Saint Paul weekly Minnesotian., 1859-01-08
Financial Condition Of. Minnesota.
New YORK, Dec. %, 1858.



to effect this by making plain statement o.
facts, leaving your readers, and the public
generally to draw their own conclusions. there
| from. st e<Ss.rsst - 81 -. - slf ;As5E
The constitution of the State Of Minnesota,
as originally framed and adopted by her peo'
pie, restricted the public debt-except in ca
ses of invasion or insurrection-to $3.50, 900.
| Subsequently, it became evident that to insure
| the speedy construction of the railways, for
| which the State had received from Congress
| muniicent grant of land, the State must
| lend her aid to those companies chartered by
| the Territorial Legislature, to which the lands
| had been transferred by the same authority
| for railroad purposes. This aid was render
ed espccially necessary because of the fnan-
cial embarrassments of 1857, which made i.
| impossible for the-companies to raise money
upon their lands, as they had been authorized
to do by their charters. The other North
western States were diligently prosecuting
their railroad communications and Minneso-
ia must labor under manifest disadvantages
unless she pursued like policy, and thus
opened the interior portions of the State to
immigration. .>.+
The Legislature of the State, at its first
session, in accordance with the mode pre-
scribed b. the constitution for its own amend
ment, passed an act loaning the credit of the
State to the four land grant railroad cornpa-
nies to the amount Of 81 ,25O,OOO each, or
s., ,OO0, 900, in the aggregate, upon certain
conditions, and providing for its submission
to vote of the people. The subject was
publicly discussed in all portions of the State,
and after the expe.iency and policy Of the
proposed loan had been canvassed in all its
bno <lo <ho al &c xl,o
proposition as part of the fundamental law
was taken on the 18th Of April las', and re-
suited in majority of nearly 20,GpD IN its
favor, and the Governor duly proclaimed it to
nave been Incorporated as part of the con-
stitution Of the State. -,
The conditions upon which loan Of State
credit was authorized were these: When the
companies shall have produced to the Gov
ernor satisfactory evidence, verified by the
affidavits of their officers, that ten miles of
their roads respectively are graded ready for
the superstructure, the Governor is required
TO issue the bonds of the State to the amount
of 100000 to the said companies, and so in
like ratio as the work progresses. And
when the companies shall have furnished like
evidence that ten miles of their respective
roads are completed and the cars running
tllcTcOIl, lllc OOtcIuOI SI1uu Issue DOItlS I'd
the amount Of 100000 to such company
until the limit fixed by the loan amendment
is reached. The Governor has ruled that
only one-half Of the s., ,O0O, 600 can be issued
for the grading of the roads, and the other
half when the roads are completed and the
cars running thereon, and the companies have
each and all acquiesccd in the decision. In
other words, two hundred and fifty miles of
railroad though the richest and most settled
portions of the State must be fully completed
and in operation, before the whole of the
So, ,O00,O0 of her bonds is delivered to the
The securities cxacted by the State from
the companies, are as follows, to wit:
/. They are required to execute an instru-
mcnt to the State pledging the net profits of
the roads for the payment of interest.
2. A conveyance to the State in trust, of
the first two hundred and forty sections of
land free from prior membranes, whichsuch
company is or may be authorized to sell in
trust, for the better security of the treasury
of the State from loss on said bonds, (which
shall empower the Governor and Secretary
of State to make conveyances of title of any
or all of said lands to purchasers agreeing
with the respective railroad companies there
for" the proceeds of such sales to "be ap-
piled to the payment of interest upon the
bonds, in case of default of the payment of
the same, and as a sinking fund to meet any
future default on the payment of interest or
principal when due" The aggregate amount
thus transferred to the State in 614,4OO
acres.
8. "An amount Of first mortgage bonds
on the roads, lands and franchises of the re-
spective companies corresponding to the State
bonds issued shall be transferred to the Treas
urer of the State at the time of the issue of
State bonds" The construction to be given
to the phraseology of this section constituted
the issue made between the Governor and the
companies which has excited so much COM
ment, the former insisting that it required
priority of lien to the bonds of the companies
to be delivered to the State over all others,
and the companies affirming that the true in
,erpretation would place the State upon the
same footing with the holders Of first mort
gage bonds. 1t is well known that the Su-
preme Court decided that the position assum
ed by the companies was the correct one
but it should be borne in mind that this de-
cisiOn in no case affects the character of the
securities previously described. The Gov
ernor, while he expressed his willingness TO
submit to the construction given to the law
by the highest legal tribunal of the State, re-
quired of the companies such a change or
modification of their trust deeds as to author
izc him, as the agent Of the State, to Cause an
absolute foreclosure and sale of all thciI roads.
land or franchises, within sixty days after the
occurrence of any default in the payment of
interest The interest on the bends OF the
companies delivered to the State in accordance
with the requirements of the foregoing sec
ton, being due and payable sixty days in ad-
vance Of the semi-annual interest due upon
the State bonds, foreclosure and sale can
be made, in case of default on the part of the
companies, in time to protect the credit of the
State bonds when the interest thereon be-
comes due, and precludes the necessity of
other legislation for that purpose.
The Governor is empowered in case of de-
fault on the part of the companies in the pay
ment of interest or principal when due, in his
discretion, but in such manner as may he pre-
scribed by law, either "to sell the bonds of
the defaulting companies, or the lands held
in trust as above, or may require foreclo-
sure of the mortgage executed to secure the
same," as the greater or less gravity of the
default might require.
1 have thus set forth, in as brief terms as
the nature of the case would admit, the cir
cumstances under which the loan of State
credit was authorized by the people, the con-
ditions upon which it was made, and the Sc
curities exacted by the State. The early"
completion of the Railroads being indispens-
ihle to the prosperity of the State, in develop
ing her resources, the loan amendment was
adopted, as he has stated, with singular un-
animity. - - :, LH
Minnesota is much the largest State in the
Northwest, being more than twice the size of
Iowa, and in her climate, soil and the excel
ience of her cereal productions she is not sur
passed: Her population is mainly of emigrants
from New England, New York, PENNSYLVANIA,
and the Western States. The rapjdity with
which she has advanced is without precedent,
N tho hIcfOrx, Df ~