Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1880-05-01

The litigation between the holders
of Tennessee bonds and the railroad
for which those bonds were issued
has at last been brought into open
court at Nashville before Judge
Whitley, of Detroit, in the United
States circuit court. The American
says:
Among the counsel from other states who
| will take part in the discussion, are Judge
! George Z. Hoadley, of Cincinnati, and Mr..
f. L; Andrews, of New York, representing
! the bOnd-holders; Mr.. Charles f. SoQths
mayd, of New York, law partner of the
/ Hon, Vim, NJ. EVaFtss secretary of state,
/ representing the East Tennessee, Virginia q
| Georgia and Memphis & Charleston rail-
| roads; Hon. Stanley matthew's, of Ohio,
! representing the substitution bond-holders,
and Hon. Russell Huston, Of Louisville, rep
resentlnE the louisville " Nashville rail-
road.
From this state there will be present Gen.
J. B. HeisKell and Gen. W. Y. G, HumeS, of
| Memphis, representing the NJ. 4 G. railroad;
| Mr.. Will. Baxter, of Knoxville, representing
the Knoxville Il Kentucky railroad; Judges
Shields and Brown, from East Tennessee,
representing the East Tennessee. Virginia d
Georgia railroad; Mr.. samuel Watson and
Mr.. Webb, representing the bond-hOldeTs,
and MeSsrs. East & Fogg and MePhail Smith,
representing the N, G. d St. L. railway.
The act under which these bonds
were issued is commonly styled the
internal improvement act of 1852,
for the purpose of furnishing funds
to certain railroad companies to
build and furnish their roads. The
question in dispute has been stated
compactly in the Nashville Ameri-
can, as follows:
The bond-holders claim, substantially,
that the bonds in question were issued and
negotiated in each instance under and in
pursuance of a public statute; that they
were duly registered in a public Office and
ear-LFlagkad la CON furHity with thai statute
40 as to Enthusiastically fix their identity;
that the statute declares explicitly that 1.-THE
bonds shall constitute a lien" upon the
property in question, TO secure their pay
inent by the company that cOnformably to
common usage in such transactions, that
lien was, by the same statute, vested in the
state as a public political corporation, to
effect that object; that the statute was a
constituent part OF contract completed as
to each bond by its sale to the money-lend-
er, and that the sale OF the bonds was 2 loan
from the purchaser to the railroads, for the
payment of which the bonds were a lien
upon the property of the railroad COM
panies to be enforced as against them by the
holders of the bonds in default of payment
of principal or interest.
The railroad companies, on the other
hand, elaim that the sale Of the bonds was q
loan to the maker OF the bonds, 81 the staiei
that the purchasers of the states bonds
from the companies thereby lent their
money 10 the state, which then let the COM
pauies keep and use 1t as a loan from her to I
them; that it was the same as if the state /
had borrowed the money from the purchas- |
ers ON her bonds, and had then turned it |
over to the companies; that after the pur- |
ohagers OF the states bonds have thereby /
lent their money 10 the state. she lends it To |
the Company gnqn terms and conditions, |
and upon security provided by a statutory |
instrument and mOrtgager; that, when the /
company sells the bonds, "a loan is brought |
about from the purchasers to the state, and /
then follows the subsequent and secured |
e 9s9 9E s e II 5Ae f G&R4g 81 Ehe Pre-
blended here-a loan by the purchasers Of /
the bonds to the state upon her faith and |
aredit, and then loan hF the state TO the
that it is a matter purely betWeBn the ooms
pany and the state, and the lien reserved to
the state is for her own indemnity eXclus
lively, and that the lien is not for the pay
ment OF the bonds by the state to the hold
ers, but that II IS ''foT the payment by said
of said bonos''-neaning the pay
ment by the company to the state of her
loan to it of bonds.
The high character and the large
number of the lawyers retained, the
immense amount at stake and the
intricaey of the questions in statute
and constitutional law which will
be involved portend very protract-
ed and closely contested litigation.
So far as we can see, the railroad
debt of the state cannot be the sub
ect of party divisions until these
suits are adiudicated.