Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1860-02-24
AND ONO CANAL.
For the Montgomery County Sentinel.

communications which appeared in your
paper of the 10th and 18th instant, over
the signature of "B." am not entirely
satisfied, however, that the pronered in
formation contained therein is to be re-
ceived as safe basis in judging of the
States loss in the Chesapeake and Ohio
canal. | am aware that the estimates
of " B" seem to be corroborated by the
late Report of the Comptroller Of the
Treasury; but | am not fully persuaded,
by either, that the State has really "sunk
$50, 900, OO0 in this government corpo-
ration" In making out his estimate,
" b" puts down as the most important
item the So, 1853, 724 of stock subscribed
by the State to the canal, upon which he
computes interest amountingt to So, 625,-
600, making the aggregate Indebtedness
of the canal to the State of $I0,788,724
for It's stock investment, independent of
the 81 600, 600 loan, with interest there
on. Now, | have always supposed that
when an individual or State took stock in
any incorporated association, they did SO
for better or for worse, and were only en-
titled to whatever digidenls should be
declared upon the amountof their stock,
be the same large, small or nothing, as
in the present case. Think, therefore,
this charge of s. ,625, 600 for interestupon
the whole States stock, is placing the ac-
tual loss of the State in the canal.in
more unfavorable light than the facts will
justify. If the above s.. l63,724 had
been in the nature of loan, the case
would have been different, and interest
could of course have been charged.
By further informs us, thai, by the
Act of 1914, the canal company was au.
thorized to issue bonds to the amount Of
81, 700,0 600 to ensure the completion of
the canal to Cumberland, and that these
bonds, together with the Repair bonds of
the State of Virginia-bonds to banking
companies--loans from banks-coal COM
panies-liablitios for repairs, etc. amount
ing now, with interest, to about SO, 400
600, were made a preferred debt, for the
extinguishment of which the net revenues
Of the canal were pledged for 30 years,
in consideration however, that the parties.
for whose benefit this act was passed
would complete the canal to Cumberland
"B" further states, that this coudiuon
was fulfilled in good faith. This assertion
must be taken with some allowance -
Hunter, Harris q Co., the contractors
employed by these preferred bond holders
to carry out the provisions of the act of
1914, Jailed to complete The canal ID
Cumberland, and abandoned the work in
an unfinished condition, and the compa-
ny had to step IN again and finish the
canal, using for that purpose, the 20 per
cent reserved for the faithful perform
ance of the contract, and which had been
forfeited by Hunter, Harris d Co., al
though this fund did not suffice to COM
plete the canal, and the company was
obliged to incur still further liabilities in
its effort to carry the canal to Cumber-
land.
It is now proposed By The bill, to which
| refer, to transfer the property and CON
troll of the canal from the State of Mary
land to new company, to be styled the
Potomac Canal Company the stock
Of which is to be divided into two classes /:
LIST, primary or preferred stock 3D. a
secondary or deferred stock. The pri-
mary or preferred stock to consist Of all
obligations of the Chesapeake and Ohio
Canal Company, which, by virtue of the
Act Of 1874, have precedence to the liens
or mortgages Of the State, which said
preferred stock shall first be entitled to
the payment Of dividends or interest
arising from the net revenues of said
company, Of 6 per cent. per aunum, be-
fore o1y dioidead shall be paid to the de-
Jerrcd stoch Of the company Thus
leaving the latter class the full benefit Of
continuing to feed on hope" dish
which is not likely to prove more pala-
table, | imagine, under its proposed rehasl
by foreign monopoly
1t is thus contended, inasmueh as th,
State waived her liens on the net rcve
nues Of the canal for thirty-five years, il
favor of these preferred bondholders, o
a special security to them, and which
they not only readily assented to, Blu
eagerly proposed, and this additional SC
curity having failed, that they can nov
plead such failure as an argument VIII
the State should provide especially fol
their case, regardless Of those claims
which were not embraced in that measnr,
Of security. What are those claims
which are now aenominated dc/ercd, and
which it is proposed to subject to this ad-
dtionaI setback under the contemplated
"ActP They are for work done by
contractors iong bcJore the passage of the
Act Of 1874, under contracts with the
company for a money consideration. --
These contracts had progressed in differ
ent stages towards completion the con
tractors had risked their all upon the
faith that the State would make good the
confederation for which they engaged to
do the work that consideration failed,
the money gave out, aud the work was
about TO be abandoned AT the earnest
solicitation, however, Of the President Of
tue company, the States agent, (who
controlled the vote Of the States stock, J
was induced to authorize the company to
issue scrip" as a temporary relief TO
the contractors for the work already done,
and to enable them to complete their
contracts and the contractors we're COM
PEELED to choose between uttor ruin, by
abandoning the work, or take these "oy-
licences Of Indebtedness" as soLstiiofc
for the NANCY for which thoy bad stiyu-
lated to perform their contracts. This
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