Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1871-03-30

Rage ~, DhhDc6 unpaid inter- SIS
est due LIST january, 1S7...., 81, $50 90
7 $54O,43l 20
Making Fire hundred and forty thou
sand four hundred and ttirty-one dollars
and tSOenty cents, the amount noao due by
the road and which must be provided for
very soon.
On page IL the President credits him
self as having GLIB EEe0ea hundred and
thirteen State Bonds, which have been by
pothecated by him to pay the $493, 1872
outstanding bills payable and which he
claims to control, waving the question of
control for the present. Page 20 of his
report, he states they would nov sell for
GO on the do lar, yielding more than
5000, 600 cash over what they are bypothe-
Gated for"
This is true if interest, discount, etc.,
don't eat them up, which is most likely.
II the company could honestly get the
benefit of these bonds at GA cents in the
dollar, free of commissions, charges, etc.,
there would be only 917l, SS9. 80,
Zone hundred and seventy-one thousand
eight hundred and eighty-nine 80-IOO dol
lars. which. with the $944.45 cash on hand
sets TO date, but who thinks for a moment
that one dollar will be realized out of these
bonds IN dng event. They viii be held as
long as the margin is left to pay interest,
discount, renewal, etc on the note or
notes for which they were hypothecsted at
about 15 to 25 per cent, Bank interest,
and then sold for what they will bring on
the market. The President, By lao, can't
sell the bonds for less than par. The Bank
Who furnished the money holds the collat-
erals for security, not for disposal, until
satisfied they do not furnish protection for
the amounts loaned, and on their discre-
ton then, if their notes are not paid. The
President and company have nothing else
to pay Nth, and have no earthly cont7ol
of the bonds, and must simply abide the tci1
of the creditor, which every business
man of common sense well knows,
means until the marginal Sc
curity is exhausted. The result then is
simply this, when stripped of all verboai-
ty and superfuous tables, hypotheses and
explanatory contingencies, that the compa-
ny have exhausted al Of the resources of
every kind, amounting to 1857, 38l 4S,
and they have tdoeRty-7lin6 miles Of road,
and the miserable sum of $94445 cash.
This is your management, gentlemen.
Without going into detail Of the account,
it is sufficient to say, that the President
states, that without any advice with the
Board of Directors, he took upon himself
the responsibility of exchanging the bonds
issued to the road for others, and the pro-
test Of the Directors to this operation is
claimed to have been entered on the books
of the com ANY, but after the tronsGctioa,
so as, evidently, to avoid iBdiUidUGL re-
Thus he changes the bonds, and pays
in cash for 1,O13 coupons $50 in cash, or
$50, 39O. 90 and per cent, commission, or
about $17, 900 of the company's means
giUen GsoGy as grdtutty. In this some
banker so far overreached our
President as to get over $4,000 and the |
50, SIS. 60 commission in the way of job |
or bonus, by acting upon his fears, as the |
coupons are never worth as much as the |
bonds or more thSn fifty cents on the dol |
lar, we believe, they themselves not being |
now paid by the State and drdtoing no in |
tersst The President claims great credit |
for sdgGcity in this transaction, and men |
are found to indorse the deliberate throw |
ing away of these sums. On page 10, ia
BILE B, you will find the President credits |
himself by local work, including bridges,
cross. ties, track laying and repairs, iron, |
fsh-bars, ETC., rolling stock, track tools, |
cars, depot building, etc., en-
cheering and contingencies, salaries, etc., |
thus covering seemingly every imaginable |
kind ofexpense, but as if to make the mat |
ten perfectly clear, he adds: Expense &C |
count, SIS, 1877" What this item is, we |
are only left to conjecture. We suppose it |
to be lawyers Tees and travelling expenses,
etc as about every charge is included in |
The other items of expense that we can |
think Of
The President then, in accordance with a |
doubtful Ian by some ''hocus pocus" known |
10 himself and Gov. Senter, perhaps, man
aged to have 8S5 bonds of 81, 900 each is.
sued to his road, and when the party |
oaning the bonds, (the Legislature) ques- |
toned the validity of this act, (ss did MIR. |
the Secretary of State, [5ee |
Legislative Report on Tennessee and Pa |
cifc Railrosdl upon Gov. Senter's order,
which reads in accordance with law to |
the extent of q refusal to issue, until per-
smptorily ordered to do so by different |
0rder from the Governor.) Straight away
in hot haste, the President, without any
with his Board of Directors,
the responsibility to pay the |
Oompany's means, some $4,000, to some
one to deprive theState through her Legisla- |
ture of the power to protect herself in the |
bonds, believed by them, to have been i'm |
if not illegally, issued to this |
Road.
The broker or banker who made this |
exchange, unquestionably made good |
thing out Of it, and as this money does
not come ont of the Presidents pocket, |
the Road of course lost it, and even this |
faux pas" is held for virtue and efficiency
in the party making it.
Page % this report puts down the engi-
neers estimate Of cost OF road to West |
Carthage, twenty one miles, at $5l6, 405. 90,
and estimates the $500, 900 Smith county
bonds at $4,000, and 5000, 600 the
company can realize on its State bonds"
etc., as sufficient to build the road. The
first consideration is, where are the $780,
900 State bonds, and how are they to be
reached? If ttey Soere in hand, at $40. on
the dollar, they would only bring $12S,-
600, which add to the $4,000 Smith
county bonds, as estimated by the Presi-
dent, makes only $33s, 600, just S238, 600
in round numbers far too short to meet es-
Inmates.
The estimates of the engineer make i.
$24, $50 in round numbers per mile, If it
cost $50, 944 10 per mile to build it TO LIB
anon, as We have shown, under present
how can we hope to build
the other twenty-one miles at 1924 $50 per
mile, even il we had the money?
Such calculations, however honestly
made, are mere fallacies, whose tendency is
to deceive. Few men have time or incli-
nation to study the details of railroad re-
port, and they pass unchallenged; but the
puffs in the papers are taken upon their
face as conclusive, when perhaps the edi-
tors never looked into q report, and have
no interest but the fees charged for at their
regular printing rates. Whilst this account
is most extraordinary one in whole end
detail, we venture the assertion that there
is not railroad man in the State who will
take a good book-keeper and examine it
carefully, but will pronounce it most IN
satisfactory, the most ingenious and deep
tipe.
On page 90 of this report we find this
statement
'sWe have as assets State bonds 81, 49,
10000 We owe 10 round numbers $780,
10000.
The superficial reader, would naturally
conclude that by taking one from the other