, 1874-07-22
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DEFAULTING RAILWAYS.

patl1H OF purity, and tAcY only, are tho pathH OF
peaco.
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DEFAULT1NG RAILWAYS.
There is busy tine juss now among lawyers
courts and juriea in tho way Of foreclosine rail-
way mortgages. Something oyor three hundred
millions OF American railway bonds hayo gone to
pioteHt Oh their interest coupons, aud tho holdors
ut first ahivoring with alarm at not receiving
their expected income, and >then wrathful at
what they doomed tho dishonesty Of tho borrow
ers, have begun now, for tho first time, to cx-
anime their legal remedies, and to inquire into
the nature and value Of tho assetB which conati-
tuto thoir security. In some casea they find
curioua provisions In tho mortgages, preventing
them from taking any steps to roalizo until the
expiration Of ono. two. or threo years
after default-a1Bo providing TINT no
foreclosure shall tnke plAce except on
petition Of q majority OF oil the bond
holdora-and other cunning devices which
really put tho lenders in worse plight than they
would bo at common law. III still other casos
thoy find TINT tho Trustees under tho mortgages
aro 10th to perform thetr duty, thus raising tue
presumption that they arc acting In tho interest
Of the mortgagorH ratlor than Of the mort
gageos. It ts found In few instances that the
money borrowed to prosecute or complete cer-
tain road Taa diverted to aomo other rond with
tho counivanco Of the Trusteos, and that bonds
said to ho payable In gold arc really payable only
in currency. Various other forms of swindlins
have been Developed but for tho most part tho
non-interoBt-paying railroads have resorted to
10 tricks. aithar before or after the default.
Most Of thom, 1t Is true. were built on tho Credit
hfobilior plan, but that was vol known to the
lenders, or might havo been known to them.
Ronce they hays nobody to blame but them
selves on that Hcore.
Tho holders Of theBe three hundred and odd
millions Of dofaultod bonds arc main1y iuhab-
itants Of tho United States. Germany and En-
gland, aud the ratio OF thoir several holdings Is
probably in tho order in which thoy aro hero Hot
down. It ia commonly supposed that Germany
is tho groatest sufferer, but few facts vii! soryo
to show t1at this ia not tho case. all tile North
ern Pacific bonds we're taken il this country, ex-
copt mere handful which wero taken in Canada
mud England. Nearly all tho now railways in
Michigan were built by Now England capital.
Boston and it's suburbs arc carrying from thirty
to fifty millions of protested bonds. seYoral
Eastern brokon-down railways, like tho New
Haven, Midd!otown l. Willimantio, the Oswcgo
Midland, tho Canada Southern, and the Chosa-
poako e. Ohio, were mainly constructed with
| money obtalnea in this country, and = great
shoal Of sccond-mortgnge bonds were sold at
home after the first mortgages had been takon
in Germany or England
Tho effect upon American credit Of thts enor-
nous failure to meet obligations Ia disastrous.
The good and tho bad suffer aliko In foreign
| markota. Evon thoso securities which havo reg
ularly mot their interest have suffered hoayy
! deeliue. Germany is full Of American railway
| bonds bought at S. to 95 cents {gold) which eau
| he bought hack at 25 to 40, with the hearty
THINKS OF the proEent holders to anybody who
| will take them at those prices. As for negotiat-
| ing now loana there, you might Us well attempt
| to soil lava on tho summit OF Vesuyius. Not
only Is the market for railway securities do
! stroyod but the ordinary roal estate mortgage,
tho highest form Of security uoxt to Government
bonds, finds no takorB. The bottom bus tuu,-
bled out Of everything except Governments. Can
anything DO done to rc-oatablish our credit?
OF courae. the upbuitaing, III any caae. muat be
slow. The first thing to be done is to givo tho
bondholdera promptly all tho rights stipulated
for In the contracts under which their money
waB borrowed. This is the work Of the courts,
aud thore is every probability TINT 1t will be hon.
eatly performed. Where foreolosuros aro do
n1anded, thoy should bo granted without un-
necessary dolay and where fraud is shown, 1t
should be exposed and punished to tho fullest
extent. II tho administration of law In this
country Is shown to DO prompt and certain, and
II tho properties mortgaged arc handed over to
| tho uortgagoes as last as lawfully demanded, no
ahall not only achieve aolf-respoot and tho
respect Of other peoples, but We shall also bogln
to rebuild our credit abroad, for these
| defaulting railways aro for tho most part worth
what tho bonds call for, aud will pay fair rate
Of interest iu tue course Of tlvo years, together
with intorost for tho timo thoy have boen in do
fault. Some Of them are uttorly hopoleas not
worth operating eapouaoH, but there aro only q
fow In this category. The great majority arc
| merely ahead Of time, and time will bring them
out. Meanwhile tho bondloldora can tahc what
thoJ bargainod for-that ia, tho property which
their nopay Las callol into bolug.
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Tho proposed now Constitution Of Ohio ia to
be ratified or rejected by yoto Of tho people Of
that State at special election on Tuesday, Aug.
10, eight wechs before the regular annual elec-
ton in October. Tho Ohio S!ase Journal Ito.
publlcan) shows by an inquiry and Classification
| OF tho Ohio Newspaper pross that Republican,