The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1874-06-02
cannot be considered as of more salue than waste


oe we'd, they were misled; if not they connived at
fraud According to the Auditors report these bond
were issued April 81 1874 but there is record an,
where of tn r sue
1t will thus be that this company on tie con
pletion of the railroad t, DonaldsoDville, obtaine
STATE Endorsement and state bonds for "a, 900 00
besides the amount of 900 for back interest.
proceeds thereof, your committee believe were use
for the payment Of debts contracted, in part leas
for the Noble division of said mpany's road. an
for payment of the nte est due the Mob divisio
| bonds.
Tie Indebtedness of the Western division was ais
increased without extending the road West by tn
purcias Of the Pc tchartrain Railroad, steamboat
wharf in Mobile, and the property and franchise
the ID Opeloulas road west Of Brashear, etc tn
extent of about quarter million of doll RS
Thereby the Mobile divis,n Dondholders, who ar
and We're from the beginning the CONF any, W. +
again prefer ed
| In March, 1872 western division first mortgag
bond in lieu of the first mortgage of March, 1870,
executed ant anteda ed ia Iualy lst 1872 to secur
issue of $3.50 600 of eight per cent bonds So s25
| 00D Westw. go to the Sable river, ST. 625, On
from hrashear to Yermilliohvie, and 50 500 900 fl
the abine to Houston Texas. About the same time
work WAS commenced at various POINTS between ira
shear and the Sabine River via Vermillonyille, unde
contract wher. by that port of the road
be completed by March 1st 1873, exclusive of rol in,
| stock, for 81 500 900 in currency.
| But as the company failed to pay the contractors
and they their sub-contractors and employees from
the first work under this contract ceased in August
1872, an new contract was August 16, 1872 be
tween the company, J. aud w. Selig'uan Co., bank
ers, and Mr.. Bushnell and associates whereby the
latter, for SIT 5000 in fiji st mortgage bonds 50 O7O
0o in second mortgage bonds to be guaranteed by the
State of Louisiana, So 600 in Louisiana State b
| sidy bonds 600 in Texas land grant bonds =
total, S. 900 and in stock together will
the company's material on hand-agreed to comp etc
tirst-class railroad from DOnaldsOnve to Hou, ton
Texas-about 270 miles.
In September, 1872, the above named securities
at the North and in New Orleans for so cents
the dollar, with equal amounts in the sh pc of eight
per cent income bonds and full paid ~ stock Thrown
in a git to each subscriber. subscription OF
81, 90 600 actually made in New Orleans, but the
whole scheme failed, because, among other reasons
the company did the securiti to dispose CT
according to agreement Even had tn y been in the
possession of Mr.. Bushnell, and the full amount at
the rate they were off red had bsen ized the pro-
ceeds, So, 759,500 won have been entirely insult
icient comp etc the road, without equipment, from
Donaldsonyle to Houston Texas, 270 les and there
would have been S5,5J1 0Ot of first mortgage bonds
in the hands of other parties, who would have the
right at any time after six months default in the pay.
men of interest their bonds to foreeose and sell
the property. This committee believes con-
tempated as final suit by the holders of said
bonds.
Mr. Bushnell, through his subcont, actors, to
wnom, an average, h paid about ten per cent on
work done by til. M respectively, laii miles of
track beyord Donaldsonvllle and rtally construct
ed in a very cheap and inferior manner. however
few m les of railway to and along Upper Grand
River. All work ceased i'll MARI 1877, end nothing
has be- II done since.
On or about the 18th day of March, 1873, s125 900
of second mortgage bonds Endorsed by the
the ten miles of track lai beyond Donald
sonville; but the final limit OF time, January 49,
1878, for the completion of the who road to the
Sabine River had expired nearly two nths pre-
viously, and the law itself provided that none of
said second mortgage bonds for upon that portion
of said main line of railroad not constructed within
the time limited shall guaranteed by the State of
louisiana. i manifest that said bonds should not
have been so Endorsed.
To date, therefore, the 81 IN lies o. track laid
west Of Westwego, with much road bull.
the State ha contributed $f,2450 o. with security
for the amount except second for 1876, 900
70 miles OF road beyond Westwego, subject to a
first mortgage lien for same amount
The road beyond Donaldsonvilie has not been
operated since the track was laid and the liens of all
the coniractOrs-who yet remain unpaid, including
the constructor of the drawbrdge across Bayou La
fourche-have been recorded in the respective par
ishes within which their work was done. and the
drawbr dye was turned off that it could not be
used.
On the 9th of June, 1873 all of the roads and pro-
perty belonging to this Company were sold by the
trustees of the Mobile division second mortgage bonds
which third mortgage on the road west, and it
all hid in by them for their rincipals On the
26th of August 1873 the said Mobile division second
mortgage bondhoders who believed to be also tt
first mortgage bondholders organized themselves in
New York into association of bondholders with the
name of the New Orleans, Mobile and Texas Railroad
Company. no. in effect and trustees Gardner and
Butler anserred to them in cons Iteration of the
of dollar, but without guarantee to title the
I'd day Of OCTOBER 1873 all of the property from Mobile
to Houston. and from Br shear to Vermillionvie,
purchased by them at the 9th of June sale.
Prior to the sale the 9th of june 1873 the Legs-
latro OF that year passed Dill 10 allow
pany more time to com lete the road to the
Sabine River to January 49, 1874, for the subsidy
bonds but said bill oed and returned in Janu-
airy, 1874, to the Legislature, which sustained the
veto.
On the 3lst of October, 1873 agreement was con-
cluded in New York to form among the western div
sion first mortgage bondholders anot err company
for the purpose of acquiring valid and perfect title
to, with view to complete said railroad west to
Houston, Texas Capital stock to consist of the west
ern divi,io bonded debt, S72jo,O0 first mortgage
9nlfSS second .rtuaoa xS 12J m
of one hundred dollars each. This company to
apply to the Legislature Of Lou siana for
Of itself the of the N. . NJ. & L. r. R.
Co.. west of Mississippi River with continuation in
favor Of all the rights, franchises aids. brne It's
cooperation, etc. granted to the old company, ill.,
Guiding the guar ,ntee of bonds, sub idi s, etc.
Tie scheme worthy of the projectors and mana
gers of the old company, but the situation had
changed. In 1869, 10 and II before the State had
be despoiled, while yet the people could pay taxes
Dur State securities were worth stealing; but now
they fallen too low to be worthy the intrigues of
these who planned and so successfully managed the
famous Credit Mobilier " enterprise, and there is
not enough left in the crib for home consumption
and the encouragement of local industry.
The last Legislature passed an act recognizing the
new company, but without aid and benefits condi
ton that it should complete the road to Grand River
Dy July l, 1874, to Vermonville March l, 1875, and
the Sabine River and Shreyep TT by March /, 1876
md this act was approved and promulgated
AS the new company did not really have " valid
md perfect title to the road west and such title
,ould not be acquired without judicial sale after
, .nkruptcy they did not attempt to proceed The
.ct therefore by its limitation will become null
md void on the LIST day of July next.
1t is believed that the main object to procure
evival of the acts guaranteeing second mortgage
md granting subsidy AS this failed-as a com |
nittee Of tzens apEointe to consider the question
having declined to recommend renewal of state |
d-there nothing left but foreclosure of the |
Western division first 1rtgage, according to the pro-
eeding initiated by Frank NJ. Ames trustee for the
Western division first mortgage bondholders by a
ill of complaint filed in the United States Circuit
,ourt, November %, 18 3.
The trustee averred that the association of bond
folders styled the N o. NJ and 7. r. r. Co. (No. p
lad 'com me under obligations a alton of
'ondhoders styled the N o. and T. R. R. Co.. and he
rayed for the protection of the court in the work Of
omple the road to Grand River, 81 miles west OF
and for decree of sale of the road
vest 1t authoritatively stated also at the time
nd thenceforward until receDtlf, that about three
hundred and fifty thousand dollars in money had
een raised and was on hand to complete the road to
irand River, but it has since TRANSFERRED that the
money put up conss ed of interest coupons detached
the fraudulent issue of Shreveport branch stock
'onds, the payment of which is e joined.
On the 23d OF May 1874, Judge Woods of the United
ates Circuit Court, rendered decree provid ng for