Saint Paul weekly Minnesotian., 1859-12-03

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What Shall We do with the State Rail.
| . .,. .e. road Bondse -rf a7.E....
The session of the Legislature is SO near at
hand, that it is time discussion was resumed
as to the remedies for our financial difficult
ties, and as to how the Railroad Bond question
is to be settled. The new editor of the St
Anthony Ne,cs, U Thomas, Esq, has been
giving this subject considerable attention
lately. We copy one of his articles below,
headed "Repudiation." While not at this
prepared to endorse all his views, We ask for
them an attentive perusal. They are those
evidently of thinker, and deserve, therefore,
consideration
REPuDIArIoN-Tor refuse to pay an honest
debt is an act of moral turpitude; to refuse
to discharge merely technical obligation may
be simply an act of justice to oneself The
former involves the loss of character the lat
ter only incurs the liability to legal PEN
atty. .....
This is a positive distinction, and one which
we must keep in view, while determining the
! future action of our State in relation to the
State Railroad bonds.
| The cry of reputation will undoubtedly be
raised in opposition to any attempt to re-
duce the State Indebtedness below the face
of the bonds now issued. 1t is cry which,
appealing as it does, to the instructive love of
| honor which men naturally feel, would have
great weight with many minds. Yet ration
ally examined, it will be found to have no
| real force in the present case. 1t should not
drive us by the semblance of honesty into a
course of fatal injustice to ourselves and our
own interests.
What are the facts Nearly two and
half millions of bonds have been issued and
delivered to the Railroad Companies at a ra-
| ito of $4,000 of bonds for every mile of road
graded for the superstructure. These were
issued upon the express pledge of the Com
panies, that in no event was the State to be
| called upon to pay either principal or interest.
1t was understood by the Companies, and
by every dealer in such stocks was it well
known, that these bonds were of the nature of
accommodation paper, and were to be met by
the parties who should negotiate them.
| The State received no consideration for
| them, the remote and future benefit to
accrue from the final completion and opera
ton of the roads.
These bonds are now outstanding, and
there is nothing to show for them but certain
unsightly banks of earth, the cost of which
has not erceeded So, 900 per mile upon an aver
age.
! Where are the bonds? A few of them
| perhaps are in the hands of merchants and
| others upon some of the lines of road, who
have received them in satisfaction for goods
| and work. furnished the contractors. Some
ot them are in the State Auditors office, the
D.sI, Of railroad money yet in the pockets Of
he people a few of them have been handed
over for the redemption Of protested notes of
broken Railroad banks. Large amounts have
been disposed of as a corruption fund, and are
in the possession of lobby men and women,
and of retired directors, as the price for yield
ing place to other and bolder financiers.
The balance arc in the hands of the direc-
tors and other officials Of the roads or their
satellites, or have been pledged at ruinous de-
probation as security for money borrowed to
carry on operations. So fully was the char
acter of these bonds, and the expressed stip-
ulations under which they were issued, known
to the public, that we do not believe single
bona .1fde sale of bond has been made, ex-
cept a very low price, commensurate with the
risks and the fear of non-payment. No one
has bought without full notice of the equita-
ble Offset which the State was likely to set up,
should she be called on to pay the bonds.
We know that it is the policy of the law to
recognize no offset to negotiable paper, which
has been transferred before maturity; and
that these bonds may perhaps be claimed as
Of the same nature. In the case of a promis-
sorry note transferred, as we have said, no
| e. ho lol
no abatement from the face of the paper could
be claimed. The holder could enforce the
''bond" to its very letter.
| But in the case Of the State Railroad bonds
this is not so; there Is no way of suing
ever the payment of those obllgations-save
by Legislative enactments. Their whole val
ue rests upon the credit and honesty of the
State; and we fully appreciate the necessity
of acting in matter of such Importance and
delicacy in such manner as to bring no dis
honor upon our escutcheon.
Justice we must do whatever it cost, for on
the other hand we can better afford to lose our
character and reputation than to lose our
money.
We are satisfied that no more equitable
rule can be applied to these bonds, (when by
| default of the Companies the State shall be-
come liable) than this; TO PAY THE
HOLDERS OF BONDS JUST THE
| AMOUNT OF THEIR COST TO THEM,
WITH A REASONABLE INTEREST, AND
NO MORE.
How to ascertain the truth in each case,
and how to apply the principle, is much
more difficult problem. The work should be
| confded to Legislative committee, with full
power to investigate thoroughly the merits of
each claim. Such committee should consist
of the ablest, most penetrating men in our
councils, men the least liable to imposition by
| specious representations, and impenetrabie to
persuasion or intImidation-men who should
be able to look behind the first appearance,
and to apply severe judgment to interested
evidence.
Such compounding would involve no pos
tive injustice.
The merchant or contractor would receive
| his pay for work or merchandise actually fur
niShed. The innocent holder of broken bank
n )tes would have them redeemed. The hold
er of corruption bonds would receive nothing,
or only so much as he might manage to OBJ
! tain through the want of Omniscience on the
part Of investigating committees. The bank
! e. who had loaned upon the security Of these
bonds would receive his principal and interest.
The buyer Of these stocks upon speculation
would receive his money invested, with inter
es' AMI no more. The State cannot afford to
enrich him by a liberaiity which would ruin
herself
such we hold should be the policy of our
State when i. shall become liable for any of
the obi .ations we have described.
Not one dollar however should be paid un-
til the Companies have defaulted, and thus
have worked a forfeiture of their charters,
their lands and franchises to the State. Then
having settled as equitably as possible for the
debt contracted in our mistaken policy of the
past, we shall be prepared to place our Rail-
roads in the hands of other men, who, when
the fitting time has come, will be glad to build
them with no other bonus than the princely