The Bolivar bulletin. [volume] (Bolivar, Hardeman County, Tenn.) 1865-1888, 1885-05-08
The Ternessee Bond Case.

The supreme court of the United
States on tie 4th inst, rendered
tLeir decision in The various suits
brought against the railroads of Ten
nessee by the holders of bonds issued
By the State Of Tennessee and loaned
to the railroads to aid in their con
struction. There was about $4,000,
900 involved in the suits, and the
cases were decided IN favor Of the
railroads and against the bondhold-
ors The Actof 1852, authorizing the
issuance Of these bonds provided that
the state should have O lien on the
roads for the payment Of the interest
and the principal If the bonds issued
to them and that upon the default IN
payment Of either principal or inter
est. the state should have the right
to sell the roads and apply the pro-
ceeds of the sale to payment Of the
same. Some eleven road, to which
the state had issued some 81, 00o, coo
in bonds, made default ia the pay
ment Of the interest and the state,
through its legislature in 1872. or
dercd them sold. The roads were sold
and brought about $500, 900 in the
deprecated bonds eff the state, and
left the other $7,500,000 to be paid
by the state, with a large amount OF
interest, which had been from TN to
time funded INTO new bonds. In 1863
10 the Legislature, at the insugation
of the railroads. passed an act author
izing the roads to pay their indebted
to the state growing oul Of the loan Ct
bonds to them in any series Of legally
issued bonds. So, the reads which
had not been sold, instead Of getting
up and paying into the states treas
ury the identical bonds which had
been loaned 10 them, went into tie
market and bought up the cheapest
bonds they could find, particularly
the Brownlow bonds, and paid them
in, leaving the bonds which lad beed
issued to hem still outstanding. The
holders Of these bonds then brought
these suits, claiming thqt tie lien re
tanned BIZ The state for their payment
attached TO the bonds and followed
them into the hands Of the purchasers
and Injured to their benefit. But the
supreme court held that the lien at
taching to the roads upon receipt Of
the bonds was merely fol the security
of the state and did not follow the
bonds into the hands Of the purchas-
ers. They therefore held that the
railroads were not liable for the pay
ment of the bonds There was I'M
questionably q great deal Of fraud
connected with the issuance Of these
bonds; but the grandest swindIe eyer
perpetrated on free people was
accomplished; when through the
manipulaiions Of the railroads the
legislature Of 1869~70 passed the act
above referred to. authorizing the
roads to discharge their Indebtedness
to the state in any series Of Bonds.
That act enabled he railroads to go
into the market and bay up the
Brownlow bonds, (Which ought and
would have been repudiated IN toto, }
at from twenty-five to thirty cents on
the dollar and pay OF their indebted
ness to the state, leaving the ante-war
bonds outstanding, the legality Of
the issuance Of which could not have
been so we'll established. The Brown
low bonds were selling in the mark
ct for perhaps one half the price de-
manded for the ante-war bonds, be-
cause it was well known that the
Brownlow bonds were fraudulent and
it was believed that the people of
Tennessee would refuse to pay one
dollar on them. The state was not
party TO these suits, and the question
of the liability Of the state was not
raised. Yet we see a loug article in
the Appeal with flaming head line
which reads as follows; The State
Stuck by the decision Of the Federal
Supreme Court for the whole of the
bonded debt" Suchsis not the case
and we were somewhat surprised to
see that the .''old reliable" had gone
of half cooked.