The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1868-12-10
make grievous mistake in estimating the

make grlevous mistake IN estimating tne
strength of his position.
The state of the case, then, is briefly this:
Bonds to the amount Of five hundred and
fye thousand dollars are issued by the
Charleston and Savannah Railroad, with the
endorsement or guarantee of the State.
The company becomes insolvent and is scld
to the second bondholdsrs, who become
stockholders, reorganizc the company, TN
der the name of the Savannah and Charles
ton Railroad, and assume, under their char
ter, the liability of their predecessors for
the payment Of the guaranteed or first lien
bonds The new company IS unable to pay
the interest on these bonds, aud the guar
anleed bondholders have no remedy as
against the company. The property mort
gagged to the State cannot be reached or
taken possession Of by any ordinary legal
process Against the State the bondholder
cannot bring suit, because the subject can
not sue he king. The principal Of the
bond, the company being unable to meet its
obligations, cannot be obtained but through
the State, and the bond virtually becomes a
bond of the State. It does not mature until
1877. And if nothing is dono to preserve
the property-that is to complete it, which
is the only cffectual preservation-it will
have become well-nigt raluelcss before that
day arrives, and the ability of the State to
pay the bondholder will have been dimin-
ished to that extent.
1t is true that the bondholders might en-
deavor to persuade the State that the best
course would be to seize the road, and sell
it to satisfy their claims. But the Stale
cannot touch the ROAD at present, and the
tedious delay of legal process, running
from tribunal t5 tribunal until it reached
the Supreme Court of the United States,
would have to be borne before even the
right of the State could be finally determin-
ed. And in the meantime the road would be
going to ruin, while the bondholders would
have no more to look to than they have now
the direct guarantee of the State. The
true policy of the bondholders is to assist
the present company to complete the road'
which can only be done by setting back the
State lien so as to give the first claim on the
road to o new issue of bonds for half nil
lion of dollars. There would be no dimi-
mutton in the value of the State guarantee,
which is of the same force to the bondhold-
ers, whether the State itself is secured by
first lien or o second lien. And if the ac-
crued interest on the guaranteed bonds ls
the stumbling block, we do not see why
that interest should not be funded in the
bonds of the company, endorsed by the
State, as are the bonds upon which it ac-
crued. The State is liable for interest, rs
we'll as principal, and this would only be
giving an explicit acknowledgment Of lia-
bility which undoubtedly exists.
Look at it which way you will, it is evident
that the speedy completion of the road is
the only quick and sure remedy for the ills
of the bondholders, the stockholder and The
general public. The State cannot take the
road and rebuild it, whether it has the will
or not. The present company cannot re-
build the road while the State first lien
stands in the way. Surely, then, all inter-
ests should combine together to give effect,
by passing the relief act, TO what is the
most certain safely Of the State which guar
antees, the bondholdcr who is guaranteed,
and the stockholders who possess the road.