Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1878-04-10
THE SELMA, MARION AND MEMPHIS
RAILROAD.


RAILROAD.
That the public, which is deeply
concerned in the building of the
above road at least as far as Holly
Springs, may be properly informed,
we have taken some pains to ascer-
tain the difficulties in the way of
construction. Prior to the 18th of
March, 1871, there were independ-
ent corporations under the above
name in Alabama and in MiSsis-
sippi and Tennessee. The Alabama
corporation issued $765, 600 of
bonds, which were Endorsed by the
State Of Alabama, and were made a
statutory first lien upon all the road
and property in Alabama to protect
the States Endorsement. These
bonds were sold and the proceeds
expended in the construction Of
thirty.two miles Of road in Alabama,
there being now forty-fve miles in
operation in that State, including
the Marion and Cahaba road, built
before the war. After This issue
the corporations were consolidated
in March, 1871, under the same
NAME, constituting one road and
one corporation, so-claimed, from
Memphis to Selma; and this
consolidated corporation author
lied the issue of s4,250, 900 bonds
secured by a first : mortgage
on the entire road from Memphis
to Selma, but recognizing the prior
ity Of the Alabama indorsed bond
on the part of the road lying in
Alabama. OF the $4,25O, 900 first
mortgage bonds authorized, only
$4,000 were actually issued, a
large part Of which were expended
in the swamp lands in Mississippi.
The company having failed to pay
the interest on this bond, l.. P.
Blackburn filed a bill in the United
States Circuit Court in Memphis
in December, in 1874, in behalf of
himself and such other first-mort-
gage bondholders as might choose
to come in, to foreclose the mort
gage and sell the road. The State
of Alabama repudiated her indorse-
ment of the bond issued by the
Alabama corporation, the holders
Of which then commenced legal
proceedings in the Chancery Court
of Alabama to subject the Alabama
road to the payment Of this bond,
and claiming to be subrogated to
the rights Of the State under the
statutory first lien on that portion
of the road. The court, in a decree
rendered in November, 1877, held
the Alabama Endorsed bond to be a
first lien and the holder subrogated
to the rights Of the State. The bond
with its accumulated interest now
approximates one million dollars,
while the road in Alabama would
not probably sell for more than one
hundred thousand dollars at forced
sale. Hence, the frst-mortgagC
bondholder and general creditor car
never realize anything from thu
Alabama end Of the road, and the7
must look alone to the property il
Mississippi and Tennessee consist
ing Of about forty-one or two mile.
Of graded road-bed between Mem
phis and Holly Springs, and abou
thirty miles between 0kolona ant
the Alabama State line, and abou
100000 acres of land in Mississippi
Besides the two classes of bond
above mentioned, the company ha
a floating debt which, with accumu
lated interest, is now about $3.50,
600. 1t was apparent that what
ever the issue Of the Blackburn
suit, the stockholders, as such, coul
save nothing, for if one pack q
hungry wolves were driven off an
other stood ready to devour. tn
stockholders had nothing to gal
and the public interest would b
greatly damaged by protraeting th
litigation. In this view the CON
pany through their attorney, Mino
Meriwether, proposed some eightee.
months ago to the frst-mortgag