The news that in 1896 Thomas Lovewell sued a dead railroad lawyer over $1,200 that had been swallowed up in the Courtland bank failure, raised some interesting questions for Thomas's great-grandson Dave Lovewell.
Why was a wealthy Atchison native dabbling in small-town banks in Courtland and Jamestown? During Aaron Everest's time in the Kansas Legislature did he help Thomas wring that final payment out of White Rock Township for a new bridge he had built across White Rock Creek? Did Everest and Thomas Lovewell know each other from some joint business venture?
The ideas seemed far-fetched until I looked at the other litigants in the Everest case. They seemed to be Everest’s former associates or shirttail relatives, sometimes both. A woman named Belle Everest sued to break the will, alleging that at the time of his death, Aaron Everest had been the business partner of her husband Frank Everest. Although my search turned up no direct connection between Thomas Lovewell and Aaron Everest, besides their shared interest in the State Exchange Bank of Courtland, I did run across a fascinating study which concisely explains the economic climate of the 1880’s and early 1890’s, especially the role played by the railroads and investors ready to sink capital into newly-opened farm land in the Central Plains.
In her 1922 master’s thesis, “The Recession of the Frontier,” sociologist Hallie Farmer wrote:
The railroads which had built out across the uninhabited prairies were eager for the coming of settlers whose crops would pay freight rates which could be translated into dividends. The speculators were dependent upon the coming of these same settlers for the transformation of acres of buffalo grass into town lots which would multiply their small investment many times...
Eastern capitalists seeking greater returns on their investments found a fertile field in the west where there was a crying need for money. Every new farmer required money to stock his farm and put in his crops… There must be roads and bridges and, above all, there must be railroads over which the increasing harvests might find their way to eastern markets. It was to meet these needs that eastern capital was turned to three most productive lines of investment - mortgages, municipal bonds and railroad securities.
Mortgages offered a field for the small investor. They could be had in small amounts and the interest rates were high - six to ten percent on farm loans and ten to eighteen percent on chattel mortgages…
Larger investors found a place for their capital in municipal bonds. The ease with which bonds could be sold and the firm conviction that the increase in population would make payment easy led the western municipalities to issue bonds freely.
Although Republic County famously voted down bond proposals in the 1870’s, municipal bonds were used to underwrite the cost of constructing railroads through north-central Kansas in the late 1880’s. When the Rock Island Railway agreed to build a line joining Jewell County to Topeka in 1887, seven townships were asked to contribute a total of $95,000 to help pay for it. Jackson, Montana and Richland, townships adjoining Thomas Lovewell’s Sinclair Township, were among those that anted up. Sinclair appears to have dodged the necessity of issuing bonds, getting its rail line only after Thomas Lovewell ceded land to the Chicago Kansas and Western Railway for a token payment just as a frantic spurt of railroad construction began chugging to a halt.
According to Hallie Farmer, hard times began rolling over the Central Plains as early as 1886. The railroads had encouraged settlement by painting agriculture as a can’t-miss proposition. In fact, the Department of Agriculture found that an acre of corn cost $8.60 to produce in Kansas, but once the crop was hauled to market, yielded the farmer only $6.60 an acre. Wheat cost about 50¢ an acre more to grow, but sold for $3.00 less. Farming prospects were bleak enough during productive years, but starting in 1887 drought sometimes whittled crop yields by two-thirds, though the price per bushel of wheat and corn actually dropped. Thomas Lovewell may have learned his lesson early on, turning to raising cattle and hogs by the early 1880’s.
When the Rock Island built the Chicago Kansas and Nebraska, Kansas municipalities contributed two and one half millions of dollars in bonds to the financing of the road receiving stock in exchange. The Rock Island held the remainder of the stock and a mortgage on the road. In 1891 by the simple process of foreclosing the mortgage the Rock Island eliminated the municipalities who found themselves with no stock and a debt of $2,500,000 which bore heavy interest charges.
Readers might remember that Republic County voters turned down a proposal to build a railroad all the way to White Rock City in 1878 by letting municipal bonds to purchase 30-year Kansas Pacific bonds paying 7% interest. The deal might have seemed less sweet by 1893 when the railroad went into receivership, 15 years before the bonds were supposed to be retired. Of course, by that time the town of White Rock was itself about to go belly-up.
Individual farmers also felt the crunch of personal debt that had been contracted so freely during the boom period.
Finding it impossible to secure relief through real estate mortgages, the farmer was forced to resort to the chattel mortgage and secure such loans as he could upon his live stock and farm machinery. These loans bore higher interest rates than the real estate mortgages (many of them twenty to thirty-six per cent) and made the burden of debt under which the farmer struggled still heavier.
There were counties in South Dakota and Kansas in which ninety per cent of the farm land was mortgaged.
Although Thomas’s White Rock neighbor Samuel Fisher died in 1892, his bones were still being picked clean three years later. Fisher had signed a loan agreement with the Lombard Investment Company in May of 1886. As early as 1888 an item in the Republic City News declared Fisher "a pauper,” bilked out of almost everything he owned by “the smooth tongued loan agent.” An 1895 lawsuit demanded that the nearly-quarter-section of land Fisher had owned a mile northeast of Thomas’s Lovewell’s old farm at White Rock, be sold to satisfy the outstanding loan.
Why did Thomas Lovewell sue the widow and the estate of Aaron S. Everest in 1896? Clues to answering that question might also be found in Hallie Farmer’s 1922 master’s thesis.
The eastern capitalist, reasoned the farmer, was the cause of all his troubles - the capitalist who invested in mortgages and bonds and railroad stocks, the capitalist who fixed the price the farmer paid for his purchases and the price he received for his product. It was to the greedy eastern capitalist that he paid the interest on his mortgage year after year. It was to this same capitalist that his taxes went in the shape of interest on bonds. The railroad rates were high that the eastern capitalist might receive dividents on stocks and interest on bonds. Farm prices were low that the eastern dealer might reap a larger profit.
Aaron S. Everest must have struck Thomas as the poster boy for everything that had gone wrong with his little paradise along White Rock Creek. Everest was not just a lawyer, but a railroad lawyer, part of the legal team that had helped Jay Gould and his Missouri Pacific Railway gain a foothold in the West. Everest was also a Missouri Pacific vice president and lobbyist, a pitchman for railroad bonds. As a state legislator he represented the railroad’s interests in the Kansas Statehouse. As a banker he peddled mortgages to beleaguered farmers, and, according to plaintiffs suing the estate, saw to it that his banks were managed solely for his benefit.
If Aaron S. Everest wasn’t the Devil, in 1896 he must have seemed, even in death, a towering figure of incarnate evil.
"The first thing we do, let's kill all the lawyers,” Shakespeare’s Dick the Butcher says in Henry VI, Part 2. “If they’re already dead, then sue them,” Thomas Lovewell might have added.