The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1874-08-18
THE CHATTANOOGA RAILR)AD
GUARANTEED BONDsWINDLE.

taken up with an advertisement for the sale
the Louisiana or Western division of the Ne
! Orleans, Mobile and Texas Railroad. This
another Of the many attempts made to perfe'
fraud upon the people of this State, an
which has been the rule for the past 81
years. This is undoubtedly the movement
a ring to buy up that railroad, or at least IL
, completed portion of it, and with which IL
quiet visit Of a former operator here in th
bonds of that company from New York, ha
evidently something to do. The object Of on
present writing however, is Of more seriou
nature.
This sale is advertised by civilian p. Ke
logg, Governor and Trustee, under certai
Sc cond mortgage bonds of the railroad CO r
p ny, the payment Of which he says has bee
guaranteed by the State to the extent of So,
500 per mile for seventy miles of completes
road, or for 1915, Now the Governo
knows that in suit No. 1863 Of the S1perio
District Court, suit authorized by himself
tho payment of both principal and interest O
these bonds was enjoined, and their issue an
guarantee declared fraudulent, illegal. null an,
void. Is there not a ring also for fuudin
these 1875, 900 bonds, and is not this move
ment towards that end?
But that the community may know the full
iniquity of the schemes on foot in this pro
ceeding We will recall some of the grounds O
nullity, which appe red, by the way, in tn,
daily city papers in October last By act O
the Legislature of February II, 1869, the
Railroad company were authorized to execute
and the Governor Of the State to guarantee
the payment of series Of bonds, bearing
second mortgage on the railroad, ETC., west Of
the Mississippi River, as the same should be
completed and in running ORDER in sections
Of forty miles each, and then the bonds could
be issued by the company, but not otherwise,
and this was for the purpose Of "expediting
the construction Of the road" We would re-
mark, in parenthesis, that not bond has
been used for any such purpose But there
was provision in the act that the first section
cf forty miles should be completed on or
before the 18th of January, 1873. There was
no section completed at the date fixed by the
statute, nor for more than two months there
after, and no second section of forty miles
has ever been completed.
The whole thing then lapsed. There re-
manned no second mortgage. The Governor
could not give his guarantee to any bonds,
nor could the company legally issue any Sec
ond mortgage bonds whatever. No such
bonds are legally in existence. But it seems
that S75 of this series of bonds were issued
after having had placed on their backs the
guarantee Of the Governor that the State
would see them paid How was this? On
the 18th of April, 1871, just three months af-
ter the time had expired for the completion of
the first section Of forty miles. the Legislature
passed joint resolution changing the name
OF the Notwithstanding the word Texas "
i'll place Of Chattanooga " in the title.
Without any reference in the title to the
subject clause was interpolated, changing
the size of the sections from 40 miles to 10
miles of completed road for the issue of the
ponds. This is null md void, being in VIC
alton Of article ia Of the Constitution. It
was also null and void, being the creation of |
! debt exceeding 100000 the liability of
he State to guarantee the bonds having
apsed on the 18th Of January without pro-
'lding means for the payment in violation of
lrticle Ill of the Costitu ion. And was null
md void for the further reason that it
the State debt after the passage of
he constitutional limitation in November,
$40, and when the limit of spa, 900, 600 had
lready been exceeded These were the
rounds upon which the injunction was
,ranted, and the bonds declared fraudulent
nd absolutely null and void.
But the notice of sale says that bonds were
Ssued on 20 miles of completed road No
UGH length Of road was ever completed.
rom Westwego to the Lafourche is exactly
! miles, the 57th mile post standing within
he bridge at Donaldsonville, and no one pre-
ends to but ten miles built beyond that-and
MS ten miles has only been completed and
INNING since the seizure by the State Some
ody. then, has been guilty Of fraud and
windle to the extent of s37, 500 bonds.
We wished to show up another Of the ways
the Heather Chinee," and how some
ody has arranged to buy in road COM I
leted 81 miles for net 100000 cash-that
all the bonds are worth which will be given
II it-and to secure the profits arising from
le funding of $4,000 of bonds absolutely -,
I'LL and void. By the way, we hear that on
le list OF the funding board these bonds are
arked with t-as "to be funded by the :
oard"-and not a :, which means ito be
,gotiated.' It would seem they had already ;.
zen negotiated when our informant saw that
IT,
Will the Bee help us look into these matters :,
d expose the swindles in contemplation
der the Funding Bill, which it was inclined :
think so highly of at first. There is plenty
room for investigation, and there are plenty
frauds to be unearthed :,
INTERESTING DECISION IN BANKRUPTCY In =,
icag recently, a merchant bought stock .,
Jewelry said to have been worth $50, 90 for
3 900, from firm. shortly before their in e