Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1870-12-15
tNION AND AMERICAS
DELINQUENT RAILROADS.
Report of the Commissioners
Appointed to Sell the
a States Interest.
Proposed Bill to Clear the
Question of its Legal
EmbarasSmentS.

EmbaraSSmentS.
To the General Assembly Of the State of Tennes-
see:
The undersigned Commissioners re-
specially report to your Honorable body,
that ia pursuance of the Act of 1870, CHI
20, they proceeded-after due advertise
ment-to offer for sale, separately, the in
terest of the State in the several railroad
companies, contemplated by said act, but
failed TO sell or receive a bid for either
road. This result was not unexpected
The proposal to sell the If terest Of the
State in said railroad companies, under
the act Of 1870, gave rise to various en-
barrassing questions; some of which are
of serious importance to the inter
ests Of the State, as well as to
the stockholders, bondholders and
creditors of the several roads: and are
well calculated-so long as they remain
open and undetermined-to deter persons
from buying; and consequently to defeat
the la1dable object sought to be accom-
plished by the Act referred to-
Most Of these questions are exclusively
of Judicial nature. The Legislative de-
partment of the government is not COM
petent to deal with or make any final
obligatory determination of them. This
can only be done by some tribunal invested
Ysth full jurisdiction of the whole subject
matter, and also of the person of all par
ties whose rights may in any way be
affected by the proposed sale.
After a careful consideration of the sub
ject, the Commissioners are Of opinion
that, before a sale should again be at
tempted, farther and more specific legisls-
ton is indispenssbly necessary-providing
for the removal Of existing obstacles to
sale under the Act Of 1870, by speedy
and final determination of the multifarious
legal questions affecting essentially the
rights Of all the parties interested in said
roads. without this, IL is obvious that
the interest Of the State must be sold, if
sold al all, at a great sacrifice, and be toll
lowed, in all probability, by multiplicity
Of veXGious and protrscted litigation.
It may not be improper to rsmark here,
that by the Act OF 1870, the Commission
ers were invested with the mere power 10
sell the interest Of the State. No author
ity was given them TO consider of or a3-
judicate any OF the numerous questions
that have arisen and even had such au-
thority been conferred, they would
scarcely have felt justified in exercising it,
as their proceedings would have been
eI-pdrte, and consequently not obligatory
on other parties. Nor do they now as
sumo to express an opinion upon any Of
the questions presspted but simply sta 6,
as briefly as possible, some of the more
important of thsms in order that the abso-
lutte necessity of father action on the part
of the General Assembly, preliminary to a
sale, may the more fully appear.
And in case of tarther legislation, look
ing 10 a sale Of she interest of the State,
the Commissioners would respectfully
suggest the Propriety of sale on time,
and payment in instruments, upon such
stringent conditions as would coerce
prompt compliance with the terms of sale,
on tho part of the purchaser: say, let
twenty-five per cent. Of the amount agreed
to be paid, be required in hand, and the
remainder at such intervals as might be
deemed proper. The purchaser to pay
the int rest ssmi-snDually on the whole
amount agreed to be psid by him, from the
time of his purchase, and his failure
promptly to meet any future instalment,
TO work an absolute forfeiture TO the State
of the payment or payments previously
made by him, and, in addition, that the
' road should be instantly, upon such de-
fault, re-sold by the Commissioners.
The Commissioners would farther sug-
gest that the provision of the act Of 1870,
fixing the minimum price Of sale at the
amount due from each company TO the
State, is impracticable. They are fully
satisfied that the interest of the State in
some of the rosds-especislly the shorter
and least valuable rosds-cannot be sold
for an amount even appro1imating the
debts due to the State. Aud in this view,
a minimum price ought either to be fixed
upon each road, or a discretion vested in
the Commissioners in regard to the price.
And in this connection, the Commits
sioners beg leave TO express their approval
of that feature Of the act of 1870, which
secures to the purchaser the right to dig
charge the amount of his purchase in any
of the legal bonds of the State. This pro-
vision, they believe, viii in no small de
gree facilitate sale, and serve to enhance
The price, and it cannot be Of prejudice to
the State, inasmuch as it is all the same to
the State whether a given amount Of its
liability be exinguished by the surrender
and cancellation Of one set of bonds or an
other. The only conceivable objection, as
it seems to the Commissioners, would be
in the mouth of the purchaser himself, and
that only in the event that it should be
held Slat the bondhOlders have lien OF
the road. Bat this objection is Of nc
practical force, if the State shall provide
for the faithful discharge of its remaining
outstanding bonds as they mature.
Having made these suggestions, th'
Commissioners proceed to present to the
consideration Of your honorable body som'
of the embarrassing questions before al
luded to
One Of the difficulties is the ascertain
ment of the actual Indebtedness Of some o
the companies to the State.
Shortly preceding the day appointed 70
the sale by the Commissioners, three in
junction bills were fled at Nashville sgains
the Commissioners One by the Edgehe]C
and Kentucky road; another by the Men!
phis. Clarksviila and Louisville road, and
a third by certain creditors OF said roads
An Injunction to restrain a sale by tn
Commissioners wss refused; but the Com
uissiorers we're enjoined, in case Of sale
10 retain Of the proceeds an amount sui
fcient 10 cover the demands set up by tn
alleged creditors
Il seems that the Receivers Of some O
the roads contracted large debts for tn
benefit of the roads, as is alleged, to differ
ept persons, and on different accounts
and it is assumed that the State is lisbl
f. for these debts, and upon this assumption
the Injunction was awarded.
How far these demands are just and BON
fde. it is not for the Commissioners to say
and if. upon careful Judicial invos'iga
ton. they shall be found to be valid
whether the State can be held liable 70
their satisfaction under the existing laws
must be left for the courts to determine.
It further appears that after the road
were placed in the hands Of Receivers
the Governor, under an act OF the Genera
Assembly, ssed in 1866, assumed Tor III,
Memphis, GAINESVILLE and Louisville road
a debt TO the United States Government
Of between thrse aod four hundred thous
and doll6rs and for the Edgeheld 1an'
Kentucky road debt Of like character o
more than ons hundred thousand dollars
These companies insist that they are no
liable Tor these debts. 81 80
1t also appears that by an art passed II
1867 bonds uf the State, 10 the amonn
Of two hundred Thousand dollars. wore is