Author Topic: Brief Flurries of Wanderlust Talk: The Extension to Wellington Part 2  (Read 4258 times)

Roger Whitney

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   Last week’s blog discussed Monson’s proposed extension to Greenville and Wellington.  The grand scheme failed. Lets look at some of the reasons why this may have failed and explore the possible routes to Wellington.
   In the Robert Jones’ book, he stated that not all of the original $70,000 worth of stock was bought. That original issue of stock fell short, however on April 1, 1884 another $70,000 was issued but this time sold quickly. There must have been a huge debt from the original construction which the company was struggling to pay on. In fiscal 1885 the railroad lost $3197.00. And then while this was going on, they wanted to issue another staggering $700,000? Sounds like a good investment? The investors may have thought that if they were struggling to pay on the $70,000, how could they pay back $700,000? Maybe the directors went ahead anyway…..could this be the father of the “holy tearing funded debt” that the Monson managed to accrue that Moody speaks of on pages 147 thru 150?
         Another major problem was that the Monson had to cross to the west side of the Bangor & Piscataquis (later the B&A) at some point to get to Wellington, since the Monson was on the east side of the B&P. The B&P was well established by 1886, the time of this proposal.  I doubt that the B&P would have gladly given permission to have the new Monson extension cross their tracks, especially when the new extension would take away from their business.
         The Panic of 1873 still may have been fresh in the minds of investors. During that period, a series of recessions happened: The New York Stock Exchange closed for ten days; of the country's 364 railroads, 89 went bankrupt; a total of 18,000 businesses failed between 1873 and 1875 and unemployment reached 14% by 1876. However recovery happened in the early 1880’s. Economist Milton Friedman states that “in the 1880’s the highest rate of growth for a decade of real reproducible, tangible wealth per person from 1805 to 1950 was apparently reached in the eighties.” So by 1886-7 they were back on a roll again financially. Maybe optimism was the only real commodity in this extension proposal. Any, all, or none of these reasons may have been what really happened. 
Route to Wellington.............
         Looking at the historical topos, and even the modern ones of today, a route west from Monson Jct. was problematic due to the Walker Ridge/Brown Hill mass on the west side of the river valley. There was no practical way out of the Piscataquis River Valley for a reasonable railroad grade going west.
        The only solution was to go south, cross the B&A and the Piscataquis River fairly soon and continue about 1.8  miles to Kingsbury Stream in Abbot Village.  From here it could have turned south west and run along the banks of Kingsbury Stream, entering the northwest edge of Parkman before turning more northwesterly and then westerly to Kingsbury.  From Kingsbury the route could turn southerly around Foss Hill, skirt Wellington Bog and follow the bog outlet valley down to Wellington. It’s an interesting exercise tracing this possible route. For anyone who has tramped around in the Kingsbury Stream area, it’s pretty rugged country.  There would have had to be numerous bridges and culverts. $20,000 a mile for construction?  I seriously doubt it.  I’ll leave the possible S&M route from Wellington to Harmony for someone else.

Cliff Olson

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Re: Brief Flurries of Wanderlust Talk: The Extension to Wellington Part 2
« Reply #1 on: December 23, 2011, 11:24:30 AM »
There seems to be some confusion here about common stock and bonds.  As I read Jones, the Monson initially offered $70,000 in common stock.  When most of the subscribers did not come up with the cash, the railroad issued $70,000 in mortgage bonds, which paid the holder 6% interest, to raise the same amount of cash.  Subsequently, the Monson approached the initial stock subscribers and somehow convinced them to give the railroad negotiable notes with 6% interest retroactive to the date when they were supposed to have paid for their stock.  The Monson then sold these notes to raise more money.

The proposed expansion confuses things further.  At that time, the railroad was authorized to issue $700,000 in additional stock.  However, the construction company's financing prediction seems to assume that the railroad will be issuing bonds in the amount of $700,000 and, therefore, obligating itself to pay 6% ($42,000) in interest per annum.  As we have seen, neither additional stock nor additional bonds were issued for this purpose.
« Last Edit: December 23, 2011, 07:32:28 PM by Cliff Olson »