Chapter 6

WISCONSIN CENTRAL RAILWAY

Aside from the general hysterical interest in railroad building in the sixties and seventies, the Federal Government was not on the best of terms with Great Britain. The latter had shown too much sympathy to the Confederacy during the Civil War and the famous “Alabama” claims dragged on long after Appomattox. The War Department felt that means of getting to the Canadian boundary were necessary in the Midwest and a so-called a Military road was constructed north from Shawano to Ontonogan on Lake Superior in the middle sixties and later extended from Shawano to Fort Howard (Green Bay). But this was little more than a rough trail, and because a railroad would be of much greater military value, the government offered a particularly valuable bait of land for its building.

The government settled upon one specific route -- that of a railroad straight north through the center of the State "from Portage City to Lake Superior".

The Land Grant for this project amounted to 2,387.000 acres valued at $1.50 to $5.00 per acre. Two companies the Winnebago & Lake Superior and the Portage & Superior, applied for this Grant and received it jointly. They failed to construct any road so the Grants were withdrawn. Later, the Portage & Superior portion was assigned to the Madison & Portage R.R., one of the predecessors of the C.M.&St.P., applying to that section of the line between Portage City and Ripon.

The Winnebago & Lake Superior was incorporated April 6, l866 and contemplated construction from a point on Lake Winnebago in a northwesterly direction to Lake Superior, about 250 miles. In the Directorate were George Reed, President and Curtis Reed, his brother of Menasha.

In May 1869 the Winnebago & Lake Superior and the Portage & Lake Superior were consolidated under the name of the Portage, Winnebago & Superior RR, with George Reed, President.

In the meantime, a third group of men from Portage City, Stevens Point and vicinity formed the Portage, Stevens Point & Superior RR incorporated March 16, 1870. It was chartered to build from Portage City directly north to Stevens Point, thence to Superior, WI, via Ashland or Bayfield. It was also authorized to connect with the Milwaukee & St. Paul RR (later the C.M.&St.P., and now C.M.St.P.& P.) at Portage City, thus assuring a Milwaukee terminal for freight and passenger traffic, originating along the line to the north. On November 23, 1870 this road was consolidated with the Portage, Winnebago & Superior under the latter name.

On February 4, 1871 the name of the Portage, Winnebago & Superior was changed to the Wisconsin Central R.R. Company and marks the beginning of the railroad bearing the name of the "Wisconsin Central of 1871".

The Land Grant to the Wisconsin Central was from Menasha to Ashland and Superior. Failing to build a line from Ashland to Superior, that portion of the grant was withdrawn and assigned to the Northern Pacific. The remainder of the Grant; namely, Menasha to Ashland was earned and proved by the Central, and in the final adjustment, after deductions, the Central was awarded approximately 888,288 acres. After the Central completed the line from Menasha to Ashland, no further grants of land were awarded to the road.

The road was originally promoted by three men Judge George Reed of Menasha, his brother Curtis of Menasha and Matt Wadleigh, a lumberman of Stevens Point. George Reed was a powerful figure in Wisconsin, skilled in corporate law, politics and promotional procedure.

The Reed brothers and their associate, ex-Territorial Governor James Doty, undoubtedly had considerable political influence. This enabled them to secure the Land Grant and start the line from the territory in which they were most interested --- financially and otherwise. There is no other explanation for the granting of land for a railroad to be built from "Doty Island to Lake Superior".

Judge Reed went to Boston, Mass., to seek money with which to complete his dream He had engineered one of the largest land grants in the State, and he found in Gardner Colby a ready sanctuary for his plan of the future Wisconsin Central. Reed was considered familiar with fundamental problems of railroad construction. Colby and son, Charles L., were novices and entirely ignorant of the highly complicated enterprise they were about to finance. However, Gardener Colby had confidence in his ability to successfully complete any project he espoused.

Promoter Reed and Financier Colby then set about to employ a practical railroad builder and manager. Their choice fell upon Elijah B. Phillips, then President of the Lake Shore & Northern Indiana. In this Reed appears to have had little voice.

Phillips throttled the enterprise for seven years, leading it to the brink of bankruptcy, into which Colby allowed it to sink. Colby and Phillips, as if by mutual understandings, so seriously hampered and abused the sincerity and ethical motives of the original promoters that George and Curtis Reed were forced to capitulate and retire before 1876. Matt Wadleigh retired from the board in 1886.

The next move in strengthening the corporate structure of the project was the consolidation of the Manitowoc and Minnesota Railway (originally the Manitowoc & Mississippi) with the Wisconsin Central, July 10, 1871. This move was the answer to George Reed's prayer, for he had worked unceasingly toward that end, visualizing a strong independent trunk line from Manitowoc to Superior and Duluth, there to connect with the Northern Pacific.

Up to June of 1871 the entire Wisconsin Central project was a matter of paper and pencil. No construction work of any nature had been performed, and the company owned no property or equipment. From here on, Gardner Colby and Company took charge firmly and with no uncertain measures.  At the first official business meeting of financiers and their agents,  promotion and stockholders, the following directors and officers were elected: Gardner Colby, President, Boston, Mass., George Reed, Vice President, Menasha, WI, Samuel H. Walley, Treasurer, Boston, Mass., and Frank W. Webster, Secretary, Menasha, Wis. Directors: Gardner Colby, Boston, Charles L. Colby, Boston, Samuel Gould, Boston, Elijah B. Phillips, Chicago, E. G. Roberts, Boston, E. E. Barney, Dayton, Ohio, George Reed, Menasha, Curtis Reed, Menasha,  Matthew Wadleigh, Stevens Point.  Executive Committee: Gardner Colby, Elijah B. Phillips, George Reed. George Reed, General Solicitor, Capt. D. W. Wellman, Chief Engineer, W. B. Agnew, Civil Engineer, W. W. Rich, Consulting Engineer - Supervisor of Construction, William Grant, Estimating Engineers P.W.& S., resigned 1871, and R. A. Brown, Engineer, Maps & Profiles north of Stevens Point, resigned 1872.

In January 1870 general headquarters were established at Menasha in the New National Hotel. In November 1870 they were moved to the Bates Building in Menasha, and in 1872, to Milwaukee, with permanent operating headquarters at Stevens Point.

At the annual meeting December 31, 1873, Directors elected were Gardner Colby, Samuel Gould, A. J. Berryon, W. T. Glidden, Edwin H. Abbot, Charles L. Colby; all of Boston, Mass., George Reed, Menasha, Matt Wadleigh, Stevens Point, and Elijah B. Phillips, Chicago. Officers were: Gardner Colby, President, Charles L. Colby, Vice President, Edwin H. Abbot, Sec'y-Treas, and Elijah B. Phillips, General Manager.

Note that Curtis Reed, of Menasha, was dropped from the Board of Directors, the beginning of elimination of local Wisconsin men from positions of influence; also, note election of Edwin H. Abbot, a brilliant young attorney from Boston, who rose to President within a few years.

Directors and officers of the Central elected March 7, 1876: Directors: Gardner Colby, Samuel Gould, A. J. Berryon, Edwin H. Abbot, J. W. Converse, all of Boston; Charles L. Colby, H. L. Palmer, E. B. Phillips, all of Milwaukee; Matt Wadleigh of Stevens Point, Officers:  same as 1873, adding Henry Pratt (former Secretary of Phillips and Colby Construction Company) now General Ticket Agent, and H. M. Riddle, General Freight Agent.

In this election but one original local Wisconsin director remains on the Board, Matt Wadleigh.

George Reed, original promoter, called the father of the Wisconsin Central, long a virtuous thorn in the side of the Colbys and Phillips, has been eliminated.

Financial report of 1876 indicates that the Company had first mortgage 7%  Land Grant Bonds due 1901 in the amount of $5,751,500.00. In October 1886, F. N. Finney, General Manager since 1878, was elevated to the position of Managing Directors and William S. Mellen, of the Northern Pacific, elected as General Manager. The new position as Managing Director came in recognition of the skill and energy displayed by Mr. Finney in his unusually efficient work in construction and management of the road, and provided broader opportunities in which to utilize his talent as builder and leader.

Of greatest importance to the affairs of the Wisconsin Central was the formation of the Wisconsin Central Company formed June 17, 1887, under the Laws of Wisconsin. In the formation, the following directors were elected: Charles L. Colby, E. H. Abbot, David S. Wegg, William S. Mellen, Howard Morris, Frederick Abbot, Abbot Lawrence, Colgate Hoyt, and Henry F. Spencer. Officers: Same as Wisconsin Central Railroad -- Samuel R. Ainslie of Northern Pacific, General Manager, Andrew A. Allen, formerly Division Superintendent, became Ass't General Manager; James Barker, General Freight and Passenger Agent.

The purpose of this new organization was to acquire possession, ownership and control Of the following Wisconsin Central Railroad properties, Minneapolis, St. Croix & Wisconsin, Wisconsin & Minnesota, Chippewa Falls & Western, St. Paul & St. Croix Falls, The Wisconsin. Central Railroad, The Penokee Railroad, and The Packwaukee & Montello Railroad.

All of these were independent railroad organizations constituting, with their leased lines; (namely, the Milwaukee & Lake Winnebago, and the Chicago, Wisconsin & Minnesota) The Wisconsin Central Trunk Line System.

On July 1, 1888, the Wisconsin Central Company entered upon actual possession, operation and management of the entire Wisconsin Central System, excepting only the Wisconsin Central Railroad and its leased line; namely, the Milwaukee & Lake Winnebago. (The Wisconsin & Minnesota was operating the Chicago, Wisconsin & Minnesota Railroad under lease at the time).

The Wisconsin Central Railroad and the Milwaukee & Lake Winnebago continued to be possessed and operated by Stewart and Abbot, Trustees for the Wisconsin Central Railroad.

But the Wisconsin Central Company will eventually operate and control all the road now in possession of these Trustees since it has already bought about seven-eighths of the stock and owns or controls at least two-thirds of the outstanding bonds issued by the Wisconsin Central Railroad Company.

In October 1888 F. N. Finney, Managing Director resigned. In 1890 he was elected to the position of President of the Soo Line.

William S. Mellen returned to the Northern Pacific in 1889 to become General Manager. Samuel R. Ainslie, Ass't General Manager Or the North-ern Pacific, immediately filled the position vacated by William S. Mellen, and David S. Wegg, Counsel for the Northern Pacific, came to the Central as General Solicitor. Charles L. Colby, Edwin H. Abbot and Colgate Hoyt, Directors and stock of the Central, were Directors of the Northern Pacific. (For the story about the Receivership of the Northern Pacific and the Wisconsin Central see page )

Henry F. Whitcomb was appointed Receiver of the Central in 1893. He had been General Manager of the Milwaukee, Lake Shore & Western when it wows absorbed by the C.&N.W. in 1893, a particularly fortunate circumstance for the Wisconsin Central.

The years 1893-1897 were devoid of expansive movements. Strict economy governed everything. Edwin H. Abbot retired as President in 1890. H. F. Whitcomb was elected Vice President and General Managers and Alpheus Hardy was elected President. The road continued to be operated by Receivers Whitcomb and Morris.

In July 1899 when the reorganization had been accomplished and all properties unified under the new Wisconsin Central Railway Company, the road was released from receivership. Whitcomb and Morris, Receivers since September 1893, were retained in positions of wider scope and responsibility.

Whitcomb came into his own and was elected President and General Manager, in recognition of his fine achievement in managing the properties through the financial crises and business depression. Howard Morris remained as general Counsel for all properties.

President Whitcomb retired from office in 1906. Earlier in that year the Cincinnati, Hamilton & Dayton R.R. entered the sphere of influence in the affairs of the Central, and William A. Bradford, a former director of the C.H.& D. took the office vacated by H.F. Whitcomb.

In 1907 William A. Bradford was elected President, George W. Webster, Secretary.

Newman Erb was elected President in 1908. He had been a Director of the C,N.&D, However, his reign was short-lived. Erb served but a few months when the Soo Line and its parent company, the Canadian Pacific, acquired priority in control of the Central.

In 1908 the Minneapolis, St. Paul & Ste. Marie Railway, otherwise known as the Soo Line, acquired ownership of a majority of the outstanding capital stock of the Wisconsin Central Railway Company. On April 1, 1909, an agreement was entered into between the Wisconsin Central and the Soo Line under the terms of which control of all the property Of the Wisconsin Central was transferred to the Soo Line for a period of ninety-nine years effective April 1, 1909. This agreement covered the acquisition of the voting rights of the Wisconsin Central through an exchange of $11,176,800,00 par value of the Soo Line's leased line stock certificates for $11,176.800.00 par value of preferred stock of the Wisconsin Central. The agreement recited that the preferred stock of the Wisconsin Central should be deposited with the Agents Bank of Montreal, New York, as Trustee, which was to effect the exchange of securities, In this manner the Soo Line gained control of the Central.

In event of default in the payment of $4.00 per share per annum on each of the Soo Line’s leased line stock certificates, the Trustee was to return the preferred stock of the Central to the original holders, and cancel the leased-line stock certificates.

The so-called lease was more in the nature of an Operating agreement than a lease, as the property of the Wisconsin Central was operated as a separate corporation. The Soo Line did not participate in the profits realized or the losses sustained in the operation of the property of the Central, nor did it pay a rental of any description in connection with this lease. All profits or losses accrued to the Wisconsin Central.

The salaries of certain officers Off e Central who were also officers of the Soo Line were paid proportionately by both companies, profits or losses accrued to the Wisconsin Central.

The Central had outstanding a total par value of $66,631,828 in stocks and long-term debt, of which $16,119,600 represented common stock, $11,265,300 Preferred stock $47,785,000 funded debt, and $1,461,928 non-negotiable debt to affiliated companies.

Non-carrier Lands and improvements were valued at about $6,759,000. Net receipts from sales of land acquired originally through federal land grants and gifts were recorded as $5,600,000.

As valued at the time of the Soo lease, the Wisconsin Central property, good will and going-concern assets totaled about $52,000,000, a conservative valuation established by the I. C. C. for rate-making purposes.

After April 1, 1909 the Wisconsin Central became another division of the Soo Line and its identity became lost except for corporate affairs.