The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1870-05-14
THOSE BLUE RIDGE BONDS.
The New. Game of Governor Scott and
the Railroad Ring-A Peep Behind the
Scenes.
IFRoM AN OCCASIONAL CORRESPONDENT

IFRoM AN OCCASIONAL CORRESPONDENT
COLUMBIA, May IL.
Something of surprise, and in its way, OF
sensation, has been produced by the pnblica-
ton of the report that the four millions of
bonds of the Blue Ridge Railroad Company are
about to be put upon the market.
A resume of recent events will explain this.
At a meeting Of the Executive Committee of
the Blue Ridge Railroad Company, held in Co.
lumbia on the 4th instant, President j. W.
Harrison, Robert K. Scott and William Gurney
were appointed a committee to negotiate the
four millions of bonds of the company, en-
dorsed by the State, in pursuance Of an "Act
to authorize additional aid to the Blue Ridge
Railroad Company in South Carolina" ap-
proved the 10th of September, 1868. These
are seven per cent. bonds, and the act mort
cages to the State "the whole estate, property
and funds in the States Of South Carolina,
Georgia. North Carolina and Tennessee" pres
ent and future, of the company.
Two days ago one million OF the four were
signed and endorsed by the Comptroller Cen
eral for the State, and are now ready to be put
on the market.
But this endorsement Of the bonds Of rail-
road company is to be examined. The Senate,
by vote of twenty-five to one, has declared
that the State is expressly prohibited by the
constitution from endorsing any bonds for
any purpose whatever. The State may issue
its oaon bonds, but cannot endorse others. See
article 0, sections 10 ami IA, of the constitu-
ton; and also the Senate Journal, pages 10 and
40. The tenor of the whole article of the con-
stitution in question is clearly. restrictive of
the right and privilege Of issuing bonds; aRd
our safest lights Of jurisprudence are said to
have expressed the view just given.
1t is manifest that these four millions first
mortgage bonds will not half complete the road.
Governor Scott in his message of November,
ls6s-the famous La6oremas document-states
this conclusion. 1t Is apparent, he says, "that
the first mortgage, covering the entire proper
ty of the company, and the work but little
more than half completed, the whole invest
ment must remain as dead capital until the
means are provided to finish the road.' The
bonds must become worthless. He also shows
that the first mortgage must be for sum sufi-
Client to complete the road, say eight millions.
The reason of this was that first mortgage
when once made cannot be increased; and o
second mortgage, of course, will not sell.
Why then, in the face of all these facts, Issue
these four millions Of bonds?
The financial dexterity OF his EXcelency,
and his advisers-the Scott Ring, is the popu-
lar phrase suggests that he is preparing a lit
tie game for US in this matter. Lei us trace
this operation in its probable results, to see if
we cannot reach q suggestion Of what the new
game is.
The plan, we will say, is TO set these bonds
of as soon as possible, and by all means before
the next Legislature; and for convenience, and
may be to avoid immediate exposure OF
The plan, they will probably be negotia-
ted mainly if not entirely in Europe. Here,
both North and South, it is well known that
the State endorsement is not worth q button;
but European Stat" will not know this. But
apart from the financial merits of the case,
these bonds cannot sell in New York, because.
among other things, parties there holding our
State bonds as collateral were solemnly as
sured last fall that these four millions of bonds
should not be put on the market at all. For
this reason, the Blue Ridge contract ,oith MeSSrs.
Crisveu Dc Co. aoas annulIed. These opera
tions took place in the maturing Of the Specie
payment scheme last fall.
What will the Scott Ring gain if they sue
ceed in negotiating these bonds before the
next session Of the Legislature
A good deal if things work well Let US see.
They get the money and expend it in the
construction of the road. Then they can come
TO the Legislature and ask the State and the City
of Charleston to take second mortgage,
which, If the s., 4,0Oo, 900 bonds are negotiated,
will amount to about $500, 600, on condition
that the Ring will guarantee to complete the
road from their private funds In say two
years. time. The Ring, by this operation,
will gain all that both the State and city have
invested or endorsed, because q second mort
gage will be worthless.
How would then stand the result?
The Ring would have the road-a paying
thing in itself when completed; the State
would have second mortgage on the road
worth button; and the Ring will pocket
81, 900, 900.
Consequently we see what need there is to
the Ring Of hurry to get and spend these
81, 100000 bonds before another Legislature
meets in Columbia.
When the Legislature meets. the State and
the City of Charleston will be called upon 10
postpone their lien and take second mortgage;
and to authorize the Ring to issue first
mortgage for SC, 900, ,OoO-possibly $4,000, 900
to complete and equip the road. The State
and city must then take a second mortgage,
which is equivalent to giving to the Ring all
that both together have put in; and that will
be about ss,oOO,OoO, provided they succeed in
getting OFF these 81 100000 bonds.
How do bondholders like the scheme +?
God save the State!
The Emperor Severus (once q colored
reedman) is again on the war path.
La6orenauS. ANON.