New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1872-03-10
CURIOUS RAILROAD HISTORY.
Memphis and Ell Paso-BOnds-Late De.
munds and Settlenents-PrOmise to
and Contracts with Public Men.
,ndence OF the CinCi1nati Gazette

ItDTleSnOnIeDCe
WASHINGTON, March ., 1872.
The late change in organization of the
Texas and Pacific railroad, by which Mar
shall O. Roberts retired from the presidency
and was succeeded by Thomas A. Scott, has
led 10 some curious developments concerning
the means which the various corporations
that were finally absorbed By or merged in
the Texas Pacific Company, used to carry
their measures both here il Washington
and elsewhere.
In this matter four corporations play a
part, namely:
/. The Memphis, Ell Paso and Pacific,
with which General Fremont was SO long
connected, and of which B. II. Epperson
afterward became president.
=. The Transcontinental.
3. The Southern Pacific
I. The final compromise line, now known
as the Texas Pacific.
The Memphis, Ell Paso and Pacific Com
pany was incorporated by the state OF
Texas in 1856, and received large grant
of lands, which grant lapsed during the
war from a failure to comply with its pro
visions. At the third session of the For
tieth Congress, and the first session of the
Forty first, immediately following, there
were three bills introduced in the Senate
and two in the House for the purpose of
granting this company the right of way
No vote was reached upon any Of these
bills in the Senate, but in the House OHe
was passed at each of the sessions named,
the test vote on the first being III yeas to
IL nays: and of the second l02 yeas to ~
nays.
Now follows history which for bold
fraud has never been equaled ID any Pacific
railroad transactions which have yet been
brought to light.
Congress adjourned in April, 1869, with
out any action having been taken in the
Senate upon the pending House bill giving
the right Of way to the Memphis and Ell
Paso railroad.
The first week in May following this com
pany placed upon the Paris BOurse for sale
So, 500, 900 worth of the mortgage bonds OF
its road, of the denomination of 500 each,
and nearly all OF the principal journals OF
that city, including the official journal OF
. the empire contained lengthy advertise
ments of this road, and editorial cOmmenda-
tious of the same. These advertisements
set forth:
|, That the line from Memphis to Texark-
ana was entirely finished and IN operation.
,. That the Memphis and Ell Paso Com
pany had purchased the connecting line.
eastward trom Memphis to Richmond and
Norfolk.
3, That the capital stock Of the company
each; of construction bonds amounting to
$50 600 per mile: and of first mortgage
bonds Amounting to $1,000 600. upon each
section of 80 miles. The construction
bonds were declared to be secured bv
mortgage upon the road, its stock. and its
telegraph line.
The first mortgage bonds were said to be
secured by a grant from the State OF texas
of $40 900 acres of land to each section of
N %
be worth as minimum price, fourteen or
fifteen dollars per acre
But the most astonishing part of this an
nouncement was that which referred TO the
guarantee of the interest by the United
States. This, as translated from the adver-
tiselnent, was as follows:
Guarantee of interest:
The Congress Of the UnlteC States. in
March. 1869, passed an act by which it guar
anteed an interest of six per cent upon the
construction bonds to the amount OF 0.OOO
H5l5 800 francsl per mile, or about lU0,0U"
francs per kilometre. The law also pro
yides for the redemption OF these bonds in
gold at the end of fifty years
These construction bonds are to oe exc
cuted and delivered to the company bN the
Secretary of the Treasury of the United
States
In case of any delay in the payment of
the interest or in redeemng the bonds, the
President of the United States has the
right 30 appoint Il receiver, who snail oe
charged with conducting the affairs OF the
road in the best interest of the company,
and to take from the treasury the sums
necessary to pay all arrearage>.
These guarantees apply not only to the
main line, but to the branches, either pro-
iecfed or in course of construction.
Other advertisements claimed that Con-
greSs had also made large grants OF lands.
The advertisements set forth at great
length the extent and binding force oi all
American laws relating to mortgages exc
cuted by corporations.
The announcement OF the sale on the
BourSe set forth that:
The mortgage taken on the lanus pos
sessed bv the company is, III accordance
with American laws. contided to three trus-
tees. or public notares. viz: TO Messrs.
Andrew & Curtin, Governor OF Pen2sV i
vani;t and Minister plenlpotentiarv OF the
United States at St. Petersburg: Paul ).
Forbar. and Grant Nj. Swcnson. The mort
gage is first charge of which no other
clam whatever can take precedence; II Is
dctin;tive and can not he aunulled untll the
mortgage has been entirely discharged from
everv claim. The rights of the mortgage
bondhol,,ers are therefore indeieaslble
On the twrntv-secoud OF May, 1862. the
entire subscription of S3,SJo,O5O had oeen
taken in Paris.
One independent journal in Paris. whose
editor had lived mauy years IN the Ini'eu
States. undertook to prevent the fFeicu
people from being imposed upon by thiS
fraud: but AS nearly all the other journals
were bought up, the swindlers succeeded.
When the exposures of this one editor
Gained circulation the holders of the bonds
came in great numbers to Mr. Wa>hbuTne,
who communicated with the State Depart
ment, and received in reply through the
same channel this information from the In
| terror Department.:
The United States have granted no sub
sidies, either in land or money, to aid the
construction of that railroad; nor have
they in any instance guaranteed the pay
ment OF interest ON bonds or debentures
issued by any railroad company
Locomotives, rails, and material We're
also purchased in France upon the credit OF
the road: and in various ways, o. which
these and promises of various kinds at home
are examples the Indebtedness Of the cpIii-
pany was run up to about S9o000,O00
Seine of the home indebtedness is de
carcd here to be made up OF contracts.
written or otherwise, entered INTO win
lobby agents about Congress, and even
with members Of Congress themselves. tor
large amounts in consideration of service
or Votes.
1t is stated that General Schenck, then a
member Of the House, and one OF the
| friends of the bill which it was attempted
to pass, claimed the recognition of former
promises involving large interest in the
sales of lands along the line 10y the officers
| Of the Texas Pacific, when that road was
! finally chartered.
But this is in advance of the order %
| time in this history.
When the various parties in interest in
the building of a Southern Pacific road
came at the next session of Congress 70