Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1879-12-19
The Chesapeake and Ohio Canal

From tho Baltimore Sunday american
The Chesapeake and Ohio Canal has for so
long time been considered pre-. eminently a
political institution that the politicians oil all
degrees throughout the State will be startled
to learn bit OF news which the american
vouchsafes 10 tell them this morning, being
nothing more nor less than that determined
movement is now being made by the bond
holders 10 take the canal out OF its present
management. such action if successful,
would probably result in general smashing
PIP OF the states mad. up by political mana
gers since the election, and il is believed that
lis effect on State politics will be felt to a
very great extent. 1t is stated on excellent
and most trustworthy authority that in the
course Of a week or ten days "A bill will be
flied in the United States Circuit Court, be-
fore Judge Hugh l.. Bond, on behalf of the
holders Of the 81, 700, 900 of first preferred
mortgage bonds Of the canal, asking for the
appointment Of receiver for the company.
The bill will attack the validity of the repair
bonds issued under power conferred by the act
of 1878, and which are a lien upon the cor
pus or body OF the canal and all that such a
lien imp les, whereas the first preferred mort
gage bonds are held only as a lien on the
revenues and tolls of the canal and they
therefore ask the court to restrain the COM
pany from issuing any more Of such bonds,
on account of their illegally. The other al
legations in the bill will be of very COM
prehensive character, and will relate TO the
general management of the company, which,
the bondholders claim has been managed in
the interest Of politics and politicians and
not in the interest OF the bond and stock
holders 1t will assert that Offices have been
multiplied far beyond the necessities of the
company; that the money had been wasted
10 reward politicians and offices created for
partizan purposes that large and unneces-
sary improvements had been made under the
name of repairing damages and that the
management of the canal has not been such
as to protect the interests of the bondholders,
and that it has not been conducted on strict
business principles. The bondholders state
that they have been paid no interest on their
bonds since 1876, more than three years ago,
that they desired change and were delerT
mined to have it, and wanted some return on
their investment. During President Clarke s
administration OF the canal they received in
terest on their bonds, which was continued
for the first two or three years of Mr.. Cor
mans administration of the canal; but, as
above stated, since 1876 they had not been
made the recipients OF any return on their
investment. The fact that the last egsla-
ture had given the company the right to issue
repair bonds as a lien on the body Of The
canal when the first mortgage bonds are
only a lien on the revenues Of the company,
is, they think, another step in direction
which may have he effect of keeping them
| for long time from sharing any returns ofthe
revenues of the canal. The act of Assembly
authorized the company to issue these bonds
to the amount Of $500, 900 for the purpose of
repairing damages on the canal, and Of this
amount about $50, 900 Of the bonds were
sold, and nearly $500, 900 are held as col
lalerals for money borrowed on the repairs
of damages. Some Of the represen tatives of
the first preferred bondholders state that il
they allow the balance of the bonds to be is
sued, and The company At some time hereafter
may not be able 10 pay interest on them, The
holders of the repair bonds would foreclose
the canal, and thus jeopardize the interest of
the first preferred mortgage bond owners.
| They say that it is patent fact, well known to
every Marylander, that the canal has for a long
lime been managed as machine for partisan
and personal ends that revenues, instead OF
| going 10 pay interest on the bonds, had been
used 10 pay salaries TO politicians and they
think that it would be well to have the canal
managed as a business enterprise for the in
lerest Of the bondholders and stockholders
The interest OF the State Of Maryland in this
canal amounts TO over twenty millions of
dollars.