The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1859-02-03
BALTIMORE.
THURSDAY, FEBRUARY 8, 1859.

SOLuc ClueS anu counties IN tTe oto'eS
have found it a perfectly easy matter to run into
debt, and are now taking what they imagine to
be the shortest possible way of getting out of it.
Smitten with the mania for constructing railways,
they readily granted their bonds end obligations
to every company that declared itself to be in
want of such facilities As to where the money
was to come from to meet their engagements, in
the event of failure on the part of the railway
corporations to pay the interest upon their indebt.
edness, that does not appear to have given them a
moments uneasness. That the bond-holders of
the defaulting companies would even have the au-
dacity to call upon the municipalities, or the
ties, to fulfil the obligations they had vcariously
assumed, never once entered into their thoughts
They had the railways, and the creditors had the
bonds; what more could the latter ask? If the
railways were valuable, and the bonds were worth
less, so much the better for those that had the
railways, and so much the worse for those that
held the bonds. Milwaukee is case in point
She has been respectfully reminded that she has
guaranteed the payment of the annual interest
upon the bonds of certain railroads terminating
there; but the Mayor of that fourishing city of
sixty thousand inhabitants, replies, with the utmost
nonchalance, that, though it may be all very true
that such pledge was given it is equally certain
that the city does not intend to abide by it. The
creditors must look to the Railway Companies 1t
is an act of impertnence to expect the city to pay
other peoples debts. In return, the Railway Com
panies call upon the farmers in tho several conn
ties, who have mortgaged their farms to the COM
panes to aid the latter in constructing the roads,
to pay up the interest upon their mortgages. But
the mortgages declare their determination neither
to pay the inerett upon the mortgages, nor to
submit to their foreclosure. In anticipation of ac
ton being taken to dispossess them, they have
banded themselves together, to the number of from
three to five thousand men, to resist all attempts
to GUST them by process of law. The 'tHome
"League," as it is called, says the Madison
(Wisconsin) Argus, "already extends over. the
'entire tract of country, where lands have
''been mortgaged to the Railroad Companies.
"The organization is a secret one; its members
''are bound by oath to sustain each other and its
'secresy is protected by signs, grips and pass
"words." similar condition of things exists in
the adjacent State of Iowa The Mayor of Keokuk
has issued circular to all who hold the guaran-
teed bonds of that city, notifying them that the
corporate debt can never be paid, unless the bond
holders will consent to receive one-half of the par
value of their bonds in various railroad stocks
owned by the city-and which said to be ''not
'worth mill in a dollar and to accept new
"bonds for the other half, but reducing the rate
'of interest upon them from eight to six per cent"
He very quietly ntimates to the bond-holders, that
if they refuse to take rather less than fifty per
cent for their claims, in new promises to pay
they will most assuredly get nothing at all, as the
debt was contracted in violation of the State
Constitution, which provides ''that no city shall
'fncur or create debt exceeding FIVE per cent of
''the true value of its taxable property" The
Burlington Qowa) Hapkeye considers the action
of the municipal authorities of Keokuk as emf
nently frank and manly, when compared with that
of other cities and counties in the State, nasmuch
as the circular of Mayor SAMPLE recognizes
the debt, and proposes to pay part of it; whilst
a majority of the counties, many of whom are
among the richest and most populous in the State
have not only suffered their bonds to 90 to pro-
test, but have either ignored the fact that they
have issued any bonds at all, or have declined to
make provision for the payment of interest upon
them Not long since, the city of Jacksonville
Indiana, also coolly refused to pay the coupons
due on certain bonds-which had been issued by
the local authorities to aid in the construction of
the Fort Wayne and Southern Raroad-on the
ground that the subscriptions were not authorized
by two-thirds of the qualified voters of the city,
as the lawrequired. Suit was accordingly brought
by some of the bondholders to enforce the collec-
ton of the coupons. But although it was proven
that the petitions sent into the CITY COUNCIL pur-
ported to be signed by more than two-thirds of
the qualified voters and that Committee of In |
quiry, appointed by the Council for the express
purpose of ascertaining the fact reported airma-
lively; the Judge before whom the case was tried,
decided "that parole evidence might be admitted
'to falsfy the records of the city, and show that
'wo-thirds of the legal voters had not petitioned
s'for the subscription" Upon the evidence thus
obtained, the jury returned verdict against the
bond-ho,ders OF course, the latter have taken an
appeal from the decision to the Supreme Court of
the UNITED STATES. 1t is not, however, at all
surprising that cities and counties should entertain
the conviction, that it is much easier thing to
repudate their bonds, than to pay the interest
upon them, when they are encouraged TO do so by
the example set them either by their respective
States, or by the States Immediately adjoining. |
Illinois and Indiana compounded, at one time,
with their creditors for fifty cents in the dollar;
whilst Michigan, to this day, pays nothing at all
"upon several millions of her outstanding bonds"
1t would be fortunate, indeed, if this dishonest
disregard for obligations legally incurred, to
end here; but who doubt, that where the
moral sense has thus become blunted similar
Indifference must eventually prevail with regard to
all species of contracts that may be entered into
between individuals. Nor are the consequences of
these repeated violations simply confined to the
defaultng States they calculated to produce
an injurious effect upon the credit of the entire
West. Merchants and capitalists in the Atlantic
States are alike disposed to generalize their opin-
ions, and if they seldom discriminate between the
probity of one section of country, and the dis
honesty of another section adjoining it; they still
more rarely draw a distinction between the rect-
tude of individuals, and the want of principle dis
played by majority of the community of which
they form part.