Alabama & Chattanooga Railroad
After the war, John C. Stanton, a promoter and contractor from Boston, moved south to profit from rebuilding defunct railroads. In August of 1869 the city of Chattanooga transferred the city's stock in the Wills Valley Railroad to Wall Street bankers issuing $10,000 in city bonds. He convinced the Alabama reconstruction legislature to extend the right of way of the Wills Valley RR to Birmingham and purchase the bankrupt North-East & South-West Railroad. The railroads were reorganized as the Alabama and Chattanooga Railroad Company. Stanton promoted and received generous loans from the Alabama legislature.
The Alabama and Chattanooga Railroad issued small size meal tickets (scrip) printed by the National Bank Note company in New York depicting ducks, chickens or sheep. Large qualities of the scrip was issued to pay for materials and labor required to rebuild the railroad.
In February of 1870 after receiving more than 5 million in bonds from the Alabama legislature, Stanton requested an additional 2 million. The bill passed after several bribes were arranged. The money was not used to pay off creditors or labors but was instead used to purchase a large tract of land in Chattanooga and begin construction for a "Stanton Town". He built a freight depot, an office building, a Passenger Depot, a roundhouse, a hotel and numerous railroad shops.
The interest of the first bonds became due in January 1871. Stanton defaulted because he never did have any money. However, work on the rail line continued fueled by the scrip. In May the road was completed from Chattanooga to Meridian Mississippi, 300 miles. The Official Guide of Railways 1870 displayed a map of the route. The company was declared bankrupt in June of 1871 and by August it was being run by the court appointed receivers. The Bankruptcy District Court Decree was signed 8-26-1872. A new group of directors were elected October 9, 1871 which excluded the Stantons. Labors, contractors, suppliers and the city felt the impact of the disaster. Massive unemployment ensued, commerce fell and real estate prices collapsed.
|AL & Chatt. Scrip
E-mail Questions or Comments