The weekly herald. [volume] (Cleveland, Tenn.) 1876-1888, 1879-04-17
TIE HONDHOLDERs KICK.
ING.
A DIScourasing Circular from
Chairman Eugene Kelly.
Charles O'COR0r's Legal Opin-
Ion the Cause.

ton of Charles O'Conor's opinion
regarding the bonds issued TO rail
road companies by the Tennessee
Legislature, published the Herald
on Friday, has produced a marked
effect in financial circles. The bond
holders feel reinforced in their resent
ment of the proposal TO give them a
meagre pittance for their due, and it
is probable that very few, if any, of
them will accept il. A member of
the Tennessee Bondholders' Commit
tee said yesterday that not a single
inrimation of a Willingness to submit
to anything but the Coe award had
been heard. "After reading Char
les O'Conor's opinion" he remarked
mo one can doubt that the bond
holders have the first lien upon the
railroads." 81:
The committee on Friday adopted
the following report, which is address
ed to each of the holdholders:
NEW YORK, April 4, 1S79.-Sir;
Your committee respectfully report
that, pursuant TO the resolutions
adopted at a meeting of bondholders,
held in New York, on the 81 day of
November, 1878, they published in
the Tennessee newspapers, for some
time before the Legislature met in
January last, renewal Of your offer TO
compromise with the State Oil the
terms and conditions OF the Coe
award, viz: 10 accept new six per cent.
boz DIS from her for sixty per cent. of
the principal and interest Of her out
standing bonds, the coupons for
interest on the now bonds to be paya-
bic semi-annualiy and to be receiva-
lie for all taxes AID dues and dues to
the State at their face valu" after ma
turity.
In addition to publishing this offer
in the Tennessee newspapers your
committee employed and sent Gen.
Roger A Pryor to Nashville TO pre-
sent the same to the Legislature.
The chairman of your committee also
went to Nashville to advocate its ac-
ceptance. Both gentlemen were we'll
received by the Governor and by
members OF both houses of the Legis-.
~lature, but your proposition was re-
iected. Your committee have, since
the return home of Mr.. Kelly, their
chairman, been in correspondence by
mail and telegraph with members of
the Legislature on the subject of a
reduction of the terms Of compro-
mise submitted through Gen. Pryor.
Hearing that a bill was before the
Legislature to compromise the debt
at fifty cents on the dollar i'll four
per cent. bonds, your committee tele
graphed to that body protesting
against the assumption that Il COM
promise couid be Effected at fifty
cents on the dollar, but expressing
the opinion that the b%ondholiers
would modify the Coe award SO that
the compromise bonls therein named
should for the first t2ur years draw
but four per gent. Such "a concession
would have girer the State time to
adjust her taxation, which is now
and for the past tYo years has been
but one.tcnth Of,One per cent.
Without needing this suggested cons
eession, or to protest of your COM
mittee against the assumption that a
settlement could be effected by Tenn
essee with her creditors at fifty cents
on the dollar, the Legislature passed
and the. Governor has approved a bill
to compromise the debt at fifty cents
on the dollar in bonds bearing four
per cent interest, payable annually in
Nashville. This bill or proposition is
first to be accepted by the bondhold-
ers and afterward ratified by the vo-
tiers of Tennessee before the Lcgisla-
ture will pass a law to make it effect
ull.
Your committee recognize how i'm
portant it is that bonds issued in
compromise by their State should be
sought for by Tennessee investors.
Fol the express purpose of making
such bond, desirable for Tennessee
investors, who,t 1T is well known, will
not buy the bonds of their State, and
to the end that,they may be largely
held at homer as n-safe and remuna
tive security ard for tax paying pur
poses and as some equivalent to the
] bondholders for rellnquishing so
large q part of,their claim as forty
per cent. your committee have urged
aud insisted that the coupons OF com
proHise bonds shall be made receiva-
able at their face value for all taxes
and fues to the State, as stipulated
in the Goe award, and also that Ten
nessee is amply able, to pay much
more than you offer to accept.
Your committee therefore recon-
mend that the proposition Of the
Legislature TO compromise at fifty
cents on the dollar in four per cent.
bonds be net accepted by the bond
holders. IF offered to the committee
it will be respectfully declined.
In conclusion the committee beg
leave TO remind you that it is the
opinion of some Of the most eminent
lawyers in the country, among them
Charles 0'Coaqr, of this city (whose
opinion to that effect is published in
the New York Herald of tins morn
ing) that the bonds Of Tennessee is
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