Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1886-08-21
GORDON EXPLAINS
Why He sold out to the l. 3 N. The cIarks.
Vile Subscribers Protested


DECATUR, Aug. io-[special.l--I notice in
your telegraphlc correspondence from ClarlIs-
vile a communication which calls forth this
reply. have endeavored since the sale OF
the controlling interests OF the Alabama &
Texas railroad, on Saturday last. TO obtain the
assent OF The purchasers TO allow me 10 COM
municate fully 10 the citizens or GAINESVILLE
and others interested In the conditions Of the
sale so far as the same have affected their in-
terests. For prudential reasons, / suppose
that assent was only obtained by wire to-day.
AS the questions involved in this railroad
enterprise from beginning to end have attract
ed such general interest and comment, itmay
not be out of place to give, as fully as a state
ment OF facts will admit, something Of Its his
tory.
In 1888 made proposition TO the citizens
OF GAINESVILLE, Tenn, and Princeton, KY.
and along the line between those places, that
II the citizens would subscribe In valid and
| solvent subscriptions to the first mortgage
bonds OF the Indiana, Alabama a. Texas Rail-
road company the sum of $4,000 and pay for
the Same at par In installments as the work
progressed on said road, according 10 a sched-
ule contained in O contract between the par
ties, the company upon It's part would build a
narrow-guage roai between GAINESVILLE and
Princeton, which distance, as was afterward
learned, was fifty-seven miles. The INSTALL
ments were to be all earned, 80 far as the Ten
nessee subscribers were concerned, when the
company should have completed thirty miles
aud graded twenty more miles, the first two
installments being 20 per cent. each, several
cttho init
and the last two being 8 per cent. so that all
the Tennessee subscriptions were to be due
and payable, except 5per cent of the entire
Tennessee subscription, upon completion of
the thirty miles above referred to, and the
grading the ten miles additional When the
thirty miles had been completed, and ten
miles additional substantially graded, instead
of the subscribers having fulfilled their obll-
cations, there remained due and unpaid
about $4,000 of the $4,000 actually subscribed
either from inability or indisposition of many
TO pay, which few, and only a very few-I
! suppose not exceeding eight out of several
hundred In number-had paid the fnll amount
of their obligations. Very soon after the
work was commenced the fearful financial
panic of 1888 was thrust upon the country,
and, so far as know, every railroad In course
of construction in the South except the Indi-
ana, Alabama Il Texas road Immediately
suspended work, and Notwithstanding the
withdrawal of friends who were backing me
with money and the continual advice of my
friends to stop work and wait for better times
we continued to prosecute our work and OBJ
tanned money therefor principally by mort
gaging my own and my brothers. private
property, the local subscribers having paid In
only about Sl05,000. Confidence in all new
railroad securities was thoroughly broken
down during those months and years Of
financial depression, and for q long time II
was impossible TO sell or raise money on the
bonds of our new railroad at any price. The
local banks of GAINESVILLE, with one excep-
ton, declined, and perhaps wisely, to advance
or loan one dollar on them. The bank which
advanced about $4,000 did so on the bonds al
only 20 per cent. of their par value. Last No
vember or December, Notwithstanding the
almost helpless condition of the road, priL.
cipally from the non-payment of the amounts
due from the local subscribers, with which tC
protect the credit of the company, l succeed
ed in selling 100000 of the whole issue o
$4,000 of our bonds at a price which, aftel
paying all expenses connected with sale, net
ted to the company about 81 per cent. of their
par value. This was q sale which was de-
clared to be by some of our bank presidents
and other financiers of GAINESVILLE at public
meeting a most remarkable financial achieve
ment under the circumstances. This salt
saved us from immediate bankruptcy anc
enabled us to pay off a very large portion o
our pressing debts and gave us fighting
chance for continued corporate existence. /
was developed, however, that these bond
sold would become first lien on any addit
ional portion of the road to be built between
GAINESVILLE and Princeton, and here we me
the obstacle of getting any fresh capital to in
vest in an extension of the road upon which
transferred bonds and bonds sold little owe
one-half of their face value would become
first lien. then conceived the idea of build
ing the remainder of the road under nev
charter, and connect with the Indiana, Ala
bama & Texas railroad, already built, ant
thereby greatly enhance the Indiana, Ala
bama & Texas bonds by giving us through
connection with the Indiana, Alabama
Texas railroad. A new charter was obtained
and contract signed by good many loca
subscribers transferring their interest il
bonds and stocks of the Indiana, Alabama
Texas Railroad company to the new com
pany, If the new company would complete
the fourth section of the Indiana, Alabam
q Texas railroad and build the remaining
seventeen miles under its charter to Prince
ton, thus giving through line from Clarks
vile to Princeton, and contract leasing tn
Indiana, Alabama q Texas Railroad com
pany. The new corporation was arranged 81
as to have it all under one management, Civ
ing both roads an equal chance; the mean
were raised to build the road as referred t
above. 1t was developed, however, that tn
Louisville & Nashville railroad company haC
acquired the 100000 of bonds sold last fall
and at this juncture they obtained an injunc
ton restraining the subscribers to the bond
from making transfer and the contemplated
lease.
Abor.t this time and only about two week
since went to New York and finally induces
Mr.. Huntington to agree, if would do
great variety of things and get great variet
of concessions from subscribers and citizens
that he would take hold of the road and com
plete it to Princeton. Effort was made Il
this direction, and it was developed within
few days that enough of the local subscriber
were refusing TO transfer their bonds to max
il impossible for me to do the required thing