Weekend Reading: From Sidney Blumenthal: Wrestling With His Angel: The Political Life of Abraham Lincoln: "In 1836, the legislature granted a charter for a railroad running from Galena in the northwest corner to the southernmost tip of Illinois at the confluence of the Mississippi and Ohio Rivers...
...The company that got the charter was the partnership of Darius B. Holbrook, a Boston investor, and Sidney Breese, then a district court judge. Holbrook purchased the land that would be the southern terminus to be called Cairo, and the company was called the Cairo City and Canal Company. But when the Panic of 1837 struck and its whirlwind destroyed the London bond house financing the scheme, it collapsed.
Breese was elected U.S. senator in 1842, became chairman of the Committee on Public Lands, and sought a federal charter for a land grant to a new company based on the old one, called the Great Western Railway, of which he and Holbrook remained the partners. The bill passed the Senate, but failed in the House, where it was undercut by Douglas, who thought it was a confidence game to jack up the value of the virtually worthless tract at Cairo to make a windfall profit for Breese. After Douglas’s election to the Senate, he battled Breese for two years over their competing proposals. Finally, Douglas succeeded in ousting Breese from the Senate by securing the election of his ally James Shields, chief of Illinois’ Irish Democrats. The Great Western Railway bid evaporated.
On the first day of the Senate session, January 3, 1850, Douglas introduced his bill for the construction of the Illinois Central Railroad, which was referred to the Committee on Public Lands, where Shields now sat. Douglas’s Illinois Central would not originate at Galena, but Chicago, where Douglas had moved in 1847. He bought vast tracts of land along the Illinois and Michigan Canal, opened in 1848, a sluiceway of commerce to Chicago. These lucrative real estate opportunities were almost certainly made possible by his relationship with William B. Ogden, the wealthiest man in Chicago, its first mayor, a Democrat with whom Douglas dined in his lakefront mansion and who was also the chief investor in the canal.
At that moment there was not a single train track in the city; by 1860 Chicago would be the junction of more railroads than anyplace else on earth. Ogden would become known as the Railway King of the West, involved in dozens of railroads, and crown his success in 1869 as president of the Union Pacific, the first transcontinental line. (His attorney, Samuel Tilden, based in New York, became the biggest corporate lawyer in the country, and as the Democratic presidential candidate in 1876 won the popular vote but was denied victory through a deal that ended Reconstruction.)
As Douglas laid the groundwork for the Illinois Central, he strategically purchased large tracts of real estate whose value would skyrocket with the building of the railroad. He began in 1849 with lakefront property that he expanded soon to seventy-five acres that happened to run exactly along the planned IC right-of-way. Meanwhile, he acquired thousands of acres on the west side of Chicago as well as along the Chicago River and near Lake Calumet, which would directly profit from the railroad. It is likely that his financing came from Ogden and other friendly bankers who were counting on his political leverage for their own mutually beneficial projects.
“He had an inspiration for land,” wrote John W. Forney. “He justly believed that where there are large risks there should be large recompense.” Forney floated effortlessly through government, politics, and journalism as a Democratic operative (until he metamorphosed into a Republican)—editor of various Pennsylvania newspapers, deputy collector at the Philadelphia customs house, and, by the early 1850s, clerk of the House of Representatives while at the same time editor of the Washington Union, the Democratic organ.
“To him,” Forney wrote in tribute to Douglas, “I am indebted for my first and only speculation—the better to be recollected because it was successful.” Douglas confided to him the planning begun in 1853 for the Northern Pacific Railroad, unfolding a map of its route:
“How would you like to buy a share in Superior City, at Fond du Lac, the head of Lake Superior?” . . . “But,” I said, “old fellow, I have no money, and to buy a share in the proposed location will require much.” “No,” he replied, “I can secure you one for \$2500, and you can divide it with” naming one of the best of the future Confederates, “and he will be greatly obliged.” I knew nothing of the location, had never been there, had no money of my own, but I saw Judge Douglas was in earnest and wanted to serve me, and when he left, I borrowed the \$2500, bought a share, divided it with the Southern gentleman referred to, who honorably paid his \$1250; and after cutting my share into five parts, sold and gave three fifths to other friends, and with my two fifths bought the Waverley House, in Washington. The proceeds of my moiety of the one share of Superior City realized \$21,000. For that I was indebted to Stephen A. Douglas—God bless him!
Douglas’s grandiose plan for the Illinois Central and not so incidentally for the profitability of his real estate had been thwarted in the 30th Congress. His bill passed the Senate, but was blocked in the House. Still in the game, Holbrook had bribed a clerk of the Illinois legislature to sneak into a measure the transfer to his cabal of any land rights for the railroad the federal government intended to give to Illinois. When Douglas discovered the skullduggery, Holbrook offered him half the profits from the Cairo property. But Douglas vowed that federal land grants for the railroad would only be made directly to the state. Finally, he ended the Holbrook-Breese threat by ousting Breese from his Senate seat and installing his sidekick Shields.
Douglas, however, faced a bigger obstacle. In the Senate, his bill had been attacked as an unconstitutional violation of states’ rights, the old Jacksonian hostility to internal improvements, by Foote and Davis of Mississippi and King and Clemens of Alabama—and the unified delegations of those states in the House.
So, in November 1849, Douglas decided to outflank them through an excursion to his other family property—his Mississippi plantation. Douglas, once rejected by Mary Todd as louche, had at last found his lovely Southern belle in Martha Martin, who had been educated at finishing schools and spoke French. Her father, Colonel Robert Martin, nephew of a U.S. senator and governor of North Carolina, owned an eight-hundred-acre plantation on the Dan River, just across the border from Danville, Virginia, and a large cotton plantation of 2,500 acres worked by 150 slaves on the Pearl River near Philadelphia, Mississippi. Martha was the cousin of the North Carolina congressman, David S. Reid, who sat next to Douglas when he first arrived in the House.
On their wedding day in 1847, Colonel Martin presented the Mississippi plantation as a gift to the couple. Douglas persuaded Martin that he should still hold the title for political reasons. Upon Martin’s death a year later he deeded the plantation to his daughter and her heirs, while Douglas served as property manager for which he received 20 percent of its annual income. (When his wife died in 1853, the plantation was inherited by the two Douglas sons while Douglas continued as manager.) It was a characteristically artful arrangement allowing Douglas to have it both ways, legally not to be a slave owner yet to profit from slavery. The Little Giant stood on the pedestal of the cotton kingdom—and above it...