The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1871-08-11
The Blue Ridge Ratlroad-h one-sided
Bargain.

The Blue Ridge Railroad-A one-sided
Bargain
The report Of the committee appointed by
the Taxpayers Convention to examine the
legislation in relation to the Blue Ridge
Railroad, printed in full yesterday, is clear
and conclusive explanation ofthe legal ques-
tions connected with the State guarantee of
the bonds of the road, and with the hypothe-
cation OF the guaranteed bonds by the direc-
tors of the company. The report, besides,
makes it manifest that, under proposed
new arrangement, or reorganization, the
State may be held liable, in any event, for
the endorsed bonds, but has no remedy if
the bonds are absorbed without completing
the road, and will have ne control over the
road if, by means Of the bonds, it be sue
cessfully completed.
At this time only thirty-three miles OF the
Blue Ridge Railroad are in running order,
viz: the section from Anderson to Walhalla.
This short stretch OF road, with the costly
work upon unfinished tunnels through the
mountains, is all that can be shown in re-
turn for an actual outlay Of about 81, 500, 900,
of which amount the State Of South Caro-
lima and City Of Charleston subscribed
So, 800, 900. Besides its stock subscription,
the State in 1868 endorsed the bonds OF the
company to tie amount OF $4,000 OF
these bonds, s3,0oO,oO were secured by
statutory lien upon the property Of the COM
pany. The act Of 1868 also provided that
these s3,00O,0Oo Of the bonds should not be
negotiated at less than par. In spite OF this
distinct prohibition, 100000 of the bonds
were hypothecated as security for loan
OF $500, 900. An act was passed in 1871 ''to
spromote the consolidation Of the Greenville
s.and Columbia Railroad Company and the
s.Blue Ridge Railroad Company" The
fourth section OF this ect provides, 'that in
ssview OF the consolidation Of the Greenville
''aud Columbia Railroad Company and the
"Blue Ridge Railroad Company" the issue
Of the bonds authorized by the act OF 1868,
the endorsement by the Comptroller Cen
eral, and the execution Of The mortgage by
the Blue Ridge Company to Messrs. Gourdin,
Clews and Cameron, are ratified and con-
firmed, and the mortgage declared to be
lien prior 10 the statutory lien. This post
ponement OF the lien is not rAsardSd t,' tho
committee-Messrs. Porter and Conner, of
Charleston, and General James Chestnut, Of
Kershaw-as any disadvantage to the State,
as the object OF both the statutory lien and
and the mortgage is TO secure the payment
Of the bonds, and the mortgage covers the
entire four millions and all the property oi.
the coml l-Iy, wherever situated, while the
statutory lien only extends to the property
within the State, and only covers three mil
lions OF the bonds.
The sixth section of the act OF 1871 repeals
the provision contained in the act of 1865,
that the bonds shall not be used at less than
par. But the committee are OF opinion, and
their arguments appear to be unanswerable,
that the repeal Of the proviso that the bonds
shall not be negotiated at less than par,
takes effect only upon the consolidation Of
tie Greenuille and Blue Ridge Roads, to
promote which consolidation is declared, in
its title, to be the object Of the act Of 1871.
But this condition has not been regarded by
the company, who have already hypetheca-
ted s3,lOO,OOO Of the guaranteed bonds
This action, in the view Of the committee, is
violation Of law, and makes uoid the en-
dorsenaent OF the State. The committee,
however, do notregard it practicable to resort
to legal process to prevent the illegal use OF
the endorsed bonds They hold that the
'liability Of the State on these bonds is a
'question to be decided sohea payment of
sthe bonds Is demanded from the State"
There is worse trouble behind. A nego-
tiation is said to be contemplated, or COM
pleted, by which the stock in the Blue Ridge
Road, amounting to s3,30O,0 900, held by the
State and city, is to be transferred to new
association, which is to complete the road.
This association pays $50, 900, in five annual
instalments, if it completes the road. Ii IN
successful. the. association pays nothing,
and the stock is returned. The four million
bonds are given to the same concern, and
moy be negotiated at any price which is
convenient. The effect OF such an arrange
ment is explained by the committee in these
words:
ssIf, this arrangement is consummated, the
city and State will have parted with all control
over the enterprise; they can exercise no dis
cretion as to who shall receive or disburse the
funds, or how they shall be expended they
cannot elect a director or be present at a
meeting, or Investigate the affairs of the COM
pany, or even ask for information. They will
have turned over the road and its property
and four millions OF bonds to an unknown as
sociation. Who can tell whether the money
will be spent on the road at all, and if it is not,
where is the remedy? Suppose it is not; then
the State is liable on the bonds, and has as Sc
onritv On nnfinished road But sllppose that