CEDAR FALLS AND MINNESOTA RAILROAD
The Cedar Falls and Minnesota Railroad, from Cedar Falls to the State line of Minnesota, was under contract to Erastus Edgerton and Company of New-York, for the sum of $1,025,000. This road was to end at Otranto, at the Minnesota state line. There it was connected with the "Cedar Valley and Minneapolis" Road, (108 miles,) extending to St. Paul. The ground was so level that not a cut or filling of more than ten feet was required. (3)
The Company paid the contractors in the following manner: $600,000 of their first mortgage 7% Bonds; $40,000 Mitchell County 10% Bonds; $60,000 Floyd County 10% Bonds; $50,000 in lands, deeded along the line of road; $100,000 in cash, and $175,000 in stock and subscriptions to stock -- in all $1,025,000. The Company was to issue $650,000 of first mortgage 7% bonds, $50,000 of which was for their own account. This created a bonded debt of about $8,500 per mile. (4)
Seeing the great importance of this road, and the increased amount of traffic that must result from it, the ILLINOIS CENTRAL RAILROAD, Galena and Chicago Union, and the Dubuque and Sioux City roads created a sinking fund for the cancellation of these bonds, by paying to the trustees of the Company bonds referred to, (for five years,) 15% of all the gross earnings from business passing to and from all points upon the Cedar Falls and Minnesota Railroad over the roads of the above-named companies. This gave these bonds an increased value. (5)
Work on the Cedar Falls to Waverly section was begun in April 1864 and completed on December 1, 1864. The first train left Waverly for Dubuque on March 13, 1865. (6)
In 1864 the directors of the Dubuque company agreed to lease the Cedar Falls Railroad from station to station as the track was completed. After negotiations, the Dubuque company agreed to a 40 year lease from January 1, 1867. There was a fixed rental of $1,500 per mile in equal monthly installments. There was also a further rent every six months of 35% of the gross earnings over $3,500 and less than $7,000 and 30% when $7,000 was exceeded. (7)
On September 13, 1867, the Dubuque Company leased its own railroad and lines associated with it to the Illinois Central at an annual rental of 35% of its gross earnings for the first ten years and 36% for the last ten years of the agreement. The Illinois Central could also keep the lines in perpetuity with the annual rental of 36%. If the Illinois Central did not declare its decision to surrender the property after twenty years it was then declared to have accepted the property and was required to pay the 36%. (8)
The Illinois Central Railroad did surrender both lines in 1887. A lengthy lawsuit resulted: Jesup v. Illinois Central Railroad Company.
1. "Iowa and the Illinois Central," Illinois Central Magazine, November 1927, p. 5
1. Desty, Robert; Goodwin, James Wells Goodwin; Boyle, Peyton. The Federal Reporter. West Publishing Company, 1891, p. 485
2. "New Railways in Iowa," The New York Times, March 4, 1861, Online: http://www.nytimes.com/1861/03/04/news/new-railways-in-iowa.html
3. Desty et. al. p. 486
The 1868 Guide, Gazetteer and Directory of the Dubuque & Soux (sic) City Railroad stated that the office of this business was located at the corner of Locust and 5th.