The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1875-11-25
The Valley Railroad Case.

examination OF the witnesses for the plaintiffs
was commenced, and still continues.
For the benefit Of those who may not be cog
nizaut OF the facts, we give the following his
rory of the case Sometime in October 1872
opened between the Valley R. r.
Co. and some gentlemen, relative to the cor
Struction of the Valley r. r. from Staunton to
Salem. In May 1878, a contract between tie
abave named parties was matEe for the en- Ire
road to Salem, but in which the Company re-
served to itself the privilege Of re-ettirg to any
ether party tifty-seven miles, proviilel they
ceWad have it taken at prices below tF.os. agreed
to BE paid to the syndicate, 10y which term the
gentlemen who signed the contract in May
were designated. The contract, required the
syndicate to commence work in 60 DAYS, which
was done.
Whilst the syndicate was thus operating in
accordance with the contract signed in May,
they, in August 1873, entered into another
contract with the Company, in all respects. as
to price, agreeing thcrewth, and only differing
therefrom in respect to the per centage of dis
count on the County bonds, which were to be
paid by the Company to the syndicate and
this difference was only slight. The syndicate,
after entering into the new contract divided
the work among its members individually, in
which way it was prosecuted Until the slspen-
sion.
When the syndicate contracted for the entire
line the Company represented to Them that it
had in stock, subscribed from the city Of Balti
more. the B. & o. r. r., and the towns and
counties along the line, the aggregate sum Of
s3.20o, 900. and when this amount had been ex-
pended in the construction OF the road, it would
lave no difficulty in negotiating a mortgage on
the constructed road for sufficient funds to
complete the whole road to Salem, which, ac-
corling to the terms of the contract, was to be
accomplished in September. 1876. The
syadicate were assured that no danger was to
be appreheRded from suspension. as such Il
contingency was not contemplated by, nor dill
it enGer into the calculations OF the Company.
The syndicate accordingly provided itself at
ar outlay OF over a quarter of a million OF dol
lars, with al! appliances necessary to the con-
structioR of the road, and went vigorously to
work. The Company was to pay the contrac-
tors or monthly estimates !; yet the contractors
received no money from the Company until
January, 1S74-ive. months after the COM
saencement OF the work-and then only about
So per cent. of the whole amount due 1t was
then agreed by the Company to pay 81 per
cent. OF the monthly estimates in cash. but this
it failed to do until after April, at which time
the Company again agreed to pay Ga per cent.
in cash on each months estimate and on the
18th of each month. which it also failed to do.
In September, 1874, the syndicate ascertain
ed that the funds Of the Company were so
snuch reduced that it would be impossible to
pay for the work if vigorously prosecuted, and
an arrangement was entered into between the
parties by which s4O,00 worth of work was to
he done monthly during the months of Sep
TENDER, October and November, and $50, 900
worth of work monthly during the succeeding
months of December January and February.
At the time this arrangement was entered into
the syndicate suggested the possibility OF q
suspension of the work, and asserted that if
there was any probability of such contingent
cy it would be better TO anticipate it and stop
the enterprise then. They were assured that
nothing OF the kind was thought of-that
the Company had 1920, 200 in available assets.
and that there was no purpose to cease opera
lions. If, however, any such necessity should
arise, such action would be taken as to secure
to the contractors the full acqutnlent OF their
claims and satisfactory settlement of the in
debtedncss to them. With suih assurances
the contractors pushed forward, until they
were formally notified to suspend, which was
done in December. And Notwithstanding the
assurance given of the $4,000 available as
SETS ami the purpose of the Company to pay
them up promptly each month, there were but
$4,000 paid to them after the new arrange
ment was made, including the work in Sep
TENDER. October, November and Decenl her.-
In fact, during the entire progress of the work
there had been bat little more paid to the
contractors than had been expended by them
in cash to purchase their respective outfits
They had borrowed money from the banks at
heavy per ccntage, and after the suspension
of the work, in order to meet their matured
obligations, were compelled to sell their stock
at loss. in some instances of 80 per cent
The county and corporation bonds that had
been paid them deprecated rapidly after the
complications of the company became Serious
and, throughout all the transactions. there
was a succession of misfortunes, consequent
upon the failure Of the company to comply
fully with the terms of the contract, that we'll
nigh proved ruinous to the members Of the
syndicate.
In January 1875 the annual meeting of the
stockholders was held and adjourned over u!l-
til February. In the meantime Rocknrldge,
waicll ha paid over her bonds, obtaineuaa
Injunction against the use of such portion of
them as still remained in the hands of the
Company. Some of the tax payers of Roanoke
had previously gotten out all injunction to
prevent the supervisors from delivering her
bonds, and with view to testing, before the
courts, the legality Of the subscription. These
lnjunctions having been obtained, the city of
Staunton declined to pay over the remaining
portion OF her subscription $50, 00O-and thus
the matter rested, until the meeting of the
stockholders in this city last summer when it
was understood that Rockbridge was prepared
to dissolve her injunction upon condition that
Staunton would pay over the $4,000 vet due
on her subscription. This Staunton refused
to do.
All negotiations having failed-Rockbridse