Saint Paul weekly Minnesotian., 1858-12-04
THE FINANCIAL POSITION AMI
REPUTATION OF MINNESOTA.


REPUTATION OF MINNESOTA.
We are just inaugurating in Minnesota, a
vast Railroad system. In its aid the people
last Spring, voted to pledge the faith and cred
it Of the State to the extent of five millions of
dollars and the executive officers of the
State are now from time to time, issuing the
bonds of the State to the five Railroad Com
panies whose enterprises are entitled under
the law to receive them. As these State
Bonds in aid of Railroads are issued they are
forthwith being made the basis of an extend
ed BANKING system; and being deposited
with the State Auditor, currency is being
issued upon them as a security for the bill
holders, dollar for dollar, upon the face of the
Bonds.
Thus, the State of Minnesota having the
risk of paying five millions of dollars and in
terest, resting upon it in its corporate capaci-
ty, and the People of Minnesota, individually,
having besides to run the risk of five millions
of dollars more in the shape of currency, be-
ing redeemed or not at par, by the sale of
their own State Stocks in the Stock markets
of the world, in case of the failure of the
banks-it naturally becomes question of
the first importance to know what is likely to
be the estimate of capitalists in New York
and other cities, as to the cash calue of those
State Stocks, which are the only security for
the currency issued upon them. 1t is in this
view that we devote our columns to-day to
the re- publication of discussion recently had
in the New York Tribune, on the highly inter-
esting and important topic; with an article on
the same subject, from Thompson's New York
Bank Note Reporter of the Goth ult.
- First, we present letter in the New
York Tribune of the Goth, dated at st. Paul,
Nov 10, which is as follows
The Railroad Swindle In Minnesota.
Correspondence of The N. Y. Tribune.
ST.. PAUL, MIMI, Nov. 10, 1858.
The curtain has just fallen upon the close of
the second act in the great Railroad Loan
tragedy" of this State, and more dark and
gloomy prospect never presented itself to the
people of State than now stares the poverty
stricken people of Minnesota boldly in the face.
AS the question has now assumed a form in
which the people of the East-especially your
capitalists be interested, it may be well
to briefly state the case as it now stands.
When the Railroad Loan was first proposed
the companies interested simply proposed that
the State issue to them $5 900, 900 Of accom-
mediation" paper, or bonds. AS security for
these bonds, they agreed and embodied in the
amendment to the Constitution authorizing the
loan the following conditions:
"Each Company shall make precision for
the punctual payment and redemption Of all
bonds issued and deliuered as aforesaid, to said
Company, and for the punctual payment of
manner as to er0nerdte the Treasury Of this
State from any aduances Of money for that
purpose"
"And as security therefor, the Governor shall
demand and receive from each of said Com
panies, before any of said bonds are issued,
an instrument pledging the net profits of its
road, for the payment of said interest, and a
conveyance to the State of the first two hun
dred and forty sections of land, free from prior
| membranes, which such Company is or
may be authorized to sell in trust for the bet
| ter security of the Treasury of the State from
| loss on said bonds, which said deed of trust
shall authorize the Governor and Secretary of
State to make cOnveyances OF title to all or OF
any such lands to purchasers agreeing with
| the respective Railroad Companies therefor.
Prouided, That before releasing the interest
of the State to such lands, such sale shall be
approved by the Governor, but the proceeds
of all such sales shall be applied to the pay
| ment of interest accruing upon the bonds in
| case of default of the payment Of the same,
| and sinking fund to meet any future de-
| fault in the payment of interest and the prin-
| cpal thereof when due; and as further secur-
| Hy an amount Of first neortgage bonds, on the
roads, lands, and Franchises Of the respectiUe
| Companies, corresponding to the State bonds
issued, shall be transferred to the Treasurer Of
| the State at the time Of the issue Of State
| b0nds."
Upon such conditions, and ten thousand
! times assured by railroad orators that in no
possible contingency could the people be call
| ed upon to pay single dollar either of inter-
| est or principal of the bonds, the loan was vo-
| ted.
Without stopping to give the details Of the
| management of the railroad companies, from
| the time the loan was voted, their repeated
violations by the conditions upon which it was
| granted, the gross corruption which has char
acerized their whole course thus far, is enough
for the purposes of this letter to say, that they
now refuse to execute to the State the g First
Mortgage Bonds" called for by the act, but
propose to issue TwENTY-THREE MILLIONS of
First Mortgage Bonds" and deliver to the
State an amount of such bonds, equal to the
| amount of State Bonds received by them. TO
| this most dishonest and monstrOus PROPOSE
| ton, which violated the main condition upon
which the people voted the loan, and which,
in fact, robbed the people of their security for
| the payment of the bonds issued to the Com
| panies, Gov. Sibley dissented and promptly
refused to issue the bonds.
| But the spoilers were not to be cheated of
their prey, either by constitutions or Govern
ors, and they therefore appealed to the Su-
preme Court, from the decision of the Gov
| ernor, and asked that a mandamus be granted,
| compelling the Governor to sign and issue the
| bonds. The case was argued yesterday be-
| fore the Court, and this morning they decided
| that "thc writ must ISSUE" Judge Flandreau
| dissenting.
What course the Governqr will now pursue
remains to be seen, but if he DECIDES under
| the action of the Court, to issue the bonds,
let Wall street prepare to receive an "army
of friends" from this State, each loaded down
| with the precious "documents." They will
of course be very handsomely "got up"
| duly embellished with "cuts" of railroads
| completed, and trains of from seven to ten
coaches all cranmed" with passengers
| passing over them, while iii the "prettiest" and
most attractive" type the words estate
RAILROAD BONDS" will form sort of "semi-
circle" over the upper half Of these precious
and valuable documents. On the whole, they
| will, think, be just as pretty as a picture,
| and will doubtless ego off" in Wall street
! like hot cakes.
But there is another feature of this Rail
! road Bonds" transaction which is of impor-
tance, not only to the holders of these bonds,
whoever they may be, but which bids likely
to prove an important affair in the history of
our State.
rTl- IL