Sunday, March 9, 2014

A big bond, a big loss for investors


click on image to enlarge
Another Missouri piece added. I prefer to collect stock certificates over bonds mainly because of their size. This is one of the largest bonds I’ve seen 17 inches width by 21 inches in height . With a quantity of six in Cox  it's not common. An interesting piece so I decided to add to my collection even for my preference for stock certificates and it's the only example from this company in Cox.

HISTORY OF THE COMPANY: The bond has  interesting title for a railroad that never reached Illinois or Texas and was a failure  in its home state of Missouri. The history of this corporation started in April 27, 1869 when the company known as the Cape Girardeau & State Line Railroad was chartered. It’s purpose was to build a line from Cape Girardeau Missouri to the Arkansas border. The city of Cape Girardeau voted to take a hundred and fifty thousand dollars worth of the bonds and the township of Cape Girardeau the same amount. With all the bonds sold work began. With mismanagement however, the money was exhausted.

Governor Thomas C. Fletcher
A new plan was purposed to build the road by contract. An agreement was entered with former Missouri Governor Thomas Clement Fletcher (governor 1865-1869) and his business associates to build the road. For their services they were to receive a deed to the roadbed, provided the work was completed by December 1, 1871 a total distance of twenty-five miles. Governor Fletcher then proceeded to organize a company known as the Illinois, Missouri, & Texas Railway and issued bonds in the amount of $1,500,000 secured by mortgages on both companies. The bonds could not all be sold and it was impossible to secure the money to finish the project. A considerable amount of work was done in building bridges and laying ties and building the road bed. All these decayed and the roadbed was washed away by the rains as the project was abandoned for next ten years. 
 
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