Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1880-10-30

CaNu 8JWA-AHC AO1<i fDcu. IiSiil Vi
way, rails, chairs, cross-ties, ETC.,
the rolling stock and the stock of
the share holders. And what is all
this to secure? The fulfilment of
the company's contract with the
state, not with the bond-holders.
The railroad companies never had
any transaction with the bond
holders they simply give the above
to assure their doing. what?
Paying the bond-holders? No!
they do not know the bond-holders
and the bond-holders do not know
them. There is ne contract between
them; what they give security for
is that they will furnish funds to
the state, by means of which it will
settle with the bond-holders, who
are creditors not of the railroad
companies but of the state. 1t Sc
cures, in fact, the performance of
the
Duty of said company to deposit in the
Bank or Tennessee at Nashville at least If
teen days before the interest becomes due 8
an amount sufficient to pay such in
terest, including . satisfactory evidence
that such interest has been paid or provided
for.
These funds, then, are to be paid
into bank and there placed to the
credit of the state, which fulfils the
railroads contract with the state,
and, fifteen days afterwards the
state is to settle with the bond
holders, using these funds for the
purpose.
1t appears therefore that on the
authority of the statute of 1912 two
contracts are made, one contract
of the state with the bond-hOlders
and another contract of the railroad
companies with the state; and that
the railroad companies have no con-
tract at all with the bond-hOlders,
and have no relations with them
except so far as each has made a
contract with a third party, the
state; but the two contracts are en-
tirely independent of one another.
By the first the bond-holders agreed
to pay in their money, and the state
agreed to give their bond on which
they were to pay the interest and
the principal when due, and the
security which the bond-holders got
for the fulfilment of this contract
was, as expressed on the face of the
bond, "the faith of the state of Ten
nessee, which was thereby irrevo-
cably pledged"
By the second contract, which
was between the state and the rail-
road companies, the railroad COM
panies agreed, in consideration of
the loan of these bonds, to furnish
the state the means of paying the
interest on them and the principal
at maturity, and as security for do
ing so, give lien or mortgage on
everything they owned.
Up to the war they complied with
the terms of this contract, and they
did furnish the state the means for
meeting its interest. After it they
ceased doing so. Why? Because
during the war the confederate gov
eminent at first, and afterwards the
federal government, seized the roads
and used them for war purposes.
Now, who will say that the state
ceased to owe the bond-holders the
money they had paid for these
bonds because the railroads ceased
to furnish money to the state to pay
it with. The bOnd-hOlders had
never looked to the railroads or to
anyone else except the state for their
money. 1t was no concern where
the state got it, whether the state
continued to have it provided by
the railroad companies or not they
knew nothing about railroads or
else but the faith Of the
state of Tennessee. That the railroad
companies were delinquent we adj
NIT, not, however, to the bond
holders, for they never had any
dealings with them, but delinquent
to the state.
Then the state entered upon the
remedy which had been provided
in case of the railroad companies
delinquency towards it in that very
statute which we have already
spoken of as enabling the issuance
of the bonds.
1t took possession of the roads,
put in a receiver who used all the
property of the roads and ran the
trains on them, paying the expenses
and receiving money for freight
and passage, and soon found that
it was thus losing nearly $4,000 a
day by the enterprise. 1t was easy
to see that the state could not run a
railroad at a profit. What next Z?
The state established a commission
for the purpose of winding up its
affairs with the railroad companies,
the result of which was that some
of the railroads settled their debt
with the state by buying up state
bonds, and others acknowledged
themselves bankrupt and their
was taken in execution
and sold to a new company. The
companies therefore have
fulfilled their contract with the
state for which the lien was security;
the insolvent ones became bank
rupt and vanished. The companies
which bought their property never
had given any lien either to the
state or to the bond-holders never,
indeed, had entered into any en-
that required a lien to
secure them, and the state remained
as it always had been, the sole
debtor to the bond-holders. What
are we going to do about it? That
is the question we are to vote on.
WE heard Col. Rogers last week
mt frinmnhantlv the question !: