New-York tribune., 1885-01-17
the firm had ever acted as the bankers OF 'ne CUT
noration or had any of its money ON deposit
Mp HUNTINGTON EXPLAINS.


Mr.. HUNTINGTON EXPLAINS.
rur CHARACTER OF HIS CONNECTION WITH THE
HOUSTON AND TEXAS CENTRAL CoMPANf'
ro ths Editor Of The Tribune.
SIR: As some misstatements have been made IN
,ssnect to nv relations to the Houston and Texas
Central Railway Company, deem it proper to state
briefly their precise character.
had not nor had any corporation in which am IN
teresed any connection with the construction OF THIS
companys railway The negotiation OF Its securites
In April 1888 the Southern Development Company, In
which / am interested, made contract Tor the pur
chase from the heirs and personal representatives Oh
the late Charles Morgan of all or neatly all the capa
stock of Morgan's Louisiana and Texas Railroad ana
Steamship Company. Under this contract the Southern
Development Company was to acquire the control OF
the Morgan Company in or about the month OF Novem
ber 1884 Upon final payment being made uhoer this
contract in November, 1884, the southern DeVeioP-
mept Company acquired q controlling interest in the
stock OF the Morgan company. Among the pfopcr''es
belonging to the Morgan company was majority OF
The capital stock of the Houston and Texas Central
Railway Company and in anticipation of its expected
accession to the control of the Morgan company the
Southern Development Company was applied to shortly
before the LIST Of july 1854 to lend to the Houston
and Texas Central Railway Company sufficient
amount of money to enable it to pay the semanhual
interest falling due the 1st of July, 1854 upon the
Houston and Texas Central Railway Companys hIst
mortgage bonds. 1t stated by the officers OF the
Houston and Texas Central Railway Company that
although a sufficient amount OF money had not been
earned to enable that company to pay the July III
teres il was hoped that the earnings of the railway
company from its business during the latter nan OF he
year would enable 1t TO pay to the southern DeVeop-
ment Company the amount of the loan. Under these
circumstances the Southern Development Company
lent the Houston and Texas Central Railway Company
the sum of $325 which was applied 70 ans pay
of the railway company The expectations OF the
officers of the Houston and Texas Central Railway
Company in respect to its earnings for the latter hall
OF the year not realized on account OF the COM
parayely small cotton crop and composition IN rates;
that Of the loaned to It 6y the southern
Development Company only $7O,0OO.of it has been
repaid After suck examination as was able to give
to the matter subsequent TO the acquisition by the
Southern Development Company of the controlling
interest in the stock Of the Morgan company, in
November last, became satisfied not only that the
railway company had not earned d the ntSTet 'a
but that under the circumstances IL couId not ne
reasonably expected thai the railway company would
be able to make provision Tor the Iage interest charge
annually accruing against it.
1t was of course, clear that neither the southern
Development Company nor myself was under any
legal obligation provide for the January interest
upon these first mortgage bonds and inasmuch as
neither that company nor myself had been concerned
in the construction OF the road or the 9 s
securities, it seemed equally clear to me ana my
associates in the ownership of the stock OF the
Southern Development Company that we we're under
no moral obligations to provide Tor this interest pay
ment.
AT the same time could we'll understand that there
might be many persons who had first mortgage bonds
of the railway company in small amounts and TO whom
ft might be matter of great personal inconvenience IL
they were unable obtain the interest falling due on
the 1st of January 1885 any part OF IT, and under
these circumstances prior to my departure for the
South in the latter part of December last arrange
nents made with the Southern Development
Company TO purchase January coupons OF the first
mortgage bonds of the Houston and Texas Central
Railway Company from any persons who might prefer
10 sell rather than to tain them, and am informed
that in fact large proportion OF the holders OF these
coupons preferred to adopt this course and voluntarily
executed printed memoranda of sale by which they
sold their coupons to the Southern Development Com
pany at par. Every pains taken. as am informed
TO advise that the interest had not been
earned that the railway company had not slihclent
credit to enable it to borrow the and that the
coupons were being purchased aud not paid: II any
person has sold his coupons TO the Southern Develop
Inent Company through nadvertence or mistake that
company has not hestated III any instance upon the
repayment Of the money, TO return the coupons.
The lue of railway Of the Houston and Texas
Central Railway Company has never been IN any WISE
merged consolidated with or incorporated INTO our
system OF lines from New-Oreans to san Francisco
claim credit to myself for the careful protection
which have uniformly sought TO extend TO properties
with " hch my name associated, but nave Dceh
and wholly unable to bring myself to the conclusion
that aDy legal or moral litigation existed for my pay
ing from my own the maturing coupons upon
bonds of railway company with which had become
connected only in the indirect which have men
toned and only after the construction of it's road and
the negotiation of its securities had taken place ana
which was manifestly burdened by an interest charge
far greater than its resources or earnings co'tio
POSSIBLY provide for. Y. l. HUNIINGIoN'
Ne,r- York Jan lG. 1855