Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1860-02-24

ColleeVly INC justice anu proprleGy OF the
passage of the bill now before the Senate,
it will be necessary to review the present
and past history of the Chesapeake and
Ohio Canal. In the year 1S39-'40 the
Canal Company being unable to sell the
bonds of the State of Maryland then in
her possession, become deeply embar-
raised, and was utterly unable to pay
the monthly estimates due the contract
ors on the contracts made with the nu-
merous contractors who were at that
time progressing with their work. The
failure to pay these estimates and the
stoppage Of the work on the canal would
not only have brought ruin on the
company in the shape of damages on
suits brought on the various contracts,
which a court of law would have recog-
nizcd as valid contracts, but il would
then, as it did afterwards, have involved
the contractors aud labOrers in hopeless
ruin. To have sold the bonds of the
State at the prices they were then COM
handing in the market--at that time as
low as 60 cents in the would
have been madness. Some of the bonds
were at that time hypothecated in New
York at 80 cents in the dollar, and were
sold at auction at 90. AT that time Ma
ryland, as a stakeholder, held the entire
control of the canal.
AT meeting Of the stockholders held
in the city of Washington, on the LIST
day of June, 1910, Mr.. Key offered a
resolution instructing the president and
directors of the canal not to suspend the
work, but to continue the work and to
issue what has been extensively known
as "canal scrip" for the purpose not
only of paying for the labor then per-
formed, but that to be performed This
resolution was passed by the vote of the
Maryland stock, given through Mr.. Key,
; the States agent at that time-Virginia,
the District cities, and the private stock
holders voting against the resolution -
1t was Marylands vote, and Maryland
vote alone, that passed the resolution -
: Mr.. Key, as the States agent, had the
right to cast the vote of Maryland as he
did, and it never has been charged, nor
can it justly be charged, that Mr.. Key,
in giving that vote, exceeded his author
ity. This was in June, 1910 Under
the authority of this resolution the pre-
s;dent and directors continued the work
until sometime in the fall Of 1912. On
the 22d of February, 1841, Dr. Shower,
then member of the House of Dele
gates, offered resolution directing the
president and directors of the canal to
proceed no further with the work until
the further order Of the Legislature. -
This resolution was defeated by vote
E of As to 12-thus the House of Delegates,
by an overwhelming majority, sustained
the vote of their agent, Mr. Key, in the
issue of the scrip. At that time Mary
land not only held a majority Of the Stock
Of the company, but she held a mortgage
on the canal for two millions of dollars.
The question now is after the scrip had
been issued by the vote of the stock, and
paid out TO the contractors and laborers
for work performed under contracts, where
gold and silver was dcmandable to an
amount over a million Of dollars-will
r the State of Maryland insist on her mort
gage? Take the labor of these parties
to enhance her stock and pay her mort
cages without paying anything to the
laborer? What individual could act in
that manner, and then sustain himself
in the courts of the State A court o.
> law Or equity would tell him he was en-.
deavoring TO perpetrate fraud-tha
. conduct Of that kind could not be toer
+ ated. The liability of the State for tn,
redemption of the scrip came before thu
popular branch of the Legislature in tn,
, year 1871. The present chief justice o
, the State, in an elaborate and very able
, report from the committee on interna
improvements, reviewed the whole ques
ton, and in that report said the State
, was legally as well as morally bound t.
redeem the scrip.
In 1845 an act was passed authorizing
, the canal company to issue bonds to the
, amount Of $1,700, 900, for the purpose
} of completing the canal to Cumberland
and waving the lien of the States mort
: gage in favor of those bonds, and pledg-
; ing the net revenue Of the canal TO pay
the interest on the bonds. The State,
still holding the control of the canal by
electing the president and directors, has
now had the management Of the canal
for nine years, but instead Of managing
the canal so that the net reUenue would
pay the interest, she has failed to pay
the current expenses by some two hun
dred aud fifty to three hundred thousand
dollars, and the bond holders have re-
ceived no interest since July, 1851
During the whole Of this period the State
of Virginia, who endorsed $500, 900 Of
these bonds, has paid annually $3.50, 900
of the interest. Virginia and the cred
itors now ask a change Of management,
ard the object of the bill is 20 give the
3 contract for a limited period to the cred
itors Of the company.
The whole debt Of the canal was sta.
ted by Mr.. McKaig TO be about s., 000,.
000-the scrip debt being about 50, 000,-
900 Of that sum.
Mr.. Kimmell thought that this bill
| had been concoctcd by parties in Vir-
ginia, or the District Of Columbia, fol
their own benefit The article Of the
J constitution giving the board of public
works control Of all public works in the
State he had read to the Senate as well
as resolutions he had previously offered
inquiring Of the board relative to the
condition of the canal, and which they