coin in proportion to their issue of bills. Marshall J. Bacon, an attorney, was appointed banking commissioner to travel about the state, look over the record of currency issues of each bank and then count the silver and gold money held by each bank for redeeming its bills.

But the record of bills issued was carelessly kept. Generally a bank was willing to confess but a fraction of its money issue. There was not sufficient silver or gold money in Michigan to enable the banks to comply with the law, so they adopted a curious practice.

The movements of the banking commissioner were jealously watched and banks were warned of his approach. They took care to have a respectable showing of coin money when he would arrive at a particular bank. As soon as he had counted the coin and given the bank his approval in his report, the coin, stored in nail kegs and other improvised receptacles, would be hustled out the back door to be whirled away by a fast team to the next bank to be visited by the commissioner. There it would be counted again and credited to another bank. So the merry chase between the commissioner and the available real money would go on from town to town and bank to bank about the state.

If the commissioner discovered this trickery, which he could hardly have failed to do, he kept his own council and let the practice go on. The alternative would be the closing of most of the banks, the immediate discrediting of all the bills in circulation and business chaos. The people of Michigan and of most of the other states were in exactly the predicament which now confronts the people of Germany, Russia and several other European countries. As fast as their money is discredited it falls in purchasing value. Then the governments try to compensate the depreciated value by rushing more money through the public printing presses. They all know that this practice must have an end and that the end will be chaos, but they do not see their way out of the dilemma by a steady process of currency deflation until the volume of money is reduced to an amount which can be sustained by the available security.

Banking Commissioner Bacon in time became alarmed at his own discoveries of the juggling of the security funds between

banks, so he began to change the regularity of his visits and drop in upon banks which had not been fortified against his call by the rapid transit transfer of money from some other bank. This compelled the adoption of a new scheme by which the available coin money was distributed about and used as a sort of camouflage. Bacon called at the Bank of Sandstone, in Jackson County, and when he asked for an exhibit of real coin money he was shown several nail kegs apparently overflowing with silver and gold.

The directors of the bank entertained him lavishly and delayed his investigation in the hope that he would make it fast and perfunctory. They had the money all right, they assured him. It would be a tedious task to count the contents of all the overflowing kegs, but to their consternation Bacon began counting and soon the money in the kegs came to an end and the remainder of their ponderous contents was found to consist of nails, spikes and other heavy hardware of little value.

Within the period of 10 months 49 banks were organized in Michigan, but the bubble soon burst and in 1839 only seven remained in existence. Meanwhile, the state was flooded with money issues of dead banks. A man with his pockets filled with bills could hardly buy the necessities of life. Flour was $16 a barrel, potatoes $2 a bushel and other things in proportion. As soon as money became discredited and could not be circulated prices of commodities fell in money value. Flour fell to $8 a barrel in 1839 and in 1842 it sold for $2.25. In fact money values had lost all significance in Michigan.

In this period of storm and stress the Bank of Michigan and the Farmers & Mechanics Bank of Detroit were carefully conducted. The general demoralization crippled both of them for a time because coin money almost disappeared into private hoards, but they were soon able to resume specie redemption of their own bills. Both these banks kept faith with the public. The Bank of Michigan went out of business in 1844 and the Farmers & Mechanics Bank in 1839, with all claims paid. The latter bank was revived in 1845 and ended its career honorably in 1869.

CHAPTER LXVII

THE DETROIT & PONTIAC RAILWAY

HEN railway building had its beginning in the United States the promoters had but a limited vision of the future. Waterways had always been the main arteries of transportation and it was supposed that they would always so remain. There was no idea of great transcontinental or even interstate railways of continuous trackage. and through transportation for loaded cars without unloading and reloading for transfer from one railway to another. Railways were regarded as necessary links between waterways. Each railway was supposed to retain its cars for use on its own lines without interchanges in the use of rolling stock.

The beginning of the modern idea in railway operation came when it was proposed to connect transportation on the upper lakes with that on the Hudson River by a railway from Buffalo to Albany. Out of that promotion eventually developed the great system of the New York Central. That curious idea of the Michigan people of having three railway systems all their own, without connection with any system of any other state, was in perfect correspondence with the general idea.

Pontiac, founded in 1819 by certain enterprising citizens of Detroit, was a "boom town" which the owners of the town plat were anxious to promote. These men employed their social, financial and political pulls for the chartering and building of the first railway out of Detroit to Pontiac. They also imparted their enthusiasm to Editor John P. Sheldon, of the Detroit Gazette, and his inspiration made him a prophet of the future in opposition to the common opinion. On December 17, 1829, he wrote an editorial to this effect:

"Ten years hence, or before, the citizens of Detroit will be able to reach the Atlantic in 24 hours. Twenty years hence the navigation of our broad and beautiful lakes will be of no manner

of use to us because land transportation will be so much cheaper. It will be a comfortable thing to get into—not a coach or steamboat-but a snug house built over a steam engine and, after journeying smoothly and safely at the rate of 30 or 40 miles an hour, find yourself at breakfast next morning in New York or Washington.

Just how much of this was evidence of personal enthusiasm and how much was paid propaganda it is impossible to judge, but certain Detroiters wanted that road to Pontiac to boom their town and, incidentally, they wanted the aid of state appropriations to finance the building. It was ten years later when the road was finished as far as Birmingham and it took 14 years to extend it as far as Pontiac. The first railway charter of Michigan was for the Detroit & Pontiac Railway, issued July 31, 1830. This was the first incorporated railway within the limits of the old Northwest Territory, which shows that enterprise was not lacking in Detroit. The older states of Ohio, Indiana and Illinois were far behind the Territory of Michigan seven years before it attained the rank of statehood. It has been a rather common characteristic of Michigan people that they are quick of vision and fast starters, but rather slow finishers.

After the state or territory, like many other human organizations, discovers something that needs to be done, it holds a meeting, passes resolutions, appoints committees and then draws a long breath, assuming that the thing is as good as accomplished. The charter of 1830 gave the incorporators authority to build a railway from Detroit to Pontiac, and then the incorporators sat down and dreamed of the future, but did nothing at all. In March, 1834, a new corporation was chartered which had a scheme for financing the enterprise by establishing the Bank of Pontiac with a speculative capital of $100,000, secured by a mortgage on the assets of the railway company. This bank opened May 26, 1835, with $99,000 of its capital stock subscribed, but only ten per cent of it was paid in. Sherman Stevens acted as cashier and also as manager of the Detroit & Pontiac Railway, which was to be built with paper money issues of the Bank of Pontiac. The bank redeemed its bills in specie

long after most of the other banks had suspended in the panic year of 1837 but presently collapsed. It was revived for a short time following the panic but soon passed out of existence.

Work on the right of way was not begun until April 25, 1836, when choppers and "swampers" were put to work clearing the timber and grubbing out the stumps and brush over 15 miles of the surveyed line.

All went well with the building of the Detroit & Pontiac Railway as far as the Six-Mile Road. There the builders ran into the bed of a prehistoric glacial lake which had gradually filled up with marine plants and had become encrusted over with a thin layer of soil which was covered with brush and small timber. When this land was cleared the soil was found to be what the old settlers used to term a "quaking prairie." The surface soil was underlaid with the water and bog, remainders of the old lake. When the soil was thrown up to make a roadbed the necessary cutting on each side would weaken its support and the heaping of the soil on the roadbed would cause it to sink out of sight, leaving an open canal of water.

To fill this discovered channel of unknown depth, trees were felled and laid across it side by side as for a corduroy road. Brush was then piled on top of the trees and earth shoveled upon the brush, but in a day or two-perhaps next morning—the construction gangs would find all their work sunk out of sight and an open channel of water again marking the right of way. It took a wide swath out of the forest on each side of the track and endless labor to create a solid roadbed. That explains why it took three years of discouraging endeavor to build the first section as far as Birmingham.

The first track consisted of stout oaken stringers laid upon crossties. The wooden rails were surfaced with a sheathing of strap iron. The road was first operated as far as Royal Oak, July 21, 1838. For several months the cars were operated by horse power, but in the summer of 1839 a locomotive, the second to arrive in Michigan, was brought to Detroit from Philadelphia and it went into operation August 16. In those days all locomotives were named like steamboats, instead of being designated