One of the most dramatic incidents in the history of Watertown is the story of the railway bond issues.
In times ago there was a group of industrious individuals who had the fascinating habit of investing other people’s money. In 1853 the electors voted aid to the Milwaukee and Watertown Railroad Company. The bonds which amounted to eighty thousand were to run for ten years at eight per cent interest. Watertown was “secured” by a promise of a second mortgage on the railway property when constructed. At the expiration of the ten years it was found that the bonds together with the accrued interest was in the hands of the speculators.
Encouraged by their previous success in Watertown the corporators of the Milwaukee and Watertown Road made an effort to get a second issue of bonds from this source. This issue was defeated at the charter election. Profitable defeat for the railroad. After much criticism the electors voted to subsidize the Milwaukee, Watertown, and Madison Company to the extent of two hundred thousand dollars. On the same day the electors voted to give the Chicago and Fond du Lac Railroad three hundred thousand dollars of the city’s bonds.
The bond question played a prominent part in the city’s politics for many years. The people were incensed at the means employed to gain the bonds. Repudiation became the office-seekers policy. One man arose before a small multitude of people and gave a very inspiring speech. It wasn’t the most correct, but at the end it informed the people that the man didn’t care for railroads or bonds, and so he was elected mayor.
During the following years, Watertown was literally without a government. By unprecedented measures it escaped payment of its “obligations.”
One can find the legal history of this case in every law textbook in the land.
The long tedious struggle resulted in a victory for the city, and a joyous celebration was held at which many of the bonds were burned in public. But the whole affair had a disastrous consequence.
It retarded Watertown’s growth, once one of the largest and most promising communities in the state. The Orbit, 1936
1855 Watertown population of 8,512; largest place in the state outside of Milwaukee
Our Railroad Bonds Have Ruined Us
Derived from Watertown Gazette, 06 22 1883
Twenty eight years ago  Watertown had a population of 8,512 and was the largest place in the state outside of Milwaukee. The people of that day looked to her future with much pride, and there was everything to indicate that at this state [time] in her history she would be one of the best business centers in the west.
In the year 1855 and for several years thereafter property and business were booming here, and every citizen was full of enterprise. Had the same spirit continued until now Watertown would still be the second city of the state, both in regard to population and as a commercial center.
At the present time everything here is at a standstill, business is dull, the value of property is away down at bed rock, and the population of our city does not exceed by 500 that of 28 years ago.
Now the question arises why is this so? The answer will be on all sides: our railroad bonds have ruined us. Admitting such to be the case the a great number of our people have still opposed any effort to get rid of the burden and as a consequence one of the best, most beautiful and healthful locations to be found anywhere for business or pleasure, ranks far behind the enterprising cities of the state in every particular.
There is no reason why this should be so. What would be paid out in taxes for settling the bonds is a small matter compared with the value it would add to every man's property in the city.
Citizens of Watertown, you have been asleep and disunited long enough. What we need is unity of action in this matter and we are bound to come out all right. At the present time we are pleased to note that the feeling among our people is for a settlement on terms which should be satisfactory to the most unreasonable bond holder.
Mistakes may have been made in the past, but all these should be forgotten and every man, woman and child in the city should shout in one voice: "Settle the bonds!"
Messrs. Hall and Bird have been appointed by the city authorities to look after our bonds and they are now busily engaged in looking up every particular in regard to them. We have no reason to suppose but that both these gentlemen will work hard and conscientiously for the welfare of our city, and we shall endeavor to keep our people posted from time to time on the progress they are making.
1856, City of Watertown, $1000, Watertown & Madison RR, WHS_005_112
11 30 OUR CITY BONDS
We understand that within a few days past a letter has been received by one of our leading citizens, from an Eastern party representing a number of our bondholders, in which intimations are made that unless there is some movement made on the part of the city towards the settlement of the bonds an immediate attempt would be made to enforce their collection. We do not know whether the matter has been laid before the Common Council or not. It is a question that seems to puzzle the brains of all our citizens, none of whom so far as we have been able to learn, have any definite idea as to what disposition shall be made of it. There is no disguising the fact, that someday or other, sooner or later, it will have to be met, and that parties holding the bonds will have to be indemnified in whole or in part for them. Our property holders and others interested in the matter should give it their attention and see if some plan cannot be devised by means of which they and the city may be relieved from the uncomfortable situation they are now in. Our columns are open to anyone wishing to discuss the question or for the advancement of any views having a bearing upon it. WR
09 21 INDEBTEDNESS FOR RAILROAD IMPEDES CITY
COMMON COUNCIL PROCEEDINGS.
The Common Council held a regular meeting on Monday evening, Sept. 1lth, 1865.
Present — The Mayor, Ald. Baum, Baxter, Beckman, Brandt, Dennis, Kellerman, Moak, O’Byrne, Prentiss, and Quentmeyer, Riedinger and Stein,
The Mayor read the following address:
GENTLEMEN OF THE COMMON COUNCIL:
Upon returning after an absence from the city since the 1st of May, and although meeting you officially the first time, on account of the lapse of several months since the commencement of the official year, I deem it neither important, nor do I know of anything that necessarily requires me to make a lengthy communication or extended remarks.
The situation of the city financially, and the condition of its schools, were laid before you at the proper time. The condition of the streets is not only good, but creditable to the city. With a site for a town naturally unsurpassed any where — a large water power — a city generally substantially built — with railroad facilities all that could be desired and not exceeded by any town in the state — surrounded with a rich and fertile farming country – business thriving and enough for all to do – it would seem that with a proper, judicious and economical administration there could be no impediment to our prosperity and success
The only cloud, in fact, that hangs over us and that has or can in any way impede our constant advance, is the city indebtedness incurred for railroad purposes.
A portion, I understand, has been extinguished by one of the companies, and if the whole could wiped out satisfactorily to the city, it would be a lasting and permanent blessing. The importance of relieving ourselves of this seeming if not real burden is, to my mind, very great, and in which every individual citizen is deeply interested.
Whatever, if anything can be done to bring about this desired result, ought and I have no doubt, will, receive your due and ready action.
In all matters, Gentlemen, coming before your body, it will be my endeavor, at least, to act faithfully and impartially, and if, in the discharge of my duties as presiding officer, which are altogether new to me, I make mistakes, they will be of the head and not of the heart; and in advance, I must ask your patience and, in indulgence.
J. Prentiss WD
1874, Watertown City Debt Assn, Receipt, WHS_005_113
1875, Mini coffin used to scare bondholders during scandal, WHS_005_115
07 13 LAST RAILROAD BOND PAID
Next Saturday, July 15, the last railroad bond held against the city will have been paid and the bond indebtedness which has laid like an incubus upon the city many years will be lifted, and the people propose to celebrate the event with appropriate exercises. To that end there will be a parade of citizens and city officials in the evening, headed by Thacker’s band after which short speeches from a stand in front of the city hall by citizens and fireworks later will be discharged from Main Street bridge.
03 12 FULL CITY COUNCIL
We think the great majority of our citizens are of the opinion that it would be a dangerous experiment to have a full council. The city is by no manner of means over its difficulty on the bond question, and until we can see clear sailing so far as any further trouble with the bond holders is concerned, we had better stay by the old plan. It has been an ark of safety during the days of the city's peril, and "let well enough alone" should be our motto yet a while. By the exercise of a little more patience the city will finally anchor all the more safely. WR
02 13 LETTER FROM GEORGE BIRD
Yesterday Mayor Voss received a letter from George W. Bird, of Madison, counsel for the city in the bond issue, stating that he intends suing the city for some $300 alleged still to be due him for services. Mr. Bird has presented this amount in different bills, but the council has disallowed it, claiming that his original contract covered such services. The letter also states that Mr. Metcalf intends to bring his interest suit against the city to the United States court of appeals at Chicago. WR
02 20 COLONEL BIRD ACTED UNFAIRLY
Last evening at the meeting of the common council a resolution offered by Alderman Grube was passed, discharging Colonel Geo. W. Bird, of Madison, from further services as attorney for the city in the railroad bond cases, and requesting him to deliver to City Attorney Pease the rulings and all other papers relating to the interest suit decided by Judge Dunn last fall. A majority of the aldermen found Mr. Bird had acted unfairly, and attempting to sue the city for a paltry $300, after having been paid some $15,000 in fees and expenses on the cases, he apparently had not much concern in his client’s welfare. The resolution also directed that the city's attorney prepare himself to argue the interest case for the city when it is heard next month in the court of appeals in Chicago.
The itemized bill of Mr. Bird, over which the controversy arose, contains some amusing features. Every time a letter was written by the colonel touching upon the cases, a charge of from two to five dollars was made, and for expressing a package of sixteen pamphlets a remuneration of two dollars was sought in addition to the regular express charges. The aldermen have ordered the voluminous bill and the original contract of Mr. Bird published in the official paper.
01 16 ONLY BONDHOLDER WHO SETTLED
Mayor Grube has been apprised of the recent death at Toledo, Ohio, of Elab W. Metcalf, who at one time held a good slice of the celebrated railroad bonds of this city. Aside from Ephraim Mariner, of Milwaukee, Mr. Metcalf was, we believe, the only bondholder who effected a settlement with this city and thus realized partially on his holdings. WR
06 23 WILL PAY LAST BONDS JULY 15
Potatoes will not be planted on Main St. after all
At a recent meeting of the council Mayor Wertheimer communicated to the council that the last payment of the railroad bond indebtedness of the city would be paid off July 15, thus releasing the city from all railroad bond indebtedness which has hung over the city for almost half a century. He said it was a day of which all citizens should be proud, as it marked the payment of a debt which many people thought the city could or would not pay. The railroad bonds have hung for many years like a millstone about the necks of the people and officials, but the city was equal to the occasion and has paid every farthing which the courts decided it was liable for. Instead of the day coming as was predicted years ago, when potatoes would be planted in Main Street, we see the city steadily growing and among the most prosperous and well-to-do cities of the state. It is but fitting that this event should be commemorated in a substantial and filling manner.
07 26 BOND QUESTION SETTLED
Now that the bond question has been settled and the financial cloud lifted that the sun of prosperity may shine upon the city, it is time that the Advancement Association of Watertown should get busy and begin systematic and active work for the industrial advancement of the city. There are many manufacturing industries looking for advantageous localities in which to locate their factories. But few cities in the country have more inducements to offer than Watertown. It possesses railroad facilities that make it a desirable point, there is a splendid water power and a volume of water sufficient to furnish the motive power for many mills and factories; there is an abundance of labor and the taxes are low, the people being conservative in their municipal expenditures. Now is the time to reach out for industries and it can be drawn to the best advantage by the association which should move in the matter at the earliest possible moment. WR
Union League was organized to fight payment of the railway bonds; Frederich Misegades was a prominent member
History of Watertown, Wisconsin