New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1871-04-16

transporting the mails alone on the various
lines of railway in this State is very large
item of expenditure, and is constant and
enduring drain on the national treasury.
The income derived by the railways from
this source is no uncomfortable portion of
their profits, and enters materially into the
calculation of those who engage in railroad
enterprises. 1t is to be observed, further,
that the investment by the State of
the fund granted by Congress was made by
the purchase of stock in existing private
companies engaged in building railroads.
1t is plain that Congress expected an
equivalent for the grant, and this equiva-
lent was of a substantial character. If the
State had expended the money on her own
account in building railways, the conditions
of the grant would have attached to those
roads. When, however, the State merely
invested the money in the stock of existing
corporations, she purchased only that right
which every stakeholder obtains by his
money, to wit: the right to participate in
the profits of the enterprise, and in the man
agement and control of the railroad. This
right is considered full equivalent for the
money invested, or companies would not
be formed. This investment III stock by
the State occupies no better footing than
loan to the companies to be refunded with
interest.
The effect of such investment is not to
create on the companies any obligation to
remit any portion of the anticipated profits
of the enterprise. No stakeholder looks be-
yond the dividend and his vote. By these
Investments, therefore, the conditions of
the grant of the fund invested did not
attach to the companies, for. the obvious
reason that they are not the recipients of
the government bounty, and there is no
ground on which the United States can
legally or morally claim the free transpor-
tatiOn of mail munitions of war and troops
from the companies in which the State has
thus become a stakeholder.
In APPLYING the fund to existing corpora
lions it was the duty of the State to grant
the money on the condition that it he eX-
pended in the construction or extension of
the railways, and on the condition that the
privilege secured to the United States by
the act of Congress SHOULD be guaranteed.
Such an application would have afforded
the aid intended by Congress, and at the
same time have created the obligation on
the part of the companies to transport the
government mails, etc, and thus have full
filled the duty resting on the State as
trustee of the fund. AS the matter stands,
however, the legislation of the State
amounts merely to an investment of the
funds for accumulation.
The result is that the State has assisted
in the building of railroads with the bounty
of the government of the United States,
and devised immense incidental advantages
which flowed to her people from these great
lines. She has not fulfilled her duty as a
trustee in securing to that government the
privilege of tree transportation. The State
has not expended her own money and the
stocks she holds are not her property. In
deed, according to the spirit of the act Of
Congress the railroads have better title to
the fund, for they were the objects of the
governments bounty, and by surrendering
these stocks or transferring them on the
condition of the extension Of the lines the
State but fulfills her obligations i'll accepting
the trust as well as carries into effect the
purpose of Congress.
Looking at the measure as one between
the State and the railroads. what are the
facts surrounding it The State, and the
confederacy of which she formed part, lit
orally took possession of these roads, and
held them for four years, during the civil
war-fOrced them to transport troops and
supples-wOre them out indeed, in this
service; forced them to receive the war cur
rency, which died worthless on their hands;
in short, ruined the private stockholders
and rendered it impossible for the New Or
leans and jackson Railroad Company to
fulfill the obligations of their charter to con-
struct the road north of Canton. The
Legislature had before it, therefore, the
alternative: to claim the forfeiture of the
in the sale of the road and its appurten-
ances to pay its debts-a result, as every
one sees, which would have rendered the
stock held by the State entirely valueless,
or to remit the forfeiture and by judiciOus
encouragement secure the completion of the
road north OF Canton. This object secured,
a vast benefit will accrue to the people of
the region through which the road IS to ex-
tend, and to the State generally, and is an
~ hnll hyrt la
State, even if it were the property of the
State.
Can the State hope to secure the CON
struction of this road through the instru-
mentality of the present company, or any
company, without State aid to an amount
equal to the stock surrendered Plainly,
it can not. By the terms of The act remit
ting the forfeiture, the stock surrendered or
transferred reverts to the State if the road
shall not be completed within the specified
time, and the State will lose nothing. If
the road is completed within that time, and
with the cooperation of the people as con
templated by the act, and think it will be,
would not the State be amply cOmpen-
stated
No rational mind it seems to me, can fail
to see in this measure a most judiciOus ap-
plication of the stock held by the State:
and besides, it is, in the fullest sense, a
faithful application of a trust fund to its OBJ
iects, and in furtherance of the primary OBJ
iects of the Legislature of 1854, to wit: the
building of a railroad north of Canton to
the Tennessee line; the State, by this mea-
sure, applies part of fund granted by Con
gress for the purpose of aiding the construc
| ton of railways in the State, and which
| Congress contemplated would be so used
In the form in which that fund now exists
| it is useless to the Improvement fund, ant
| the State. Is not the State undel
| obligation, as a trustee, to make thii
| application of it, rather than to risk 1T
| total loss by claiming q forfeiture of the
| charter; or let me ask, can the State secur,
| the same amount of railroad improvement
by any other disposition of this stock Al
it now stands, the stock will bring but {
small price in market, not exceeding one
| fourth of its nominal value. If retained, tn
State will receive no dividend. In its pres
ent condition it fails to benefit the State
and fails to answer the will of Congress
| The Legislature determined to utilize thi
stock, and if by the measure adopted tn
| extension of the railroad from Canton
| Aberdeen has been secured, if but fit
miles of additional railway communicable
shall be secured to the people, the act o
the Legislature stands justified.
A. M. WEST.
JACKSON, Miss, April -, 1871.
Messrs William Yerger and Wiley P. Harris;
GENTLEMEN am sabout to publish th
communication which accompanies this not
but before sending it to the press, dssiT
to have your legal opinion ON the singl
point, whether the construction given
the act of Congress by the communication
and therein referred to, is correct, an