The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1877-06-25

| and bhe Legislature, upon bIe HypDbHtStS
that the company owned the railroad prop
erty, retained, under the same section Of the
act. second mortgage as security for any
advances the State might make under this
grant.
In pursuance Of this act Gov. Wa1'inoth,
during his term Of Office, delivered to these
parties State bonds to the amount OF $546, 900,
that Is to say, bonds for $4,000 per mile for
| ninety-o1ie miles Of railroad, viz: seventy
four miles from vicksburg to Monroe and sew
| entecn miles from Shreveport westward TO
the Texas line, although Ludeling and his
associates had never done single stroke OF
work on the latter or the western division OF
the line. which was under lease to another
company.
| BY section IL Of the same act 108 OF 1869,
the company contracted to deposit III the
Treasury Of the State, ON or before the tnatu-
rity of the interest coupons on said bonds, the
amount OF interest due ON them, under PEN
atty Of emo further issue Of bonds and a
foreclosure Of the second mortgage retained
by the State But the company defaulted In
making this deposit for the interest cou-
pons, and they had to be met from the State
Treasury. In September 1879, the State had
advanced some $4,000 on this account, Tor
which suit was brought, at the instance OF
Ludeling and Ray by Attorney General
Belden Isee State vs. N. L. & I. II. n. Co, 25
Annual Reports, page So. resulting In iudg-
ment In favor of the State for $s7,96o, with
interest. But this was not the object Of the
suit
In the meantime. viz: in the spring OF 1879,
Ltldeling and Ray obtained from the Legis-
lature another act (No. 81 of 1922, by which
the State agreed to relinuuish its claims
against them under the Judgment above re-
ferred to- and released them from all liability
on the bonds. in consideration Of the delivery
TO the State by the Ludeling company of GER
tifcates Of stock for LEGO shares-equiva-
lent to $1. 122, 00O-and upon such delivery the
Governor was required TO issue to the COM
pany bonds Of the State to the amount Of
$4,000, In addition to previous deliveries.
This made total of 1922 bonds of $1,000 each,
payable in forty years, with eight per cent
per anntlm interest or total outlay by the
State. at the end of forty years. Of principal,
$t.122.oDo interest. $500, 4o0-in ALL $4,7l2.-
400, for stock in railroad company whose
title was in litigation at the time and has
since been annulled and cancelled on grounds
Of fraud
It was with the proceeds of these State
bonds and the earnings Of the road that Lude-
ling. Ray and their associates reconstructed.
repaired improved and operated the property
during nine yeais-say from 1866 to 1875. and
yet they have claimed. and Judge Woods has
rendered Judgment in their favor against the
V 8, and T. T. r. Co. for $3gT00D
We learn that from this Judgment, which is
satisfactory to neither party, an appeal will
probably be taken to the Supreme Court Of
the United States, but it may not be an mop
perfume moment to suggest that an inquiry
should be made into the relations of the North
Louisiana and Texas Railroad Company to
the State of Louisiana, for the purpose OF
ascertaining whether or not the State has
any recourse against that company for
the fraud perpetrated by it against
the State. We have been informed
that acts 1as Of 1868 and 81 Of 1872 are uncon-
stitutional and otherwise invalid Such is
| the opinion, we understand. Of members of
| the bar who have examined the subject Ii
| this opinion be correct, we do not see why the
| State should not claim, by whatever proceed
| ing would be proper, the benefit OF the
| Judgment rendered by Judge Woods in favor
| Of Ludeing and associates. 1t is certain that
| the stock subscribed by the State in the North
Louisiana and Texas Railroad was worthless
from the beginning. because the Supreme
Court of the United States has decided that
that company never owned the railroad
upon which the stock was based In
other words, the so-called stock was
mere myth and existed only in
the maginations Of Ludeling, Ray and associ-
ates. 1t was an interest contingent upon the
success of swindling operation The sec
ond parcel or installment Of bonds delivered
to these parties, viz $4,000, they were not
entitled to- even If the acts of the Legislature
were without defect and valid. because they
had already received bonds for more miles of
railroad than they had constructed. These
s5T6. 900 were based upon that portion OF the
road which has never been touched by any
one. viz the projected middle division, be-
tween Monroe and Shreveport, about ninety
six miles. This delivery of bonds was in direct
violation of the provisions OF section II OF
the act 10s of 1863 and for that reason the
act 81 of 1872 was passed, constituting the
State stakeholder and releasing the second
mortgage.
We venture these suggestions as they occur
TO our mind at the moment Of the rendition
Of Judge Woods decision: the law officers OF
the State are probably familiar with the case
and will Judge whether or not it be practica-
bic TO protect the States interest in this mat
ter.