Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1880-09-11
FOR GOVERNOR,
DO THE RAILROAD COMPANIES
OWE THE BONDS?
(sECoND PAPER.)


Last week we discussed this ques-
tion as it affected railroad companies
which had become bankrupt, whose
property had been taken in execu-
ton by the state in payment, so far
as it would go, for the bonds loaned
by the state to the railroad. The
point we made then land il cannot
be refuted) was that, whether the
purchasing companies are bound by
the lien the state once held on those
or net, certainly they can only be
proceeded against for the money in
case of the delinquency of the state.
Thestate primarily owes the money,
in short, and there is no question Of
the railroads becoming liable for it
except in case of the states failure
to pay and the inability of the pub
lie creditor to obtain justice from
her by legal process.
The amount obtained by the state
by tine sale of that property is in all
S6,69S,OO0. We are unable to state
what is the face of the bonds for
which this execution was levied.
We are now to discuss the case of
a different class of bonds, those,
namely, which were issued to rail-
road companies which have never
become bankrupt, but which have
settled with the state dollar for dol
lar. The amount of bonded debt
for these exclusive of interest past
due) is $14, 7S7, 900.
Now, on the face of it, it must be
confessed that it looks very strange
that bonds which were not issued
by these railroad companies, but by
the state, and only loaned to the
companies by the state, and for
which the companies have paid the
state dollar for dollar, should be
considered as still imposing a debt
upon the railroads. They have paid
the state for the bonds which were
loaned them, and yet it is contend
ed that it is they and not the state
that owe the amount of these bonds
and of their past-due interest cou-
pOns to the bond-hOlders.
On what theory this can be con-
tended is a question worth looking
into, for, strange as it may seem,
the holders of these bonds also are
suing the solvent railroads for their
money. What then are the alleged
grounds of this suit?
understand them we must state
the method i'm which the railroad
companies settled their indebted
ness to the state. This was done
according to the PROVISIONS of an
act Of the general assembly of 1869
40, by which the railroad companies
were authorized to settle their in
debtedness to the state by the pre-
sentatiOn of any state bonds they
might own, which were to be re-
ceived in liquidation at par. 1t is
not denied that this was a good bar
gain for the railroads, for the state
bonds could be bought at 60 cents
on the dollar, and being then re-
ceived by the state in liquidation at
par, of course the companies made
the 40 cents. And there are those
who think that the state ought to
have received its own notes not at
par but at their market value. Had
the state done so, she would I'M
doubleday have made better trade,
but she would have done what is
considered i'm private transactions a
dishonest thing. 1t is not honest |
for man to shave his own paper. !
Thus, may have given my note |
for the purchase of a house and lot. |
The holder of that note may have |
doubts of my solvency and be will
ling to trade il off for less than its
face. A third party may honestly |
buy it on those terms, taking into
the risk of collection
as counterbalanced by the discount |
ON the face value of the note; but l
cannot myself honestly so purchase
il. / owe sill the money up to the
face value, and, in the case of my
purchasing it, run no risk at all
/ cancel my debt at its full amount;
I can therefore i'm honor offer no less
than its face value for the note; to
act otherwise would be to trade on
my own discredit.
However, whether it would have
been right or wrong to receive Inc
bonds at less than par, the state by
act of the legislature agreed to re-
ceive them at par, and, as we think
pursued the honest course in DONG
so. 1t is true that the railroad COM
panies were guilty of some very
questionable transactions in running
down the prices of the bonds, that
they might buy them cheap, but