Electronic reproduction of: Transcription of report / James W. Lydon.

From James W. Lydon On September 3,1879, a group of Detroit businessmen headed by James McMillan[,] J. S. Newberry, Francis Palms, George Hendrie, F. E. Driggs, Hugh McMillan of Detroit and George I. Seney of New York[,] incorporated the Detroit, Mackinac and Marquette RR., and proceeded to build a line of railroad between St. Ignace and Marquette, a distance of 151 miles. The State of Michigan allotted to it 1,327,041.65 acres of swamp land as a Land Grant. The line was opened December 19, 1881. Officers were James McMillan, President, John S. Newberry, Vice-President and Hugh McMillan, Secretary and Treasurer. The object of the road was to form, in connection with other roads, a line along the whole extent of the southern coast of Lake Superior to a connection at Mackinaw with railroads all ready constructed (New York Central and Pennsylvania subsidiaries) from southern Michigan to that point. A branch from the main line to Sault Ste. Marie was in contemplation. On the west a connection would be perfected with the Northern Pacific at Iron River, WI., and that railroad used for the 43 miles to Duluth. When these connection were completed the new railroad was to form a link in a new trans-continental route. In 1882 the Detroit, Mackinaw and Marquette terminating at St. Ignace and the NYC [New York Central] and PRR [Pennsylvania Railroad] terminating at Mackinaw City, across the Straits, organized the Mackinac Transportation Co., that provided two car ferries "Algomah" and "Faxon" ([a third] ferry, the "St. Ignace" was acquired in 1888) to transport passengers and freight from one side of the Straits to the other. Ore docks were being built in St. Ignace to h and le iron ore that would be brought 165 miles from the mines near Marquette. It was later learned that the expense was too great and docks were built in Marquette by the Marquette and Western RR., a subsidiary of the DM and M [Detroit, Mackinac and Marquette Railroad]. When the DM and M was being projected it was the plan of the founders to buy the MH and O RR. [Marquette, Houghton, and Ontonagon Railroad], a going concern, and continue the new road from Nestoria toward Duluth. But the MH and O was not for sale, neither were the owners agreeable to giving up any part of the iron ore business it alone, then enjoyed, at the port of Marquette. This situation brought the second line, the Marquette and Western RR., into the field as an ore carrier from the mines to Marquette. Likewise, the DM and M, thru the M and W [Marquette and Western Railroad] was a constant threat to parallel the MH and O. Another matter that the DM and M management was adept at was postponing, from year to year, the building of the promised branch line to Sault Ste., Marie. While the DM and M was outwardly doing a good business, behind the scenes, it was having trouble meeting interest on bond that were falling due. Therefore, in October 1884 and agreement was made with the bondholders to defer interest for several years. And because of shortage of cash the DM and M sold the Marquette and Western April 1, 1885, to the MH and O which line saw an opportunity to be rid of a close competitor and in doing so increased its common stock by $600,000 and issued $1,400,000 6% bonds, secured by a mortgage on the purchased property and with which the M and W bonds were retired. Like a cyclone that might have whirled out of nowhere, the news of the bankruptcy of the DM and M hit the streets of Marquette and other cities and towns in the Upper Peninsula in the summer of 1886. There was shock but no panic as legal steps were immediately taken to operate the railroad, under the name Mackinaw and Marquette RR. Co., temporarily pending reorganization. At the foreclosure sale October 21, 1886, the directors purchased the DM and M and acquired a controlling interest in the MH and O thru a perpetual lease of that Company's property and its subordinate line, the M and W, by guaranteeing a sum page 2--From James W. Lydon sufficient, above operating expenses, to meet the fixed charges and dividends of 6% per annum on the preferred stock of the MH and O. The DSS and A Ry. Co. [Duluth, South Shore, and Atlantic Railway Company], was then formed by the consolidation, December 22, 1886, of the Sault Ste., Marie and Marquette RR., Co., and the Duluth, Superior and Michigan Ry. Co. Thru the consolidation of the Mackinaw and Marquette RR. Co., 151.9 miles of completed main line from St. Ignace to Marquette were acquired. The portion of the projected road Soo Jct., to Sault Ste., Marie, 48 miles was placed under construction and on November 1887 it was opened. In June 1888, there had been completed 166 miles of the western section, extending from Nestoria, Mi., to Iron River, Wis., where connection was made with the Northern Pacific RR., which line was used under a traffic arrangement to secure entrance to Duluth, a distance of 43 miles. Officer at the time were James McMillan, President, Detroit and Calvin S. Brice, Vice-President, Boston, Samuel Thomas, Treasurer and L. M. Schwan, Treasurer, both of New York. Directors were James McMillan, Calvin S. Brice, Samuel Thomas, Hugh McMillan, George I. Seney, C. R. Cummings, Nelson Robinson and John G. Moore. (Most of the Detroit men were replaced by New Yorkers.) News from New York early in July and an authoritative dispatch from the Detroit News, was announced in the Sault Ste., Marie Democrat of July 19th that the Canadian Pacific has, within the past ten days, consummated a deal which gives it the shortest possible route from the Northwest to the Seaboard. It is the purchase of a large block of stock of the Duluth, South Shore and Atlantic Ry., Co. Negotiations for this sale have been pending since the trip over the line several weeks ago by General Manager Van Horne, President George Stevens and Sir Donald Smith of the CPR [Canadian Pacific Railroad] in company with President James McMillan and Vice-President Brice of the South Shore. In commenting on the sale President McMillan said, "the majority of the South Shore stock has all along been owned in New York. I don't know just what amount was purchased. I will not know positively until after a meeting to be held the 20th of the month". Then it officially became known that the CPR had absorbed the DSS and A by purchasing a majority of both the common and preferred stock. The annual meeting was held in New York July 20th. The new ownership was represented by Sir George Stevens, Sir Donald Smith, W. C. Van Horne and Richard J. Cross of the CPR and T. W. Pearsal and J. W. Sterling of New York. Members of the old board Samuel Thomas, C. S. Brice, G. I. Seney, J. G. North and James McMillan were reelected. Mr. Millan [sic] was again elected President and Mr. Brice Vice-President, while W. C. Van Horne was elected second Vice-President. One of the first items to received attention by the new owners was the extension of the railroad from Iron River to Superior. Orders were issued that work was to commence at once. "The new portions to be built is only 43 miles long and will be rushed thru with all possible haste". But in August Henry and Balch, contractors, were ordered to stop because thru the efforts of W. C. Van Horne a more satisfactory traffic arrangement had been made with the Northern Pacific. The resistless pressure of Mr. Van Horne and staff was beginning to be felt.