[C]harles Paine was in trouble. Shareholders of the Vermont Central Railroad, of which he was president, were closing in on him. They accused him of mismanaging the railroad and their money, and enriching himself in the process.
It seemed like just the sort of thing Paine would do. After all, in laying out the railroad during the 1840s, he had bent the route to his will, and to his enormous benefit. Instead of serving the state capital of Montpelier and nearby Barre, he decided the tracks would run through his hometown of Northfield. It could hardly have been a coincidence that Paine was a major landowner in town. He sold land to the railroad on which it built a station, headquarters and repair shops.
While he was at it, he decided Northfield was the perfect place for trains to stop for the night. Passengers needing a place to sleep could stay at the hotel he owned.
That wasn’t enough for Paine. As head of the Vermont Central he drew a salary more than three times higher than those of presidents for the region’s other railroads.
By May 1852, a group of shareholders had grown worried about the company’s precarious financial situation and demanded to inspect the Vermont Central’s records. Company officials cooperated and set a date for shareholders to examine the books. But the review never happened. The day before it was to occur, a fire broke out at the headquarters, destroying the company’s papers.
Such a well-timed fire might be the sort of thing you would expect from a crooked businessman, but you wouldn’t associate it with the typical former Vermont governor, which Paine was. In a state where corruption at the highest levels has been commendably rare, Paine was seemingly an exception.
During the mid-1800s, Paine was one of the most influential men in Vermont. He had been born with considerable advantages. His father, a former U.S. senator, was a successful businessman in Northfield who owned a good chunk of the town, including a large textile mill. The son took over management of the mill after graduating from Harvard College in 1820.
In addition to his business dealings, Paine had political aspirations. He joined the new Whig Party, which opposed slavery and sought to curb alcohol consumption. But he may have been more drawn to the party’s economic positions, particularly its support of government-financed internal improvements: massive projects that included the digging of canals and the laying out of railroads, which were expected to produce economic prosperity for the regions through which they ran.
Paine quickly climbed the political ladder. He briefly served in the Vermont Legislature and then, in 1841, was elected governor. At age 42, he was the youngest governor in the state’s history to that point. As he was leaving office two years later, the Legislature granted Paine and some business partners a charter to construct and operate a railroad between the Connecticut River and Lake Champlain.
The deal smacks of cronyism. In defense of the transaction, it is only fair to note that before he was governor, Paine had been granted a separate charter to build a railroad across the Green Mountains. That venture folded when he couldn’t find enough investors. The new charter was the genesis of the Vermont Central Railroad.
Workers began laying tracks in December 1845. It would be four years before the tracks, which ran from Windsor to Burlington, were completed. But the railroad was never a success. Competition from steamboats for hauling freight threatened the rail line.
In desperation, Paine struck a deal with the Vermont & Canada Railroad to link tracks at Essex Junction to provide a rail connection between Boston and the St. Lawrence River by 1851. As a result of the merger, however, he lost control of the Vermont Central. Worse, the rail line continued to falter, as did his finances.
Paine, undaunted by his experience with the Vermont Central and his narrow escape from angry investors, continued to pursue riches in railroads. He quit the board of the Vermont Central during the spring of 1853. He headed off to Texas and a scheme on a much larger scale than anything he had attempted in Vermont. Paine was entering the big leagues of railroad speculation.
Details of this new, and ultimately tragic, chapter in Paine’s life were largely overlooked until a historian, the late Gene Sessions, dug into them. After Paine’s premature death, an orator at his funeral lamented that he had been “cut down in the midst of his projected schemes of usefulness.” Surveying the record, Sessions saw things differently. “(T)he disreputable scheme … provides scant comfort for those seeking to exonerate Paine and to remove the tarnish from his reputation,” wrote Sessions, who died this year.
Paine hoped to take part in his generation’s great business venture, building the nation’s first transcontinental railway. At the time, railroads reached only as far west as the Mississippi. If he couldn’t succeed, Paine no doubt hoped he’d regain his fortune trying.
He joined a group of capitalists and government leaders from New York, including a former attorney general and the state’s sitting lieutenant governor. The group apparently wanted to avail themselves of Paine’s marketing skills. The so-called Atlantic & Pacific Railroad Co. was just one of a handful of competing companies seeking congressional backing for their plans to build rail lines from the Mississippi to the West Coast.
Predictably, congressmen supported routes that ran through their home states. Routes starting in Illinois, Missouri and Texas all vied for support. Paine’s group sought a congressional charter for a Texas route. With approval would come federal assistance in the form of federal lands and funding. It would also help persuade other investors to entrust their money to the group. A charter would also empower the group to determine the route the railroad would take.
When a congressional charter was not forthcoming, Paine’s group lobbied for and received a charter from the New York Legislature, which allowed it to operate outside the state. It also authorized the group to raise as much as $100 million for the project, a figure that would dwarf the other railroad companies.
A&P officials continued to push for a congressional charter. Rumors circulated that they planned to bribe congressmen for their support. The rumors seem justified; one of the leaders of the A&P was Robert J. Walker, a former congressman and U.S. Treasury secretary, who had been involved in shady mining and railroad bond schemes. The New York Tribune dubbed the A&P “a farce” and “a humbug.”
Undeterred, members of the group traveled to Texas, supposedly to determine the technical feasibility of a route along the 32nd parallel. But Sessions believed that Paine revealed the true purpose of the trip in a letter he wrote to a U.S. senator from Texas shortly before departing Vermont. In the letter, Paine explained that he would arrive “with such pecuniary aid and such strength of Capitalists as will enable the construction of the Railroad …”
No engineers, geologists or other experts who could offer advice on the route’s suitability traveled to Texas with Paine and his partners. This was purely a politics and money mission. They needed to lure investors and state politicians to back them.
At a gathering in Austin, Paine told people that it was “as easy to build a railroad in Texas as it is to trot a horse.” Whatever the truth of Paine’s claim, he found it difficult to muster the massive financial and political support his group needed. Ultimately, the A&P scheme would collapse. But not before Paine and his partners decided to break into three groups to cover more territory in their lobbying and marketing efforts.
Paine was to cover a route from Fort Graham to Waco, then Shreveport, Louisiana, and back to Houston. He made it only as far as Waco. Even before leaving Vermont, Paine’s health had been failing. Some attributed it to the strain of fighting off legal challenges over his railroad dealings in Vermont. Suffering from a serious case of dysentery, he was taken to a Waco hotel to recuperate.
He lingered for 25 days before dying July 6, 1853, his dreams of recouping his fortune at an end.