The Bolivar bulletin. [volume] (Bolivar, Hardeman County, Tenn.) 1865-1888, 1874-08-21
Defaulting Railways.

There is a busy time Just now among
lawyers, courts, and juries in the way
of foreclosing railway mortgages.
Something over three hundred millions
of American railway bonds have gone
to protest on their interest coupons,
and the holders, at first shivering with
alarm at not receiving their expected
income, and then wrathful at what they
deemed the dishonesty of the borrow
ers. have began now, for the first time,
to examine their legal remedies, and to
inquire into the nature and value of
the assets which constitute their secu-
rity. In some cases they find curious
provisions in the mortgages, preventing
them from taking any steps to realize
until the expiration OF one, two, or
three years after default-also provid-
ing that no foreclosure shall take place
except on petition of a majority of all
the bondhoIders-and other cunning
devices which really put the lenders in
worse plight than they would be at
common law. In still other cases they
find that the trustees under the mort
cages are loath to perform their duty,
thus raising the presumption that they
are acting In the interest of the mort
eagors rather than of the mortgages.
It is found in a few instances that the
money borrowed to prosecute or COM
plete q certain road was diverted to
some other road with the connivapcs of
the trustees, and that bonds said to be
PAYABLE In gold are really payable only
in currency. Various other forms of
swindiing have been developed, but for
the most part the non-interest-payiDg
railroads have resorted to no tricks,
either before or after the default. Most
of them, it is true, were built on the
Credit Mobilier plan, but that was we'll
known to the lenders.
The holders of these three hundred
and odd millions of defaulted bonds
are mainly inhabitants of the United
States, Germany, and England, and the
ratio of their several holdings is prob
ably in the order IN which they are
here set down. All the Northern Pa
cific bonds were taken in Canada and
England. Nearly all the new railways
in Michigan were built by New England
capital. Boston and its suburbs are
carrying from thirty to fifty millions of
protested bonds. Several eastern brok-
en- down railways, like the New Haven,
Middletown and Willimantic, the Os-
weoo Midland, the Canada Southern,
and the Chesapeake and Ohio, were
taainly constructed with money OBJ
mined in this country, and a great shoal
of second mortgage bonds were sold at
home after the first mortgages had been
taken In Germany and England.
The effect upon American credit OF
this enormous failure to meet obliga-
tions is disastrous. The good and the
bad suffer alike in foreign markets.
Even those securities which have regu-
IarIv met their interest have suffered
heavy decline Germany Is full OF
American railway bonds bought az 90
to 90 cents (gold) which can be bought
back at 25 to 40, with the hearty thanks
of the present holders to anybody who
viii take them st those prices As Tor
negotiating new loans there, you might
as we'll attempt to sell lava on the sum-
nit Of VesuYius. Not only Is the mar
ket for railway securities destroyed, but
the ordinary real estate mortgage, the
highest form of security next to govern
ment bonds, finds no takers. The bot
tom has tumbled out of everything ex-
cept governments Can anything be
done TO re-establish our credit CHI
edgo Tribune.
"A JAPANESE young lady who had come
over to our shores three years ago, bore
of four Of the higest prizes at a Wash