The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1867-02-14
The Canal.

stimulated and guarded by private int.
rests and sagacity, 1t would be far better
for the public, far better for the State,
since there would be more activity, more
prosperity, and increased resources to the
State.
The canal is very justly included in the
application Of this general and truthful
princije. And the moment the State cam
with advantage, relieve herself from the
care and direction Of that valuable work,
as we'll as all others in which she has inte-
rests, the better for her and the people at
large.
When a company or an individual is
embarked in an enterprise which has cost
so much that the profits in the business
will not give support and pay the in
terest upon the capital, the inevitable con-
sequence is sale of the property-its
transfer to others at cost so much under
the original outlay in building or con-
struction that the interest account is not
too heavy for the business, and the new
proprietors are enabled to so on prosper
ously, where their predecessors failed.
To some extent this is the condition OF
the canal, without terminus as it is. 1t
has never paid the interest upon its cost.
1t has really paid nothing; and having first
settled large debt to the State by its con-
version into preferred stock, it now pro-
poses to fund floating debt of s65O,000 by
bonds secured by mortgage upon the
canal itself, which is the property of the
State. This adds an annual interest OF
500 900 to be taken from its profits. But it
is proposed to give the privilege of borrow
ing a million-i. e., besides funding the
floating debt to make loan of $3.50, 900,
thus making the annual interest account
$50 900 more than one-fifth of the largest
amount of its annual receipts since it be-
gan operations. The credit Of the CON-
pany is really upon the property in the
canal, and that only. Not in the business
it does. And this is repeating the history
we have related of enterprises which had
cost so much that their operations would
not pay the interest upon the outlay in
their establishment. The State has deter
mined to contribute no more money; yet,
in submitting its property to be mortgaged,
should the company be unable to pay, the
property must ultimately be sold or the
State will have to save it by paying the
debt. So that the State is still indirectly
mourning the liability, which she cannot
avoid as long as she works the property.
| And should new loans and new mortgages
be made, or this present floating debt be
not paid, the end is very clear.
In view of these facts, and the difficulty
of the prosecution of the work upon the
credit of the company, would it not be
well if the State could relieve herself and
submit the canal to the responsibility and
management of company of substantial
the first place, save the States property
from mortgage for s650,O0O, or for any
other sum; and, in the second, undertake
the completion of the work to Covington.
We suppose this would be part Of the
contract. Thus preserving the property
in the canal intact and extending it to
E something like terminus, should the Co.
vington and Ohio railroad be finished in
the mean time.
The President Of the canal, in letter in
the Enquirer opposing the leasing of the
work, enters into an account for the les
sees, should the work be leased, in which
he charges them with interest on $780,
900, which added to that on the present
floating debt, and on the cost Of the ex-
tension to Covington, foots up an annual
interest of S666,OO0, against which he
arrays the annual receipts of the canal,
the highest of which is 1924, 1871 in 1860.
OF course neither the State nor the lessees
could dream of any such magnificent ar
rangement as this-so much in excess OF
any achievement of the work under State
management, which has never paid any in
terest. The lessees would much prefer to
make out their own account, and might
make out one much better for the State
than the canal company can make out for
itself.
Colonel ELLIs's idea of the contract OF
the lessees is altogether at war with the
natural law, which, in the transfer of pro-
perty overloaded with debt, must cut down
its capital SO that those into whose hands
it falls may bring it out and make it pay
The estimate for the lessees is in keeping
with the grand plans of the State which
have entertained us poor Virginians in
other days, while the receipts are the stern
results so dreadfully below our expecta-
tions. Sensible lessees, who could be re-
lied upon, would make no such bargain as
that. Yet, if they paid the State anything,
they would pay more than the canal has
paid, except indirectly in the improve
ments it has induced.
Whether the plan of relieving the State
by leasing the work can be carried out or
not, we do not undertake to say; but we
believe proper contract Of lease would
be the best thing for her. Not only would
this policy be the best for her property in
the canal, but for every other work which
she endeavors in part to control. She
ought to quit all outside business, and
pursue assiduously the simple business of
government. By combining herself to that
alone, and attending to it well, she will
soon be out Of debt and prosperous.
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