The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1870-02-23

In view or tile unexpected ulIncultes Wnlcn nave
arisen to embarrass the prosecution OF the Blue
Ridge Railroad under the contract with Crissvell
l. Co., the Executive Committee be instructed to
confer with the contractors In reference to re-
sciuding the contract on terms just and equitable
| to both partiesu-respectfully report:
On the 9th day OF August 1862 contract was
made with the Blue Ridge Railroad Company by
Mcssrs Crlssvell i Co. 10 construct the ROAD OF
price which, according to the estimation OF the
engineer Of the same, was not to exceed the sum
OF eight millions seven hundred thousands dol
lars, (ss, 100, Oo0) When that contract was made
gold was worth 138.
On their part tile contractors agreed to place to
the credit OF the company, on the first day Of
September, 1862 three hundred thousand dollars,
to he used In liqudating the bonds coupons, anu
floating debt OF the company. Before that date
| they notified the president that he could draw
| against that sum.
The said parties also entered into contract with
Mr. Thomas Steers 10 do the work, but very
small portion of the work had been performed as
the sequel Will show When the contract was an
nullCd.
WHAT THE CONTRACTORS DID NOT DO.
The contractors undertook to execute within
eight months from tile date OF their agreement
not less than seven hundred thousand dollars
worth OF work, which amount they agreed to adj
| vance, taking only as collateral an equivalent sum
| In the bonds Of the company, with tile under
standing that said bonds were not TO be disposed
of without the consent uf lhe company, until
| after The meeting OF the Legislature. The great
lnducement to make such O contract was tile 1act
the engineer having reported that the cost OF con-
| StructI0n would be between eight anu nine MILL
lions OF dollars; that an absolute sale OF any por-
ion OF the bonds necessary to carry on the work,
until the meeting OF the Legislature, would have
| prevented that body from authorizing, by an
amended act the issue OF sufficient number Of
the same class Of bonds, to wit: First mortgage
bonds to complete the undertaking. The com
pany were fully convinced that If the road was to
| be finished, 1t could only be done by state aid,
through guaranteed bonds and that disposi.
lon absolutely, OF any OF the four millions would
have compelled the Legislature, In granting addir
tiUnal assistance, 10 issue second classoT mort
gage bonds, which would have materially deterto-
rated in value and unnecessarily injured the H.
terests OF the road and OF the State Hence, the
object OF the agreement with Messrs Crissve
| Co. was TO compel an advance by them OF seven
hundred thousand dollars for work done, In addi-
ton TO the three hundred thousand dollars first
alluded to- and thus save to the Blue Ridge Rail-
road Company all Of the original bonds, to tile
end that when the Legislature took further &C
tion In the matter, the additional issue OF bonds
requisite to complete the road might be OF the
same class.
TIE CONTRACT TO BE CANCELLED
Up to the 4th OF December, the sub. contractor
under Messrs. Crissych Co., Notwithstanding
their agreement, had done but little Of the work.
The directors OF the company met In Charleston
on the 10th, and the stockholders OIL tile 3Oth OF
November and declared the contract OF CrisSrell
& Co. Invalid. because OF the failure to perform
its stpulatOns; but ut the same tlmc In tile res0-
lutions which were adopted, they authorized the
Executive Committee ito give TO the contractors
an opportunity Of Withdrawing from said con-
tract II they preferred to do SO, and also to make
such indemnitcation for aay outlay 10 which the
said contractors may have been subject, which
may be agreed upon by the two partes and
which, in tho event oil disagreement, may be
deemed to be just by diSlntrrcStcu persons Sc
ected by bot parties"
Subsequently, the Executive Committee met In
Columbia, and the contractors made claim FOR
very large decentralization for outIays and cX-
which they claimed would have been realized by
them, had The contract been r6lalled. On an ex.
animation OF the contract 1t was found that the
company had right, In case OF "unrcasunaols
neglect or failure to perform the contruct, 10
serve q written notiSAupon the said parties, set
ting forth the GROUNDS Of their apprehension, and
specifying the manner, together with reason
able time In which said parties might cause such
grounds to be removed, and If Mt the expiration
not rcm0vcd,. tncn rull power and authority WIS
vested with the chief engineer to place such force
of men OIL said work, ns would, IN MS Judgment,
secure II completion OF said work In tic manner
and time specified by the contract, deductinG the
expense so Incurred from the estimate OF the
amount due, and payable to sald parties OF the
first part"
Under this class OF contracts, Crissvell Co.
having failed to do the amount Of work required,
1t would have been competent for the chlel en-.
gMeer to have let the work to other parties put
it was found, In consequence OF the very great
depreciation in the price or gold ut that time
as compared with tho price OF gold when the con-
tract was made, that new contracts could De
entered into at SO much lower rates as would
have saved the company more than million ol
dollars yet, while tile engineer had the right,
under the contract, with Crlssvell Co., to en-
plOy labor, he would have been compelled sy us
terms to pay them the full amount therein silpu-
lated hence Messrs. Crlssvcll i Co., having the
advantage, under the contract, first, by reason
OF their advance OF three hundred thousand dol
lars, (athough the company have not ueemsd IL
prudent to use the same,l and secondly by
reason OF the depreciation in the price OF gold,
have claimed large damages should the contract
with them he annulled.
WHY PAYMENT WAS MADE.
The Executive Committee, considering the ad-
vantagcs which would accrue from annullng the
contract and making another that would save
more than million OF dollars for the cause a-
ready stated, the Attorney General OF the state
and the solicitor OF Crlssyel Co. were invited 10
appear before the board OF directors, and both
these gentlemen presented their views The
principal point OF the controversy discussed was
whether Mcssrs. Crissvell & Co. had forfeited
their contract by failure to commence the WORK
within the period and in the manner stipulated.
On both Sides the arguments were able anu
learned; and, without undertaking TO decide
which view was eorrsSt legally bere se
material In the case for q long, tedious ana
doubtful lawsuit, which will necessarily result In
the suspension Of the work on the ROAD.
They, therefore, advise to avoid litigation Oy
recommend shall he done by paying to Messrs
Crissyell L. Co, seventJ live thousand dollars TO
release their contract, aud thirty-scven hundred
dollars, being onc-half Interest upon the sum ae-
posted 10 the credit OF the president.
This recommendation OF the Executive Com
mlttec IL confirmed by the fact that the company
wasnot In condition to deposit the bonds, anu
thus comply with their part OF the contract.
THE POUR MILLION GUARANTEE.
As above stated, none Of the bonds authorized
to be issued by the Legislature have been dlspos'
Ell OF. small amount has been deposited IN the
office of the South Carolina Loan and Trust Com
pany Charleston, as eoaferals, to raise money
necessary for the purposes Of the company; but
they have been used In such way as not 10 pre-.
vent tile Legislature from putting any additional
issue of bonds which 1t Inny authorize IN aid OF
the road upon precisely the same footing with the
original bonds, and thus create u arst-clasS Sc
curlty. s,
The Executive Committee hope and believe that
the General Assembly will authorize an approprll-
tIon OF additional guaranteed bonds 10 complete
tie construction OF the road, so important to the
commercial, agricultural and material welfare
OF the State.
In all or these recommendations they have Kept
I'm view FIRST the interests or the road, tits caplia
belng owned chiefly by the State anu by the CITY
people; and they feel assured that results VIII
demonstrate the wisdom OF the policy suggesteu.
(Slpned) JAMES L. ORR, Chairman.
Statement of Bonds Issued under ACT o1
September, 1868.
Tho hoard of directors in April last, after much
consideration and inquiry OF capitalists, ueter.
mined to make the bonds authorized 10 De issued