The Grange advance. [volume] (Red Wing, Minn.) 1873-1877, 1876-01-12

by affidavit Of the chief engineer
treasurer and two directors Of the company
that any ten miles of the road were actually
completed and ready for placing the super
cause to be issued and delivered ia. the COM
pary the special bond Of the State bearing in-
teresta at seven per cent. per annum, payable
in New York as loan OF public credit, to the
amount OF one hundred thousand dollars. Is
sues in the same amount were also required Il:
be made upon the furnishing Of like evidence
that any ten miles had been actually complet-
ed and cars running thereon. By this amend.
ment the faith and credit OF the State were ex-
presly pledged for the payment of the interest
and the redemption Of the principal OF the
bonds. .-.-~.s .s,v>,---- ..-..
As this was merely =: loan of tue credit
OF the State. the amendment provident-
e tsfe should be T ndt n sssd9'it y
case the companies should default in payment.
It was therefore provided that each company
should make provision: for the punctual pay.
ment and redemption of these bonds. an d
for the punctual payment of the interest which
should accrue thereon, in such manner as to
exonerate theState from any advances OF money
Governor was required to demand and receive
from each of the companies before issuing any
Of the bonds, a mortgage of the net profits
the first two hundred and
forty sections ofland, free from prior encum-
brances in trust, to secure the State from loss
on the bonds, and as further security the Gov
ernor was directed to exact of the companies
an amount Of first mortgagebonds on theirroads,
lands and franchises, corresponding to the State
bonds issued, to be transferred to the treasurer
OF the State at the time OF the issue of the State
bonds. 1t was also provided that. in case the
companies made default in payment of inter-
&c orv oaSv. 1,,a <nA H.
them, no more State bonds should be issued.
and the Governor was required to sell the
bonds of the defaulting companies, or to sell
the said two hundred and forty sections of
land, or to require foreclosure OF the mort
gage which covered all the roads, lands and
franchises.
.. The companies, accepted these provisions,
and work upon the roads was commenced inn
mediately. Governor. Sibley, in his requisi.;
ton upon the companies for the first mortgage
bonds upon the roads, lands and franchises,
demanded that these bonds should specify a
priority of lien, but his construction OF the
amendment was over-ruled by the Supreme
Court OF the State, which held that the bonds
need only be the ordinary first mortgage bonds
in common with other bonds of that charac-
ter.
After the companies had commenced work
and had earned large amount of these secu.
rites, warfare was made upon them which
was so far successful that distrust was excited;
the companies were unable to negotiate them
and obtain funds to carry on construction and
they ceased to be marketable. Work was
therefore stopped and the companies made de-
fault in the payment of interest. They have
become insolvent. The State then proceeded
to toreclose its securities By these foreclosure
proceedings it acquired about $50 miles of
graded road, the franchises Of the companies,
the lands Of the companies-in fact it acquired
the title to all the securities which it had
| taken for its indemnity, including nearly five
million acres of land, as security for its liabil
ty upon s., 275, 900 OF bonds with interest
Here then we see the State-a surety-become
the owner of assets enough to satisfy all this
claim over and over again.
In the meantime another constitutional
amendment had been adopted by which it was
provided that no law levying a tax or making
other provision tor the payment of the princi-
pal or interest OF these securities should take
effect until submitted to a vote of the people
of the State and adopted by them.
The duty ofthe State at this stage was an
obvious one. 1t was to make provision for an
adjustment of the question by means of the
securities which it held tor that purpose. But
this duty was wholly neglected. The lands
and road bed and franchises which it held for
companies free and clear, and the result has
been the development of our railway system
to its present proportions.
One legsl objection has been raised to this
amendment. 1t is said that the constitution
was adopted Oct. Is, 1857, while the amend
ment was adopted April Is, 1853. Minnesota
was admitted into the Onion May II, 1853, by
an act which, while it recognized lin terms the
constitution as originally framed, did not men,
ton the amendment. T. -
This objection is specious, yet sophistical.
The original constitution provided for its
amendment. 1t was amended as therein pro-
vided, and it will not be presumed that Con-
tically deprived it Of one of its most vital 1anc-
tions, namely, its capacity to be thus amended.
II this consideration is not sufficient an
swer to the objection, it is sufficient that the
State acted under this amendment, contracted
under it, received securities under it, foreclos-
ed under il, is now enjoying benefits under it,
and should be estopped from denying obliga.
satisfaction for what it received.
1t is asserted by some persons who have en-
Uttered our people by the intliction of un-
qualified ceDsure upon them, that we have
planted ourselves upon an explicit denial that
there is anything due upon these securities.
many Of them do think that the transaction is
affected by circumstances which ought to
abate materially from the obligation to pay these
securities at their lace, in the case of those
who hold the bonds with notice of the facts.
This is a defense that any debtor has right to
make. But in making it he ought not to bar
every avenue to adjudication, and make his
defense as to part pretense for not paying
anything. AS to the portion which we do
wrongfully refuse to pay the world will hold
that we repudiate as long as we deny juris-
diction to any tribunal to entertain the ques-
ton involved. suppose that when the claims
of this government against Great Britain were
first advanced on account of damages done by
Confederate cruisers, the English people were
as firmly persuaded that they owed nothing,
and were as, firmly resolved to pay moth
ing, as any of our people to-day are
Dat o,,1 - In h.