Mower County transcript. [volume] (Lansing, Minn.) 1868-1915, 1877-05-31

and now to cry fraud, would he only the
dodge Of q dishonest debtor to escape his
creditors who demand payment. To ar
que that the people were not alive 10 tile
true facts at issue-tlat they were not
aware that the State was held responsible
for the principal and intclest--in case the
companies should fail, would be special
pleading belonging only TO unprinciplcd
dcmagogues. The question was ably dis
cussed, pro and con.
Those opposed to loaning the State Gre
dit taking the ground that the companie
would fail, and the State would be com.
PEELED TO meet the obl,g cation. II was an
swered by the friends Of the measure, that
they did not expect tho companies to fail ;
but if they did fail and the State had the
bonds to pay they would vote for the
proposition, believing the advantages &C.
cruing from the roads would more than
compensate the State for the debt, 1t
may not have been the wisest measure
that could have been adopted, but after a
long and thorough canvass the people dc.
cided by an overwhelming majority to
loan the credit Of the State for the pay
mcnt Of the principal and intercs. on the
bonds, in case the companies should fail
to meet them, as they became due; the
bond holders only looking 10 the State,
and the State securing itself against loss
from the railroads by a mortgage on their
lands and fr: 4 :hises.
Thus, in no case, could the failure of
the companies inyalidate the obligation
to pay the bonds to whomsoever might
hold the same. They were Il; credit de-
mand upon the State, not rs an indorser,
but as the original debtor.
FINANCIAL FAILURE OF THE BONDS.
Let us now inquire into the financial
failure of these bonds, and see upon
whom rests the responsibility of the fail
ure of the companies, and also see who
first broke falth-lhc railroad companies
or tho State.
By the terms of agreement between the
companies and the State, the companies
| were to be responsible to the State for the
payment of tho interest upon tie bonds.
and for this purpose were to deposit with
the State Treasurer, On a day fixed previ-
Gus to the time the interest became due,
the amount necessary to pay the interest
on the bonds they hid received. As be-
fore stated, it was we'll known that the
persons composing the different COM
panies had expended their private capital
in getting the roads to their then condi-
ton; and thus they would he compelled
10 depend upon tho money obtained from
the sale Of the bonds, to pay even The ill.,
tcrest on the same. Upon the value of
these bonds, then, depended their ability
to stand firm, build the roads and pay the
principal and interest on the bonds. If
the bonds deprecated to any great extent
the companies must fail And it is quite
evident that whoever took such a course
rs to cause the depreciation of the value
of the bonds was responsible for the fail.
ure that would certainly cnsuc.
| WHO CAUSED TIE FAILURE.
The first COUPONS due in July, 1859,
were promptly paid by most if not all of
the companies. Thus far, both parties
had acted in good faith.
In the fall OF 1859, Gov. Sibley, by &c.
quest, went to New York for the purpose
OF negotiating tho bonds. Pending the
negotiation, the enemies of the loan raised
the question concerning the interest on tho
bonds. making the statement that the
State did not intend 10 pay the interest I'm
der any circumstances. New York CAPT
talists hearing this, took measures to in
vcst,gate The truth of the report. They
became satisfied from the tone of the pub
lie Journals and few leading men Of the
State who were trying to make political
capital out of the bond question, that the
people were not disposed to make provi
sion for the payment Of the interest, in
case the companies should fail. Tie CT
feet of this disposition to rc,udiate upon
the part Of the State was to make thu
bonds a drug on the market, with few
purchasers at thirty. forty or fifty cents OF
the dollar, and not many willing to take
them at any price. Tie legitimate con
sequences Of this was that they could moi
meet their obligations, or 60 on with the
building ofthc roads; in short they failed
The companies failing to pay tho inter
est, and TO further prosecute the building
of the roads, the State having a mortgage
on Goa, 400 acres of land, 2271 miles Of
graded road bed, and also the land grants
and franchises ofthe companies, forccloscd
upon its securities, bidding ID the proper
", thus becoming sole owner of values
that today are worth twice the sum that
it would take to pay the bonds in ques
tion. And any arguments that would
make it right to refuse to pay them
would justify any individual in the land
in refusing to pay note of hand or to adj
vocate the reputation of our national
bonds, because pcrchance they cost some
Of the holders bu! 40, so or 60 per cent
on the dollar. If the State then is under
obligations to pay the bonds, the ques
ton arises - az :...- ..
; HOW SHALL THE DEBT BE PAID?
i The legislature Of last winter, havinl
carefully considered the matter. both b!
committee and public debate, passed
, bill for the approval Or rejection by tn
, people at the coming election on the 12tl
| day of June.
: The proposition in brief is this: MI
Chamberlain, being the owner Of bonds
=, the principal and interest of whicl
2 amounts to $2,799, 785.00 offers to tax
: 81 ,395 10000 in new six per cent. bonds
r running thirty years Thus it will
q seen that tho concession is more than 8