The weekly pioneer and Democrat. [volume] (Saint Paul, Minn. Territory) 1855-1865, 1859-09-23
THE WEEKLY PIONEER AND DEMOCRAT
doubtless, at the instigation of these

oOuOtleSS, at the lnStlgatlOn OF THESE
harpies.
The constitution provides, that in case of
default in paying the interest, the Governor
shall proceed " in such manner as may be
prescribed by law" either
Frst-To sell the bonds which the de-
faulting company transfer to the State
Treasurer, at the time it receives the bonds
Of the State, and which are equal in amount
to the State bonds it receives, and are
secured by first mortgage on the roads,
lands and franchises of the company or,
Second-He may foreclose the mortgage
by which these bonds of the railroad COM
pany are secured, and upon such foreclosure
sell the road, lands and franchises of the
company in default or,
Ihird-He may sell the two hundred and
forty sections of land held in trust by him,
provided always, the companies have obtain.
ed title thereto, which can only be obtained,
at least as to the last one hundred and
twenty sections, by the company completing
twenty miles of the road, according to the
terms of act of Congress, granting lands to
the State.
The law passed in pursuance of the Con-
stitution, pointing out the manner in which
the Governor shall proceed in case of de-
fault, which is so satisfactory to the Repub-
licans, that they pledge their party to oppose
all further legislation, until after default,
and forfeiture, and which, we charge, was
dictated by these spectators, provides that
the foreclosure of these mortgages, by which
the bonds of the companies are secured Ii. e.
the first mortgages,) shall be by sale of
d" all the properties, rights, privileges and
franchises of the defaulting companies
pledged in such mortgage" mot part only,
or so much only as may be necessary to pay
the interest in default) and the purchaser
and his associates, successors or assigns
acquire by such sale, and can exercise and
enjoy thereafter, all and the same rights, priv
ileges, grants, franchises, immunities and ad-
vantages which belonged to and were en-
joyed by the company as fully and absolute
ly in all respects as the corporators, share
holders, officers and agents of such company
might or could have done Heretofore, had
had not such sale taken place. And may
proceed to organize anew, and elect direct
ors, distribute and dispose of stock, take the
same or another name, and conduct their
business generally, under and in the manner
provided by the charter, with such changes
or variations in manner and form of organ
ization as their altered circumstances NAV
ruquire, and not inconsistent with the origi-
nal charter of the company."-[Sec. S Com.
Stat. page 840-l.
1t will be perceived that the Governor
has no discretion in case of default, for the
constitution is imperative. He shall pro-
coed in the manner prescribed by this law.
He has only a choice of remedies. He can
do nothing with the trust deed, for the COM
panies have not yet secured title to the lands
therein mentioned. So he must sell the
bonds of the railroads, or foreclose the mort
gage 10y which they are secured.
Now, take for example the Northern Pa
cifc Railroad, and admit for the sake of
convenience, that the company has obtained
from the State 100000 of bonds, and has
transferred to the State Treasurer bonds of
the Company to an equal amount ; say that
in addition to the bonds in the hands of the
Treasurer of State, the company has issued
to others of its creditors, bonds to the same
amount. The company would then owe
$1,OOO,OOO, all secured by first mortgage
on its road, lands and franchises. The in
terest on these bonds amounts every six
months to $50 900, one half of which goes
to the State, and the other to men who
desire, perhaps, to get entire control of the
road. We will then suppose that the latter
class of creditors refuse further to furnish
money to the company to pay the interest
due the State, and the company find it i'm
possible to pay the next instalment of inter-
est. The Governor must at once proceed,
and either foreclose the mortgage, or sell
the bonds of the road and let the purchaser
afterwards foreclose, which he would have
the right to do, as the mortgage would fol-
low the bonds into his hands. Whichever
course the Governor vouM pursue, it would
result in the foreclosure of thu mortgage. Ac-
cording to the law before mentioned, which
the Republicans refuse to alter, all Of
the rights, privileges, properties and
franchises, of the road are offered for sale.
No one has any confidence IN the road after
such default, and the consequence is, that
none but the very men who have perhaps
forced the company to make default, will
bid,.and everything is sold to pay six months
interest. The State has then exhausted her
securities, and has yet to pay her outstand-
ing bonds. While if the purchase is made
in the interest Of the company, it would by
this simple process have wiped out half