Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1880-09-04

10 THE RAILROADS OWE THE
STATE DEBT,
We laid before our readers last
week a copy Of one Of what are erro-
neously called the railroad bonds,
but are really bonds of the state
loaned to the railroad companies,
and we demonstrated from the face
Oft @
Ffrst--That the bond is simply a
transaction between the state and
the bond-holder, in which no rail
road company is even mentioned /;
that therefore the state and no other
party is debtor to the bondholder.
Second-That, as a transaction be-
tween the state and the railroad
company, with which the bond
holder had nothing to do, the rail-
road agreed 70 pay the interest as it
might fall due, and the principal at
maturity, so as to secure the state
(not the bond-holder) from having
to pay it, and, as security for the
fulfilment of this agreement, gave
the state lien upon the road. This
was transaction entirely between
the state and the railroad company,
the bOnd-holders being no party to it.
Third-The railroad company be-
came bankrupt and was unable to
fulfil that contract made with the
state, whereupon the state put in an
execution on the railroad and sold
ii out 10 amer company to reimburse
itself for the loss so sustained.
Now, who owes payment to the
bond-holder The old company
never made any contract with him,
but only with the state. From the
first, therefore, it owed nothing to
him itsimply bound itself to secure
the state from loss i'm settling with
the bond-holder. 1t is therefore a
bankrupt debtor, not to the bond
holder, but to the state.
Docs the new company owe ii F.?
The new company never had any
transaction with the bOnd-hOlder at |
all; it simply bought a railroad |
from the government for money |
paid down without making any |
agreement with it in reference to |
the bond-holder.
The state, therefore, is obviously |
the debtor to the bOnd-hOlder, as it
was from the beginning, but more
stringently so since it has seized and
sold the railroad property, which
was indirectly security to the
bond-holder as being a security to
the bOnd-holder's debtor, which was
the state.
What, then, is the basis of the suit
now pending between the bond
holders and the railroads in the
courts? Why simply this: Some
New York lawyers have discovered
(Orthink they have discOvered) that,
in case ofHie delinquency of the state
this condition-in case the
state becomes delinquent to its cred
itor, the bOnd-holder, then the lien
which the old railroad company
NOW defuncD gave TO the state to
secure it from loss in case of the
railroads delinquency or bank
ruptcy, is still a burden on the prop
nrty which the state seized in exc
,utiOn and sold to the new company. I
Observe it is not settled yet whether
Inc lien docs so adhere to the prop 1
,rty. 1t is contended against these
awyers that the lien which was
given to the state and to no other {
party became extinct when the state
eized the property on which it lay I
But however this may be decided,
III parties agree that primarily the a
tate, and only the state, is debtor a
o the bond-holder, and that it is a
My i'm case of the states delin-
uency that any question arises d
bout this lien one way or another. d
The thing, then, which those men 5
esire who want to throw this debt z
pom the railroad, is that the state O
hall become delinquent, and then l,
he creditors, having no legal re- c
ress against the state, shall sue out n
heir lien against the railroad. Il
And what a delinquency it is I
'hich they want to urge upon the g
ate! She would become dOubly II
elinquent delinquent as regards d
ne bond-hoIder by refusing TO pay al
inn interest or principle of the debt u
leowes him, and doubly delinquent al
regards the railroad company by OF
ling to 1t rs unineumbered prop "
tv goods which were burdened by ID
lien originally given to secure its I'll
I'm interests. Towards the bond re
,leler she would stand as fraudu- &C
M debtor; towards the railroad OF
mpany Is having obtained money tn
der false pretenses, or, to make it In
amer. she would hold towards the 70
iIroad company exactly the posi- do
M of man who sells to another at
ortgaeed property withoutinform- w
I'VE are informed ON good autnoflsss S,lat
Il II the Unanimous ~ i'h's'' eli