Volume 18 , Issue 11

1879 - Colorado Railroad Situation

As mentioned in The Emporia Weekly News, Emporia, Kansas, dated 25 July 1879, Friday, page 1, "The Colorado Railroad Situation" ... So many law suits have grown out of the Santa Fe and Rio Grande railroads in Colorado during that time, and so rapidly too. It was very difficult to comprehend the exact situation of affairs. As the news reported it, they understood the matter, all the positions of the Santa Fe were in a fair way to be sustained by the courts,a nd the question the disputed possession of the Rio Grande property was already decided in their favor.

Found on Newspapers.com

A brief history of the litigation, would make this more plain. About 1878 the Rio Grande road, which was operating amicably with the Santa Fe road in the transportation of passengers and freight to denver via Pueblo, broke off it relations with the Santa Fe, and refused to carry either except at full rates. This, was in pursuance of an agreement entered into by the Rio Grande with the Union Pacific. The sAnta Fe just then being prominently before the business world, found no difficulty in securing a subscription sufficient to build a broad gauge road from Puelo to Denver, to connect with its main line, and began rapidly to make preparations for its construction. This threatening the business destruction of the Rio Grande people, forced them to enter into an agreement with the Santa Fe, by which the possession of the former road was to be turned over to Sant Fe, under a lease, the Santa Fe to assume a debt of $20,000 a mile on the Rio grande property. Certain conditions were prescribed by those negotiations for the Rio Grande to which the Santa Fe assented; the most important of which was a certain floating debt of the Rio Grande amounting to about $300,000 should be paid; and to secure these conditions, it was agreed that he stock of the Rio Grande to the amount of ten more shares than a majority should be placed in escrow, and likewise a lease of the Rio grande road and the possession of the Rio grande property should be delivered to the Santa Fe which was done. Certain agreements as to exchange of stock were entered into at the time, which were not important in this connection. Before the transfer of the road under this agreement, a a dispute between the Santa Fe and the Rio Grande had grown up as to the right of way through the Royal Gorge of the Grande Canon, which being a narrow defile did not admit of the building of two railroads, which rich dispute was in the federal courts in the form of a suit for an injunction. The discoveries at Leadville had given it great importance. It was supposed that the possession of the Rio Grande road under the lease to the sAnta Fe had resolved to dispute practically in favor of the Santa Fe. However, Wm. J Palmer, president of the Rio grande, who had always disliked the necessity which drove the Rio Grande to its union with the Santa Fe, still persisted on behalf of the Rio Grande Company, of which corporation he still remained president, to fight this question of title, and at the same time sought to break the agreement by which the lease and stock were delivered in escrow. As a pretext for this action, unfortunately given to him by the Santa Fe, he urged the fact that the floating debt was not paid within the time limited by the agreement. Although the money was paid by the Santa Fe, and accepted by the Rio grande after such time, notice was served by Palmer upon those holding the escrow and lease, not to turn the same over, and a suit was brought in Boston for their recovery and to abrogate the agreement. Subsequently the supreme court decided the the Rio grande had the first right through the Royal Gorge, but they could not enjoy it to the total exclusion of the Santa Fe, but must enter into an equitable agreement with the sAnta Fe for a right of track over that narrow defile where two roads could not be built. Meanwhile the Santa Fe had been building the road on through the canon to Leadville. Various proceedings of mandamuses, quo warrants, etc, were thereupon began by the Attorney General of Colorado, on the relation of Palmer, in Judge Bowen's court, and under the order of that court in these proceedings. After the suits had been removed into the federal court, as it was claimed, Palmer and his associates forcibly repossessed themselves of the Rio Grande property, and as it appeared, to prevent the operation of any order to restore its possession had a foreclosure writ brought against themselves on a default of the May coupons on their bonds in Judge Bowen's court, and a receiver appointed. The receiver was a Mr. Risley, one of the attorneys of the Rio Grande road.

As soon as the facts were shown to Judge Miller, he made an order uno the Rio grande people to turn the road back into the possession of the sAnta Fe within three days. Then the Rio grande people came in and averred their inability to obey the order of the court on account of the receivership. This availed them until under direction of the court the Santa Fe was made a party to the foreclosure suit, when Judge Miller, having all the cases and all the parties before him, directed that the receiver turn the property back to the Rio Grande, and that the Rio Grande thereupon obey the order already made upon them to restore possession to the Santa Fe, and here the matter now rests.

When the decision of the supreme court of the Untied States was made giving the prior right through the Royal Gorge to the Rio grande, the Santa Fe filed a supplemental bill, setting up the fact of the lease and the transfer of the stock, and that the right of the Santa Fe had since the beginning of the suit decided by the supreme court been therein established to the control and enjoyment of all the property and franchises of the Denver & Rio Grande. The Rio Grande replies that the agreement was abrogated by the non performance of conditions on the part of the Santa Fe. Judge miller had substantially decided that before he would pass upon the question as to lease or no lease, or as to the conflicting rights of the Santa Fe and Rio grande to the possession of the latter's property, that both parties must be placed in the condition they were at the commencement; that is, he would not allow the Rio grande to enter the mandate from the supreme court of the Untied States, deciding their prior right to the canon in the old injunction suit until the amount expended by the santa Fe in the Grand Canon extension had been ascertained and paid. Nor would he allow them to urge their defense to the supplemental bill as to the non delivery of the lease and the non performance of the agreement until peaceable possession of the property had been fully restored to the Santa Fe. So the Arkansas judge decided, when he ordered the parties to a suit before him to take off their revolvers and hand them to the court before the case should go on. Judge Miller's firmness in this matter was assurance that justice would ultimately be fully vindicated, and that neither by trick nor force would one party be permitted to obtain any lasting advantages over the other. There were of course two sides to every question, but an impartial public would instinctively determine that the party who would not trust the decent administration of the laws of his country, but resorted to subterfuge and fore to prevent their operation was necessarily in the wrong. The Santa Fe, whether in the end it wins this suit or not, had, at all events, held a consistently decent attitude throughout this exciting experience, and had convinced the public that it had faith that its cause was the cause of justice and order.
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