Saint Paul weekly Minnesotian., 1859-01-08
FI.anel.l Condition of minnesota.

| of Minnesota to correct publicly certain mis-
! representations which have been made here
relative to the bonds of that State, issued OF
to be issued, by virtue OF constitutional
provision, as a loan to expedite the construc-
! ton of railroads within her limits. propose
to effect this by making plain statement of
| facts, leaving your readers, and the public
generally to draw their own conclusions, there
from. ~ ~ sf #
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 $2oO, 600.
Subsequently it became evident that to insure
the speedy construction of the railways, for
which the State had received from Congress
munificent 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 espcciallv necessary because Of the finan-
.ial embarrassments of 1857, which made j:
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 mus. labor under manifest disadvantage
unless she pursued a 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 compa-
nies to the amount of 81 1,250, 900 each, or
S5,OOo,OOO, in the aggregate, upon certain
conditions, and providing for its submission
to a 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
bearings, the vote upon the adoption of the
proposition as part Of the fundamental law
was taken Oh the 18th Of April las', and re-
suited in a majority of nearly 2O,G,.t n its
favor, and the Governor duly proclai:...I it to
nave been incorporated as a part of the con
stitution of the State. 81.
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 10y tn.
:ffidavits of their officers, that ten miles of
their roads respectively are graded ready for
,Le superstructure, the Governor is required
10 issue the bonds Of the State to the amount
of 100000 to the said companies, and so in
a 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
the Governor shall issue bonds to
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 S5, 600, 900 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 900 900 of her bonds is delivered to the
The securities cxactcd 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. \ conveyance to the State, in trust, of
the first two hundred and forty sections of
land free from prior membranes, which'such
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 convcyanccs 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 abe ap-
piled to the payment of interest upon the
bonds, in case Of default of the payment of
the same, and as 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 Ga, 400
acres.
3. "An amount Of first mortgage bonds
on the roads, lands and franchises of the re-
spcctive companies corresponding to tie 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 mlch COM
ment, the former insisting that it required a
priority of lien to the bonds of the companies
to be delivered to the State over all others,
and tic companies affirming that the true in
,crpretation would place the State upon the
same footing with the holders of first mort
gage bonds. 1t is we'll known that the Su-
prcme 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 change or
of their trust deeds as tn author
iZt him tho Of tho Sfoto t,>
absolute foreclosure and sale of all thc.. roads,
land Or franchises, within sixty days after the
occurrence of any default in the payment of
interest. The interest on the bends OF he
companies delivered to the State in accordance
with the requirements of the foregoing sec
ton, being due and payable sixty days in ;d-
vance OF the Scml-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
ii 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.
l 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
cuiities exacted by the State The early
completion of the Railroads being indspens-
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.
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
lpncc Of hor .....