xt7ns17snk40 https://exploreuk.uky.edu/dips/xt7ns17snk40/data/mets.xml Ferguson, Edward Alexander 1905  books b02-000000009 English The R. Clarke Co. 1905. : Cincinnati : Contact the Special Collections Research Center for information regarding rights and use of this collection. Noland, Stephen, 1818- Founding of the Cincinnati Southern Railway with an autobiographical sketch, by E. A. Ferguson. text Founding of the Cincinnati Southern Railway with an autobiographical sketch, by E. A. Ferguson. 1905 2002 true xt7ns17snk40 section xt7ns17snk40 


      OF THE



            WITH AN


        E A FERGUSON


This page in the original text is blank.


    Preface   -    -    -    -    -    -    -    -    -
 I. Autobiographical sketch of E. A. Ferguson,
 II. The Necessity of the Railway, by Dr. J. H. Hollander,
III. Legislation and Litigation, by Dr. J. H. Hollander,
IV. Testimony of E. A. Ferguson, before Special Master



- -  31

V. Testimony of E. A. Ferguson, before Investigating Com-
       mission,    -    -    -    -    -    -    -    - 61
VI. Account of the Banquet, March 18, 1880, with Speech

        of E. A. Ferguson,    -    -    -    -
Vii. Municipal Results, by Dr. J. H. Hollander -

-   - 125
-   - 219



A. Text of Ferguson Act

-   - 131

B. Opinion of Judge Alphonso Taft, and concurring opinions 135

C. Common Carrier Act

-   - 142

D. Memorandum of Agreement between the Trustees of
        The Cincinnati Southern Railway and The Cincin-
        nati Southern Railway Co. -    -    -    -    -
E. Form of Lease prepared by E. A. Ferguson  -  -   -



This page in the original text is blank.


    With the exception of the autobiographical sketch this work
is a compilation fromn various scattered sources. It is not a his-
tory of the efforts made before the passage of the Ferguson Act
to oet a railway from Cincinnati to the South Atlantic Seaboard
or to the south. Incidentally allusions are made to these efforts.
It beoins with the drafting. of the Ferguson Bill and ends with
a short account of the grand banquet given by the citizens of
Cincinnati on March 18, 1880, upon the opening of the Cincin-
nati Southern Railway for traffic between its termini, the city of
Cincinnati, and the city of Chattanooga, Tennessee, a distance
of 336 miles.
    From the dissertation of Mr. J. H. Hollander, a student at
the Johns Hopkins University, presented to the Board of Uni-
versity Studies for the degree of Doctor of Philosophy, I have
taken and used, with his and the University 's consent, the
chapter on "The Necessity of the Railway" and that on "Legis-
lation and Litigation." After the decree was conferred on him,
his dissertation was published in January, 1894, in the Twelfth
Series of the Johns Hopkins University Studies, with the title,
"The Cincinnati Southern Railway, a Study in Municipal Activ-
ity. "
     Dr. Hollander spent several months in making a thorough
investigation of the subject of his essay. In matter, thought and
style it is believed to be unexcelled by any similar dissertation.
It is regretable that there are but few copies of it left, and it is
hoped that if he should prepare a supplement, giving his views
of the municipal results of the operation of the railway under
the lease to The Cincinnati, New Orleans  Texas Pacific Railway


Company, that his original monograph will be reprinted with it.
Dr. Hollander is now a Professor of Political Economy in the
Johns Hopkins University. He has made a national reputation
for himself by his work for the United States Government in
devising for Porto Rico a system of local taxation to meet the
expenses of its domestic government which was adopted and went
into force in July, 1901, and under which, with free trade with
this country, that island has been greatly benefited.
    For a sketch of the frequent vacillation of public opinion
and the consequent delay in the completion of the railway, ref-
erence is made to a pamphlet, entitled "The Beginnings of the
Cinicinnati Southern Railway," published by Mr. H. P. Boyden,
November 9, 1901. Mr. Boyden's experience as a journalist and
as City Auditor of Cincinnati amply fitted him for his task. It
will repay perusal.
    For laws relating to the railway, other than the Ohio Acts,
published in the appendix hereto, reference is made to a com-
pilation published by the Trustees which contains them and the
Tennessee and Kentucky acts, authorizing the Trustees to ex-
arcise the powers in those states conferred on them by the Fer-
guson Act. As there was but a mile of the original road in Ohio,
it is evident that without the Tennessee and Kentucky enabling
acts, the plan would have failed, unless congress had intervened,
and authorized the construction of the railway by the Trustees
as a military and post road.
    To the Hon. John G. Carlisle, then Lieutenant Governor of
Kentucky, credit is principally due for the passage of the Ken-
tucky acts.
    For the use of the plates of the railway, as finally built, and
the view of the Grand Banquet, I am indebted to the Lessee
    August 28, 1905.



       Autobiographical Sketch of E. A. Ferguson.
    I was born in the city of New York, November 6, A. D.
1826. In 1830, my parents moved to the city of Cincinnati,
bringing with them their two children, my elder brother, Wil-
liam Gribbon Ferguson, and myself, Edward Alexander Fergu-
son. I was educated in the public schools of this city, at Tal-
bot's Academy and Woodward College, from which I was grad-
uated in the English Department in June, 1843.  I had also
studied Latin and Greek, enough of the former to be useful as a
student and practitioner of law. When I entered Wood-
ward  College my   desk-mate was Charles Nordhoff, who
became a noted author. Having imbibed a strong desire
to become a lawyer, I entered my name with Henry Snow, Esq.,
of the Cincinnati Bar, who had been Professor of Languages in
Woodward College while I was a student. I pursued my studies
at home, my method being to read not less than thirty pages of
law each week-day, except Saturday. Saturday morning I re-
viewed what I had previously read, and on Saturday afternoon
was examined by Mr. Snow. In this way I acquired, in the
course of five years, a good knowledge of the principles of law.
While studying law I read history, political economy, and the
best of the English Classics. One of the books that had probably
the most to do in forming my opinions was the Edinburgh Re-
view, the bound volumes of which I read from its first issue.
     At the May term, 1848, of the old Ohio Supreme Court, on
the Circuit, I was admitted to the bar; but did not commence
practice until December of that year, having for the previous
eighteen months taught in the public schools of Cincinnati.
On September 17, 1851, I married Miss Agnes Moore, a grand-


daughter of Adam Moore, an early pioneer and a leading mer-
chant of- Cincinnati.
    In -April, 1852, in my twenty-sixth year, I was elected by
the City Council of Cincinnati, City Solicitor. My first duty
as Solicitor was to go to Columbus, Ohio, where the First Gen-
eral Assembly under the Constitution of 1851 was in session.
A general tax law had been passed, a section of which so re-
stricted, it was thought by the city officers, the levy for city
purposes, that under it there could not be a sufficient amount
raised for municipal purposes to carry on the city government.
There were two bills pending for the organization and govern-
ment of municipalities, one drawn by William G. Williams,
the City Clerk, and introduced in the House by Benjamin T.
Dale; the other drawn by William Y. Gholson, my predecessor
in office, afterwards a Judge of the Superior Court of Cincin-
nati and the Supreme Court of Ohio, which was introduced in
the Senate by Adam N. Riddle, a Senator from Hamilton
County. Mr. Dale felt aggrieved that Senator Riddle had in-
troduced the Gholson Bill without first consulting with him,
as he had first introduced the Williams Bill. Mr. Dale also
complained that he could not get his colleagues, the Hamilton
County Delegation, who were mostly young men, to give at-
tention to this important subject. Upon my suggestion Mr.
Dale agreed that we should meet at his room in the evening and
take up both bills. As the Gholson Bill was drawn by a learned
lawyer, and contained provisions for the organization as well
as the government of municipalities which the Williams Bill
did not, we took up the Gholson Bill first, and by twenty-seven
amendments taken principally from the Williams Bill, that
evening prepared a new bill which became the Municipal Code
of 'May 2, 1852.
    One of the amendments repealed the restricting clause in
the general tax law; another created the Police Court. This
was my first experience in legislation. My term as City Solici-



tor expired in Mlay, 1853, and soon thereafter I was retained by
the Commissioners of Hamilton County as their legal adviser,
and was such for about eight years. During this time a new
court house, jail, lunatic asylum, and other public works were
constructed, which required the drafting of bills and contracts
which became the subject of litigation.
    In addition to a general practice I was engaged as one of
the Counsel in all the important street and steam railway cases.
    In AMay, 1855, I went abroad on a vacation trip. While in
London I visited the Courts of Law and Equity then in session
and had an opportunity of listening to debates in the House of
Commons. From London I crossed to the continent landing at
Ostend and from thence to Brussels and the field of Waterloo,
then to Cologne and through the Rhine Country into Switzer-
land. From Switzerland I went through France, stopping two
weeks at Paris during the Exposition, returning to England
and going as far north into Scotland as Edinburgh.
    At the October election in 1859, I was elected one of the
three Senators from Hamilton County to the General Assembly
of 1860-1861. While in the Senate I drew various bills which
became laws relating to the City and County government and
street railways. I also drew the Bribery Act, the Canal Leasing
Act, and after the outbreak of the Civil War in 1861 with the
aid of General George B. McClellan, the act under which was
organized the Ohio Volunteer Force. Among the Senators who
afterwards became distinguished were James A. Garfield, Jacob
D. Cox, and Thomas M. Key. In the House was William B.
Woods, who became distinguished as a soldier, and afterwards
a Judge of the Supreme Court of the United States. General
Benjamin R. Cowen was Clerk of the House; two of the re-
porters were Whitelaw Reid, now of the New York Tribune and
Ambassador to England, and William Dean Howells, one of the
editors of Harper's Mlagazine, and a distinguished author.
     After the expiration of my term as Senator in 1861, upon



the election of Charles Fox, Esq., as a Judge of the Superior
Court of Cincinnati, who had been solicitor of the Cincinnati
Gas Light and Coke Company, I was retained by that company
in his place, and continued such for about thirty-three years.
    The foregoing is a partial statement of my experience as
a lawyer and legislator before drafting, in my forty-second year,
the Cincinnati Southern Railway Act of May 4, 1869.
    As to the part I took in the execution of the trust after
my appointment as Trustee, Dr. Hollander in his review of the
trust has this to say (Essay page 73):

    "In the objective study of an institution, it is rarely pos-
sible to recognize personal elements. Yet any survey of the
influences at work in the history of the Cincinnati Southern
Railway would be imperfect without a clear recognition of the
part contributed by a single personality, Mr. Edward A. Fergu-
son, the author of the original enabling act, and a member of
the Board of Trustees since its creation. In so far as it is pos-
sible to speak of any large work as the product of a single agent,
the Railway is to be associated with his name. The inception
of the project, every piece of legislation, is traceable to his legal
ingenuity. He is closely identified with the actual construc-
tion and ultimate disposition of the Railway, and but few cle-
tails in its history fail to reveal the impress of his activity.
Material interests, political preferment have been sacrificed, and
a life of high possibilities devoted with rare unselfishness to this
one end."
    To this may be added the testimony of Mr. H. P. Boyden,
in his pamphlet entitled "The Beginnings of the Cincinnati
Southern Railway." On page 110 he says:

    "Mr. Hollander says in his intensely interesting sketch,
'The experiment was unique as it was remarkable.' So it was
as hazardous as it was unprecedented. It was not in the power
of the capacity of many men to steer a straight course in the
nine years from the time the building of the road was decided
on to the decisive vote of 1878.
    "But no one can read the history of those years as meagerly
set forth in the various extracts that have been given, and call
back to mind what happened in the years that came after, and
fail to recognize the dominant, controlling power of one man
and his consistency of purpose. The man whose ingenuity and



knowledge of the law drew the first act; who as, Trustee thought
out a plan for the construction. of the road which was finally
carried out almost to the letter; whose faith never wavered and
who cheered in times of despondency; whose indomitable courage
withstood attacks from fellow Trustees, from newspapers, from
the wealthiest men in the city, whose steadfast conviction as to
policy sustained him through criticism and objection, whose fer-
tility of resource, capacity to meet obstacles and overcome them,
whether interposed by General Assemblies or Chamber of Com-
merce, never failed him-Mr. Ferguson is the one above all
others who, from first to last, hewed close to the line."


                The Necessity of the Railway.
                    (By DR. J. H. HOLLANDER.)

    During the early decades of the present century, Cincin-
nati was the most important commercial center of the West. In
1820, Chicago had not yet come into existence, St. Louis was
a mere trader 's settlement, and Louisville a modest town of
some four thousand inhabitants. The traffic of the entire
region drained by the Mississippi river and its tributaries was
transported by water, and Cincinnati was practically the only
market in which the surplus products of the South and West
could be exchanged for eastern and northern manufactures.
The application of steam to river navigation in the decade be-
tween 1820 and 1830 greatly strengthened and developed these
natural advantages. Louisville and St. Louis rose about the
same time to commercial importance, but their competition only
served to stimulate the growth of the older city. Population
increased from 9,642 in 1820 to 161,044 in 1860, and remained
throughout this entire period the largest of any city west of the
seaboard.' Commercial relations extended from Pittsburgh to
Fort Benton, Montana, and from St. Paul to New Orleans.
Particularly with the South, as a result of advantageous location

   1 The population of the four cities, as shown by the several census
reports, was as follows:
                 1820   1830    1840    1850     1860     1.870
Cincinnati      9,642  24,831  46,338  115,435  161,044  216,239
Chicago                    70   4,470   29,463  112,172  298,977
St. Louis               5,862  16,469   77,860  160,773  310,864
Louisville      4,012  10,341  21,210   43,191   68,033  100,753
    See Report on Internal Commerce and Navigation of the United
States, 1880, p. 73.


and intimate acquaintance with the tastes and habits of southern
merchants, a large and profitable business was enjoyed.
    Recognizing that the natural empire of trade lay in this
direction, clear-headed Cincinnati merchants early urged the im-
provement of existent means of communication. Already in
1835, five years after the feasibility of steam locomotion had been
demonstrated, a public meeting was held for the purpose of con-
sidering the subject of railway transportation between Cincin-
nati and the cities of the South Atlantic. An active part was
taken in the agitation which, in the following year, secured the
charter of the Cincinnati, Louisville and Charleston Railway,
and a memorable event in early municipal history was a wonder-
ful illumination of the city, amid falling snow, in February,
1836, in celebration of the grant of right of way to this road
by the Legislature of Kentucky. Cincinnati sent a strong dele-
gation to "the great southwestern railroad convention," held in
furtherance of the project in Knoxville, in the following July,
at which delegates were present from Indiana, Ohio, Kentucky,
Virginia, Tennessee, Georgia, Alabama, South Carolina, and
North Carolina, and over which Governor Hayne of South
Carolina presided. The proposed road was here endorsed, and
a route selected from Charleston, South Carolina, along the
French Broad through Cumberland to Cincinnati. The Ken-
ticky charter required the construction of branch roads from
some point in the southern portion of the State to Maysville and
Louisville. This burdensome condition delayed the commence-
Inent of work until the financial crash of 1837, when, under
the general industrial and financial depression, the project, with
all that it promised, was for the time abandoned. Agitation for
a southern railroad was renewed at intervals in Cincinnati dur-
ing the next fifteen years. The constitution of Ohio permitted
special acts of legislation authorizing cities, towns or town-
ships to become stockholders in private corporations, and in the
general spirit of the period, encouragement was given to various



umnsuccessful railroad companies organized for the purpose of
providing direct access to the South.
    By the year 1850, the reaction against public works in
Ohio had fairly developed. The     State debt at    that  time
amounted to over eighteen millions of dollars, and " as busi-
ness enterprises both the public works and the private concerns
aided by the State were failures." 1 The abuses of rash wild-cat
speculations made in the mad fever for internal improvements
by cities and counties throughout the State had grown very
serious. Most of the stock so subscribed had become utterly
worthless, and the greatest difficulty was experienced in the as-
sessment and collection of the heavy taxes necessary to meet
the bonds by which the subscriptions were paid. Legal processes
had repeatedly to be employed, counties attempted repudiation,
and the public credit was greatly shaken.2 The general situation
was so ominous that the Constitutional Convention which met in
1850 not only prohibited State aid of any kind to public works,
but inserted, by a decisive vote of 78 to 16, the following clause
in the new document:

    Art. VIII. See. 6.-" The General Assembly shall never
authorize any county, city or township, by vote of its members
or otherwise, to become a stockholder in any joint stock company,
corporation or association whatever, or to raise money for, or
loan its credit to or in aid of such company, corporation or as-
sociation. "

    The insertion of this clause definitely removed the possi-
bility of Cincinnati securing railroad connection by subscription
to any private enterprise.
    In the meantime, the local necessity for improved means of
communication with the South had grown in urgency. Com-

    1 Charles N. Morris, Internal Improvements in 0i7io; in Papers of
the American Historical Association, vol. iii., p. 107.
    2 Walker vs. City of Cincinnati, 21 Ohio St., 14.
    3Poore, Charters and Constitutions, ii., p. 1473. For the long and
interesting debate which preceded its adoption, see Debates of Con-
stitutional Convention of Ohio, 1850-51, ii., p. 300 et seq.



niercial supremacy in the West and Northwest departed from
Cincinnati with the inauguration of railroad transportation in
the vallev of the Mississippi. The area of trade was greatly
enlarged, but the number of competing points more than
proportionately increased. Three distinct lines to the sea-board
brouoght in New York, Philadelphia, Baltimore and Boston as
active competitors for trade north of the Ohio river. The
Chicago and Rock Island Railroad, with connections completed
in 1834, gave Chicago access to the northwestern region of
Dakota, Nebraska Minnesota, and Iowa. St. Louis reached out
in all directions, increasing connecting mileage in Indiana,
Illinois, and Missouri from 339 miles in 1850 to 4186 miles in
1856.' Cincinnati responded to this general movement by active
railroad construction and extension. The mileage of Ohio grew
from 299 miles in 1850 to 1869 miles in 1856.2  But the exclusive
advantages that had existed with respect to water transportation
no longer prevailed. The closer proximity and momentum of
growth of the new cities, the ease of railroad construction in the
West, more than compensated for the advantages of established
industries and defined lines of trade.
    In the South, Cincinnati retained a dominating position for
some years longer. Railroads constructed during the early part
of the decade were largely tributary to river transportation, or
local lines offering little competition to river traffic. In 1859,
however, the Louisville and Nashville Railroad was opened for
through travel, and Louisville, the most active competitor of Cin-
cinnati for Southern trade, was placed in direct communication
with Nashville, thence by connecting roads, with Knoxville,
Chattanooga, Memphis, Augusta, Charleston, and almost every
important point in the South. The superior rapidity and regular-
ity of railroad transportation at once asserted itself, and a steady

   'Internal Commerce of the United States, 1882; Appendix, p. 235.
   2 Report of Secretary of State of Ohio, 1880, p. 625. The greater
part of this was directly tributary to Cincinnati.



deflection of traffic from the river to the railroad, that is, from
Cincinnati to Louisville, set in.
    The graver aspect of the situation now engaged general
attention. Efforts were renewed to secure the construction of
an independent Southern railroad by private enterprise, but
without success. It was a period of quick active speculation,
with abundant opportunities for secure investment and imme-
diate returns. The length of the proposed road, the unusual
topographical difficulties of the route, the probable cost of
construction, the slow developilent of local traffic, the certainty
of bitter competition from an intrenched corporation, and the
necessity for practically completing the line before profitable
connections could be secured, presented difficulties to outside
capital which the obvious local desirability of the road could
not overcome. Various propositions were suggested to evade the
constitutional prohibition of municipal aid, but these were one
after another demonstrated impracticable.
    In 1859, an attempt was made to stimulate private enter-
prise by the offer of a cash bonus to be raised by individual sub-
scription. After some negotiation, the Cincinnati, Lexington
and East Tennessee Railroad, in operation from Lexington to
Nicholasville, Kentucky, proposed to extend its rails to Knox-
ville, Tennessee, upon the condition that the sum of one million
dollars should be so provided. The Kentucky Central Railroad
was already in operation between Cincinnati and Lexington, and
the proposed extension would practically give Cincinnati an in-
dependent line into the heart of Southern territory. The offer
was conditionally accepted, and subscription lists circulated.
Many persons, whether convinced of the futility of the project,
6r believing that the necessary amount would be raised in-
dependently, failed to respond as expected, and after a little
more than half of the entire sum had been secured, no further
progress was made. Modifications of the original plan were sug-
gested, but before anything could be accomplished the muttering


of the approaching civil storm had diverted public attention in
other directions, and all agitation was abandoned.
    During the war the absence of a Southern railroad was
keenly felt. A direct line connecting Cincinnati with some com-
manding point in the South, appeared so obviously necessary
to successful military operations that one of the early messages
of President Lincoln to Congress urged its construction.' Sur-
veys were ordered by General Burnside, and lines run by Mr.
W. A. Gunn, of Lexington, Kentucky, from Nicholasville, south
to the Cumberland river.2 Somewhat later a draft of negroes
was actually made for the preparation of grades. No immediate
action was, however, taken by Congress, and in the excitement of
immediate developments the enterprise was allowed to drop.
But for the failure of local representatives to press the Presi-
dent's recommendations upon Congress, and the abandonment of
the projected advance against Cumberland Gap, it is probable
that the construction of a Southern railway would have been
at least undertaken by the national government.3
    The commercial interests of Cincinnati suffered much from
-the events of the war. Trade with the Southern States was
practically cut off, and manufacturing and commercial interests
were paralyzed. The demand for military supplies later de-
veloped feverish activity in certain industries, but the stimulus
was artificial, and its evil effects were felt in the reaction which
followed the close of the struggle.   When business interests
returned to normal development with the revival of the pros-
trate industrial life of the South, it appeared that the four
years of strife had firmly established the deflecting tendencies of
the preceding period. Just as the.rich stream of immigration

     Congressional Globe, Dec. 3, 1861; Appendix, p. 1.
     2 Mr. Gunn was subsequently appointed Chief Engineer of the
Cincinnati Southern Railway and directed the preliminary surveys
made for this purpose. The line, as finally located, included a portion
of the earlier military survey.
    'Cf. Nicolay and Hay, Abraham Lincoln, v., pp. 66-67.



had been diverted from the valley of the Ohio to the fertile
region of the Northwest, so the new channels of trade, which the
dawning revolution in means of transportation had indicated,
were now permanent and predominant. By 1868, the general
traffic of the North and West had passed from Cincinnati to the
new cities of the Mississipppi and the Lakes,-St. Louis, Chicago,
Cleveland, Toledo, and Indianapolis.
    A no less critical situation was developing in the South.
Years before a Southern railway had been urged as an ad-
vantageous outlet from the Ohio river to the southeastern sea-
board. Such was the plan of the Cincinnati, Louisville and
Charleston Railway, and the significance of the agitation of
1835-6. But now the situation had changed. Cincinnati
reached the seaboard through New York, Philadelphia, and
Baltimore, and sought southern territory for its own sake.
Moreover, throughout the South, the river had definitely yielded
to the railroad. Two large systems of railroads, embracing
some 4,000 miles, had grown up,-the one extending from the
southeastern seaboard in a northwesterly direction, the other
bearing from the southwestern Gulf cities toward the northeast,
and converging with the former in eastern Tennessee. Louis-
ville tapped this network by means of the Louisville and Nash-
ville, and the Nashville and Chattanooga railroads at the precise
juncture of the two branches, Chattanooga, Tennessee.
    The only connection of Cincinnati with the South, aside
from the all-water route, was by river to Louisville, thence via
Nashville and Chattanooga by the Louisville and Nashville
Railroad. As a means of transportation in competitive trade,
it was both indirect and inadequate. Shipments to a dis-
tributing point due south from Cincinnati, as Chattanooga, de-
scribed a wide circuit, going successively west, south, east, and
north. The legitimate difference in freight charges, other things
being equal, tended to swell the stream of Louisville trade at the
expense of that of Cincinnati. The Louisville and Nashville


Railroad was moreover, at that time, "a Louisville road," con-
trolled by, and operated in the interests of Louisville merchants.
Rail rates between Cincinnati and local points were made by
adding the rate between Cincinnati and Louisville to the rate
between Louisville and those points. Between Cincinnati and
competitive points, the rates were formed by adding an arbitrary
charge between Cincinnati and Louisville to the rate from Louis-
ville to such points.' The facilities of the road for shipments
from Cincinnati to Southern points were entirely inadequate.
Through freight was delayed in Louisville, and merchants still
tell of pork destined for this section, unladen at Louisville and
piled up for days outside of the city. For several years the
Board of Trade of Cincinnati maintained a special agent at
Louisville to trace out and hurry through Southern consign-
    The disadvantages thus indicated were emphasized by the
radical changes in business methods which the economic revolu-
tion in the South had effected. Formerly the needs of a large
portion of the population had been uniform and supplied by
the planter, who purchased his stores in the larger Southern
cities and retailed them to his body of dependents. Now, how-
ever, the negro bought for himself where and what he wished.
General merchandise stores sprang up at every cross-road, and
Southern merchants poured into Northern centers ready to buy
for cash or on short time larger and more varied supplies.2 The
natural tendency was for these buyers to stop off at Louisville,
rather than continue for 150 miles to Cincinnati, where any ad-
vantage gained in purchase would be lost in additional freight
charge and delay in transmission.
    By the spring of 1868, the construction of an independent
Southern railroad had passed from a matter of general ex-

   'Internal Commerce of United States, 1880, p. 90.
   2 See Merchant's Magazine, vol. lvi., 1869, p. 363.



pediency to one of commercial necessity. The subject was under
constant discussion in Cincinnati, and various projects of more
or less impracticability were proposed. The bonus plan was
revived by a proposition from the Atlantic and Great Western
Railroad to acquire the Lexington and Danville Railroad and
extend it in connection with the Kentucky Central to a Southern
eenter, provided that a partial guarantee fund would be sub-
scribed.  Like the earlier attempt, this proved unsuccessful.
Attention was also given to "the Dickson plan," based upon the
claim that, while the State constitution forbade a municipal gift
or loan to "any stock company, corporation or association,"
there was nothing in it to prevent such action with respect to an
individual who should engage to build the road. The doubtful
validity of the interpretation, and at any rate the impossibility
of securing such an "individual," were soon pointed out.
    The situation, to summarize, was this:  Cincinnati and
Louisville were active competitors for Southern trade. This
trade was definitely established upon the basis of railroad
transportation. Cincinnati possessed no direct railroad to the
South; Louisville did. The advantages enjoyed by the former
city in the era of water transportation were now held by the
latter. Southern merchants dealing directly with the North
were diverted from Cincinnati by the closer proximity of