Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1854-10-13
Prom tho BOSTON Traveller, Oct. S.
Railroad Mortgage Bonds.

-Msssrs. EJtior The mo rtgsge bor
inteest IN Railroad property, under the
prdSent aspect, is likely to assume consider
ohx importance.
Had the expectations Of those who pro-
jected the works. so largely indebted to
mortgage loans for their construction been
realized had their productiveness proved
sufficient TO meet the interest and indebted.
ness, with promise to discharge the princi-
pal, in part or whole, at maturity, it is not
probable that any vexed questions of validity
or title would have arisen; but It can no
longer be concealed, nor is it desirable to
conceal the fact, that, after from four to six
years experiment, some of the Northern
roads have failed to yield from their traffic a
net income adequate to pay the interest
obligations on their funded debts. In few
years the principal of these liabilities will
mature, and no reasonable prospects exist
that the corporations will have the ability to
discharge it, or negotiate a renewal on
reasonable terms.
In the meantime, as in the past, the ambi-
ton and weakness of managers will unite to
inuuce u sacrifice of the material to the tenn
porary advantage OF interest payments. -
Road and equipment will be suffered to
deprecate, in order TO satisfy temporary and
speculative objects.
With periods of intermittent agitation
marked by complaints of msmanagemeni
aud personal changes in the administration
Of the property, the present state of things
will continue until maturity and non-paymen
Of the bonds bring the questions Of validity
and title to the test ofjudicial determination
under an action Of foreclosure. 1t is folly tS
presume that any point OF honor will deie
parties, who find themselves about to be dis
possessed of their interests IN these corpora
tons, from resisting, by every legal meant
within their command, a summary process o
ejectment
They will assuredy avail themselves o
every technical as well as equitable objection
to such measure, that the laws Affords
Nexalious aud protracted proceedings II
chancery will be resorted to- and will inter
pose their delays to defeat the attempt o
bondholders to realize their claims.
J he effect Of these applications for in
functions hearings, arguments and appeals
viii most undoubtedly be, to cast distrus
and suspicion upon the validity Of the mort
Cages, and upon any title acquired unde
them.
What prudent man will invest HE funds il
property to receive a disputed deed, subjec
to ejectment?
N ithout entering into an enumeration o
the many forms and varieties OF proceeding
which can be nierposed to defeat bondhold
ers ~ their efforts To realize their claims,
sufficient to say that they exist, and mos
prahably will be called INTO practical action
Assuming all we have said on the tw
mam points to be well founded - that Ia
corporations referred to will not be in a cor
dition 10 lqDidate their mortgage liabiltie
at maturity, and that the title under whic
creditors will claim possession of the frau
chlse and road is disputable and will be cor
tested with depreciatng cffect upon tn
property, as an article for sale or use, W
come to the proposition
What s. most for the interests Of sl PAL
ties? We answer unhesitaiingly, unioa-
consolidation of bonds and stock into Hel
stock, upon an agreed valuation based upo
certain income OF SIX per cent THIS vi
give a reliable and settled value TO the secu
rites under a corporation organization at
ihorlzed by an existing law. The charter
the only law 10 value Of which, a rallroa
created by the authority Of the State can @
let aud be operated.
/ II IN the future there be for these roads
better day--if their net income should IT
crease, higher rate Of dividend viii q,
enhanced value 90 the srock.
Two things will certainly be mmediatel
accomplished property viii be settle
upon fixed productive capital. and the I'ru
tees wiii be relyed from all responsibility
the matter of d surrender luasmuch as u
Trustees viii cease 10 exist.
BONDHOLDER.