The Daily clarion. [volume] (Jackson, Miss.) 1866-1888, 1876-01-05


OF the duties of the Office.
RAILROADS,
The educational funds of the State which
former Legislature granted to railroads,
has been under litigation during the past
year, Time but confirms the views enter
tanned by me year ago, and which l now
reiterate:
| recommend the repeal of so much of an
Act entitled san Act to aid in the construc
ton of the Vicksburg and Nashville Rail
road" approved April Is, 1873, as surren-
ders to the Nicksburg and Nashville Rail
road Company, under certain conditions,
/ trust funds known as the three per cent.
and the agricultural land scrip, which
am unit to some 1920, 900.
/ also recommend the repeal of so much
of an Act entitled san Act to amend the
several Acts now in force concerning the
Grenada, Houston and Eastern Railroad
COmpany,and for other purposes" approved
January IL 1873, as eXempts said railroad
company and its acquisitions from taxation
The agricultural land scrip fund was
recently bestowed by the United States, to
constitute perpetual fund-the capital of
which shall remain forever undiminished-
and the interest Of which shall be inviOlably
appropriated by each State, which may take
and claim the benefit of this Act, to the en-
dowment, support and maintenance of at
least one agricultural college
/ The State was authorized, at the same
/ time, to invest this fund in "StOck of the
|, ). or of the States, or some other stocks"
Has the State done so
/ Tie railroad company to which this fund
/ Is proposed to be surrendered has not com
+ pleted single mile of road. As projected,
/ it will when completed, extend some $50
miles III this state, and about $50 mikes in
! the State of Tennessee, making total of
some 400 miles. The section now being
worked on is between OkOlona, on the Mo-
/ bile q Ohio railroad, and Grenada, on the
Mississippi Central, (nOw the New Orleans,
ST. Louis and Chicago railroad, distance
/ of some 60 miles. 1t is asserted that some
twenty miles are now ready for the iron.
Judging by its progress to the present
time, a number of ye5rS must elapse before
these siXty-five miles can be completed and
in a condition to pay interest on its bond.
/ Were it in working order to-day, between
( OkOlOna and Grenada, it would run through
/ but one county untraverSed by railroads
/ and would be but feeder to two great rail
roads
Its Southern terminus is some two hun
dred miles from the Gulf of Mexico, and
almost equi-distant intervals the road is in
ter3ected by three rich and powerful lines
well established and in successful operation
The history of railroads has taught that
only through roads, which carry the pro-
ducts of country to market, are successful
and especially is this the case in sparsely
settled sections; and it has also taught that
new roads are rarely, if ever, able to NEE
the powerful demands of stock and bond
holders.
Is a paper railroad, like is, one but lit
tie more than projected, a safe Investment.
Is it one that can, in any reasonable perlOC
of time, from its legitimate business, pay al
interest OF eight per cent to its bOndholders
Is it an investment from which the prlncipa
can be Withdrawn at will? If not, it GER
, talnly is not the best Investment that could
r / be made, nor even safe one.
In the consideration of this subject. j
must not be forgotten that the NiCkSburg
and Nashville Railroad is not railroad il
reality; it is but projected one.
Observe the security extended by tha
Company to the State. Four hundred mile
, of road, at $4,000 Der mile, supposed to be
4 fair estimate when completed and in gOOC
f running order will cost some twelve mil
lions OF dollars ($12,000000). The State il
expected to advance to the road 100000
and receive in return, the note of the Com
pany, secured by first mortgage bonds t
the same AMOUNT. Can this note be regard
{ ed as " safe stocks :" Could the Unitet
! i States, in bestOwing this fund for the educa
ton of our youth, have contemplated sucl
an investment?
The first mortgage bonds proposed a
collateral security, cannot be deemed o
- much value; for other first mortgage bonds
to the amount of some ten millions $4,000,
, O00) may be Issued. In tact, the law place
no restriction upon the amount of sue
- bonds.
The experience of the State, in adm
railroads with its trust funds, has not bee
+ of such a character as TO cause its tax pay
IS ers to contemplate the effects of this la,
with any very lively satisfaction.
!, In our reasoning as to the safety of thi
G investment, we should not neglect to cor
Y slider, should the law remain unrepealet
: the possible action of some future Legislf
sure, when this company, in days of advel
n sity, appears before it and pleads pOvert
'e or misfortune.
n Tie success of this road can in no wi;
= depend on the sum of $4,000 expecte
II from the State, which, though inSignitical
e as compared to the cost Of the road, is highl
important to the State. To withhold
al cannot embarrass the ROAD or impede i
y progress. However, if it should, then tt
lie Hstocks'' of the Vickshurg and Nashvil
IS, Railroad cannot be regarded as safe, al
i the sooner the fact is known by the poop
at who are paying taxes in the interest Of Il
m road, the better.
~ We should be, if possible, more caution
OF and circumspect in the disposition of Il
re funds of the State, than with our own. a
IT, We prepared, as individuals, to invest o.
ne own funds in this enterprise:
ey By the original charter, and by the A
III of January p, 1872, heretofore referred
a. the road is authorized to buy, without 7
striction or limitation, and all its proper
OF and acquisitions, of whatever charact'
SIS shall be exempt from taxation for thir
~ years, or till the roaa snan pay ul'loel
Under such provisions, all the roads
the State can be consolidated, and their e
IT, tire wealth, amounting to tenth or a fif
at of the property of the State. would be
ok empt from taxation. And this, too, thous
ST. only small section, of the road, IN Whc
,rS interest the law was passed, should be bul
Of Who cannot foresee that such a corporate
W. would delay for many year the annount
ment that the stockholders were to be pa
co. a dividend of eight per cent, and with su
ed announcement expose their millions to ia
ate alton,
or Railroads, when friendly to the Peep
ne are of inestimablc advantage, but when a:
nd to Cypress them, are quite the reverse: l
ion this law stand, and there will spring from
corporation, which, it ruled by the spirit
ch the Legislation, which gave it birth, v
IL. q lLk o.