The weekly pioneer and Democrat. [volume] (Saint Paul, Minn. Territory) 1855-1865, 1858-03-18

or may BE- authorized TO sell :" and the pro.
ceeds Of these lands are TO be sacredly ap-
piled as sinking fund for the principal If
the company thus parting with the title and
the right to convey in favor of the State,
shall agree with parties for the sale Of any
Of these lands, the Governor may approve
Of such sales, and in connection with the
Secretary OF State, may execute deeds to
the purchasers, but all proceeds of such
sales 60 into the Treasury, and must there
remain as sinking fund for principal, or to
meet any default Of interest 1t is also pro-
vided, that if company fails to meet inter.
est, the Governor may sell the lands 50 held
in trust, of course at any price to protect
the Treasury; but the evident intention is,
that as long as the companies pay regularly,
they may help the State to advantageous
sales for the purpose Of making the most of
the above provision to meet the State bonds
at maturity.
Held for such purpose, and sold with
due regard to the interest Of the State, what
should 5000 acrcs bring? The lands OF
the Illinois Central X. K. Company, hither-
to sold, have averaged $3.50 per acre
Even at $40 per acre, the proceeds of the
above conveyance in trust will be 81 ,j3G,-
600 These lands cannot fail to furnish IA
sufficient provision for retiring the State
bonds long before their maturity.
4. First Nodgoee Bonds on Tie roads,
idnds and franchises Of the respective Cone
pdn,s, corresponding 10 The State bonds ISSUED.
These are to be transferred to the Treas
urer Of State at the time of any issue OF
State bonds, as further security not only
for every accruing payment Of interest, but
for the final redemption of principal. The
bonds have this advantage; that they can
be made available on any sudden cmergen-
/ cy: and the Governor is directed 10 sell them,
in such manner as may be prescribed by law,
to prevent default in the payment Of in
terest. The Legislature, as recommended
! by the select committee of the House Of
Representatives, will prescribe the manner
in which such sale of railroad securities shall
take place. 1t would be well, say three
months before the day for payment OF in
terest, for the Governor to require from each
Company by day certain that funds should
be deposited to meet such payment-on a
failure to comply with this notice, then the
Railroad bonds should be Immediately adj
vertised for SALE and every step taken to
provide the requisite amount of money in
advance Of the day of semi-annual payment.
The Section clearly authorizes such pre-
cedure, and in this way, no possible discredit
can fall upon the State Treasury.
We notice, in some quarters. a misappre-
hension Of the subject Of First Mortgage
Bonds, which we think it desirable to re-
move Fears seem TO he entertained that the
Companies will make excessive issues of first
mortgage bonds. But why should they incur
this ,discredit! Why authorize ten millions.
with prospect Of sale at fifty cents on the
dollar, when par can be had for five millions?
But, in fact the officers of road have little
discretion in the matter. Capitalists de-
termine this essential point for railroad
company. upon n jealous scrutiny OF the
prospects and resources Of the enterprise.
Ii has become an universal usage, especially
with Land Grant roads, to execute, in adj
vance of any issue Of bonds, deed of trust,
covering the road, lands and franchises, and
in which all particulars. deemed necessary
for the security of future bondholders,
are carefully stipulated. Three Trustees
are usually named, who enjoy the conf
dence Of the financial public, and no
point is more carefully guarded than the
limit of the issue Of bonds. At this time
there is no prospect that our Minnesota
Companies will be allowed to issue more
than half the amount which would have
been yielded to them one year ago. What
ever the limit which will keep the value Of
these Land Grant bonds nearly at par. that
will be fixed in the deed nor would any
intelligent Railroad Director wish such a
limit to be exceeded. At any rate, the Com
panies cannot help themselves in this parti.
cular. and the State will have the full bcne-
fit Of the jealousy and vigilance Of capital
ists a, this very critical juncture. For one
We arr willing to accept the risk tina, the
first Mortgage Land Grant bonds of the
respective companies, authorized by deed
Of trust executed under such circumstances,
will prove q satisfactory security to the
State. II is TAR better security than an
exclusive lien upon any section, even If fifty