Nashville patriot. [volume] (Nashville, Tenn.) 1858-1860, 1859-06-04
SECOND MORTGAGE BONDS.

on the 156 bonds, if no more. And now as to
the
SECOND MORTGAGE BONDS,
They may be very nice to dilate about,
but it might be another matter when it come
to using them for a Ual,la6Le consideration
it should be remembered by every voter that
you are offered these beautiful pioures at so
cents for every dollar they call for, for your
tax receipts if you will only be so kind and
accommodating as to vote yourselves in
to the tax. But what are they?
By the legislation of the State of Tennes-
sec, in relation to a number of railroads. ten
thousand dollars worth of State bonds per
mile, are loaned to number of railroads,
and in some instances, State bonds are also
loaned for building bridges.
The Nashville and North western Railroad
is entitled TO ten thousand dollars per mile
for the purpose of buying iron, rails, equip
pages. &c and $500, 900 to build the bridge over
the Tennessee river aud other bridges. All of
these loans are, however, conditional. By the
1892 section of the revised statutes of our State
any company, claiming the aid. is required to
have and TO show to the satisfaction of the
Governor, that it has procured bona tide and
good and sOtUaa stock subscriptions to an amount
sufficient to grade, bridge, and prepare for
the iron rails the whole extent OF the main
trunk of the road, before bonds can issue for
the first section of 80 miles of the road.
The Nashville and Northwestern Railroad,
however, can procure the bonds for the first
thirty miles 10y showing that she has bona fide
solvent stock subscribed to the amount of one
million of dollars and has thirty miles of the
road completed and ready for iron.
By the I0G7th section of this statute these
bonds, whether for iron, &c. or bridge aid. con-
stitute when issued lien upon the entire
road, including the road bed. right of way.
grading, masonry and bridging. Upon all
the stock subscribed (citys as well as any
body else'sD TO the road, and upon the iron
rails chairs spikes and equipments when pur-
| chased. This lien is TO secure the State from
| any loss on account of her loan of bonds to
the company, and by the succeeding sections.
it is the duty of the road to depOsite in the
Bank of Tennessee, fifteen days before the in
terest on the bonds falls due, semi-annually,
an amount sufficient to pay the whole inter
est, exchange and expenses; and should they
fail to pay off the interest as it falls due, or
fail, after the first five years, TO lay up two
per cent annually as a sinking fund to meet
the maturity OF the bonds, the Governor is
authorized to issue orders for the road to be
taken possession of by receiver, and run at
| the company's expense, until all arrearages
| of interest and sinking fund are provided for.
and then the road is to be surrendered back
i to the company until another defalcation takes
| place, when she is to he treated before.
And should any of the bonds at maturity not
he met and paid by the road, the Governor
directs the Attorney General to file bill and
to fOrcclOse the mortgage, the State being al
lowed, if necessary, to purchase the road on
the day of sale.
| Now, these second mortgage bonds so much
talked about, are simply the printed notes OF the
company, payable some 80 years hence, with
promise Of interest every six months of per
cent, with lien upOB the road subject to the
above described lien of the State. Does not
any ole see that any ordinary road encum-
| bored 10y State lien of the character and for
the purposes above described. will have all it
can do to make money enough to pay its cur
| rent expenses, pay the unavoidable wear and
| tear of road. bridges iron, cars, machinery,
| &C., together with the interest and sinking
fund on the State bonds, without being able
to pay one cent of interest upon these second
mortgage bonds, or laying up cent to meet
them at maturity?
There is no possible means by which you
can enforce your lien until after the maturi-
| ty of the State bonds and until after they
have been paid off, and their entire amount
on this road will reach some 81 $780, 900; and
! no sane man will insist for moment that
| should there be necessity tor the State to
enforce her lien for any thing like the amount
Of the bonds, any company with the cash
means can be found which will give much
more than the State lien, and all know that
the purchaser would get the road free of any
cncumbrance on account of the second mort
gage bonds, and they and all the back inter-
ests due on them would BE- dead letter.
And yet, not withstanding all these facts.
the President counts them as available. and
even the Directors in their circular spoke of
| them as a good permanent investment Would
they not indeed be an investment of such
permanent character, that no holder would
likely ever get dollar Of his money back?
With all these facts could the Committee do
| otherwise than reject these bondsg
That large part of the stock on the
stock books of the company is utterly worth
less, on account of insOlvencies, conditional |
subscriptions, &c, no one can doubt who |
will take the trouble to look over the list OF
our own county, or examine the records |
and dispositions in the suit o. Davidson county |
against this road now pending and being |
prosecuted in our Chancery Court. How
much OF this no one can precisely tell. Some |
of the witnesses, perhaps, swear that one
halt of all the stock subscribed in some /
counties is utterly insolvent and others dis
puted while in other counties the subscription
seems better. With all these difficulties. |
doubts and uncertainties surrounding the |
future fate of this road, it is a serious ques-
ton TO every voter of the city to say whether |
he is to deliberately walk up TO the polls and |
by his vote compel the City Council TO lay IA /
tax upon them TO the full extent of the city's /
right or power to take stock in any railroad.
The tax if voted, will have to be paid, and /
then if the read fails, your money is gone,
and you have no road; besides. however
meritorious an opportunity 20 assist any other !
road may offer itself you can give no material
aud Tor some years.
a few words about taxation, and we close. |
II is an admitted fact that our taxation, al