Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1879-01-19

United States should be deemed valid, anu
the Courts of the States should be open 1or
their collection. All the States declined to |
allow interest. The British Minister called |
Mr.. JefTerson's attention to it, and upon tins
point. among other things. he said And
we NAV add. once for all, that there IS no
instrument or title to debt so formal and
sacred as to give a right to interest on Il
under all possible circumstances.
If then, there is no instrument or title OF
debt so formal and sacred as to give the
right to interest under all possible clrcum-
starces, and if circumstances of exemption,
stro lger than in the present case, cannot
possibly be found, then no instrument OF
title of debt, however formal or sacred, can
Dive the RIGHT to interest under the clrcum-
stances of our case. General ca
lamity, then prevented profit, and conse-
ouently stopped interest, which IS IN lieu OF
profit" 1t need not be affirmed that the
!sueneral calamity" then, is not comparable
to the general calamity of Tennessee re-
sulting from the late war.
The next fatal step was the issue OF adj
5itional bonds to the insolvent roads. II
was done under the pretence that 1t was
necessary to enable those roads to meet the
interest upon their anti.war bonds, and thus
protect the taxpayer. All of these bonds
were pretended to be issued under various
amendments to the Act of 1872. The
amount issued was $l0,683,0O There
were honest men in the Legislative bottles
which authorized this fraud, bat their Ell
forts to protect the State were unaValllng'
Rut their manly protests exhibit the shame
full methods employed in the preparation OF
this vast fraud. The facts subsequently Of
fcially developed, in connection with the
| Journals of the two Houses, show that ap
organizations were refused unless the men,
| hers were paid to make them. 1t appears
| that bonds were sold at a large discount to
raise money to pay members to vote further
appropriations. 1t appears that with the
proceeds of bonds so sold, minister
| of the Gospel was employed to
manipulate members of the Legislature, and
that when he reached the Capitol the bill,
authorizing the issuance of bonds, had been
rejected by a decided majority. In the
morning he opened the proceedings with
prayer: before night the vote was reconsld-
cred. and the next day the bill passed with
but two dissenting votes. This bill appro-
priated $4,000, 100000 to the lnsolvent
| roads.
1t appears that relatives of high officials
were paid money, the proceeds of bonds, tc
induce favorable action in the further lssu-
ance of bonds. 1t appears that bonds were
sold at large discount to pay interest III
order to conceal delinquencies. That the
proceeds were used to pay high salaries tc
!, railroad officials; to pay eXorbltant law
yer's fees; to pay old debts, and In short
onnIied to an infinite variety of other un
lawful purposes. 1t appears that the Gov
ernor. who was clothed with the power tt
decide when the law was complied with
delegated his power to issue bonds, ant
that many of them were signed and ISSUED
nv one of his subordinates in the city o
New York. The prodigal waste of this vas
sum can be appreciated, when it Is STATED
that before the war the State had appropr
ated bonds to the insolvent roads OF Eas
Tennessee to the amount of $47l, OOO.OO
That after the war, for the alleged purpos'
oflprotecting the taxpayers from pawn!
interest on the SAT- 100000, there were is
sued to the insOlvent roads of East Iennes-
see S4.S47.OOO.00. That when they wer
sold they brought. in deprecated bonds
S768. 900 90. worth not more than $500
00O. 90 in currency. The same disastrou
, policy was pursued in dealing with the delIn
Guent roads of Middle and West Tennessee
By an examination of the unanimous re
mort of the Joint Judiciary Committee c
both Houses of the Legislature of l869-TC
composed of some of the best lawyers IN tn
State. in relation to the validity the bond
issued to the Tennessee & Pacific road,
will be found that the principle is atfirme
] thar unless the conditions and limltatlo
{ fixed bv law were complied with in the mod
+ prescribed, that the Governor had no powe
to issue bonds, and if issued without sue
compliance they are void. The same com
!, mittee. in its report in relation to the Min
eral Home road, declared the principle thu
: if the law was fraudulently complied witt
= and the purchaser of the bonds purchase
E at less than the par value Of the bond, b
. and the purchasers from him were atiecte
with notice, and the bond void. In h
message of 1875, Governor Brown declare
the principle, in discussing the liability
f the State upon the endorsement on Ii
bonds of the Memphis & Little Rock roat
o that if the purchaser paid full price, yet
the Governor who issued the bonds did NJ
> | comply with the law the bonds were void. u
onthis point he said, "The execution of thes
mortgages and the providing of a sinkin
= fund. were conditions precedent to the rlgl
! and power of the Governor to endorse saI
: bonds, and the liability of the State did NJ
: attach in the absence of compliance wit
o such conditions
t Tested by these principles, but few,
o any, of the postwar bonds were valid.
n The holders of these bonds were awal
d that when the Government was restore
= to the people, and they had knowledge
: all the facts, and were left free to ac
d they would never recognize this debt
b was not supposed the debt would be +
S pudiated, but it was believed the relati'
d value of that part Of the roads built
Is the ante-war bonds, and that built by Il
d postwar bonds, would be ascertained, an
o the courts opened for the sale of tt
1t roads, and that so much of the proceed
1t as arose from the roads built by the pos
/. war bonds would be paid on those bond
1t and nothing more, and the remainder az
e piled to the ante-war bonds.
( When the election of 1869 demonstrate
e that the right to vote and to hold oifiC
j. were about to be restored to the who
e people, the interest Of the solvent raj
road companies and the holders of II
t, postwar bonds concurring, they made
9, Joint effort to procure legislation allowlr
the solvent railroad companies to buy Il
IF post-wa bonds and deliver them TO IL
Is State, and for every bond delivered
st have the taxpayers assume one OF their