Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1870-01-13
THE UNION AND AMERICAN.
rHF7TNTERNAL IMPROvEMENT
r. Editors OF the Union and american:

4
sents itself is this:
What are the rights of the railroad
companiesl Are they compelled to pay
the debt they owe the State in the specific
bonds issued to them by number and
date, or are they required to pay in any
bond of the State, without regard to
series or numberl BY consulting the 7th
section of the contract (the internal I'M
provement law, passed l1th February,
YOU will find they were compelled to pag
/ per cent. of the principal annually, and
could pay il in any bond OF the S1ate
they saw proper, and it became a creolt
on their debt. There can be no doubt
about this right. II was a part OF the
original contract. The State reserved The
right to change this law for the states
protection. She did change that law IN
1S59-6O, by passing a law defining and
constituting her former act by requiring
these railroad companies, instead OF pay
ing in one per cent. per annum OF the
principal of the bonds issued to them,
they were required TO pay = per cent.
ser annum. and they further provided
That il might be paid in money or in the
bonds of the State of Tennessee,
of like character as those issued to them
at par or in money. What was meant by
like character2 Was it not plain that they
meant bonds bearing the same rate of in
terest and falling due within the same
time. If you were TO borrow sum OF
money from bank and give your obliga-
ton for and to state that themoney loaned
was gold or United States Treasury notes,
and agree to pay it in like character of
currency as that you had received, (the
lender keeping the number Of the notes
only, } would you not think strange of a
man to demand on that obligation that
you should pay him the specific notes or
pieces of coin You had received;..and
would you like 20 trust an important case
to lawyer who would tell you that You
were bound to pay back these specific
notes or pieces of coin.
/ have heard some lawyers who held the
opinion that if these railroad companies
paid either theprincipal or interest Onthese
bonds TO any one except the holder OF the
identical bond that was issuedtO their par
ticuiar company, the bondholder could
make them pay it over again. Now, this
is simply ridiculous The law requires
the company to pay both principal and IN
terest to the State, and il is absurd to sup
pose that any court would or could require
a man to pay a debt the second TINE who
had paid it in precisely The manner and TO
the party he contracted 10 pay 1t to, and l
can but suspect any man who would utter
such sentiments as these as being himself
interested on the side be was giving such
ali opinion.
This brings us 10 the third and last
proposition. What docs the best interest OF
the State require | maintain that it Is
TO pay her liabilities as rapidly as posi-
bic. How can she best do this z think
by Offering every inducement possible TO
her railroad companies, who are her lar
gest debtors, to pay theirdebts TO the State
in any of her liabilities and thereby re
duce them as rapidly as possible. The
State has failed to pay her inteTest; her
credit is impaired her bonds are low. If
the roads are authorized 10 lake up the
debt in any bonds of The State, many Of
them will pay their entire debt. II the
State requires per cent TO bs paid, or
q as the law now stands, and that can
be paid in any bond of the State, would
it not be wise policy to dlio50
the whole debt TO be paid in like manner,
and relieve the State from the liability at
once! The low price of the bonds viii
also enable the State to sell out her insol-
vent roads for a much larger sum than
they will ever bring in the future. The
longer they are run the less valuable they
become and the larger the debt becomes,
by reason of the accumulation OF interest
A road worth fifty cents in the dollar to-
day, by natural depreciation Of road and
rolling stock and increase in interest, VIII
only be worth twenty-five cents five years
hence, and the bOndholder should sec this
and favor by every effort in his power,
the closing up of the Indebtedness
of these roads rs rapidly as posi-
bic, as the only possible hope
TO avoid bankruptcy Of the State and final
reputation and entire loss of his bonds.
How is It possible for a State owing $40,
900, 900, making no provision for pay
ment of interest, to avoid bankruptcy
Had not the bOndhOldcrs better favor any
policy that would produce a demand tor
their securities? The roads in the State
are comparatively new, and by a sale now
of all those who are unable to pay ,heii
interest, the State cannot possibly lose
over SIS, 600, 900 by this policy. The re,
mainder, about ST., 600, 900, can and will
pay their interest, if the State will take
vigorous measures and relieve herself by
sale of the roads who cannot pay, and re
sumo the payment of her interest. This
will leave the State with only @
debt proper Of about 1000, OOO
to pay interest upon from taxation. This
she can do and her people not feel 1t.
Would this policy be detrimental to thu
public. | contend not nor to the stock
holders; but beneficial to both. 1t would
place the roads in the hands of capitalists
who would bring capital 10 their aid Il
build them up and equip them properly
TO do the business of the country as j
should be done and give much more sat
isfatiion to thc public and reduce tn
rates Of travel and transportation oyc
them. The stockholders could not com
plain. They have no show in the pTescn
condition OF ever getting anything. The,
did not originally subscribe with the OK
pectation Of profit; it was n get The roai
for its incidental advantages, whic,
latter benefit they are now bein
deprived of, but which they would Obtai
by letting them out to individuals or com
panies who were able to improve and op
crate them. Neither the State, stock
holders, or the country have anything
hope for in the present state of thing'
and some vigorous policy must be adopic,
or ruin and bankruptcy must follow.
the State does not pay her interest, VIII
right has she TO call upon her goo
roads to pay, especially if she hesitat,
about her right to collect, or for m
ment admits a bondholder's right to {
on the company to collect his coupon
bond. If the delinquent roads fail to pa
and are not forced, is it likely any roi
will pay? think not, and some decd
action must be taken TO relieve the Sta
at once, or she is irretTievably ruine
And the policy here indicated seems to
the most plauSihlc of any that | can 5