Article: Olds Backed Boyne Railroad - 1920
His $450,000 Saved Boyne City, Alpena & Gaylord Line
RRHX Editor's Note: Around 1917, the BCG&A had been completed from Gaylord east to what today is the M-33/M-32 junction, east of Atlanta in Montmorency Co. There may also have been some progress west from Alpena. Then, completion of the line stalled out due to lack of funding and the line went into receivership at thre request of the White family. During recreivership, the White interests attempted to gain investments from Alpena investors. The BCG&A gained a major investment which brought the line out of receivership. Three local Alpena investors claimed "foul" and sued the railroad in Alpena circuit court. This court case is noted in several newspapers at the time, but the outcome is not documented. It may have been settled prior to the end of the trial.
Alpena, Mich., Nov. 20. - The man whose cash was the magic key that released from receivership in 1917 the Boyne City, Gaylord & Alpena railroad, and has made possible its operation to this day, was Ransom E. Olds, the automobile financier, a jury in the Alpena circuit court was told Thursday by George E. Nichols, of Ionia, defending the railroad in a $100,000 contract suite brought by I. S. Canfield, F. H.; Orcutt and W. T. Hoey, of Alpena.
Olds put up $450,000 that the road might be rescued from receivership into which it was plunged in November, 1913, Attorney Nichols told the jury.
All this the defense expects to prove, it said, during its inning in the trial occupying the attention of Judge Emmerick, a jury, and a costly array of legal talent. The trial already has been in progress more than a week, and predictions were it would not end Friday.
The road originally was a spur to a lumber camp. William H. White & Co., of Boyne City, had extensive lumber holdings there, about which this road reached. The brothers were William H., Thomas, James, and Robert White. When the road was projected in 1905, a bond issue of $250,000 was negotiated which was partly sold. Later it was decided to extend it to Gaylord, where-upon the Whites advanced the road $160,000 more. The road continued expanding until 1915, when it owed White & Co. $325,000. The story of its extension to Alpena in 1919 was recited in full.
In November, 1913, James A. White made application in the district federal court for a receiver, both for the railroad and William H. White & Co., which was granted, the Michigan Trust company, of Grand Rapids being named receiver. Up to that time stock had been issued in the William H. White & Co. the sum of $1,200,000, of which $1,150,000 was owned by the White brothers. And $500,000 in stock and bonds had been issued by the railroad, of which the White brothers owned a majority.
In 1915, William H. White came to Alpena, Attorney Nichols related with the idea of enlisting the aid of Canfield and Attorney Orcutt, a banker; Hoey, a lumberman, in the raising of $700,000 with which to rescue the two companies from receivership, for which service he was willing to pay $100,000. Then it was that the contract, which is the basis of this suit, was entered into.
From August, 1915, until early in 1917, various attempts were made by the trio, the White brothers, and others to finance the road, it was declared. All sorts of combinations were devised and each time success seemed to smile on the plan, a frown appeared, usually opposition of the receiver. At lease, several distinct attempts were claimed by the defense.
Finally Claude Hamilton was brought into the financial problem and it was he who went to Ransom E. Olds and borrowed $450,000, as claimed by the defense, of which amount $275,000 was used in putting the road on its feet. The Alpena stockholders, partly through the efforts of Canfield, Orcutt and Hoey were induced to take the paper of the new company, par for par, while William H. White & Co. did likewise, said Nichols.
Reprinted from the Charlevoix County Herald, East Jordan, MI 11/26/1920.