Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1879-03-04

road, but that enterprise did not get we
into life, and these 80 bonds were neye
s used. and were returned for cancellation
4 hence there were 26,35I bonds issued /
. the shape of loans to railroads. For tn
payment of the interest and principal {
, these bonds, the roads were primarily liable
and the State only secondarily so,
at all.
= OF these 28,35l bonds, II, 308 were issuet
before the war under the Internal Impro;e
ment law of 1872, and its ante-wa
amendments, except $50, which were ISSUED
to the East Tennessee & Georgia Railroad
Company under the act of January 30
1850, which is substantially similar to the
act of 1872 and 1898 were issued since
the war under the act of 1872, and various
acts passed by the Legislature since the wal
amendatory til reof.
There are -ltstanding Of the l4,30e
bonds issued before the war, as State aid,
1888, and of those issued since only 1888.
/ There were issued Under the act of 1866,
4,94I bonds, to fund interest that accrued
upon bonds during the war and up to the
| LIST of January, 1866, and the bonds that
had matured, and of these bonds there are
| outstanding 2,246.
Under the act of 1868, 1900 were issued
and used by the Comptroller in raising
money to pay interest and maturing bonds.
This transaction amounted in substance 10
funding the interest and the matuI ed bonds.
Of this series there are outstanding 500.
Under tie funding act Of 1873, 6,64I
bonds were issued to fund past interest an1
matured bonds, and Of these 6,64l, there are
outstanding 1867. Hence, of the outstand-
ing bonds, I0,320, that is, $l0,320,000, are
Post-GcIIam bonds.
The second question to respond to in the
Senate resolution, is 2. "What was the ma
ture and extent of the obligation incurred
by the State by issuing each class or series
Of bonds whether the State was directly
liable for said bonds, or was only the en-
dorser on a great part ofthe same, or loaned
the same to certain railroads and other in
corporated companies; and whether the
conditions of the States endorsement or
loan of said bonds have been complied
with p
In reply we beg tosay chat of the q ,0O8
bonds outstanding, 1903 are bonds Issued
to railroads; bonds issued under the fund
ing act of 1866; bonds issued under the
act of 1868, and bonds issued
under the funding act of 1873; and Of this
under the internal improvement law of
1872, and amendments thereto, as be-
fore stated, and were primary charge
upon the roads; and ifa charge at all again-j
the State, 1Ccre so only secOndarly. 1t
to be observed TIT we are directing our an
swer to the second inquiry upon the |
assumption thatit, as did the first, addresses |
itself to OutSlaRdjug bonds.
Tho Ty,,ra ~, l., H., II D01
were issued, required certain specific !
things to be done, and certain specified |
evidences to be filed before they were au-
thorized to be issued; and certain conditions
were attached to their disposal and applica-
ton and the method and source Of their
liquidation designated after their issuance.
We are well within the limits of established
facts, in saying that in nearly every in
stance the conditions Of the law, either
preceded or subsequent, with respect to
hese bonds, were not observed.
We are directed in the third
place, by the Senate resolution
o inquire especially if the great
bulk of the present s0-called debt of Ten
lessee was not thrown upon the State in
'iOlatiOn Of the contract creating, or pur-
porting to create, the debt, by the foreclo-
ure Of the mortgage given by railroad
md other companies to secure the State
.gainst the payment Of the bonds before the
inc specified in the contract for said
oreclOsure and sale Of the property upon
7hich the debt was based, and if it was not
" this premature and forced sale, at q
eayy sacrifice Of tho property, bound for
he debt. that the debt was thrown upon
he people. We have given this inquiry
he best thought and investigation We
ould, and we are still somewhat at Il loss {
ow to give q specific answer. But re
arding the inquiry as directed to the
lerits Of the deb and not to the techni-
ahues Of its creg IN, a direct and truth
Il response is easily formulated. The I
reater part Of the present debt is the re- {
alt of vicious policy and corrupt legis- {
ltiOn, superinduced by the various corpor- q
tie bodies interested in securing aid from d
le State. q
The immediate law under which 1867 of t
le outfunding bonds were issued, was 1
ne funding act of 1873; 9,246, under the /
lading act Of 1866, 500, under liquidating
ct Of 1868; 1888, under the internal i'm t
rovement acts of I8jl--2 and its &. e-war i
62S, under the act of f
S5I 2, and its ante and post war amend i
rents, and 2,l05, State debt proper under e
le various acts heretofore cited as author C
ing its original creation. But answering t
lrther and directly to what we presume T
as intended to be elected under the third t
sction of the Senate resolution, we say \
lat eleven defaulting or delinquent rail b
,ads were sold by the State under the act t
1872. There were realized from this v
lie $6,698,0 600, paid almost entirely in de- b
-eciated bonds and coupons. There had !
cen issued to these eleven roads $l4,648, o
% in bonds. Hence there was a loss of Q
7 $50, 900 in connection with the States t
suance Of bonds to these roads, independ- W
ut Of interest paid and interest funded 0
,ads. When we take into consideration the "
mount of private, county and municipal u
ock absorbed or presumably absorbed in a
e construction, or in connection with t;
lcse roads, in addition to the $l4,646,0 600, n
lvanced by the State, and also the posi- "
ons occupied by and the combinations OF 0
me Of their purchasers at the States sale, o
requires a great deal Of disinterested 81
)nhdence to believe that there was no NAL
preparation Of the States securities, Or "
lat there was no interested influences at II
ork in shaping the loans, and the condi- b
1ns of a sale Hereunder, which realized P
lly S6,696, 600 in greatly deprecated Sc le
lrties. AS to the aspects Of the question
vOlving the act Of 1869, and the act Of W
SO, and the acts Of 1872, and their rela- Il