Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1879-06-16
TENNEssEE,s DEBT.
Circular from the BOndholders.

A0NA
compromise. | have given the matte
of the State debt considerable atten
ton, and since the legislature met
have studied very closely some of tn
reports of our State officers, particu
larly Comptroller Gaines publishe,
statements, and | confess that within
the year my views have undergone
great changes, especially since study
ing the comptroller report. Thougl
slly a small taxpayer, yet one whC
has lived long years in Tennessee,
confess to a feeling of sorrow that, il
my opinion, because of sad changes il
fortune, especially through the SAT
waste Of every material interest Of oul
people by the war, | do not feel tina
we ought to ratify this settlement. L
is too much. Our taxable values can.
not stand it and leave any future fol-
our people. Let me ask you, as a fair.
minded and clear headed journalist,
now that the time for action is near at
hand, to favor your readers with full
information as to our resources, our
abilities, our future, and permit me to
lay before you, and through you your
readers, the very remarkable circular
of ous beloved bOndholders. Please
publish it entire and let our people
weigh carefully in their minds the
matter of this organized foray on the
shriveled properties OF the taxpayers of
our State. We want our people to get
both sides of this question, and may l
not ask that the PUBLIC LEDGDR-
ever gritty, snappy and outspoken-
will speak for the people, for the tax
payers speak for the people, of the
people and to the people, and against
this fearful settlement?
HENRY j. LYNN.
OFFICE Con. OP TESN. DoNDHoLDERs,1
No: 81 NASSAU STREET,
NEw YORK, May II, 1879.
To the Holders of Tennessee Bonds:
In our last circular we informed you
that the committee was considering
the best means for enforcing our first
mortgage liens against the railroads in
Tennessee. After full deliberation.
with advice of counsel, and with the
approval of the following prominent
houses interested Brown Brothers &
Co, Maitland, Phelps & Co., Ward.
Campbell 4 Co., and of the presidents
OF the Seaman's Saving Bank, and the
Globe Mutual Life Insurance Com
pany of New York, and of large indi
vidual holders in New York, Balti-
more, Philadelphia and Chicago, we
have decided to adopt the suits lately
instituted by Mr.. G. Amory Stevens.
Prompt action on the part of the bond
holders will enable us to bring these
suits to trial during the ensuing sum-
mer.
1t may be we'll for us to give some
Of the considerations that make us
confident of a successful enforcement
of the lien conferred on our bonds by
the distinct language Of the Tennessee
Statutes. While Tennessee bonds of
the new issue were being offered for
sale in bOhalf of the railroads of the
State, 5. Watson, agent for the State
of Tennessee" addressed the follow
ing argument to the public, which
was printed in pamphlet form in 1868
The important question Cor the
bOndholders now is, what security
have | for the payment of the princi-
pal and interest of my bend, The
State debt proper is only about four
millions. The railroads and all their
rolling stock are m~ortgaged to the
State to secure the payment of bonds
loaned. This mortgage, as bondhold-
ers must know, enures to their benefit.
For the payment Of twenty-nine mil
lion bonds, which will be the entire
amount of bonds issued to the roads.
including those hal may be issued
under the recent act of the Legislature,
the bondhOlders have as security roads
which, when completed, will be nearly
two thousand miles in length. and
which will be worth fully Z 1000, 900.
In addition to that they have the
whole resources Of the State solemnly
pledged to them"
Again, in 1868, when the legislature
OF Tennessee sought to impair our
securities, Governor Brownlow, then
chief executive, sent a message to
that body demonstrating against the
proposed measures in the following
emphatic language:
The State, in point of honor and
TACT, holds the lien in a iduciary
capacity. She holds it in trust Tor
the benefit Of the bondholders. She
honorably has no right to abandon it
or surrender it to the companies. She
ought not to prove faithless in this
trust, but maintain and execute it az
the oondholders understood it, and as
the people of the State understood it.
The bOndhOlders are interested in
these resources to pay the bonds they
hold, and the people are interested in
them to see that they are not to be
taxed to pay interest or principal OF
bonus for which the railroads are
pledged by the terms of the law"
The assurance of our rightful legaI
claims against the railroads is strongly
fortified by the following facts;
In April. 1873, the committee ad.
dressed a circular to tho bondholder,
notifying them that 1t vas about t
enforce the lien. We petitioned to bC
heard in the Mobile and Ohio cast
then pending on appeal before tn,
sHpTeme Court Of the United States
In that suit, the question whether O.
not the holders Of Tennessee bond,
had a first mortgage lien apop rail
roads in that State, was clearly pre-
scented. The cause was fully areue,
by several counsel for the railroa,
company Rs well as by our counsel
and the court took the case under ad
Yisement. Some timO after while W,
J were confidently awaiting a decision
~ nfrn tnNFaW -. -