Was Bonded For $100,000

WAS BONDED

FOR $100,000

__________

But Ann arbor Burned the Bonds

Before Delivery,

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CHAPTER OF HISTORY

___________

Indicating How Ann Arbor 

Escaped Paying $100,000 for a

Road Never Built.

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There is a page in the history of Ann Arbor that is particularly interesting in that the city narrowly escaped being saddled with a big indebtedness. The city had deposited $100.000 bonds with the state treasurer for the benefit of the then Toledo, Ann Arbor & Northern Railroad Co., now known as the Ann Arbor road. The then city attorney, Zina P. King, became alarmed lest the bonds might get into the hands of innocent purchasers outside of the state and the city would have to pay the bonds and yet have no road, and as it afterwards turned out, this road was never built. The matter was first brought up in the city council by a petition signed by Sedgwick Dean and others. Then on March 4, 1872, on motion of Ald, Leland, the following resolution was adopted: "Resolved, That Emanuel Mann be and is hereby appointed to receive from the state treasurer of this state the bonds of this city of Ann Arbor, voted in aid of the Toledo, Ann Arbor & Northern Railroad and deposited with said state treasurer in trust for said railroad, and the said treasurer is hereby requested to cancel and deliver said bonds to said Emanuel Mann and such delivery shall be a delivery to said city."

This was followed on March 9, 1872, as the official record shows :

"Ald. Mann, having as directed by the council, obtained the bonds voted by the city in aid of the Toledo, Ann Arrbor & Northern railroad from the state treasurer, delivered the same to the council.

"On motion of Ald. Leland, the recorder was directed to count and report the denominations and amount of "The recorder reported one hundred $500 bonds, one hundred $200 bonds and three hundred $100 bonds, amounting to $100,000.

"On motion, the report "as accepted and adopted.

"On motion of Ald. Gott, the recorder was directed to burn the bonds in the presence of the council, which was done by the recorder as directed."

Mr. King was asked about this episode, and said that the matter originated wholly with him. He saw that although the bonds were void in the hands citizens of this state and under the decision of what was known as the Salem railroad case having been issued' by a municipal Corporation in aid of a private company, nevertheless there were great fears that such bonds might be held good in the hands of bonafide citizens of other states. He therefore thought it best to inquire in what manner and under what conditions the bonds would be surrendered by the state treasurer, with whom they had been deposited, to the city of Ann Arbor, for such disposition as the council might determine. He thereupon, on his own responsibility, addressed a letter to the state treasurer inquiring of him upon what terms he would surrender the bonds to the city. He replied upon the written order and request of the president and secretary of the railroad company. Mr. King replied asking the state treasurer to draft such a request as would be acceptable to him and he, Mr. King, would endeavor to secure the officers' signatures. The state treasurer sent the form and Mr. King at once interviewed Dr. Silas H. Douglas, president of the road, and after some hesitation on his part, obtained his signature. He then went to Elijah W. Morgan, the secretary of the railroad company for his signature. Mr. Morgan at once made the statement that, as a matter of law, he believed the bonds would be good in the hands of bonafide parties outside of the state. Mr. King told him that was the very thing he was trying to prevent, and after some hesitation Mr. Morgan also signed the request. Having procured the request of the president and secretary of the railroad -company, Mr. King deemed it best to get the matter before the council for official action, and therefore drafted the petition and induced Sedgwick and others to sign it, requesting the council to take action for the return of the bonds. The action taken by the council upon the petition is shown by the records and stated above. A certified copy of the resolution and the request of the president and secretary of the railroad company were sent to the Hon. Emanuel Mann, then state senator at Lansing, with the additional request that Mr. Mann go to the state treasurer's office and secure the bonds and send them by express to the city recorder, Leonhard Gruner. As soon as Mr. Gruner received the bonds he informed Mr.King, who immediately informed the mayor, who called a meeting for that evening, Then they were destroyed. as stated above. The company were entitled to the delivery of these bonds upon the of certain conditions which King thinks were nearly complied His haste and anxiety was to the officers of the company demanding the bonds from the state treasurer. The company had practically failed at this time but had not yet gone into bankruptcy. His desire was to save the city from the fate of the sister city of Ypsilanti, whose railroad bonds went into the hands of non-residents, and the United States court held them good. The face value of the bonds was $100,000. and as they were given for a long term, at a high rate of interest, the entire indebtedness before maturity would have amounted to something over $150,000.

The council room at that time was in the second story of a small two story brick building situated where the engine house now stands. In the center of the council chamber there was an enormous box stove. The mayor presided at the meetings on a little raised platform at the end of the room. Between the mayor and the stove there was an oval table about the size of a large dining room table, around which sat the aldermen, putting their hats, canes, umbrellas and pipes in the center of the table. The mayor directed the recorder to put the bonds into the stove to burn. The heat of the burning was so great that the aldermen were compelled to get up and move the table. Everybody in the council chamber seemed pleased and relieved to know the bonds were in ashes.

The course taken by Dr. Douglas and Mr. Morgan in signing the request for the return of the bonds, entitled them to the thanks of this community, because their conversation with Mr. King showed they clearly saw how they might be pecuniarily benefited by the bonds passing into the hands of parties outside of the state. They were willing to sacrifice this personal interest for the public good and are entitled to the lasting gratitude of this city for that unselfish act.