are one million dollars. I will at once give you credit for one hundred thousand dollars. No one shall know it. If you do not accept, I will ruin you and your road and prevent your finishing the canal.”
“ Mr. Kountz, I am not for sale. Do you think I would work night and day to build this great road; would work in an unselfish attempt to make a land-locked harbor; watch every dollar that goes into the road, and then, just as my honest endeavors are about to be crowned with success, sell my manhood to you for a hundred thousand dollars? Do you think I am going to put my hand into the treasury of our company and give you one million dollars for something I consider worthless? There could be only two reasons for my doing this: one, that I am for sale at one hundred thousand dollars, which I am not; the other, that I fear you, which I do not.”
I left the bank, and then was started the great fight at Washington, a record of which has been published by the Government.
Now remember, my dear reader, that Mr. Kountz sent for me; I did not ask for the interview. and notice from here on that in no case have I sought any of these people who have year by year followed me. You ask why they followed me? I will tell you. Each enterprise that I have started has had such great merit that it excited avarice in some rich man's heart. He wanted what I had created, as his own. He thought I was for sale - that I had a price. When he found I was not, he adopted the well-known method of ruin through his bank connections.
The fight at Washington was fierce. The matter was brought to the Ways and Means Committee, and we were enjoined from cutting the forty feet that remained to connect with deep water. We were to be given a hearing before the Committee at a distant day. It finally arrived.

Then Mr. Kountz's attorney made a long speech, telling the Committee that God made the harbors and He had not made one in my cow pasture; that I had located mine to give it my name, “ This great financier of the West,” he continued, “ has told you in eloquent words of the awful storms that have in times past wiped out the Southern Pacific [Railroad] that runs along his great canal. But, gentlemen, he has not told you what would happen to his canal if such a storm came again.”

[ “ 9/28/05 Port of Port Arthur Port Director Floyd Gaspard said his port survived the 125-mph winds of Hurricane Rita ' just fine,' with only minor roof damage to some transit sheds, and no structural damage at all to critical infrastructure like the port's 75-ton, rail-mounted crane, and no damage to any stored cargo at the port.” ]

I arose and said: “ Mr. Dingley, I was just going to tell you of the fourth storm last year, when you said my time was up. The same kind of a storm visited this section last year and again removed ten miles of Southern Pacific track.”
“ Mr. Stilwell,” asked Mr. Kountz's attorney, “ what did the storm do to your canal? ”
:It only wet the water,” I answered. There was great laughter. We left the committee room and in one hour the Ways and Means Committee, with a vote of one in our favor, gave us permission to proceed. I was waiting around, and as they came out, Congressman McMullin, I think it was, of Tennessee, came up and said: “ Stilwell, they had me lined up against you before your talk, but that ‘ wetting the water’ got my vote.”
That evening President McKinley sent for me. He told me Mr. Kountz had about perfected papers for a new injunction, and asked, “ How long will it take you to make that connection? ” “ It will be done by daylight,” I replied; and it was, and when the Government officers went to serve the papers, the canal was connected. It is a great waterway, as you can see on the map. It is seven miles long, and the same width and depth as the Suez Canal. The grain elevator I built, started in one week to load steamers for Europe. During the two years' fight to build a waterway on our own land, every effort had been made to prevent us. A paper had been published each week at Sabine Pass, making fun of our canal, and these papers were given out at Port Arthur to all who arrived by train.

Then notice the sequel. A few years later the same Government that Mr. Kountz had used as his tool took over this canal, agreed to maintain it free for ninety-nine years, and extended it, at the Government's expense, about ten miles to the Natchez River. This wild dream of Stilwell's, that he fought the Money Trust and the Government for, was not such a wild dream after all. Port Arthur has grown rapidly; its increase of tonnage for the year ending 1910 was thirty-five per cent. Some months its foreign trade is greater than that of Galveston, but the finishing of the Panama Canal will make it one of the greatest ports of the United States.

(Page 72.) I was called West and while there, awoke one morning to find that Mr. Thalman had forced a receivership at midnight on a small printing bill.

(Page 78.) CHAPTER VII The Gates Offer
Later I went to Chicago to open the office there, and one day met my old St. Louis acquaintance, John Gates.

(Page 81.) He said: “ Stilwell, do you want to make some big money? I want to make you rich.”
“ Gates,” I replied, “ any honest way that I can make money, I shall be very glad to accept.”
He said: “ Stilwell, your principles make me sick. I am after the stuff, and everybody knows it. Now, I am going tonight by the Alton special train to St. Louis. At two o'clock a receiver will be appointed for all four of our Northern roads. I want you to go with me. You shall be the receiver. Then you go to these bondholders of the Omaha and St. Louis road and the Quincy road, and tell them there is no future for the road. You know them all, as you got them to accept your plan of reorganization. They will do what you say and will accept any old price. I will supply the money, and we will divide the profits.”
“ Mr. Gates,” I exclaimed, “ how dare you suggest such a thing! We have over three hundred thousand dollars in the treasury now, and this, Mr. Brimson says, is all we need to bring the roads up to fair condition. Why a receiver at two o'clock in the morning if it is an honest need? ”
“ Stilwell,” he said, “ you are a fool. Who said it was an honest need? A receivership is to scare people out — that is what it is for. You are a fool if you do not accept. I can keep you from being re-elected president of the Southern. Do you wish to give up the presidency of this road, to also give up a big fee as receiver of the Northern roads, as well as the profit on the deal? Now, will you go or not? The time is up. Don't be a fool.”
“ Mr. Gates,” I said, “ you say the Judge will appoint a receiver at two o'clock. You must have it fixed.”
He flew into a rage, pounded the desk, and said: “ It is all fixed, and I did not let you know until too late to kick.”
I said: “ Gates, I can not and will not do it. I started life at twelve hundred a year, and would rather end it that way than make money as you suggest.”
At two o'clock the next morning the receivership was granted. Gates joined forces with Thalmann and Harriman to keep me out of the Southern road as president. I did all in my power to keep these bond and share holders from loss, and did prevent his making as much as he expected.
Kountz, Thalmann, Gates and Harriman I now had on the warpath after me, but I did not regret any of my refusals to don their several yokes, and I would today rather be the business exile I am than to own Archbold's millions, and expect here or hereafter to reap his harvest.
* [ Note: Full name — Charles G. GATES. ]

Next: Birth of the Kansas City, Mexico, and Orient Railroad.
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