The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1881-01-08
A Thorough Vindication.

n 1HoiUuSA fIuuIo1Glou'
No more thorough vindcation of the abel
and efficient management of the affairs of the
Chesapeake and Ohio Canal under the adj
ministration of President German could be
found than the decision of the United States
Circuit Court Judges Bond and Norris, re-
flsing the application for receivership made
through an English bondholder. 1t is due
the court to say that nothing could be clearer
than its elaborate review of the whole case
and nothing more equitable than the conclu-
sions reached in its disposition. The decision
is complete refutation of the allegations Of
political corruption and misnanagement set
forth in the bill of the complainant. 1t will
be recollected that in the examination OF the
witnesses the widest possible latitude was
given them to testify, the usual technical
rules of evidence being disregarded, yet not
a scintila of evidence was brought to light
to disprove the we'll established fact that the
canal had been operated during the whole
period of Mr.. Germans administration with
business like economy and thorough efficien-
cy The principal witnesses and other gen
tlemen who made affidavit to the bill dis
tnctly stated in their testimony that they
had no knowledge of political corruption.
On the other hand, it was shown that the
canal is now better equipped and in better
condition to transact an increased business
than ever before in its history. Itwas proved
that the boats can carry larger tonnage than
ever and at lower cost to shippers. Even
during the trade disasters of 1874, IS and
rs. when the stocks and bonds Of almost
every description deprecated in value to dis
astrous extent, the canal bonds stood eXcep-
tionally high, and they only broke down after
the business stagnation, the ruinous compe-
-. I,,tir l,,as
great labor strikes and the terrible. freshet-
a combination of causes that could not but
prove very serious to any corporation. In the
decision of the court the case as presented
by the able counsel employed on both sides
is clearly reviewed and CONCLUSION reached
that, notwithstanding the default in the pay
ment of interest on the bonds of the com
plainant "the express terms of the mortgage
give him no ground to ask to have possession
of the canal either through the trustees or by
the appointment of a receiver" unless mis-
appropriation of the funds or mismanagement
can be shown. AS to the allegation that the
canal was run as political machine to
the detriment of its bondholders, through the
employment of useless salaried officials, the
decision explains that such, if it existed, is
not an evil that the court can remedy; THAT
it existed at the time complainant purchased
the estimate of their value" But" re-
marks the court, "wc do not find the allega
ton established by the proof" The court
next considers the charges made in connec-
ton with decrease in the revenues of the
canal in 1877, rs aud 70, and acknowledges
that the explanation of the defendant, show
ing the hostile competition, general depres-
sion of business, the great flood and Interrupt
lions by strikes, rendered it impossible for
the corporation to yield the revenue of former
years, and further that complainant has failed
to shcw that the deficiency ofrevenue can be
attributed to the extravaganza and mis-
management Of the officers of the corpora
ton" The fact that the utmost confidence
is reposed in the present management is
pointed out by the court, when it states the
well-known fact that, although the suit has
been in court an entire year, no other bond
holder, with a single exception in which only
u triling amount was involved, has united in
it save the complainant, ''and it does not APP
pear that any others believe that the remedy
now sought would be beneficial 70 their in
terests.n The court also calls attention to
the fact that from period Of forty years
down to 1865 the canal paid no interest on
these bonds, and points out that such failure
may exist in the future, so that should a re-
ceiver be appointed it might have TO manage
the canal, subject to treshets, strikes, NC,
through period of time which this century
might not see the end Of" The decision
fully sustains the management in the purchase
of the wharf property at Cumberland, the
building of the outlet at Georgetown, and the
construction Of telephone along the line as
necessary acts for the canal to maintain it
self against competition which threatened its
existence" and notes the important fact that
the complainant never raised his voice IN
protest before their acquisition" though am
pie opportunity was offered him for doing so.
The building of the line of telephone is fully
justified by the court. and the decision shows
that its use 'resultS in a considerable saving
Of annual expense" The court next takes
up the item of directors expenses, hotel
bills, &c, and expresses the opinion that
even though it had been long the custom,
such expenditures are not warranted, and
while they ''do tend to excite distrust they
do not actually prove anything but themsel-
YES, and are not in themselves sufficient to
justify the costly machinery oFa reoeivership."
The court in concusiou considers the charge
that the issue Of the repair bonds in 1878 was
not necessary, and disposes Of it by showing
that the very same counsel employed by COM
plainant in this suit also represented his in
terests before the Legislature when the ne
cessary act for the issue of the bonds was
passed and urged its passage as a wise, ne
cessary and beneficial measure" Under all
the circumstances the court decides that the
facts developed during the trial of the case
are not of such a character as to call for the
exercise of judicial power to place he canal
in the hands Of reeei.er' We have no
doubt that me decision will be Endorsed by
Eli persons who view the whole case from
non political or unprecedented standpoint. 1t
should and will forever silence assaults upon
the management of corporation whose af:
fairs have been for years administered with
rare business sagacity, prudence and Skill
BaltO. Gazette.