New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-10-06
RAILWAY INTERESTS.
BIG DROP IN ARKANSAS BONDS
EFFECT OF A DECISION AT LITTLE ROCK THAT THEY
ARE NOT A LIEN ON THE RAmRnAna

EFFECT OF A DECISION AT LITTLE ROCK THAT The
ARE NOT A LIEN ON THE RAILROADS
Justice Miller, of the United States Supreme
Court at Little Rock Thursday decided that the
bonds issued by the State OF Arkansas TO the Little Rock
and Fort smith, and the Little Rock Mississippi River
and Texas Railways were not lien upon the
roads. The announcement caused some excitement
among the holders OF Arkansas State aid bonds in this
city yesterday, and sales at the Stock Exchange
made at 12 instead Of at AZ to 49, at which the bonds
have been selling recently. The full text Of Justice
Mler's decision has not been received. An appeal
TO the Supreme Court OF the United states will be made
at once
ExJudge Dillon who argued The cases for the railroad
companies, said yesterday 1.-THE telegraphc dispatch
Is undoubtedly authentic, for have Just received q
dispatch from the clerk OF the court saying
that Justice Miller has dismissed the bills OF the
state bondholders In the cases against these roads,
which means that the State and boudholders have no
lien against the property Of the present companies, and
that the companies not liable for the bonds
The amount Of the State aid bonds is about
S5O0O,0OO, but the accumulated interest makes the
sum about double that amount The State Of
Arkansas at the close the war; destitute OF rail-
roads, and to encourage their construction passed an act
In 1867 providing for lOaniDg the faith and credit OF
the State to aid In the construction OF railroads.
This act OF 1867 authorized State bonds 10 be issued
to specified extent and provided that the re-
ceipt by any railroad company OF the bonds loaned 1t
by the State should Immediately operate lien upon
the road and have priority all other debts That
Act, which gave the State express and specific first
lien, proved imperative as no companies applied for aid
and no bonds were issued under IT, The year, the
Legislature repealed that Act and substituted of
July 81 1868 which also authorized an issue OF State
bonds to the extent Of fifteen thousand dollars per mile
to each company which had not received land grant,
and ten thousand dollars per mile to each company
which had received land grant. 1t was under this Act
that all the state aid bonds Issued. This Act
tanned express provision for lien, but instead con-
tanned peculiar provision that the Legislature shall
from time to time impose upon each railway company
TO which bonds have been issued tax equal TO the
amount of the interest upon such bonds then Outsand
ing aud unpaid, such taxation TO continue until the
bonds and interest shall have been paid By the COM
pany' After the roads partly completed the com
became nsolyent and interest paid on the
State bonds the mortgage bonds after 1873 In 1874
the mortgages were fOreclOsed in the Fed
eral Court, and the roads purchased by the
mortgage bOnlhoders; aud companies were
organized under act OF the LEGISLATURE passed
in December 1874 for this purpose Arhe companies
never received auy OF the State ad bonds and N 1882 IL
was suggested for the r't time mat the ponds Issued IN
1868 constructive or equitable liens upon tue rail-
roads, superior 10 the lien OF the Old hIst mortgage
bonds.
The principal questions IN the case therefore,
First, whether the act Of 1868 created constructive
lien IN favor OF the State boudhoders and II So second
whether tas was paramount 10 the Hen o. tue mort
executed DI the Ola companies Oh tho
District Judge held that the State bOndhoders had
direct lien and tnat II was paramount 70 any Gn when
the old created ny the execution or the mort
gagrs ana that this lien attached TO and followed the
property into the hands OF the new companies anu was
a nf-t lien roads In July the case was argued
before Justice Miller aud DIstrC, Judge Caldwell upon
| It's Wcrs.
zine present decision, in my opinion. practically ends
the controversy. The may " appealed Olt do
nor mink that the Supreme Court VIII take different
view u IT, The bondlOdcrs have the remedy, which
their bonds gave them, the faith and credit OF the
! state"
John H. Dos PassOs, who appeared FOR the state
nonuhodcrs said: 1.-THE case seems TO have been de-
cld, on TWO POINTS the len created By the act was
operative upon income aud revenue Oi the Companies
| receiving STATE AID aud did not apply 10 the
| railroads 80 as enable Dnuuuulders 70
eu.Orrp the lien against Il new organization, ana mat
even n there lien IL exists merely Tor the dement,
az the state ana the bOudAOlGrgs cannot avail them
sclyC, OF H. Justice Nlers position utterly untena0!e
ana the case will APPEALED prOmp uy 10 me supreme
CUu, ,urge f. would have gone probably, Ia any event
Ihaye lust received dspac that Judge Caldwell VIII
| file a dissenting opinion"