Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1858-02-02
ICoMMUNICATED.
The Chesapeake and Ohio Canal.

The Chesapeake and Ohio Canal.
Being one OF the holders OF the preferred
bonds issued by the Chesapeake aud Ohio
Canal Company, | have recently examined
into the security offered by the books Of that
company for the payment of the principal
and interest of its preferred debts, aud was
a good deal surprised TO discover that the
holders of the 81, 700, 900 of bonds issued to
complete the canal have no power to enforce
their payment. These bonds were issued
in pursuance Of the provisions of an act Of
tie general assembly Of Maryland, passed
March l0th, 1915 Prior to that. the State
nf MARYLAND, to secure the payment OF inter-
est and prin ,ipal Of loan OF large amount
held preferred lien or first mortgage on the
whole OF the net revenues, and OF the water
rights, lands, and other property OF the canal
company. BY this act Of 1915, the State
consented to waive the right thus secured, so
far as the rece,ueS Of the canal company
were affected, in favor of those who might
purchase bends. not exceeding 81 100000 in
amount, to be issued by the canal company.
But the State did not waive its rights so far
a. they affected the water-rightS, lands, and
other property Of the company. So that the
holders Of these preferred bonds can look
oniv t. the revenues for their payment. Not
ONLY 20, but in the act Of March 10, 1915,
the State stipulated expressly that the pres'-
dent and directors Of the company shall, at
all time, have power 10 use the tolls and
revenues Of The company to keep the canal
10 good condition, to provide the requisite
supply OF water, and to pay salaries OF officers
and agents, aud the current expenses OF the
company.
Seeing this, is it not high time for the hold
ers of these canal bonds to look to the nature
and value of the security We hold? The IN
terest on these bonds has not been paid. Ad-
ding to the principal the interest due. and
we have debt of lot less than 2,5OO,OOO
To this sum we are to add not less than $780,
600 to pay the debt due to the old Potomac
Company, and 10 pay for repairs and other eX-
penses authorized by the president aad dire"-
tors in pursuance at power gwen to them by
the act Of March TO- 1915, and for which the
rercHueS of the company are to be used .hr%t
to pay, before any part of them can be applied
TO the payment Ot the S2,5UU,OUO due on bonds
issued 10 complete the canal to Cumberland.
The figures from which my estimate OF the
amount of these debts is made will he found
in table appended to the report OF the presl-
dent of the canal company made to the stock
holders in June. How much more money
has been borrowed for building dams Nos.
4 and 5. and for other expenses since June
last. We know not Neither do we know how
much money il To be expended to complete
these dams and TO keep the canal in navl'
cable order. Nor do We know bow much the
expenditures for repairs will exceed the net
incomes of the company, annually, hereafter.
Ii nav not be unreasonable 10 estimate the
sum required to pay expenses incurred Tor
repairs since June last, TO pay for dams Nos
4 and 5, when completed, and put the cana
in good navigable order, at $3.50, 600. And
if. in this estimate, | am right, where, let me
ask, is this large sum OF money to CONE
from? And if loaned now is it to be repaid!
twill be perceived that the debts of the
company. created for repairs and other pur'
poses. and constituting a lien on its revenues
prior TO that of the holders OF the bonds is
sued 10 complete the canal, amounted in june
to 100000. Add 20, this $4,000 more
and we shall have 81 $50, 900 of debts, tear
ing al interest Of S7j 900 per aunum, to be
paid out of the net revenues before the hold
ers of these preferred bonds can be entitled
to receive even the interest on their claims
Looking to the experience of the past it ma,
not be unreasonable to assume that at leas
500 600 annually of the incomes Of the com
pnny will lie required to pay for ordinary re
pairs, and to deiray other unavoidable expen
ditures Ii so, add to that sum the 5,OO
necessary to pay interest on debt Incurred
aud to be incurred, as | have stated, and W
have an annual expenditure of Sl65,OOO
be taken from the tolls of the company, whic
SUN exceeds the average annual amount tha
can be anticipated from tolls for several year
to come. unless there is very great and W
expected change in tho present depressed COZ
dition OF the coal companies Of the Allie
ghanies.
But what are the holders of these pre-
fcrred bonds to expect while these debts TO
repairs, interest and principal, are being Il
Quidated? Would it not be advisable for tn
holders Of these bonds to meet and con
suit together before it is too late? Unles
some decisive measure be adopted, in th
opinion Of the writer, the day is far distan
when the canal would not sell to any pruden
parties Tor q a sum nearly sufficient to pa
these preferred debts.
1t is not intended by what is hero said t
reflect upon those who have hal the manage
meut Of the canal in charge. The write
has no knowledge of the details Of that man
agement that would Justify an expression q
opinion iHcuipathg one or crcHipdttHg anott
or of the parties concerned. lie sees grea
work upon which nearly twenty millions
dollars have been expended, in great degre
useless, and would invite these most deeri
interested to interpose, and, if possible, PR
vent its entire destruction. The duty OF th
bobd-holders aud preferred creditors genera
~, is one of immediate action. great an
costly work is in ruins, How shall 1t be r.
vived, and thus rendered useful to the Stat
aud profitable to oil interested? We as
with emphasis. what action will the preterre
creditors take, and rheH 1ciH they act
BOND-uOLDER.
COMMUNICATED.