Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1879-07-13


Branch, Monroe county, Tennessee
EDITOR CHRONICLE: We want
more light. We want to know if the
railroads are not liable for their own ,
bonds. II you issue me your bond TO ID
buy me q horse, ami / make that !
horse public carrier, receive all the !
money, am / not liable alone to y0l
for your bond? Now the State issued
her bonds to the road or com pAny. ,
The people have no controlling iDfiu-
ence, neither do they receive any of ,
the freights or fare. Now tell US who
is liable and ought to pay the bonds
If the people pay them 1t looks Ike .
they ought to have some controlling
Influence. 1t is hard TO make man
pay for riding ia his own wagon Then
tell Us, what will be the result If the
fifty cents compromise ia voted down.
J. II. EWING.
We have not the pleasure of our
correspondents acquaintance, but
his questions are reasonable and we
propose to answer them to the best
of our ability. AS early as 1852,
an Internal Improvement Act was
passed by the Tennessee Legisla-
ture under the provisions of which
the bonds of the State were loaned
to certain railroads. The State re-
tanned a first lien on the roads
which received bonds under the
provisions of this and subsequent |
acts, for its own security, and made |
provisions for selling the roads or
placing them in the hands of re-
ceiver in case they failed or refused
to pay the bonds when they fell
dne. Under these acts, bonds
amounting to several millions of
dollars were loaned to the roads
before the war.
At the close of the war, the rail-
road property in the State had run
down until it was absolutely neces-
sary that they should have aid from
some source, or suspend operations.
Under this state of affairs, which it
is unnecessary for us to elaborate
here, the Legislatures between
1865 and 1868, provided for the
issuance of bonds to nearly if not
quite all the railroads in the State.
The bonds thus issued, before and
since the war, constitute a very
large proportion of the debt We
now owe. We will not stop now to
discuss the propriety of what may
appear to US a too indiscriminate
issuance of bonds to railroads, with
out paying proper regard to their
solvency, or looking with due eau
ton to their ability to pay. Suffice
to say, whatever was done was the
act of the lawful representatives o!
the people.
Some of the roads in 1869 had
paid up the interest on their bonds
regularly while others had not.
On the Goth day OF January,
1870, the Legislature, whether
wisely or not, we do not say here,
passed an act providing that any
railroad in the State might dis,
charge its Indebtedness by paying
in the bonds of the State, without
regard to series or number. Under
this act the solvent roads
did discharge their indebted
ness, and now hold receipts
from the Comptroller of the
State Treasury showing that fact
They availed themselves Of the
provisions of an act passed by q
Legislature elected by the people
invested by the Constitution with
power to make laws, and conse
quently they owe the State moth
ing now. They have discharged
every dollar of their indebtedness:
to the State in the manner pre-
scribed by the law-making power 0
the State. IF the bondholder'
should be successful in the sui
they have brought against the rail
roads the State would still owe it
for the reasons above stated. Th'
roads which proved insolvent were
sold by the late Judge Mckinney
Judge Wright and Godfrey B