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President Lincoln & His Most Profitable Client, the Illinois Central Railroad
President Lincoln & His Most Profitable Client, the Illinois Central Railroad
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Lincoln Abraham



President Lincoln & His Most Profitable Client, the Illinois Central Railroad



ABRAHAM LINCOLN. Autograph Letter Signed “A. Lincoln” as President, to Secretary of War Edwin M. Stanton, May 23, 1863. “Executive Mansion, Washington” stationery, 2 pp. on one sheet, 7¾ x 9¾ in. With front panel of original envelope, to which Lincoln has added an Autograph Note Signed, and Stanton has also added an Autograph Note Signed.

 



Transcript

 

Executive Mansion

 

                                                                                                     Washington, May 23, 1863

 

Hon Secy of War

 

          My dear Sir,

 

In order to construct the Illinois Central Railroad, a large grant of land was made by the United States to the State of Illinois, which land was again given to the Railroad Company by the State, in certain provisions of the Charter. By the U.S. grant, certain previleges [sic]were attempted to be secured from the contemplated Railroad to the U.S., and by the Charter certain per centage of the income of the road was to be from time to time paid to the State of Illinois. At the beginning of the present war the Railroad did certain carrying for the U.S. for which it claims pay; and, as I understand, the U.S. claims that at least part of this the road was bound to do without pay. Though attempts have been made to settle the matter, it remains unsettled; meanwhile the Road refuses to pay the per-centage to the State. This delay is working badly; and I understand the delay exists because of there being no definite decision whether the U.S. will settle its own account with the Railroad, or will allow the State to settle it, & account to the State for it. If I had the leisure which I have not, I believe I could settle it; but prima facie it appears to me we better settle the account ourselves, because that will save us all question as to whether the <2> State deals fairly with us in the settlement of our account with a third party – the R.R. I wish you would see Mr. Butler, late our State Treasurer, and see if something definite can not be done in the case.

 

                                                Yours truly, A Lincoln”

 

Historical Background

 

Lincoln had a long prior relationship with the Illinois Central Railroad. In 1851, although not a member of the state legislature, he participated in the struggle over the passage of the railroad’s charter. Its 705 mile-long track was completed in 1856, making it the longest in the country. Lincoln represented the Illinois Central in 45 cases in the 1850s, mostly as defense attorney. The Mr. Butler mentioned was William Butler (1797-1876). He and Lincoln became friends when Butler was Clerk of the Sangamon County Circuit Court (1836-1841) and Lincoln a circuit lawyer. Butler later served as Illinois State Treasurer (1859-1862).

 

Illinois had granted the railroad an exemption for all state taxes on the condition that it pay an annual “charter tax.” However, the McLean County assessor levied a $428.57 tax on the railroad’s 118 acres in that county. The railroad claimed that the General Assembly act chartering the railroad exempted it from such taxes. The railroad retained Lincoln and sued to prevent the County from selling railroad land to pay taxes. The parties agreed to go to the Illinois Supreme Court, where the only question would be whether the county had a lawful right to tax the railroad’s property. In Illinois Central RR v. McLean County, Illinois & Parke, Justice Scates ruled that the charter was constitutional and that the legislature and the state could exempt property from taxation. Lincoln received $200 for his services in both courts. After consulting with fellow attorneys, Lincoln told the railroad he deserved more. According to the “Law Practice of Abraham Lincoln” website (www.lawpracticeofabrahamlincoln.org), in April 1857, he sued over fees. The jury awarded Lincoln $5,000, a huge sum at the time. The railroad chose not to appeal, and Lincoln continued to handle cases for the railroad until 1860.

 

Thomas Walker, writing in The Northern Railroads in the Civil War, 1861-1865 asserts “In April 1861, a military force of 8,000 to 9,000 troops was concentrated at Cairo, and the [Illinois Central] railroad for 253 miles south of the Terre Haute and Alton was used chiefly for transportation of troops and stores ... The government paid cheap rates in return for the land grants originally made to aid in the building of the railroad. Since the actual cost of operating the troop trains was 1.8¢ a mile, the return of 1.3¢ made the business a losing proposition and took away potential profits from local traffic … and troops proved to be a severe hardship on the passenger cars ...”

 

The ongoing dispute threatened to slow the movement of troops. Though Lincoln knew he could use his personal knowledge and connections to end the impasse, he had more pressing matters to attend. On the day he wrote this letter, Saturday, May 23, 1863, Lincoln met with Secretary of War Stanton, Secretary of the Navy Gideon Welles, Assistant Secretary of the Navy Gustavus Fox, and General Henry W. Halleck, Commanding General of the Army, regarding an attack on Charleston, South Carolina.

 

We don’t know if Stanton met with Butler, but within a week, Lincoln’s letter was sent to the Quartermaster General to follow up. Montgomery C. Meigs in turn wrote to Major General Lewis B. Parsons, Chief of Railroad and River Transportation for the Department of the Mississippi for the particulars. On June 3, 1863, Meigs instructed the Chief Quartermaster, Colonel Robert Allen of the Department of the West at St. Louis, to settle the government’s accounts with the railroad. By the war’s end, the Illinois Central had moved 556,421 troops.

 

The letter is accompanied by a partial front panel of the original envelope, bearing the recipient’s imprinted office and address, “The Secretary of War, / Washington.” With Lincoln’s Autograph Note Signed on the lower left:“Please see Mr Butler / May 23, 1863. A. Lincoln.” To the right of the addressee, Stanton added “Referred to / the Quarter / Master General / for Report. / Edwin M Stanton.” 9¼ x 4

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