Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1854-01-14
COKRTN7CATTOE.
McMrNSyILLE, January 7, 1856
erroneous.

MChlNNNlLLE, JANUARY 4, loOf.
J. A. GARDNER, Esq:
resiieqG Of the Nashville and North Westa,n r. r. C.
DEAR SIR: give to you with pleasure, my views
in regard to the probable effect ofthe passage of the
bills now before the Legislature, authorizing the
issuance Of county bonds for railroad subscriptions
and authorizing the of such bonds basis for
banking under the 'free' banking law of the State.
The object Of these bills is to facilitate the con-
strucGon of railroads, and if it be shown that
such would be the result, without hazard to any
interests, doubt not that tEey would speedily be
come laws for the Legislature has heretofore shown
her desire TO encourage the construction OF sys
TEN of internal improvements throughout the State,
by literally EXTENDING to them her aid. In exam
lining this subject it is proper to look at the expert
ence of other States, and see by what way and
means they built their roads.
Ohio has been the pioneer and the empire State
of the Western country in the construction OF rail-
roads She has already constructed over two thou
sand miles of road, within her limits, and has in
progress some fifteen hundred miles more which
cost about eighty-seven millions of dollars. and
nearly all this has been accomplished in period of
five wears About one half the means required to
build those roads was raised from local resources
and the other half for iron and equipment from the
sale OF bonds secured by mortgage Of the roads.
This amount of local resources lover forty millions
of dollars was principally procured in the agricu
tural districts where there was but little surplus
capital and if it had been attempted to be raised in
that short time as is now required in this State by
individual subscriptions and by direct taxation in
The case of county subscriptions, it would have
crippled every branch of trade and business if by
any possibility it could have been done at all
The way in which these local means were raised
was principally 10y the issuance Of county bonds
running tern Of years which were received by
the railroad companies for county subscription the
interest being paid by taxation in the different
ties until such times as the dividends which they
received on their stocks sufficient
The favorable condition Of tie money market in
our eastern cities at that time enabled the differ
ent Companies to dispose of those bonds on favor
able terms.
The raising of means in tbs way upon the cred
it of tEe different counties did not entail upon
them onerous taxes and burdensome debt to
hand down to their children. A county had sub
scrbed to road in Northern Ohio one hundred
thousand dollars upon which they paid the inter-
est for three years during the construction of the
road. The first year after the road was completed
1t paid twelve per cent. dividend the second year
fourteen per cent when the county sold its stock
lot 'A'rty thousand dollars premium and then took
up the bonds which she had issued, having secured
10 heFsei al the incidental advantages to be de-
HVeulrom tue construction of the railroad besides
making Tor herself drectproft This is not an
isolated case for 1t IS true of nearly evor county
in that State that the dividends required from, tho
different roads has been greater than the ar,o,r.
of interest paid, and the market value Of the stool
has been greater than that Of the bonds
The distance which this State is from eastern Of
ties and the small amount of direct interest which
capitalists there have in the construction ofour rail-
roads, even if the money market was in favora-
bic condition, would embarass the ready sale of our
county bonds. To obviate these difficulties it is
proposed to make these bonds available as basis
for banking. The advantages which would result
from this to the different railroad companies are
very evident 1t would furnish to the most of
them, with the State aid available means for the
immediate construction of their roads, without sub
jectng them to the loss of large interest and dis
counts paid during years of retarded construction
1t would supply an additional circulation, the