The weekly pioneer and Democrat. [volume] (Saint Paul, Minn. Territory) 1855-1865, 1863-11-13
The Five Hundred Thousand Dollar
Scheme.

"A proposition Is before the City Council
to make gift of Five Hundred Thousand
Dollars, by an issue of bonds to that
amount, to the Lake Superior and Missis-
sippi Railroad Company, on condition that
it shall construct and put in opel alton
within five years road from this city to
Lake Superior. A more absurd and impu-
dent proposition was never made to a
business community than this. This Com
pany has been in existence for years, on
paper, and it has never po, sessed sufficient
vitality to procure and pay for the survey
of feasible, sensible route. 1t is talked
of as " direct line " to Superior, while its
own survey shows it to be one hundred
and seventy-one miles. There is not a
man connected with the active manage
ment of the Company who has capacity or
position as railroad man or financier.
The project in its present hands was
laughing stock while it had any life; but
it has long been dead, and, until this eX-
travagant request for q gift of Half
Million of Money, to enable it to "resur-
rect" everybody supposed it to be buried.
So much for the Company.
Now, few words as to the project of
encumbering the city with the proposed
enormous increase of debt in aid of this
railroad. Similar schemes have been tried
all over the West. Milwaukee, and all
the cities and most OF the large towns of
Wisconsin, went to building railroads in
this way few years ago. The result has
been, in every case. reputation. Such
Reputation has, we venture to say, in it's
damage to private as well as public credit,
been of incalculable injury to the cOmmu-
mites concerned. There is not single
road in Wisconsin. now paying as an in
vestment, which would not have been built
and in operation quite rs soon without
such aid as it has been with it. This is
the Judgment of the railroad men of that
State. They say that the population
which er,sued, caused them immense loss
in the depreciation Of their own securi-
ties; aud to this day, the best lines in that
State are suffering almost destructive dis
counts from this cause. The market value
of the securities of no Wisconsin COM
pany that has used and relied on corpora
ton bonds, approaches their real value,
as demonstrated by the income and profits
of the road; and city, town and county
reputation is the cause of that depreci
alton.
"But," will say the advocates of the
half-milion grant, "you assume that these
bonds will be repudiated, as matter of
course; and you utter gross libel on the
integrity of Saint Paul when you do So"
That is, precisely, our assumption. We
havn't doubt of it. And, in making it,
we only place such estimate upon the
financial character of our City, a., by its
acts, it places upon itself. Saint Paul is
repudiating city, and has always been one.
Faith has never been kept with its credi-
tors. Let us cite an instance in point:
A lawyer of this city received, few
days ago, letter from a gentleman in
Kentucky, from which we make the fol-
lowing extract:
WARSAW. KY, Oct. 4, 1868.
I write you in reference to some
ST. Paul CITY Wharf Bonds, which are held by
q widow lady, near Madison. Indiana. There
is eighteen months interest due on eight thou
sand d pllars of these bonds bearing twelve per
cent interest, held by this widow lady. on
which sac has not received q cent for these
eighteen months; and it is her all. and leaves
her begging as it were. The coupons are in
the hands of your City Treasurer, waiting pay
ment.
am sorry to trouble you about such a ma
ter hut will esteem it special favor if you
will call on the City Treasurer, and ascertain
the cause of this bad faith towards bond hold
ers. and learn whether il is the intention of the
city. or its proper agents, to pay the unpaid in
terest due on bonds Nos. q, 49, 20, 30, 81, 81,
80. 81. 30, Sc, and 81, and if SO, schen. have
advanced most of the sum due for years in
terest TO this lady, to keep her from distress.
There is now another set of coupons due.
Please write me what to advise this lady to do
with her bonds.
The law under which the bonds above
described were issued, was approved
March 1, 1856. Section Five of the
Act provides that it shall be the duty of
the Common Council of the City of Saint
Paul to provide for the payment of the in
terest, and the ultimate payment OF the
principal. In addition to this, Section
Five of an Act approved March 20, 1858,
entitled an Act to authorize the Common
| Council of the City of Saint Paul to issue
bonds to connect the levee between the up
per and lower landings in said City," pro-
| vides that
| To secure the punctual payment of the in
terest on the bonds provided for in this act, and
also to secure the like payment of interest on
bonds to the amount of thirty thousand dollars,
heretofore issued for levee purposes all receipts
for Wharfage shall be applied exclusively for the
| payment of such interests and provided further.
| That ii such receipts for wharfage shall exceed
, the amount necessary for the payment of the
interest as aforesaid the excess OF receipts
| thence accruing shall be used in redeeming the
bonds Of the city issued for levee purposes, or
Il = o.