Story: Receivership of the Potts Logging Company - 1891

A view of Michigan's largest lumber operation and its railroad.

The Potts Lumber Company was one of Michigan's largest logging companies during the pine era from about 1880 until 1891. The company had saw mill facilities in Au Sable on the shore of Lake Huron and at "Potts" in northeast Oscoda County on the Au Sable River. The company was owned by J.E. Potts, formerly from Ontario who lived in Au Sable and later Detroit. In the early 1880's Potts brought on another partner - identified as J. Tindale - and the company became the J. E. Potts Salt and Lumber Company.

Around 1886, Potts built a narrow gauge railroad - the Potts Logging Railway Co. - from Potts to forest locations in northern Oscoda County and another branch line southwest looping around Mio to Lupton. During this period, newspapers estimated the population of Au Sable and Oscoda at about 8,000 residents, and the village of Potts at about 700 souls.

The railroad would bring logs into Potts (located on the Au Sable river), where they would be floated down to mills at Au Sable. At first, the Potts railway was about 50 miles long and land-locked. From Oscoda, supplies and woodsmen were brought up the river and logs were sent down the river for milling. Barges - some owned by Potts and others hired - brought finished lumber to markets as far away as Chicago and into Canada.

The Potts operation was one of the most well equipped logging companies in Michigan. As the amount of pine seemed inexhaustible, the company took on more debt to create these facilities and to connect Potts and the railroad directly with mills in Au Sable (this was in about 1886). The company began having financial troubles in 1886, mostly blamed on the cost of extending the railroad to Lake Huron. The company failed on November 27, 1890 and was placed into receivership by creditors. The receivers ordered a sale of the owned land and other assets, including the Potts Logging railroad, as well as much of the contents of the towns of Au Sable and Potts. Note: By this time, Potts had moved to Detroit, no longer living full time in Au Sable.

It was noted in newspapers of that era that Potts attempted to remove the railroad from the receivership, but testimony from D. Tisdale, his partner, indicated that this had never happened. It is noted that D. Tisdale became one of the receivers appointed by the court to dispose of the Potts company.

The Sale of Assets - A fascinating look at the company and railroad

In February, 1891, in various advertisements in newspapers around the state, the receivers at the direction of the court, announced they were prepared to receive offers for the property, including the railroad. The offer was broken down into fifteen "parcels", Parcel 1-8 being land and in some cases farm buildings.

Parcel 9-15 covered the railroad and mills and give a fascinating description of what would be, at the time, the largest logging operation in Michigan.

Parcel 9 [The Railroad]

The railway (including the road bed as it is), the rolling stock and equipment of the same, described generally as follows: Gauge of railway 3 feet. The main line extends from Au Sable to the Village of Potts, in Oscoda County, Michigan, about 38 miles with branches North and South of about 50 miles more without including sidings and short spurs. In all there is in use steel rails about 1,915 tons of 30 pound rail, 500 tons of 35 pound rail, 3,430 tons of 40 pound rail, or a total of 5,845 tons.

Where settlements rendered fencing necessary, substantial wire fences have been constructed. Substantial bridges have also been erected, including two across the Au Sable River. Numerous sidings with necessary switch stands, frogs, etc., have been put in sufficient to accommodate large traffic. A telephone line has been constructed between Au Sable and Potts, and also over the whole system North of the Au Sable River. On the main line, coal platforms and frost proof water tanks have been built. At Potts a round house with nine pits, steam heated with water pipes and hydrants and roofed with iron has been erected.

There is also [in Au Sable?] a turn table in yard connecting with round house; also a machine shop, car shop, coach house for passenger train, oil house, paint shop, supply office, store house, car repair shop, foundry, blacksmith shop, coke and coal house and pattern room, train despatchers office, etc.

In the shops there is a large quantity of valuable machinery with shafting and pulleys and all necessary tools and implements to maintain, repair and keep in order the railway rolling stock and equipment. The motive power is supplied by a large engine. The round house and machine shop are lighted by electric light.

The waterworks are supplied with a large Worthington duplex force pump.

The rolling stock is composed of:

• 9 twenty-eight ton Mogul locomotives, constructed especially for the Company by the Brooks Locomotive Works, on Dunkirk, N.Y.
• 1 twenty-six ton Mogul locomotive, second-hand Brooks manufacture.
• 1 eighteen ton locomotive, passenger, 2nd hand; H. K. Porter, manufacturer.
• 4 twenty-eight ton geared or Shay engines, built by Lima Machine Works.
• 1 twenty-ton geared or Shay engine, built by Lima Machine Works.
• 3 fifteen-ton geared or Shay engines, built by Lima Machine Works.
• 1 first-class plush upholstered passenger coach
• 1 second-class perforated wooden seat coach.
• 1 combination baggage and express car.
• 1 baggage car, 5 box cars, 263 Russel logging cars, 9 coal cars, 7 flat cars, 1 snow plow on car, 2 water tanks on cars, 9 hand cars, 1 sand dryer, and 2 snow scrapers and flangers.

Parcel 10.

[In Au Sable]. The steam circular and gang saw mill, lath mill, salt block, cooper shop, machine shop, blacksmith shop, brick office, large frame barn, 7 lake and river docks and 1 land tram for piling lumber. Sheds for storing salt, etc., and all lighted by electricity. Situated at Au Sable, Iosco County, Michigan. This parcel also will include about fifty acres of land containing channels and bayous with water storage capacity for about 1,500,000 feet of logs.

Receivers note that "this is probably the largest and one of the best appointed establishments for the manufacture of lumber and salt in the State of Michigan".

Parcel 11.

[In Au Sable]. One large frame manager's house, 1 1/2 stores high, and also seven 1 1/2 story frame cottages, and 15 1-story frame cottages, conveniently situated for employees of the mill or residents of the city, and adjoining last mentioned parcel. Tenders will be received for these separately, with sufficient land for the accommodation of the occupants.

Parcel 12

[In Potts]. A large new frame circular saw mill with two new shingle machines fitted with all modern improvements, situated at the Village of Potts, Oscoda County, Michigan; also 1 large shed for storing shingles. Ample yard and piling room, as may be agreed upon, will be conveyed with this parcel.

Parcel 13.

A number of buildings conveniently situated for using in connection with Parcel 9 (the railroad), consisting of 1 large frame store with offices, 1 log warehouse, frame warehouses, 1 baggage room, 1 large frame barn and stable, 1 log barn, 1 large hay shed, 1 harness store room, 2 large ice houses, 1 large cook camp with root house and cellar convenient, 3 buildings for men's sleeping apartments, and 3 log dwelling houses. these are offered jointly with parcel 9 or separately.

Parcel 14.

[In Potts]. Eight frame houses, lathed and plastered; 1 of them two stories high, remainder one story high. 6 frame houses, double boarded and papered, one story high. 1 frame harness shop, 1 building used as a jail. These buildings and shop are conveniently situated for employees and others at the Village of Potts, and are offered separately, with sufficient land attached.

Parcel 15.

• Fifty span of large and valuable draught horses.
• 50 hogs.
• 5 full sets blacksmith's tools, complete.
• 14 wagons and buggies of different descriptions.
• 3 large office safes.
• A large quantity of office furniture.
• 80 sets of harnesses.
• A large quantity of harness and horse furnishings and appliances.
• A large quantity of mill supplies.
• About 15,000 pounds of chain.
• A large quantity of lumbermen's supplies and camp equipage.
• A lot of lumbermen's tools and implement.
• 32 cook and box stoves.
• 200 lengths o stove pipe.
• 15 canvas tents; quilts, sheets, pillows, pillow cases, mattresses, bed steads, bed springs, bed ticks, towels, blankets, and a large quantity of other miscellaneous articles.

Tenders (offers) will be received by the Receivers until the 1st of May, 1891, for all parcels which will be opened at 10 o'clock a.m., on the 1st of May; in the presence of all parties tendering at the office of the Receives.

Tenders to be for cash or one-third cash, and the balance upon such terms and security as the Court may approve.

For any further particulars or information apply to: D. Tisdale, H. A. Harmon, Receivers, 58 Buhl Block, Detroit, Mich. 

Outcome

The railroad was purchased separately by H. M. Loud & Sons, another Oscoda based logging firm. They used the railroad to support logging operations of their own forest properties in the region (prior to the end of receivership). It appears that Loud also purchased most of the other assets as well and took over operations. The Village of Potts was renamed "McKinley" (after the U. S. president) and continued to support logging operations until they ended. McKinley is now a ghost town and difficult to find.

In 1900, a fire wiped out the railroad facilities in McKinley. By then, the railroad had replaced the Au Sable River as a way to bring logs from McKinley to Au Sable and Oscoda. Former Potts properties around McKinley had been "logged over" so Loud moved railroad operations to Comins, twelve miles north on a new branch of the railroad going towards Montmorency County. The town of McKinley was abandoned and by 1920 the site was completely gone.

Potts died in 1909 at age 70.

[Some information provided by the "Code Family History". www.codefamilyhistory.com]

 Editor's Note: While researching the Potts Lumber Company, I came across an article from the Alpena Argus in 1887 which told a front page story about a man named "Potts" in Alpena. It is unknown if this is the same "Potts" who owned the lumber company, or  relative, or may have no connection at all. There were other "Potts" in the area at the time, including the Alcona County Sheriff. But this story is so bizarre, I decided to add it to the bottom of this story and I hope you enjoy it...

[From the Alpena Argus, Alpena, Michigan May 11, 1887]

Potts' Dental Experience

Mr. Potts has suffered a great deal from a toothache, and one day he went around to the office of Dr. Slugg, the dentist, to have the offending tooth pulled. The doctor has a very large practice, and in order to economize his strength, he invented a machine for pulling teeth. He constructed a series of cranks and levers fixed to a movable span, and operating a pair of forceps by means of a leather belt, which was connected with the shafting of a machine shop in the street back of the house. The doctor experimented with it several times on nails firmly inserted in a board, and it works wonderfully.

The first patient he tried it on was Mr. Potts. When the forceps had been clasped upon Potts, Dr. Slugg geared the machine and opened the valve. It was never known with any degree of exactness whether the doctor pulled the valve too far open or whether the engine was working at the moment under extraordinary pressure.

But in the twinkling of an eye, Mr. Potts was twisted out of the chair and begin to execute the most surprising maneuvers around the room. It would jerk Mr. Potts high in the air, and souse him down in an appalling manner, with one leg among Slugg's gouges and other instruments of torture and with the other in the spittoon. Then it would rear him up against the chandelier three or four times, and shy across and drive Potts head through the oil portrait of Slugg's father over the mantle place.

After bumping him against Slugg's ancestor it would twirl Potts around among the crockery on the wash stand and dance him up and down in an exciting manner over the stove, until finally the molar gave, and as Potts landed with his foot through the pier-glass and his elbow on the pink poodle worked in a green rug, the machine dashed violently against Dr. Slugg and tried to seize his legs with the forceps.

When they carried Potts home he discovered that Slugg had pulled the wrong tooth; and Dr. Slugg never sent to collect his bill. He canceled his contract with the man who owned the planning mill; and began to pull teeth in the old way, by hand.

Mr. Potts, a day or two later, resolved to take the aching tooth out himself. He had heard that a tooth could be removed suddenly and without much pain by tying a string around it, fixing the string to a bullet and firing the bullet from a gun. So he got some string and fastened it to the tooth and to a ball, rammed the bullet into his gun and aimed the gun out the window.

Then he began to feel nervous about it, and he cocked the gun about 20 times, as his mind changed in regard to the operation. The last time the gun was cocked he resolved not to take the tooth out in that way, and he began to let the hammer down preparatory to cutting the string. But the hammer slipped, and in the next minute Mr. Potts' tooth was flying through the air at the rate of 50 miles a minute, and he was rolling over the floor howling and spitting blood.

After Mrs. Potts had picked him up and given him water with which to wash out his mouth, he went down to the front window. While he was sitting there thinking that maybe it was all for the best, he saw some men coming carrying a body on stretcher. He asked what was the matter, and they told him that Bill Dingus had been murdered by somebody.

Mr. Potts thought he would put on his hat and go down to the coroner's office and see what the tragedy was.

When he got there Mr. Dingus had revived somewhat, and he told his story to the coroner. He was trimming a tree in Butterwick's garden, when he suddenly heard the explosion of a gun, and the next minute the bullet struck him in the thigh and he fell to the ground. He said he couldn't imagine who did it. Then the doctor examined the wound and found a string hanging from it, and a large bullet suspended upon the string.

When he pulled his string it would not move, and he said that it must be tied to some other missile still in the flesh. He said it was most extraordinary case on record, the medical books reported nothing of the kind.

Then the doctor gave Mr. Dingus chloroform and proceeded to cut into him with a knife to find the other end of the string; while he was at work, Mr. Potts began to feel sick at his stomach, and to experience a desire to go home

At last the doctor cut deep enough, and giving the string a jerk, out came a molar tooth that looked as if it had been aching. Then the doctor said the case was more extraordinary than he thought. The doctor said that the tooth could not have been fired from a gun because it would have broken to pieces. It couldn't have been swallowed by Dingus and then broke through and buried itself in the thigh, for then how could the string and ball be accounted for?""

"The occurrence is totally unaccountable upon any reasonable theory," said the doctor, "and I do not know what to believe, unless we are to conceive that the tooth and ball are really meteoric stones that have assumed these remarkable shapes and been shot down upon the earth with such force as to penetrate Mr. Dingus leg, and this is so very improbable that we can hardly accept it unless it is impossible to find any other". Halo!

What's the matter with you Potts! Your mouth and shirt are all stained with blood. "Oh, nothing," said Potts forgetting himself, "I've just lost a tooth and"...

"You lost and who pulled it?" asked the doctor"

"Gentlemen," said Potts, "the fact is, I shot it out with my gun."

Then they put Potts under bail for attempted assassination, and Dingus said that as soon as he got well he would bang Mr. Potts with a club.

Source: Alpena Argus Newspaper [AAN-1887-0511]

Story: Telegraph companies and railroads in Michigan

By Dale J. Berry, all rights reserved.

Railroads were first laid in Michigan about 1836 and all were single track operations with occasional passing sidings in towns along the way. Collisions were not a big problem because most new railroads had few locomotives and they did not run at the same time. At that time, railroads had more to worry about with poor track conditions causing derailments, and snakeheads in the track causing strap iron to spring up and injure or kill passengers. Speeds were low.

As business grew, railroads began to operate bi-directionally and they used schedules - insuring that trains going in opposite directions did not collide. Meeting points were scheduled at various towns along their line. This worked well, except when a train didn't show up at the prescribed time. Engineers and conductors either waited, or they continued on, carefully watching for the delayed train to appear. If that happened, then one train had to back up to the previous station to allow the meeting on a side track.

Keep in mind that there was almost no communications between terminals or stations along the way. These points were connected by horse trail (i.e. pony express) or stage coach trail at best and the town passing tracks were ten miles apart. The postal service, created in 1792, was reliable but very slow, taking days for mail to reach a neighboring town. From the very early days of railroads, it would be 50 years before the telephone was invented and radios were about 100 years in the future. There was simply no way to communicate along a railroad, except by word of mouth.

On the state-owned "Central line" and the subsequent Michigan Central, this lack of communication lasted for 17 years. Then came the telegraph which changed everything.

The Morse system, first invented about 1844, was first deployed here on the Michigan Central railroad in 1855. Connected by a single wire on poles along the tracks (using the ground to close the loop), station agents along the line could send other agents information about delays and requests to hold or send trains which were not meeting the schedule. "Blocks" were established and the train "order" was invented. Stations were equipped with signals to hold trains waiting for orders from a dispatcher who was charged with coordinating all of this over the telegraph. Station agents had to quickly learn "Morse Code" and learn all of the official abbreviations which were approved for use by the railroad to shorten each message. An example would be to substitute "C&E" for "Conductor and Engineer".

Commercial telegraph companies rapidly formed throughout the country to providing messaging services between cities and towns. The Associated Press was formed to relay newsworthy stories and stock prices from a central location (i.e. New York) to newspapers throughout America.

Railroads and telegraph companies quickly became dependent on each other. Telegraph companies needed right-of-way for their wires. They also needed a large work force of trained telegraphers in towns along the way. Railroads had these rights-of-way and they had telegraphers in each station. They were also ahead in the training of telegraphers for every station in every town they served. They also had locomotives and cars which could assist the telegraph companies in the installation of poles and telegraph wire along their lines.  

Railroads needed the telegraph companies for other reasons. By enticing the telegraph companies, the new wire and poles could be installed by the telegraph companies at very little cost to the railroad. Deals were struck.

• Railroads provided - rights-of-way for the wire and agents to receive and send messages in every town they served.
• Telegraph companies provided - poles, wire, installation and maintenance, property rental and fees paid to the railroad to handle messages in towns which could not afford full-time company telegraphers. Only the largest towns, such as Detroit and Grand Rapids could initially afford telegraph company dedicated offices.
• In many cases, this relationship was a hybrid. Some wires were owned by the railroad and rented to the telegraph company. Other railroads exclusively used telegraph company wires along their lines.

On the larger lines, multiple "wires" were run between towns using the same set of poles. The larger railroads might "own" one or two of these lines for railroad business, while the telegraph company might own as many as 10-15 wires. As technology improved, the telegraph inventors created duplexers and the "quadruplexer" which used one wire for four separate messages at the same time.

This partnership between railroad companies and telegraph companies lasted for years, well past the invention of the telephone and into the 1950's. The vast majority of messages carried by telegraph companies were messages between businesses, or messages for the government. Personal messages made up less than 10% of the commercial telegraph business and were not common because of the cost. An individual message might cost the sender $10-$15 per message and in todays dollars that would translate to over one hundred dollars per message. Only the rich had enough money to send a telegram, or a "cable" as it might be known between continents.

One common message sent was by the government to inform a family of the death of their son in the armed forces - often in other parts of the world. To have a telegraph messenger appear at your front door during war time could be a devastating event for a family.

The financing of telegraph companies was similar to the financing of railroads in America. Both started small with local capital or a combination of local and eastern capital. Financial troubles were common and occurred with each business cycle panic. Small railroad and telegraph companies were bought out by larger companies, which became regional and national providers. Stocks were manipulated behind the scenes with almost no government oversight limiting insider trading.

Michigan had a number of telegraph companies in the early days, including the American Union Telegraph Co., the Atlantic & Pacific Telegraph Co., the George W. Barsh & Company (along the MC's Air Line Division), the Montreal Telegraph Company (used along Canadian roads), the Northwestern Telegraph Company (in the upper peninsula), and the large Western Union Telegraph Company.

The largest telegraph company to survive all of this was Western Union (WU). Even as Western Union grew throughout the entire United States, start up companies would compete and then be absorbed by WU, making investors wealthy.

Most transportation historians are aware of the railroad competition by Cornelius Vanderbilt and Jay Gould. Vanderbilt and later his family controlled the New York Central and Harlem River railroad, including the Lake Shore and Michigan Central lines in Michigan and the Canada Southern in Ontario. Gould, at various times, controlled the competing Erie and Wabash railroad lines, the latter which came into Detroit. These factions manipulated stocks to absorb competitors and were ruthless at times.

What is not well understood, is that the Vanderbilt family and Gould also competed in the telegraph business. By 1870, Vanderbilt quietly bought control of the Western Union Telegraph company and Gould simultaneously invested in many of the WU's competitors, driving stock prices up and down, and settling on lucrative buy outs of the smaller lines by Vanderbilt's WU. [WUCO]

During this telegraph competition, the Vanderbilt family controlled railroads in most towns of the populated northeast, as well as in the midwest states of Michigan, Ohio, Indiana and Illinois. The family also owned or controlled the Chicago & North Western (reaching north and west of Chicago, including into Michigan's upper peninsula).

Railroad and telegraph companies existed for almost 100 years, even after the telephone was invented and refined. The Michigan Central, first used telephone to dispatch on their logging and branch lines, continuing with telegraph into the 20th century for sending messages along their main line routes. Installation of telephones on their main lines was established in 1908. Other railroads followed. [TSE-1908-9] Telegraphs improved as well, giving way to automatic "teletype" machines which could send freight train car lists between yards, freight agents, and accounting departments.

In 1879, the Michigan Railroad Commission asked railroads to begin reporting their relationship with telegraph companies. I suspect that the public was interested in having them regulate telegraph rates in Michigan, as rates varied widely as a result of competition and speculation.

Though this never happened, the railroad commission was later assigned duties of regulating telephone companies in the state, a function which ultimately overtook the attention of the commission as it evolved into the Michigan Public Utilities Commission and ultimately becoming the Michigan Public Service Commission in later years.

In 1879, thirty-three companies responded to the Michigan Railroad Commission with information about their relationship with telegraph companies:

• Allegan & Southeastern (GR&I) - 11 miles of line owned by railroad company. Others were not noted.
• Canada Southern Bridge Company - their lines were owned by Toledo, Canada Southern & Detroit railroad
• Chicago & Canada Southern - 67.6 miles of line owned by railroad company
• Chicago & Lake Huron - 232 miles owned of line by railroad company
• Chicago & Northeastern - None reported
• Chicago & North Western - None owned by railroad. 150 miles of line owned by Northwestern Telegraph Co.
• Chicago & West Michigan - No lines were owned by railroad. Others not mentioned.
• Chicago, Detroit & Canada Grand Trunk - None owned by railroad. Montreal Telegraph Co. operates 59 miles of telegraph lines along their road.
• Chicago, Saginaw & Canada - 38 miles of line owned by railroad company. No others reported.
• Detroit & Bay City - None owned by railroad. Western Union owns the line on main line and branches.
• Detroit, Grand Haven & Milwaukee - None owned by railroad. Western Union owns 189 miles of line (double lines).
• Detroit, Hillsdale & Southwestern - None owned by railroad. Western Union owns 65 miles on line along their right-of-way.
• Detroit, Lansing & Northern - 197 miles of line owned by railroad. No others mentioned.
• Flint & Pere Marquette - None owned by railroad. Western Union owns unspecified lines along railroad,
• Fort Wayne & Jackson - None owned by railroad. 100 miles of line owned by Western Union.
• Grand Haven - 58 miles of line owned by railroad. Western Union owns 13 miles of line on railroad's poles.
• Grand Rapids & Indiana - railroad owns 401 miles of line. Atlantic & Pacific telegraph company owns 49 miles of their own line between Kalamazoo and Grand Rapids.
• Grand Rapids, Newaygo & Lake Shore - 46 miles of line owned by railroad. No others noted.
• Hecla & Torch Lake - None owned by railroad. No others reported.
• Lake Shore & Michigan Southern - 1,973 miles of poles and 1,232 miles of line owned by railroad. 7,068 miles owned by Western Union.
• Marquette, Houghton & Ontonagon - 73 miles of line owned by railroad. 63 miles owned by Northwestern Telegraph Co.
• Michigan Airline (east) - None owned by railroad. 14 miles of line owned by Western Union telegraph company.
• Michigan Central - 410 miles of main line poles owned by railroad. 223 miles of two-wire, and 194 miles of single wire owned by railroad. Western Union owns 6 wires of 223 miles each on main line for 1,338 miles of line. The railroad and Western Union jointly own 232 miles of poles and wires on the JL&S Division to Mackinaw. The George W. Barch & Company owns 104 miles of pole and wire on the Air Line division, 94 miles of line on the Grand Rapids division, and 40 miles of line on the South Haven division.
• Michigan, Midland & Canada - None owned. No others reported.
• Mineral Range - None owned or noted.
• Northwestern Grand Trunk - Lines owned by railroad. Western Union does commercial business over railroad lines.
• Pinconning railroad - 7 miles of telegraph owned by railroad. No others noted.
• Port Huron & Northwestern - None owned by railroad. No other lines reported.
• Saginaw Valley & St. Louis - None owned by railroad. Western Union owns 33 miles of line from Saginaw to St. Louis.
• Toledo & Ann Arbor - None owned by railroad. American Union Telegraph Co, owns 46 miles of line.
• Toledo, Canada Southern & Detroit (CS) - 55 miles owned by railroad. No others noted.
• Toledo & South Haven - None owned by railroad. Western Union owns 9 miles of line.
• Traverse City (GR&I) - 26 miles owned by railroad. No other lines reported.

Books

For an excellent book on this topic, please read Western Union and the Creation of the American Corporate Order, 1845-1893 by Joshua D. Wolff, ©2013 Cambridge University Press, New York, NY.