Saint Paul weekly Minnesotian. [volume] (Saint Paul, Minn.) 1858-1859, 1858-11-13
Another Act in the Five Wilton Loan
%s net n, we Predicted"

The Supreme Court vi
day decided to grant peremptory mdndd-
nan Mr. S,plEY as Acting Governor, to
;ssuo 20 the Minnesota and Pacific Railroad
Comr,nv $4,000 of State Bonds, upon the
offers Of said company transferring to the
State Treasurer, an equivalent amount OF the
Ccmpany's general First Mortgage Bonds"
drawn ,rithout any prior lien in favor OF the
State! Chief Justice EMMETT and Associate
ArwArER concurred in this decision-FLAN-
pREAu dissenting The decision is verbal only
at present-the opinions at length, we under
stand, will be written out in a few days,
when we will lay them before our readers-if
their length is not too great and appalling.
This important decision brings us to the fourth
act inthe great Five Million Loan" Drama
The first act embodied its proposition and in
PRODUCTION into our legislative halls-the second
its passage-the third its adoption by the
people-.he fourth now gives us the decision
of the Supreme Judicial tribunal of our State,
constituting authoritatively that portion Of the
Five Million Loan Amendment, in regard to
First Mortgage Bonds" to mean exactly
what the Ninnesotidn EARNED the people it
meant prior to the election at which the Loan
Amendment was adopted by themi On the
9Th of March last, in 4 leading article, we re-
marked as follows:
From reading the bill, the casual reader unfamll-
lar with the plans of these gentry of the Railroads
L.. In NOR have hpan led
70 suppose that the State was to be PREFERRED
CREDITOR of those companies. In other words
that First Mortgage Bonds" meant that the State
was TO have the first mortgage on each OF the roads
TO the amount of the sl.250,o 900 loaned to such
road-a PRIOR LIEN.
Srca Is NOT THE FACT. The State is to receive
First Mortgage Bonds" true enough; but so as
ererv5ody else, The State is to receive First
Mortgage Bonds" to the amount of 81, $50 900 from
each road; while MILLIONS of First Mortgage
Bonds will at the same time GLUr THE MARKET!
The manner of effecting this and complying
with the letter of the law is eminently simple.
We will take as an example, the Minnesota and
Pacific Railroad Company. They select and ap-
point Trustee execute to him bonds to the amount
of FIFTEEN MILLIONS OF DOLLARS, and secure them
by mortgage on such of their rights, privileges,
franchises and estate, as they seem proper to en-
brace This is the FIRST MORTGAGE and these are
the First Mortgage Bonds" Of these-as Sc
curity for the g. $50 600 advanced by the State to
hat COMPANY like amount is transferred to
the Treasurer"
If it was intended to give the STATE priority OF
other creditors, the bonds and mortgage would be
executed TO the STATE and not transferred tothe
Treasurer"
This single clause would betray the cloven foot
even did we not know the fact from reliable
source; we assert it as fact from information re-
ceived from those who belong to one of these COM
panies that this is the plan of operation and that
these are the First Mortgage Bonds to be trans
ferred to the State.
This being the case, why did not these men come
out openly and avow it? Because they are what
we have charged them with being-mere tricAsters
-n4Oecdsiia-men!-men who do nothing openly and
boldly like honest men, compelled by conscious
ness of right. 1t is this kind of conduct which
arms suspicion, and causes prudent men to dread
the experiment of entrusting to their hands So 000
600 of the peoples oney and so long as they act
thus covertly and tread thus insidiOusly, their
steps will be watched, every net marked, and so
long as tulS COuuuCl COutlnueS lueJ Will NC Nithout
credit in the money market
We assert on similar information, that it is the
intention of the NJ & p r. r. Co. alone to issue
First Mortgage Bonds" to the amount of Sl',
0oO, 900; of the Root River and Southern Minneso-
ia R. R. Company to issue S 100000, and of the
Transit and Cedar VALLEY, EACH issue i'll similar
proportions.
Thus we see that these four companies propose
oissue near $40 600, 900 of First Mortgage Bonds"
out of which TIE State will receive its $4,000 600
or one-e;gkM OF the whole.
Now, we ask any candid man, what will be the
value Of these " First Mortgage Bonds" with $685.
600 900 ahead of us in the market?
We boldly assert that pledge to the State Of
three dollars Of these First Mort gage Bonds fer
one of the 5tates would rot it against loss,
and in case &C default, would scarcely pay the i'll.
terest
Yet in the face of all this we find the represent
tatives of the people-men intrusted with the in
terests of the State-rushng boldly into this ruin
Gus experiment-this most fatal trap.
We therefore, make appeal to the PEOPLE.
Ne entreat them to examine and reflect and ask
them whether, for the mere chance of the temper
AIRY relief so lavishly promised, they will consent
to entail upon themselves and their posterity q
permanent and crushing burden?"
In addition to this, Senator Folsom, in his
letter to his constituents, March 18th, eX
plains to them in similar manner what ''first
mortgage bonds" inca mt and in the address
of the anti-loan members of the Legislature tc
the people, dated March 18th, they argue tc
their constituents as follows:
snow, what will be the first mortgage bond,
of these Companies? The Companies transte,
to trustee all their rights, franchises lands and
roads (present and prOspective) as security OF
the bonds issued by said Company, and in an
amount (after allowing literally for contingen
cies, expenses, large salaries and depressed
market) sufficient to complete the achole road
Of these First Mortgage Bonds the State will
receive five millions in lieu of five millions is
sued 6y the State; while the balance will be
thrown into market at a sacrifice of perhaps
So per cent, but which the State must receive
at par"
This address was signed by nearly forty
members of the Legislature, and leaves nc
doubt that their construction of the act on this
point was the same with that then expressed
by the MINNEsorIAN, and now by the SUI
preme Court of our State
When the Five Million Act was passing
throughlthe House, Mr.. LIBBEY, an anti-loan
member from Goodhue county, moved to so
alter the pharseology of the act as that " First
Mortgage Bonds issued to the State as secur-
ity" should "should haze e.rclusice priority OF
all tile other liens" which amendment was
voted down by the members in favor of the
loan-45 in all.
We have no desire to indulge in mucl
comment on this matter at this time. lnpur
suance of our declaration Immediately aftel
the loan election, in favor Of the policy of CIV
ing the railroad companies every chance tt
redeem their pledges to the public, and to built
the roads, we have refrained from noticing