The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1873-04-08
Rebate Of Interest.

As to whether the Board OF Public " orks
allowed too much interest to the Danviile
Railroad Company when receiving aymen'
from that company In State honds OF the
nr,ce Of the States interest therein. We baye
several time, remarked that We were Wiling
To remi, this question TO the Attorneys Gene
m, and 80 the courts. We have no decided
opip;on upon the question raised as 70 tho
right TO pay any interest except what lsad
already accrued. Almost every ones ttss
impulse would be to deny the right of the
Board to allow interest which has not ac-
crued, and which can never accrue because
the bonds have been taken up by the maker
of them. Perhaps some Of our readers DO
not yet understand what was done 10 e1is re-
spect. We will try to enlighteir them. Ana
first, let us read the law: .:
1.-THE said company is to pay ana denver.
10 the said Board Of PUBIC orkS, soi l'ss
state the sim of 81 200, 900 OF the bonuS oT
certificates of debt OF the State in twelve
eonal instruments of 100000 each, the trst
nayahlc on or before the expiration OF SIX
months from the time Of the acceptance 0!
this act b, the stockholders Of said company
i, general meeting: and the other install
mcnts successfully, on or before period OF
six months after each, until the whole nave
been paid and said instaiments may De ar
fcipatcd By SAID company at its opson."
We have construed this to mean simply
that the company had the right to pay the
instalments TO the Board as rapidly as It
might find it convenient to do so, yet always
in sums of 100000 each. But the company
claimed that the words in Holics as above
quoted gave them the right not only so to
nav the debt, but TO anticipate" interest
,,pon the State bonds. The Board of Public
Works allowed this claim. Whether wisely
or not, the fault was not with the Danville
Company. The result was that interest was
allowed upon the State bonds for five years
after the time when the purchase was made.
Thus $4,000, say, was allowed upon the
100000 paid six months before the in
stalmcut was due; $4,000 upon the install
mcnt paid twelve months before it was
due; and so on, $4,000, $4,000, SIS. 900.
$4,000, S21, 900, &c, amounting in the aggre.
gate to a large sum. The objections to such
allowance Of interest IRE That 1t never did
and never could accrue that the Legislature
had never authorized any interest to be al
lowed or paid to this company not authorized
to be paid to all her creditors: and that the
even sums allowed are just what would have
accrued if the company had in each instance
held the bonds until the instalment was due,
and not the sums that would have been
found due if The present value of the interest
thereafter to accrue had been calculated. The
Secretary acknowledges this last to be an
error: and the President of the company
says in his testimony that IL 1t is found to be
so the money will he refunded. The
other objections, we repeat, have been re-.
United to the courts. But the price
paid shows that the company honestly
believed itself entitled to rebate of interest,
and that the Board Of Public Works really
received for the State as much as or more
than it would have received if the rebate OF
interest had not been allowed and the State
stock and The company stock had each been
valued at its then market price.
As conclusive proof, however, that the
Board did not favor the Danyille Company,
il NAV he stated that the Orange aud Alex
andria r lroad Company was also allowed
rebate OF interest upon the payments which
that company anticipated under similar. cir
"umstapccs. This settles the point that
there was no collision between the parties
to the transaction. Indeed, the more the
transaction is investigated. the more clearly
does it appear to be free from all faint OF
corruption and un(airncss.