Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1881-10-06

and became tneolvent. The state then proceeded
to foreclose its securities. By these forecles-
ure proceedings II acquired about $50 miles
of graded road, the franchises Of the comps;
nies-the lands of the cempanies-in fact 1t
acquired the title to all the securities which 1t
had taken for ito indemnify, including nearly
five million acres Of land as security for it,
liability for 90 ,27S, 900 bonds and interest.
In 1850 the state, by an amendment to her
. institution, repudiated the bonds and forbid
the levying Of q tax to pay the interest. The
lands, road-bed and franchises, which the
state held for it's indemnity, were afterwards
granted by it to existing companies free and
clear.
This action of the state left the holders OF
the bonds unprovided for. NJ. Selah Cham
berlain, contractor, who had received pay
ment in bonds, brought suit In the United
States court against the Southern Minnesota
company, the st. Paul & Sioux City company,
and others. The decision Of the court was
that where land was conveyed to the state by
a corporation, a. indemnity against losses on
| state bonds loaned to it, the bondhOlders have
no equity for the application Of the land to
the payment Of the bonds which can be en-
forced against the state, and her Eranters take
the property discharged Of any claim OF the
bondholders. This was affirmed by the su-
preme court of the United States.
In his annual message of January, 1877, the
governor advocated recognition Of the old
repudiated bonds. He says that the state has,
by strong implication, uniformly affirmed the
validity Of the bonds, and cites numerous In
stances a. proof, and refers to the decision OF
Judge Dillon and the supreme court.
The bonds in question were issued In 1858
and 1859, in aid Of railroads, bearing interest
at Z per cent, and redesmsble in 1888. The
amount of the Issue was S,275, 600, on which
the unpaid interest for seventeen years
amounts to nearly $780, 900 more, making
the repudiatsd debt, principal and interest over
The Chicago Tribune in February, 1877.
said: The companies offer to the State q
Minnesota, by Mr.. Chamberlain, the largest
holder of It's defaulted railroad bends, was
not entirely satisfactory to all the mambers OF
the committee Of the legislature having the
matter in charge. Mr.. Chamberlain has made
concession of 4250, 0o0 in his previous pro-
posal, and has written to the committee %
follows: 81 will accept for each z per cent.
bond surrendered $l,55sin new per cent.
bonds, interest commencing June, 1873. In
either case this is less than 50 per cent. Of the
amount legally due me, AID further conces.
sion of about $3.50 due upon the amount OF
my claim.
The bends and interest now amount to
81 600 GOO and Mr.. Chamberlain is ready to
forgive the state more than q, 500 900 Of the
debt.
The same year the joint legislation com.
mi,tee reported q bill providing for the issue
of per cent. bonds to b issued In lieu Of the
old bonds and their unpaid coupons to the
amount OF 81, 600 for each outstanding pei
cert bond or coupon, or $3.50, zoo includ.
| ing the then outstanding indebtedness OF over
seven million dollars. This provision was moi
| to 20 into effect unless the people ratified ar
act devoting the proceeds Of the soc, 00e acres
of internal Improvement land to the paynel,
| of the principal and interest. This proposition
was submitted to the people for their ratifca
ton on the 18th of June, it having passed both
branches of the legislature almost unanimous
ly. 1t was generally supposed that the popu-
| lar vote would be recorded In favor Of it
Nearly all the legal papers Of the state were il
faver of the amendment, and the larger towns
and cities gave it considerable maJoritiss. Bu
| it was defeated in the agricultural districts.
1S66-In 1855 the legislature Of HilHesot'
passed law for the adjustment Of the OLE
debt providing for the appointment Of three
commissioners, whose duty it would be to a.
certain the present whereabouts Of the s.. S75,
600 bonds, how much the holders paid 10
them, and if satisfactory arrangement can b.
m ade new bouds are to be exchanged for tn
old ones, subject, however, to the approvallb 10.
| /, legislature and the direct vote Of the PEG
pie.
1s71-Aay ,, 1871, the citizens Of Mime
sofa voted upon the adoption or rejection o
an act which had been prepared BY the legisla
ture with view to terminate the centrovers.
long waged in that state On what are know
a. the loan auendaent bends. The result o
the election was in favor of not acknewledg
| ing the indebtedness of the bonds iss1ed b.
| the state and known as Minnesota State Rail
road bonds.
Recognized state debt. -. .s19e, 900
Loan of 1878, Z per cent, for
| public buildings, due in
| 1883 Observation-Disclosures. $1,000
Temporary loan for purchase
| of seed grain for sufferers
by grasshoppers.. e5.0O'
I $4,000
Unresognlzed state debt
Bonds issued in 1858 for
railroad aid due in 1883,
per cent ................ ss,s7s, oe
The principal and accumulated interest o
the above uDrecognised debt now anount
| 10 sho