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In October, 1855, work on the Northwestern Railroad was rapidly progressing between Freeport and Butler, and likewise between the latter and Mercer. For the $1,500,000 stock held by Pittsburg and Allegheny County in the Pittsburg and Steubenville Railroad, it was alleged that only $750,000 was realized, owing to the depreciation in the East of the local bonds. The discount of $300,000, or nearly thirty per cent., was looked upon with great alarm by the sagacious business men of this vicinity. The failure of General Larimer in 1854 revealed the fact that he was indebted to the Pittsburg and Connellsville Railroad to the amount of $218,799, which sum was later reduced by the assignee to $196,481. In order to assist the railway the Legislature enacted that the bonds of Allegheny County, held by the company, might be sold at a discount of twenty-five per cent. Pursuant to this act they were accordingly placed upon the market in the East, but even at that ruinous figure could not at first find a purchaser. The county and municipal credit here at this date and a little later was perhaps lower than at any other time in the history of this community. No wonder the people groaned under the enormous burden, and no wonder the party called the "Repudiationists" sprang into numerical and vigorous strength.

Many citizens at the outset had objected strenuously to the wholesale manner in which the cities and county bound themselves to aid the railways. In most eases they pledged themselves to pay interest on the bonds in case the railways were unable to pay. Several of the railways paid such interest for a time, and then failed to do so, while several could not do so from the start. This threw the burden upon the cities and county, until, in 1857, it was found necessary to levy an eight mill tax to pay current railway obligations. Hence arose the Repudiationists, the father of whom was Hon. Thomas Williams. This faction was the strongest political force in the county in 1857. The contest over the bonds marks an important epoch in the history of the county.

It may be said as a fact that the existence of the canal prevented the chartering of the Central Railroad for several years, because it was argued as unfair to parallel the canal with another public highway that was certain to rob it of much of its carrying trade. The difficulty was avoided by uniting the two highways. In 1857 the Legislature sold the public works (canals, Portage Railway, etc.); but, through the Supreme Court, the canal commissioners enjoined the State from making the transfer. It became a political question, and finally turned upon the partisan complexion of the Supreme Court. The Pennsylvania Railway was enjoined from purchasing such public works. At last all controversy was settled by the transfer of the property to the railroad.

While the bill for incorporating the Pennsylvania Railway was pending in the Legislature many in that body feared the competition between that highway and the canal, and so at first refused to let the former have the use of the Portage Railway. On February 15, 1854, the mountain division of the railroad was opened for use, whereupon the Portage Railroad fell into disuse, though it had been employed since 1848 by the Pennsylvania Company. The Governor, by proclamation, August 1, 1857, transferred to the Pennsylvania Railway the canal and the Portage Railway, and the two latter were permitted to languish, and finally became extinct before or during the War of the Rebellion.

In 1860 the following railway indebtedness hung like a millstone around the neck of this community:

ALLEGHENY COUNTY
Pittsburg and Connellsville . . . $ 750,000
Allegheny Valley . . . 750,000
Pittsburg and Steubenville . . . 500,000
Pittsburg and Cleveland . . . 150,000
Chartiers Valley . . . 150,000

CITY OF PITTSBURG
Pittsburg, Ft. Wayne and Chicago . . . $ 200,000
Pittsburg and Steubenville . . . 550,000
Pittsburg and Connellsville . . . 500,000
Allegheny Valley . . . 400,000
Chartiers Valley . . . . . . . 150,000

CITY OF ALLEGHENY
Pittsburg, Ft. Wayne and Chicago . . . $ 400,000

   Total . . . . . . . $4,500,000

County assessment outside of cities . . . $12,500,000
City of Pittsburg . . . 10,500,000
City of Allegheny . . . 3,000,000

   Total . . . . . . . $26,000,000

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Last modified: 15-Oct-2001

Source document: "Standard history of Pittsburg, Pennsylvania" edited by Erasmus Wilson. Chicago : H.R. Cornell & Co., 1898.