New-York tribune., 1881-10-11
MINNEsoTA's DISPUTED DEBT


FRoM AN OCCASIONAL CORRESPONDENT OF THE rnIBusEl
ST. PAUL, Minp., Oct. 3.--The call for an eX-
ira session OF the Legislature to meet October IL re-
Gently issued by Governor PiIlsbury with view to the
final adjustment Of the outstanding railroad bonds, rem
ders II more than probable that this vexed question VIII
soon be set at rest The National comment evoked by
the attitude OF Minnesota the only Northern State
which refused Justice to its creditors, and the large
number Of these bonds held by persons at the East,
make history OF their issue and the efforts to obtain
settlement not wholly uninterestng. On the 26th OF
February 1857 Congress passed act authorizing the
inhabitants Of Minnesota form for themselves Con-
sttuton andstate Government, and TO come into the
Union according to the provisions OF the Federal Con-
stitutOn. Territorial Government had been in exist
ence since 1Si9 and now in pursuance OF this recog
milton OF its claims two district conventions met and
their abors being completed August 20, 1857 they mu
tualy agreed to submit the Constitution to the
people, This, In essentials the fundamental law
that now governs the State ratified almost unan
mousy by the people only 700 being cast against
it. Section 10, Art TX OF this document reads: The
credit OF the State shall be given loaned In old
OF any individual association corporation" But al
ready In the State there were two parties,
the conservative element which framed this clause and
hoped for firm prosperity the result Of steady
growth and the enthusiasts who, conGdng in the un-
bounded resources Of the country and intoxicated with
the prospect OF ts advance in dignity eager to In
the speedest Veopmen At the ensuing election
the latter party largely In the majority and on tho
18th OF April, 1858, amendment adopted which
added to the negative given above impor tant exoeP
ton authorizing the Governor to ISSUE for the purpose
OF eIpedtlng tine construction of railroad lines, the
special bonds Of the State bearing interest OF per
cent TO aggregate amount OF $50000Oo The people
seemed crazed with visions OF boundess prosperity
about TO break upon them. The opponents Of such
pledge of State credit 1T euch time scarcely able
to hearing and the amendment passed immedl-
ately into the form OF law 1t will be observed that this
adopted April 49, while the State not admitted
until the 11h OF tho following May; and upon this the
advocates Of ropudiation, later scored their first
point that the authorizing amendment, being framed by
Legislature OF what not yet State, was void OF
0blg tOn upon the State which later came into being
The Governor oreseeing the future loath to issue
these bonds but a writ of mandamus from the Supreme
Court lett him further discretion. According to this
law S2,275 900 OF the fAmOus minnesota Railroad
Bonds" issued to four companies, which bound
themselves, a condition Of the loau TO complete by
January $685. total OF 765 miles OF road under pain
Of forfeiture OF their land grants assets and franchises
The success Of this measure not proportoned to
the promises OF the railroad nanclers the hopes Of
the people The country passing through period
Of terrible depression. The population and cutya-
ton OF the state were such to yield profitable
return the roads had already been in working order
The banking law allowed these bonds to be received by
the Auditor "a basis for circulation and currency
was Issued upon them. Enormous discounts TO con-
tractors persuaded them TO undertake limited amount
Of construction But the only guarantee given the pub.
lie for the payment OF principal or interest was the
threat OF connscaton against the roads Local quarres
broke and increased tine general dstrust The bonds
dcpreciated with unav oIdsbe rapidity. until In May
1860 bank stocks OF this class sold by the Auditor
for eeyentoen cents the dollar. The railroad COM
rsnies had stopped ali except the Southern
Minnesota defaued tho tpuated payment OF interest;
and the State took p0ssesaon OF their assets including
Nasa .N.Iu, Th.r aapla
goaded 10 evaporation on finding themselves saddled
with what 90 that date was enormous debt and on
the 9th OF November, 1850, new amendment to the
Constitution adopted. containing these curiousy
inconsistent provisions: "No law levying tax, or
uing other provision, for the payment Of interest or
principal OF the bonds denomnated Minnesota State
Railroad Bonds shall take effect or be in force until
such law shall have been submitted TO vote OF the peo
pie OF the State and adopted by majority OF the electors
OF ,he state voting upon the Nor shall there be
any further bonds under what prpors TO be ar
amendment TO See 10, Art TX, OF the Constitution
adopted April 49, 1855 which is hereby oIpunged from
the Constitution excepting and reseryng to the State
neyertheless all rights remedies, and fOrieitures
ing under said amendment" The frat hall OF this pro
vdng that any proposal for the settlement Of the bonds
must first submitted to the people, has been the bar
rer against which every effort for the removal OF dis
grace has spent itself useeesy. But the latter half has
an like manner always been the confusion OF the repu
diators; for State had right TO the property OF the
roads only forfeit for the unredeemed bonds. II the
bonds were not valid, rs has siuce boon repeatedly
claimed the State had neither right nor title 20 their
assets which It has nevertheless persstenty retained
Such remained, substantially, the status Of the bond
question until the present year. The holders OF the
States pledges OF honor repeatedly pressed for pay
mcut. In the years immediately following $50 the
people were really poor 10 satafy the deb 1bcn
wealth incfcased, the large proportion OF iorem Pohn,
Immense immigration bringing IN class Of people who
knew nothing OF the bonds aud hence would
hS naenee OF class Of anaeosaes VINO rode nto power
BY persuading the people that ropudaioh was NOT dis
through the test OF popular vote Four aboriye sos.
in al sreng hened The impression abroad that hinne,
these four proposltlons one passed oy the lGssatnre
the taxes paid by railroads sinking hlnd for the qui
datou Of the bonds one passed IN ISL provided for
ained authorized tue ssue OF new hrtyyear bonds to
tber place and passed IN 1875 devoted the pro
oecds Of The Internal improvement lands their extnc
on; but III three were defeated by heavy najories
upon the popular vote which the amendment 0i 1860
made an Imperative preliminary. Inc fourth proposal,
passed Ia 1870, the ony one which the people ever
approved This required S2OoO0OO OF the bonds 10 be
Deposited before the rst Nedhssd1Y N september WIN
the Commissioner OF the state Land Onice accompanied
by written contract on me part OF the owners 70 par-
chase, public auction on that day an amount OF unil
proved state lands equal IN value 70 the face and unpaid
neither could nor would comply with snch condtons IN
few weeks time. The requisite number OF bonds was
nun and void such Ia the record OF twenty years OF
virtual repuaton for Il IA 10 be obseryed that the frat
pose a scheme OF payment II not until later years
that prcte1ts advanced to throw doubt on the a
bility Of the state IN point OF law
Az these bonds viii mature in 1888 prompt action now
became necessary 20 avert act OF ayowed repudia-
ton The bondhOdcrs offered again and again to sub
NIT tho validity OF their claims 20 the state courts
agreeing n advance 10 the destruction ot the paperR II
an adverse should be reached but they could
not obtain ths concession Finally, Mr.. Chamber
LAIN the holder OF the largest amount OF these bonds,
proposed to the Legislature OF 1881 10 deposit thom with
the State Auditor; have their VALIDITY passed upon
and N they decided o. constitute Yalld obligation,
TO accept lily cents the dollar In fIll payment Of
principal and interest. No such proposition was ever
before made wealthy and solvent state by rhtfnl
creditors The Legislature responded by passing, on
March l. 1881 after much discussion The act for bond
tribunal. TINS empowered the Governor Ia appoint tr
bunal OF Ave judges before whom the counsel for and