Page 153 - a-history-of-columbia-county-florida-(1996)-edward-f-keuchel

A History of Columbia County Florida (1996) Edward F. Keuchel 142/340

A Period of Growth and Development

stockholder in the Florida Central when it had been formed out of
the reorganization of the Florida Atlantic and Gulf Central. The
Florida Central was leased to the Pensacola and Georgia, but the
combined road could not show a profit. On March 20, 1869, the
trustees of the Internal Improvement Board ordered the Pensacola
and Georgia sold. Houstoun, acting as Swepson’s agent, was able to
purchase the outstanding bonds for only thirty to thirty-five cents
on the dollar.5

Next, the trustees allowed Swepson to purchase the Pensacola
and Georgia using some $960,000 worth of bonds of the Pensacola
and Georgia, and the Tallahassee Railroad as payment. Even
though these bonds had been purchased at the depreciated price of
thirty to thirty-five cents on the dollar the trustees allowed the
bonds to count at full face value for purposes of the purchase. The
deal was stopped by Franklin Dibble who earlier had been ousted
from the Florida Central by Houstoun. Dibble demanded and the
trustees agreed to allow him to bid on the Pensacola and Georgia
using depreciated bonds acceptable at face value.6
Swepson and Dibble ended up by working out an agreement
between them and purchased the railroad with $960,700 face value
worth of railroad bonds and Swepson’s check for $470,065. Swep­
son had no funds to cover the check but hoped to make it good by
selling new bonds to be issued by the newly purchased railroad.
Such shenanigans did not escape the public’s notice. Columbia
County brought suit against the Florida Central charging fraud in
the 1868 lease of the Florida Central, while Jefferson County
protested the sale of the Pensacola and Georgia. Judge Alva A.
Knight ordered both railroads placed in the hands of receivers, but

bIbid., p. 245.
6 Ibid., p. 245.

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