Lewistown gazette. [volume] (Lewistown, Pa.) 1843-1944, 1858-09-30
Sale of the Public Works to the
Sunbury and Erie Railroad.

FlSo lioIu tiiS dCb ecIhHsS5 INC hCIdUc WoihS W
this road, which would at first sight strike
an ordinary reader as not involving the
State in any liability, and the editor even
goes so far as to say that the State does not
lend its credit to this road Here is part
of the second section, which will speak for
itself:
THAT the Sunbury and Erie railroad COM
pany shall execute and issue their bonds for
seven millions of dollars, bearing interest at
the rate of five per centum per annum, paya-
bic semi annually on the thirty first days of
January and July in each year; of which
said bonds, one million Of dollars shall be
due and payable in the year 1872, and one
million Of dollars, in each of the six succeed
ing years, and shall not be subject to taxation;
and the payment of said bonds shall be Sc
cured by mortgage, to be executed and de
livered by the said company to two or more
trustees, of the whole line Of their railroad
finished and unfinished, from Sunbury to the
harbor of Erie, including all their real estate,
together with the rights, privileges and fran
chlses of the said company, which said mort
gage shall be recorded in the Office for the re
cording Of deeds for the city and county of
Philadelphia, and deposited for safe keeping
in the Office of the state treasurer, and shall
be lien on all the mortgaged property, with
out further record; and the state treasurer
shall feccjre from the said company three mil
lions flee hundred thousand dollars Of the said
bonds, in settlement for the purchase money Of
the SAID canals and property, and the residue
thereof shall be reserved and deposited in the
Office of the state treasurer, to be surrendered
to the said company, for the purposes, at the
times and on the poudifinnS harain aGtnr
pressed"
Now for the facts in the case First,
here was an insolvent railroad without re-
sources Of any kind, and without credit
Secondly, the State of Pennsylvania had
some valuable public works-certainly val
liable if rightly managed-which the tax
payers were desirous Of selling. Instead of
putting up these works to the highest and
best bidder at public sale, as was the case
with the Main Line, the Legislature DR..
Bower included, says in effect to the Sun
bury and Erie managers, Gentlemen, the
Constitution prohibits US from creating
public debt, we will therefore be compel
Z" led, in order TO assist You, to whip the
devil around the stump little. Here
q are some valuable public works: we will
" frame law putting them at low price,
"say 81, 300, 900, and permit you to issue.
:" bonds to the amount Of SEVEN MILLIONS.
(Which you can Of course use, because
q they will be a mortgage ON your and our
possessions. Nobody but you shall bid on
- these terms, so that you need not be
" afraid of opposition. You will perceive,
gentlemen, that we give you valuable
"public works, ON which you can obtain
"what you have not now, crcdd, and thus
Z" be enabled to 90 on with your works at our
" expense" This in reality is the pith and
marrow of the whole law, for not dollar
Of the purchase money, except the ecceSs
Of a resale, is payable into the State Treas
ury until the year 1872 the only secu-
rity being mortgage on the road and the
very canals which the State gives them
Is not this lending the credit of the State
to this road Would any man for mo-
ment pretend TO say that if he sold farm to
aficnd at a low price, taking mortgage that
could not be foreclosed for fourteen years,
and at less than legal interest, that he
was not aiding his credit?
And now for the liability. Our impress
sion was last week that it was a simple en-
dorsement by the Governor, which howey-
er is not the case, but in reality worse.
To show what this endorsement is, we will
copy little more than appeared in the
Democrat Section provides among 9th
er things that when, in the opiHjoa Of the
chief engineer of the road and two assis-
tants to be appointed by the governor, the
managers can satisfy the State authority
that with the reserved bonds &c they can
finish the road, (most people know how
opinions can be obtained nowadays the
State Treasurer shall deliver up these 49,
100000 of reserved bonds, and then goes
on to say
"And before delivering any of the said
bonds to the company, there shall be endorsed
thereon, over the signature Of the governor,
the words, First mortgage bonds issued un-
der the act, entitled An Act for the sale of
the State canals ," and no bonds issued by
the company, except those owned and held
by the state, shall be considered valid and
entitled to the security Of the said mortgage,
without the endorsement Of the governor as
aforesaid: Provided, That the said endorse
ment by the governor shall not be construed
to create any liability whatsoever on the part
of the comm onwealth to the holder or endor-
sers of said bonds"