The New Orleans Democrat., 1876-06-18

THE STATE BONDS lEsUED ~
1, LUDEL1N0 AND ASSOCIATES
| In relation to the recent decision q
/ Judge Woods IN the case Of Henry h
jackson and other bondholders Of the
vicksburg, Shreveport and Texas Rail.
road Company We. John T. Ludeline
and others, published In the DEMOCRAT
OF June 8, we have been asked whether,
under the principle laid down In that
decision, Ludeling and his associates
are to account to the plaintiffs In this
case for the bonds Of the State Of Louis
lana, amounting to e1,129,OOO, and the
coupons Of interest thereto attached,
which were delivered to the North Lou
isiana and Texas Railroad Company, by
virtue Of acts Of the Legislature, No. 1Os
Of 1868 and No. " Of 1879. Our answer
to this inquiry Is that claim to these
bonds and coupons or their proceeds
was made before Judge Woods by the
plaintiffs In their quality as stockhold-
ers Of the vicksburg, Shreveport and
Texas Railroad Company, and the ques-
ton OF their right to make this claim
has been argued before Judge Woods
by the counsel for both parties. The
theory upon which the claim is based Is
that these State bonds constitute one Of
the receipts Of money or property which
Ludeling and his associates derived
from their fraudulent possession Of this
railroad, and which they are required to
account for under and by express words
OF the decree Of the Supreme Court Of
the United States in this case. Ludeling
and associates are ordered to render an
account Of ALL their receipts OF every
description while they held possession
OF tho railroad. The flfth paragraph OF
the decree reads thus
| And IL is further ordered and decreed that the
| defendants do account for all money and prop
erty received BY them out Of the property 50 sold
TO them, or any OF them, or from its pfo1ts or
income. receiving in their account such credits
as under the circumstances Of the case, they
are entitled to; and that they pay and deliver to
| the receiver whatever, on such accounting. may
be found due from them.
But Ludeling and associates, as might
have been expected, strenuously resist
this claim and have not included the
bonds. nor the proceeds Of such Of them
as they have sold, in the account or
statement Of receipts which they have
filed in court in obedience to the decree
above quoted. They contend that
neither the stockholders nor the bond
holders of the vicksburg, Shreveport
and Texas Railroad Company have any
right, title or interest in and to these
bonds. They contend that the Legisla-
ture had the right to subscribe, and did
subscribe, to the stock of the North Lou
isiana and Texas Railroad Company, q
distinct corporation, to the extent OF
II ,22O shares out Of 10000 shares, that is
to say, for 81, ,122, 900 out Of $6,OOO,O0O lat
which latter figure they fixed the stock
Of their company, and that the COM
plainants In the suit have nothing to do
With that stock. They contend that as
these bonds were not included In the list
Of property mortgaged tothe bondhold-
ers Of the vicksburg, Shreveport and
Texas Railroad Company, therefore the
latter have no lien upon them. In other
words, Ludeling and associates defend
themselves against the claim upon the
theory that they. and not the real owners
OF the railroad, were the beneficiaries
Of the State; and they propose, II the
court will allow them, to keep these
bonds, or their proceeds, as their own
private property, donated to them by
the good and generous people OF Louis
lana, and for which they are not re-
quired to render an account to anybody
Upon these pretensions. Judge Woods
has, 50 far, expressed no opinion, and
therefore the matter remains undecided
until he shall pronounce his final judg
ment and decree In this suit Neither
has the Master in Chancery, to whom
the account and claim OF Ludeling and
associates was referred for examination
and adjustment, expressed an opinion
upon them, but 1t surely cannot be that
Ludeling and his associates are to "get
away" with nearly five millions Of dol
lars Of the money OF the taxpayers OF
this State ($1, ,122,O00 and forty years
interest at per cent? It cannot be
successfully contended that the Legis
lature had the power to make dona-
ton out OF the public treasury to indi-
vidual citizens for individual benefit.
The Legislature probably had the right
to aid public enterprise, such as
railroad, but it was the real owners,
and not the fraudulent possessors of
this railroad, whom they intended to
assist in extending the work to Shreve-
port. Not single mile Of this extern
sion has been made. The very act (No.
1Os OF 1869 under which these bonds
were granted sets forth the reason or
motive of the Legislature. That body
was made to believe, or rather acted
upon the supposition, that Ludeling
and associates had become the O,cners OF
the railroad at q certain sale OF 1t made
by the sheriff. The preamble to the
act contains the statement. Upon that
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