The Portland daily press., 1871-01-04

Gold Premiums.
THE CONFERENCE BETWEEN The CRY AND THE
ATLANTIC ST. LAWRENCE AND GRAND
Trunk RAILROAD COMPANIES.
At the meeting of the Board Of Aldermen,
City Solicitor Symonds submitted the follow
ing report
At the interviews which have had with
Mr.. Hickson and Mr.. Barnes representing at
i once the Atlantic & St. Lawrence Railroad
| Company and the Grand Trunk Company, the
| papers relating to the subject have been fully
reviewed, and the construction which MI.
Hickson puts upon them is briefly this:
He makes no question that the debt due
from the A. & st. L. Railroad Company to the
| city, under the recent decision of the Supreme
Court, was gold debt but on the contrary
admits that all payments made thereon, either
tor interest or on the principal, must be made
in gold or its equivalent.
The only point on which he takes issue with
the city, relates to the true construction of the
agreement of extension entered into between
the city and the railroad company on the 3lst
OF October, 1868. By that agreement it was
provided, substantially, that, inasmuch as the
Sinking Fund, established in accordance with
law by the A. & St. L. R. R. Co. for the re-
demption of the principal of the bonds of the
city issued in aid Of the road, would be INSULT
cient for that purpose and would be able to
furnish only about one half of the amount
required, therefore the balance of the debt
over and above what the Sinking Fund could
pay should be extended for period of eighteen
years; the city issuing new bonds to the
amount Of such balance, the railroad company
taking them at par and paying all expense Of
preparing, issuing and negotiating them and
the proceeds thereof being applied, with the
amount furnished by the Sinking Fund. to the
payment Of the old bonds of the city issued
in aid Of the railroad.
BY this arrangement whatever payments
were made by the Sinking Fund were to be
indorsed on the mortgage bonds of the rail-
road company to the city, and the balance re-
naming due upon the mortgage bonds would
be equivalent to the amount of new bonds is
sued by the city and would indicate, and be
the security to the city for the debt due from
the railroad company.
This agreement of extension appears on its
face to be made for the benefit and at the re-
and it is expressly provided that no loss or
detriment shall result to the city therefrom.
Mr.. Hickson claims, that, while under this
agreement the payments made by the Sinking
Fund must be in gold or its equivalent, and
the interest must be paid in gold, the re-
mainder Of the debt has been extended by the
city, and the railroad company is not obliged
to pay any portion of it, till the expiration of
the eighteen years. Then, but not before,
they must pay it in gold.
If this construction was correct the result
most probably would be, that, at the end of
eighteen years, there would be no premium on
gold, and the city would have the gold differ
ence on the portion of the debt extended. In
s,,Ap amt fha u
construction. 1t is not necessarily implied in
any part of the contract, and is opposed to its
whole spirit and to the express provision that
"the city is to suffer no loss or detriment."
One Of the conditions Of the mortgage bonds,
also, is that the railroad company shall hold
the city harmless on account of the issue of
bonds in aid of the road. As it was clear that
Mr.. Hickson's views on this point, were en-
tirely at variance with those of the city, and
were such as could not be entertained as a
basis of settlement, he stated further that,
while this was his idea Of the legal liability of
the railroad company and Of the extent of
their obligation under the contract, his only
desire was to have that liability determined,
and to meet the obligation as it actually exists,
adding that the railroad company had no wish
to have any controversy or litigation with the
city or to avoid any Of the duties legally de-
volved upon them, but only to ascertain, in an
amicable manner, what the rights of the parties
are. He therefore proposed a reference of the
question to some person of competent legal
authority, whose award should be final. 1
understand that the offer of reference is au-
thoritatively made to the city. There is an
other method Of meeting the difficulty which
has occurred to me and which was suggested
at the conference with Mr.. Hickson and Mr..
Barnes. That method is simply this: for the
whole amount of the gold premium which the
city has been or shall be obliged to pay to be
deducted from the payments made by the
Sinking Fund, and only the remainder credited
by Endorsement on the mortgage bonds of the
railroad company. The balance then appear
ing to be due on the mortgage bonds would
indicate the precise amount for which new
bonds of the city shall be issued under the
agreement of extension and would show the
Indebtedness of the railroad company to the
city to be precisely what the city claims. By
this means, also the correct balance due,
would appear on the original bonds, Sc
cured by mortgage Of the railroad. A larger
portion of the debt than otherwise, would be
extended but it would be extended in the
same way in which the rest of the debt is ex-
tended, it would be due absolutely on the
original mortgage bonds of the railroad COM
pany and no loss would occur to the city by
any fuctuation in gold. On suggestion Of
this plan, to Mr.. Hickson, he said that he
would consider it, and if found satisfactory to
the city, he would give an immediate answer
on the part of the railroad company. In my
judgment, it is method of procedure which
protects all the rights of the city, by which
the city is made as secure Of the gold premium
as Of any portion of its debt against the
A. & St. L. railroad company Itmay be said,
also, that the A. &. St. l.. railroad company
bv its Sinking Fund has made and is makiuo