The Worthington advance. [volume] (Worthington, Minn.) 1874-1908, 1877-06-07
THE STATE RAILROAD BONDS

THE STATE RAILROAD BONDS
LETTER FROM GEN. H., H. SLBLEY
COMPLETE AND RELIABLN STATE
MENT OF FAC1Y CONNECTED WITH
THEIR HISTORY.
Gen. Sibley, who was Governor of the
State at the time work was commenced
on the railroads, and who issued the
bonds, has written letter to the Eli
tor of the Northwestern Chronicle,
giving their history and considering
the question in all it's important bear
ings. Below we give the entire letter,
excepting the caption:
BONDS AUTHORIZED BY OvERWHELNl.
ING VOTE OF THE PEOPLE.
It is well known that the constitu.
ti0nal amendment which authorized
the issue of these bonds to certain rail.
road corporations was adopted in 1858.
by the overwhelming majority in round
numbers Of $4,000 yeas to 1000 nays.
The amendment, by that act, became
part and parcel of the original constitu.
ton.
GOVERNORS STRINGENT REQUIRE.
MENTs IN ISSUING THE BONDS.
SUPREME COURT INVOKED.
I was the Governor of the State when
work was commenced upon the roads
respectively, and upon me was imposed
the duty of issuing the bonds. Having
been opposed to the measure for the
loan of the State credit, deeming it pre-:
mature and unwise til is TO burden Min
nesota ut the very outset Of her exist
ence, it was perhaps natural that the
railroad companies should regard the
stringent requirements which [ laid
down as q condition precedent to the
delivery of the bonds, as an evidence
OH my part of ali intent to cripple and
embarrass them in their operations; and
the criticism to Which was subject by
them eliminated in an appeal from my
ruling by one of the companies, to the
Supreme Court, and q writ of peremp-
tory mandamus was obtained from that
body, directing me to issue the bonds,
without insisting, as I had done, upon
ecclusiue first mortgage bonds of the
companies in return for those of the
State. I mention this to show that
was governed in my official action by a
determination to enforce strict com
pliance with the law on the part of the
companies, and that, in the Judgment
of the highest legal tribunal Of the
State, 1 had gone even farther than
was justified, in my desire to guard her
interests. Not only was the evidence
required by the enactment, Of the a.
mount and quality of the work on the
roads, as progressed, strictly exacted,
but I assumed the responsibility of ap-
pointing competent engineers to exam
inc and report upon it under oath, be-
fore issuing the bonds, testimony adj
ditional which was not provided for in
the law.
It should he borne in mind, that a..
mong the directors and corporators in
these railroad companies, were to lie
numbered many of our most reputable
citizens, who could not he justly sus-
pected of any design to take undue ad
vantage of the State. While [ disa-
greed with them in some points as to
the construction of the amendment, I
never had reason to doubt that it was
their intention to carry out fairly their
contract with the State.
BONDS NEGOTIATED IN NEW YORK.
The total amount of tie bonds issued
was 50, 49, 900, but before these were
all delivered I was requested, by the
officers of the companies, to visit New
York City, and aid them to sell their
bonds, and conceived it to be my duty
to do 50, that the means might he Sc
cured for the continuance of the work.
[ remained in that city for two months
at my own expense, and had nearly con-
summated an arrangement with the
banking house of Duncan, Sherman &
Co., to place them upon tile market at
80 cents, when they were deferred from
completing it by the denunciations of
the bonds by one or more newspapers
in the State. did not hesitate to state
my belief, that the bonds having been
legally issued, were good and would be
and upon my representations
nearly $3.50, 900 were sold for 90 cents on
the dollar i'll gold, and I am reliably
Informed that more exchanged hands
at that figure. The failure of the ne
gotiations was 4 fatal blow to the COM
panies, us the contractors who had re-
ceived the bonds in payne 1T could not
dispose Of them except at ruinOus sac
rifice, and were thus deprived of the
means to continue their work. The
great financial disasters of 1857 and
1868, were also upon us. and the COM
l'anies failing to obtain money from
any source, were unable to meet the in
terest on the bonds they had received,
and l gave them due notice that no
more would he issued.
The State was thus in the same situ-
alton with an individual engaged in
building house, who had obliged him.
self to pay certain sum when the foun-
dation was laid, in negotiable paper,
and to continue the payments p0ri pas
So us the work progressed, but who
found himself by the failure of the con-
tractor, witt, portion only of the edi-
lice::completed. What would be thought
of such man il he refused to pay his
outstanding notes in the hands OF IN
nocent parties, because the contractor
had not finished the building? Who
does not know that such a defence
would be OF no avail in any court in
Christendom?
WORK ON ROADS DULY PERFORMED.
NO swINDLE ON PART OF COMPANIES.
But it. is asserted that the contract
ors swindled the State by receiving
more for the work performed than It
was worth. That charge is very east
ly refnted. The contractors lad no
direct dealings with the State 1T all,
but with the companies who employe.i
them, SO that if Il. fraud was pr:,cticed,
ny which the State was the sufferer it
could not Justly be charged upon part.
les who had entered into no engage.
ments with her. If, therefore, swim
dle was perpetrated, it must have been
by the companies, and yet, l have nev.
er seen or heard ofany allegations that
the members of these corporations had
made money out of the transaction.