Knoxville weekly chronicle. [volume] (Knoxville, Tenn.) 1870-1875, 1870-07-06
THE GOVERNMENT AND EAST TENNESSEE
RAILROADS

+. Butler, on the Indebtedness of certain
Southern. railroads. treats the claims of
our Tennessee roads against the United
States Government with n candor and libe-
rality highly encouraging to our roads,
and very creditable to the Committee. The
report after reciting the history of the
seizure of the railroads in 1868 by General
| Burnside, and the amount and character
of property transferred at that time, passes
to the terms upon which the road bed and
rolling stock We're surrendered to the COM
panies in 1865. 1t then recites the amount
of the Indebtedness of the roads--the East
Tennessee and Virginia Road, S255, 545. 33,
and the East Tennessee and Georgia Road.
$780,, 1925. To secure this Indebtedness,
the military authorities of the Government
required the officers of the roads to exc
cute bond, the penalties of which were
very rigorous, and, as we think, very harsh.
One of these provisions was, that in case
| the roads failed to pay the sum named at
the time specified years from date
the Government should have the right to
enter upon and take possession of the roads
by the officers of the roads under species
of duress, and when they were led to believe
| that the Government would favorably en-
terrain the claims which it was known they
would present, and which, by the very
terms of the bonds, were in effect waived.
Upon this point, Mr. Butler, in his re-
port, says:
| - Nnur ho, ;,,4o III
| press any opinion to the merits of the litiga-
| ton now pending between these roads and the
Government but they are impressed with the
consideration that there may be doubts about
the validity of the bonds accepted by the roads
in the manner that was done, and under the APP
parent form of corruption used; and they can
not fall to believe that there may be equities in
favor of the roads or of stockholders therein,
which are entitled to be considered
And in speaking of the testimony of
Gen. Meigs, wherein he expresses the
opinion that the Government would not
get much money from them but that the
roads would he treated literally, Gen. But
Ter says
" If IN officer of the Government at the time
he was executing the bonds made the explana-
tons and held the views which seem to have
possessed Gen Meigs; and as he says he did not
| reiraln from frankly expressing such views,
talking with the officers of the road it may well
be imagined that the Company might have
taken property, rolling and other stock at a val
uation much enhanced from the actual price,
ana that the appraisers might have been quite
careless IN the valuation affixed to property
they being officers of the Government when
their Chief believed that the property never was
to be paid for, and the President of the road in
signing the bonds, believed they never would
be eXacted.'
The report then reviews the answers pre-
pared in this city by the counsel of our
East Tennessee roads, and after fully no.
ticing the defences relied upon-one of
which was the illegality of the bonds ms
above referred tO-and the refusal of Associ-
ate Justice Swayne, sitting at Chambers
in the city of Washington, last November.
TO grant the Injunction or appoint "A Re
ceiver, IA prayed for 10y the government.
The report says:
1t will be Mt once seen that these defenses set
up equitable claims and legal bars to a recovery
by the United States, which will give rise overy
vigorous and protraeted and expensive litigation
III Is an object worthy of consideration, how this
may be avoided or abridged, and justice done
| ms well to the roads as to the government"
The report then concludes with recon-
mending the passage of Buffers bill.
which, in effect, provides, that to avoid the
expense and delay of litigation, the Pres-
dent appoint three competent and disin-
terested citizens Commissioners, with DOW
er to summon witnesses and take tcstimo-
ny, and with authority to determine all
controversies and claims made and exist
ing between the railroad companies and
the United States. They are, also, to take
into consideration the financial conditions
of the roads, and recommend the terms of
payment to he required in case any balance
is found due to the government. The re-
port of the Commissioners, when approved
by the President, shall form the basis of
settlement of said claims.
This report Of the committee shows. on
the part of the Government, Il spirit of
liberality which we are sure will be appre-
ciated by the officers of our roads and the
people interested. The Government is
amply protected against eXorbitant claims
and imposition, which some may think
might he attempted by some of the roads,
for it has exclusively the appointment of
the Commissioners, and finally the safe
guard of the Presidents approval.
DANA, of the New York SIM, wanted
from President Grant an office worth about
$50 900 year, and in return promised him /