The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1876-05-30
(Co:nmunicstcd.l
,,lauttc. NiSSiSSippi and Ohio Rail
road Company
QUEER pclNcS.

QUEER pcINGS.
l. T.. fortunate for all concerned that the
:, Nao n,a originally set apart for the eN-
:'r,fan f. cumberland Gap have been safely
r.,a.,,ci in London, and placed beyond
w. -rach q the managers Of the Atlantic,
y....><ipri and Ohio railroad. The debt
: +n5U. 900 due the state. whether by
nd mortgage or hy covenant to stand
..;,.l. j tncrcly advanced and its security
.un,urri. The European hondho!dcrs Will
X care that the funded debt Of the whole
,..a and II the several divisions together,
...., jr no event exceed 81, ,O00,o0o. equal
.1rui 80. 600 per mile. The divisional
..nfholdrr- viii! rejoice that the lien sub
....rYt ~ tlcirS cannot be increased he
,.ri SJ.5uo uu1. especially in view Of the
.. recently disclosed. that more than two
war, ago the managers of the road claimed
49,. ;n,. lien oi the Atlantic, Mississippi and
eli, .oIl mortgage was equal. ii not sSpc-
-t.v. in Gl-nity and security TO the liens OF
.... deeds Il the several companies conSoli-
G.;cJ
President Mahonc'S letter to Mr.. John
r,g,r.,;J. dated 18th February, 1874, is in
,,.ry aspect startling document. 1t was
written soon after the annual meeting of the
stockholders held in Petersburg in Deccm-
Ir-. t>13. al which the President, on behalf
- the Board OF Directors, presented
yo>a-colcrcd report, asserting "thc
l,a.Ay financial condition of the COM
,.9y" and 1.-The ability OF the COM
Iavy 10 maintain the integrity OF its credit"
And containing the following impressive
ngcuagc: The demands for interest on
..r present bonded debt amount to S1Il 200
in currency per annln. and it will be seen
mat the not revenue for the past year Is
more than sufficient by the sum OF
$4,000 for the liquidation Of this lia-
I.5i,y." Nevertheless, the company, within
q fortnight afterwards, on the first day OF
JANUARY. 1874. dcfaultcd in the payment OF
interest upon the bonds OF the separate
mmpanic>. The astoniShmcnt and discon-
tent II hondholdcrs in Baltimore found ut
frranrr in what the president characterized
- "ionli>h talk" and contrarineSS," and
attributed 10 the promptings of one party
who had hoped to make Il commission out Of
the sale OF old rails to buy this interest ''-i.
j.. ,hr interest due lSt January, 1871
Whether inspired by pique or policy !;
whether intended a> mere Jrut,tna j,umen-
= countcrblaSt to the Baltimorcans' threats
o.! Injunction and foreclosure, or deliber-
airiy designed TO solicit the cooperation OF
the European bondholders in Il serious effort
= degrade and impair the value OF the
ulS Of all the separate companies, 'eX-
r-:r perhaps the old bonds of the Norfolk
and Petersburg railroad "-thc letter forces
attention. and demonstrates the necessity OF q
change oi administration. For noU the same
PRESIDENT is soliciting the cooperation OF the
divisional bondholderS in opposition to the
hWiulclaim< of the European holders OF con-
>5Iidated bonds. The writer Of the letter
a>>rrtS his belief ..that the Atlantic, Mis-
ii,>ipui and Ohio mortgage directly holds
,5r>,. foremost, and exclusively on all the
stocks and all the claims it bought OF and
received from the state in these old rodds. y
And after cataoguing the claims and other
Property Uassing By the Stocks) the writer
presents the aggregate as "making In all not
iv>S than $J.2jU.00O actual values on when
Ih" gold mortgage directly, exclusively
holds. according to my Judgment; which
would make the outstanding gold bonds
S5.41o.n0N. quite - good as any security OF
HE whol.. line except, perhaps, the old
bonds Of th- Norfolk and Petersburg rail-
road. and especially good with reference to
the Virginia and Tennessee division, the
Key 10 The line
The questions Of law thus raised upon
the terms OF the mortgage, and the complex
Of the Atlantic, Mississippi and
Ohio Railroad Company to and with its
pal1sand their respective credit.
or>, must be met discussed, and !udlcaally
G"cidcd. The shadows thus cast upon the
rights Of the several classes OF bonds can
not hc permitted TO abide. Discussion now
would be premature and literally cordM aao1
juiice. But it neheoyes all parties inter
r>tcd to consider the consequences II the be
lief and judgment OF the President IN fhls
behalf shall be sustained by the courts.
President Mahonc's first report to ins
dated January, 1872, pages
and 6, contains full tahulated statement 0l
The stocks and claims transferred by the
State, aggrcgating at par the sum OF S6,3IL-
l&0. 80. The stocks amounted to 4, ,069 shares,
equal to 81, ,4OG. 900. These stocks cannot be
sold by the trustees under the mortgage,
because the charter [seetion 81 expressly
declares that they shall iIbc cancelled or
distributed among the stockholders OF the
Atlantic, Mississippi and Ohio Railroad
Company" The claims, consisting OF ne
go'iIblc notes. and mortgage debts, &C.,
amount 10 81, ,9G4 ,230.39; and they are sold,
assigned, and conveyed TO the Atlantic,
and Ohio Railroad Company, in
terms sufficiently broad for any purpose
Section 81. But President Malone in his
report aforesaid says, that upon the consum-
lnIion Of consolidation these "obligations
heretofore outstanding against them (thc Sc
parAie divisions) TO the amount OF $780,
5000 will be forever eXtinguishcd, to the
manifest benefit OF every stockholder," DC.
1t accordance with this avowed purpose
'1e granting clause OF the mortgage exc
cu,ed 30th September, 1871, seems to have
been carefully so worded as not to convey
10 the trustees any chooses IN action What
soeycr. On the other hand, it has been the
practice OF the company, since the 10Th Jan
uary, 1873, not TO pay the past-due bonds OF
,he divisions, but to buy them, and take
from the holders, as vendors, assignments
III the following words:
"For and in consideration OF ---- TINS
day received of the Atlantic, Mississippi
ana Ohio Railroad Company by the hanas
VI lis treasurer, james Il. CuthDert, tnis
bond, with all the rights and interest Whlch
are secured 10 the holder thereof by lien or
Otherwise, is assigned to the said Atlantic,
mississippi and Ohio Railroad Company
without recourse" In accordance with the
purpose thus indicated, President Mahone
u his letter aforesaid, distinctly asserts that
IN his belief and judgment all the claims ac-
Iuircd from the State and ali the past-due
Jonds Of divisions retired and taken in by
.Hcliange or purchase, and all the coupons
or interest paid by the Atlantic, Mississippi
nd Ohio Railroad Company, become and
re trust assets under the mortgage for the
ecurity OF the $5,470,0 900 OF outstanding
old bonds. Further corroboration OF this