Saint Paul weekly Minnesotian. [volume] (Saint Paul, Minn.) 1858-1859, 1859-01-22
ments might influence capitalists adversely to

the bonds, we make few extracts:
1.-THE difference between the Governor and the
Railroad companies, and the occasion of the suit
lately determined, arose upon the construction of
the term FIRST mortgage bonds as used in the
amendment to the Constitution authorizing the
80 The Governor believed that the people
voting the loan of State credit to the Railroad COM
panies. expected the State could be secured By a
priority Of lien upon all the property Of each res
pectiyey SO as to exonerate the State in any sup
possible case, from loss. - y a. X. B
Under the ruling of the Governor, no one doubts
that the State would have been amply protected
against injury on account Of the loan. The sale OF
PRIOR secdrtties upon the roads. lands. and fran
realized sufficient to indemnify the State against
loss on account of interest or principal. Whether
the State is equally safe under the decision of the
Supreme Court, will appear from an examination
OF the securities now possessed, and their avaaia-
FIRST, A pledge of the net profits of each road
for the payment Of interest;
Second, A conveyance of two hundred and forty
sections of land in trust;
Third, An amount of first mortgage bonds,
without priority of lien, from each company to the
State.
The pledge of net profits before any part of
road is completed. of course amounts to nothing.
Neither does the conveyance of two hundred
and forty sections of land: for no land, by the
terms of the Congressional grant, can pass into
the possession of the companies until twenty miles
of each road is completed and in operation; and
even then it is doubtful, if deficiency exists with
in the fifteen miles limit whether it will be allowed
to be made good from other points along the line,
before the entire road shall be actually finished
At least there is no ruling from the General Land
Office which indicates consent that such deficit
should be SO made up. On the other hand, it is
which the companies would be entitled, IS to be
found within fifteen mileu of the road each side,
for distance of forty or fifty miles:
Consequently, the conveyance Of the two first
two hundred and forty sections to the State by
possess, and Of sohat 1t mag nsuer receive.
And it is evident that, as security, immediate
and available to guard the State from loss, in case
of default on the part of these corporations, such
Conveyance Is practically Of no uatue uhatever.
The only other security, therefore, and, indeed
the only tangible security to the State of present
value, is that of the bonds of the companies cor
responding in amount to those issued by the State
to them.
BY the ruling of the Governor, as we have al
ready remarked, these would have been ample !;
for they constituted an erclusiUe first lien upon all
the property Of the companies Of euery description };
and summary foreclosure and sale would have
placed the State in possession of abundant means
to meet any default on their part.
BY the decision of the Supreme Court, however,
overruling the construction of the Governor, the
State will hold 81, CSC, 900 of the bonds of each
winch are no more CICuQOte IMAM the re-
mainder Of the $25 000, 900, $40 00O, 900, and S.
OOO 900 of bonds which the companies respectively
may deem proper to issue.
In this matter of SECURITY then it is true, has
been said, that the lender in this at tile en-
tire mercy of the borrower!
The State furnishes $4,000 per mile, which is
sufficient to complete and stock the roads and the
companies very literally deliver back to the State
security upon the same work at the rate of $4,000
or sss 900 per mile, and not eOe" prior security
The State only shares equally with others, to an
almost indefinite amount, at these nearly doubled
rates.
What would be thought of the prudence of man
making improvements upon his own land, and then
sell 1t to neighbor, and, without receiving any
part of the purchase money, take security at the
rate OF $50, 900 upon the same property? Why,
Judged by the rules of ordinary business prudence
such financier would be called maniac
We have thus endeavored to set forth, as plain
ly and fairly able, the practical difference
SO far as security to the State is concerned between
the effects Of the ruling of the Governor and the
decision of the Supreme Court.
We do not, by this either directly or indirectly,
impugn the prOpriety or legal Justice of that de-
csion. The judgment of that Court is final and
conclusive on the question of construction and it
will be carried into effect by the Governor without
any attempt at embarrassment or delay.
But the opinion Of the Court has so materially
enangsa the VALUE OF the SECURITIES pledged to the
gency would not have been required had a prior
Company in default, which the Governor was au-
thorized to sell to the State from loss would
have been amply sufficient for that purpose
We have merely desired to state the
and as it is now presented under the decision Of
the Court.
And this shows, what must be apparent to all,
that the necessary effect of the decision is to d.
~.1Ixl H. IL
render them of comparatively little value.
We don't propose to allow this fact, however, to
impair our confidence in our companies; nor to
make us believe that because the FACILITIES are
MORE MORE OPEN mo,C than 0r that they will per-
trary, we hope and believe the several roads will
be completed.
The progress of the work on all of them has,
magnificent land grant from the general govern
ment, and the loan of State credit to aid them the
bonds of the companies sOoutd be of the foremost
rates in the market but for the Developments of ell
ldinies on the part Of the Directors of Railroad
companies in other States, which have TOLD DIsAs-
TRoUsLY upon that description of securities
throughout the country.
The paper containing this article of the
Pioneer, thus showing conclusively that the
State had absolutely "No TANGIBLE SECURE
TIES" to defend itself from loss in case of
the default of the companies, doubtless had
its effect in lettering from investment in the
Bonds
4th. The capitalists in New York no doubt
had likewise before them the Journals of the
Legislature, in which they found a Protest
of the Republican members of both Senate
and House. against either doing business until
the State was admitted into the Union: until
which time, they commended, we were still a
Territory, and the State Legislature without
the State officers elect, could not legally or
constitutionally act. The fact was likewise
apparent to them, that the Loan amendment
was submitted to the people by this unconsti-
tutionally acting body: and that it was adopt
ed q considerable while before Congress ad-
mitted Minnesota into the Union-or, in other
words, that this State was admitted into the
Union under one Constitution, when she was
acting under another which had not been SUBJ
mitted to Congress for its sanction. The ar
gument Of their lawyers was, that any Con-
stitution but that endorsed by Congress was
mere waste paper: and that the Bonds, issued
under this non-submitted Constitution, through
law of the State Legislature acting before
Minnesota was State, and in violation of
the Constitution submitted to Congress, were
not whit better! To sustain this view, they
had before them also the decision of Judge
DONALDSON, one Of our district judges, to the
same effect
9th. The men of Wall Street beside the
MINNEsoTIAN containing the pledge of the
Sixty "--besides the Pioneer with its leader
showing there was no security for the State
and besides the Protest of the Republicans