The Portland daily press., 1885-09-30
The oedenshure Cat

| To the Editor OF the Press:
Can you inform our citizens why the city
| of Portland, which owns a controlling inter
est in the stock and second mortgage of the
Portland & Ogdensburg railroad and cannot
realize fifty per cent. on its investment, after
indulging in an expensive law suit should
now throw away whatever advantage it has
gained, and seek to devise a scheme by
which the control of the road will be trans
ferred to others under the guise of helping
to pay floating Indebtedness and third mort
| gage bonds illegally issued, when its own
second Indebtedness is not half secured or
paid? This floating Indebtedness, it is to be
remembered, is of ancient date, prior to
1878, and not that which is to be cared for by
the Receivers certificates. On its face is it
not little suspicious? Why so much gen
erOsty? What has set our doughty Mayor
writing letters to Mr.. Putnam to see if some
other method of recognizing this railroad
cannot be devised outside Of the method of
foreclosure and stock issue?" Why has it
seemed to his mind that a mutual agreement
of all the different interests, ETC., would be
better? The former has seemed good enough
to the average citizen. 1t will at least give
the corporation good credit" Why does he
wish to issue preferred stock to pay ques-
tionable Indebtedness, when the same stock
may control the road? Does he know the
history of this floating Indebtedness and
these third mortgage bonds? If so let him
give it to the public. The public also would
like to know who now own these third
mortgage bonds. If l mistake not suit
was brought about two years ago by one of
our citizens on some of these bonds in the
Supreme Court of this State, and the road
defended on the ground that they were
fraudulently issued. Since then a suit has
been brought by the same plaintiff in the
United States Circuit Court in this district.
Is this scheme intended to aid in the cOllec-
tion of those bonds? 1t certainly looks so.
Let us have all the facts about them before
the city is asked to waive its rights to let
them In.
Ii preferred stock is. to be issued to pay
these outside claims, and only this stock has
voting power, how long will the city retain
control of the road? How long will it re-
tain it under the new mortgage as proposed?
The city will not hold a majority of the new
bonds; it cannot buy any of those issued to
take up the SS00,000 first mortgage, it cannot
buy any of those is sued to complete the road,
for the reason that the per cent eonstitu-
tional limit is already exceeded; and if this
is the case it does not require any great sa-
gacity to see that the control of the road by
the city is likely to be lost. The legal adyis-
er of the city is the City Solicitor, and pre-
sumo he understands railroad foreclosures
as well as Mr.. Putnam. Why did not the
Mayor ask his views on these questions? Is
it because, as l understand he has expressed
an unfavOrable opinion of this scheme, or is
our mayor somewhat friendly to some Of the
Large bOndholderS" referred to in the cor
reSpOndence?
There is one sentence in Mr.. Putnam's let
ter, which is peculiar. In speaking of the
advantages OF the scheme, he says, pre-
serving the present charter would also have
the incidental advantage of retaining the
benefits, 1chich, ii is claimed (but not by him
it will be noticed) the present corporation
possesses, the exemption from the general
railroad tax of the State of Maine" Does
Mr.. Putnam, as lawyer, mean that the p
u .. railroad possesses any such exemption,
or that the charter is not subject to legisla-
tive control and amendment? We hardly
think so and if not why is this advantage"
referred to. Is it a plausible recommends
ton OF scheme which willn stand the test
of examination? As citizen ofPOrtland who
has professionally been acting for the protec-
tion of the citys interests in this suit, ought
not Mr.. Putnam to give us his real opinion on
these questions, and not the unsatisfactory
statement in his letter, 81 do not underS and
that the trustees or their counsel are called
upon to urge upon you as representing the
city, or upon any bondhOlder the choice as
between the above methods of handling the
property" Why are not the trustees and
their counsel called upon to make such rec
ommendation? Are they not the trustees
and counsel of the city as holding the major
interest under the mortgage? They have
not been backward in the past in giving ad-
vice as to, the action they deemed proper to
be taken by the city in these matters. Why
should they stop at this point where the
pros and cons are of so technical character
as not to be readily appreciated by the aver
age citizen, and when the advantages of their
labors are either to be secured or lost?
If you can answer some of these ques-
tions, Mr.. Editor, you will thereby greatly
oblige A SUBSCRIBER