s east of Des Moines. In spite of the fact that the cost of
operating the road had from the beginning varied but little from 60 per
cent. of its gross receipts, its president, in a circular letter to the
stock-and bondholders, dated October 20th, 1865, made the statement that
the company was "driven to the necessity of selling the road or
reorganizing." In 1866 suit was brought in the Circuit Court of the
United States for the District of Iowa for the foreclosure of the
company's mortgages, and a decree of foreclosure was entered on the 11th
day of May of that year. The property was sold on the 9th day of July
following at Davenport, and was purchased by the Chicago, Rock Island
and Pacific Railroad Company, which was incorporated in this State a few
weeks previous to the sale, for the purpose of acquiring the railroads
built by the Mississippi and Missouri Railroad Company with all its
appurtenant property, "and all the rights, privileges and franchises
granted by the act of Congress of May 15th, 1856, to the State of Iowa,
and by the State of Iowa granted to the said Mississippi and Missouri
Railroad Company, and when so acquired to maintain and operate the said
railroad." It is a significant fact that all the corporators of the new
company, except one, were directors of the bankrupt company. On the 20th
of August, 1866, the Chicago, Rock Island and Pacific Company of the
State of Iowa consolidated with the Chicago, Rock Island and Pacific
Railroad Company of Illinois, and conveyed all its property, powers and
franchises to the consolidated company. The validity of the
consolidation was questioned by a large number of stock-and bondholders,
and the courts were appealed to to issue injunctions restraining the
consolidated company from extending its line or expending any money
obtained through the sale of its securities. In this predicament the
company turned to the Iowa legislature for protection. Anxious to secure
the early completion of the road, the Twelfth General Assembly, by an
act approved February 11th, 1868, recognized the consolidated company,
and resumed and granted to it "all right or interest" which the State
had in the lands previously granted to the Mississippi and Missouri
Railroad Company. The act expressly provided, however, that the Chicago,
Rock Island and Pacific Railway Company should "at all times be subject
to such rules, regulations and rates of tariff for transportation of
freight and passengers