The Ottawa free trader., 1884-10-25
PLUMB's AUDACTIY.

q
that bv the sale of the Fox River Val.
lev railroad TO the Burlington company the
municipal stockholders OF the former com.
pany were not despoiled of their stock, Is
uphesitatingly pronounced one OF the
most audaciously mendacious publications
that has appeared in the whole course
of the present campaingn, astoundingIy
fruitful rs il has been Of what for want OF
n stronger word to cover the idea OF masto-
DOMAIN lying, goes by the name Of Blain-
ism" But if Plumb's audacity excited AS
topisbment, that astonishment is turned to
profound regret, not unmingled with dis
oust TO see the Hon b. G. Cook writing a
letter, in the form of legal opinion, spe.
ciously and deceptively backing up the au
dacious claim of Col Plumb, that the sale
of the Fox River road by Plumb, Force "
Co. to Joy involved no such eXtinguish men
of stock AS the FREE TRADER had claimed
and all the world knows 1t did. Mr. Cook
no doubt wrote what he did purely in pro.
fessional way and for pay, and as far as he
poes his "opinion" may be good law But
Mr. Cook knows very well that his opinion
does not cover the whole case, but that be.
hind it are certain important ifs, the ignor-
ing of which renders his writing delusive
and deceptive, and the proper consideration
of which would give the lie to Col. Plumb's
claim.
A few facts will make this plain, The
transfer of the Fox River road to the Bur
ling,on company was not, as Mr. Cook as
sumes, lease, but an absolute sale 1t in
cluded all the property of the company and
It's franchise or charter, which was It's life
All the bonds of the company that had been
issued were withdrawn and cancelled, all
Its debts of every nature and kind were
wiped out, and all its stock was turned over
to.the Burlington company, so that 1t was
clean bill of sale, except the single incum-
brance of about 100000 stock issued to
municipalities and individuals. The con
sideration was that the Burlington company
should pay to c. II. Force Il Co. $l4,4OO
per mile to complete the road. The
Fox River company itself, having parted
| with its charter, went out of existence. But
there was the incumbrance of $5OO,OOO. II
needed no new issue of bonds In lieu OF
the old ones, as Mr.. Cook assumes, TO ena-
BILE the defunct Fox River company TO pay
Force & Co., for the Burlington company
had agreed TO pay them as its consideration
for the ownership of the road, and If ne
cessary must raise the money on It's own
bonds But there was the incumbrance,
and Mr. Joy refused to execute the contract
until that was got rid Of That gave birth
70 the device known as the issue OF the
| $4,000 mile new bonds and mortgage 70
secure them. That mortgage was given by
the Fox River Company, which was sold to
and merged in the Burlington company, and
was therefore given by the Burlington u
self to the Burlington company to secure
the payment by the same TO the same of its
purchase money of the Fox River road,
The mortgage and bonds have 30 years to
run at per cent. interest, payable semi an
nually and any failure TO pay the interest,"
when due subjects the mortgage to imme
dIate foreclosure To redeem the bonds Sc
cured by the mortgage 1t Is provided that
the Burlington company shall annually set
aside 40 per cent of the gross earnings of
its Fox River branch, to be paid In redemp
tion of such of the bonds as shall annually
he offered on certain day at or below par,
but If none of the bonds are so offered, then
the 40 per cent. goes into the common
treasury of the Burlington company,
Mr. Cook assumes that the interest on
these bonds is regularly and promptly paid
and that quite sum OF them Is annually
extinguished by the 40 per cent. fund, and
then "can't see how this lease can affect the
stock In question:" &c.
But just here come In several important
ifs which Mr.. Cook entirely overlooks and
ignores. If the Burlington road should
neglect to go through the ridiculous form
ality of paying to the Burlington road
every six months the interest on these
bonds, and If the Burlington road should
fail to 90 through the other ridiculous
formality of presenting annually to the
Burlington road enough of these bonds for
redemption at par to exhaust 10 pc: cent
of the gross earnings of its Fox River
branch, what is to prevent It's foreclosing
the mortgage any day for non payment of
INTEREST," but failing to do that II can and
must foreclose the mortgage at the end
Of 30 years for the non. payment of princi-
pal and interest, and Mr.. Cook says: II
know of no railroad In the state whose
stock may not be wiped out by foreclosure
of the mortgage In case of failure to pay
It's bonds, in precisely the same way that
this might be-" Exactly 50, Mr.. Cook.
There is no pretense that the Burlington
road goes through the ridiculous formality