The intelligencer. [volume] (Lexington, Mo.) 1887-1891, 1888-10-27
A BIT OF HISTORY.
THE HANNIBAL AND ST. JOSEPH BONDS
INVESTIGATION.
How the Fund commissioner Were
Exonerated-The Difference Between
Republican and Democratic
Administrations.
Special to The Republic.

Special to The Republic.
JEFFERSON CITY, Mo-, Sept. 17.-There is a
scrap of history connected with the Hannibal
and st. Joseph bonds. OF all the loans made
by the State to secure the construction of
railroads 1873, 701, 0O0) the $1,000, OG0 loaned
the Hannibal and st. Joseph alone escaped
the ~plundering Republican administration,
and this fact affords a good comparison of the
relative merit of the two parties.
The State made two loans to the Hannibal
and St. Joseph Railroad Company, viz: In
1851 81, 500, 900 and in 1855 81, 5000 600. Like
all loans of the kind, the State held a first
mortgage on the road to secure the payment
of principal and interest. June 20, 1881, the
trustees of the company paid to the State
treasurer the sum of &, 1890 600. OF this sum
500, 900 was credited to the interest fund,
the s ,000,O coo being only the face
value Of the bonds. But the sum
so paid the treasurer was wholly insufficient
to purchase the bonds themselves or any other
State bonds having the same length of time
10 run. With a sinking fund sufficient for
the retirement of all maturing obligations of
the State, the acceptance of S3,O00,0 600 as full
payment of the bonds would have involved
the State with the payment of interest on
Hannibal and St. Joseph bonds from July l,
1881, to the dates of their maturity, eleven
and twelve years.
Accordingly the fund commission
ers, Gov Thomas T: Crittenden'
ol1b <AAulOOl oOuu NN0lhCI duu hllOTuCy-
General D.. H. Mcintyre, directed the Treas
urer to receive the money only as a part
payment of the statutory mortgage held by
the State against the railroad. This did not
suit the trustees of the company. They
wanted the State to release her claim, and t-
dious litigation followed. First, mandamus
| proceedings were tried before the State Su-
preme Court, and the State won. GSee IA Mo.
Report, page 1856. Afterwards the United
States Courts were tried, and the
l nnyn Lost emit - IT,
held that the terms of the mortgage could
only be fulfilled when the State had received
full recompense for the responsibilities she
assumed in paying the interest on the bonds
to maturity.
Under a decision of the United States Court
the State was ordered to invest the 80, 600, 900
paid by the Hannibal and St Joseph Com
pany in any bonds of the State subject to call,
and in such other bonds as the State could
purchase. The company was allowed 3 per
cent. interest on the money paid to the State
until such order was complied with. There
were only about 81 800, 600 of bonds
subject to call in which an investment
could be made at par. Under the ruling of the
court, virtually fixing the rate of interest at 8
per cent, and ordering peremptorily the in.
vestment of the money, Missouri bonds sud.
denly went up, and few were offered and they
at eXorbitant prices. The fund commission,
ers were etwee the devil and the deep sea,
The money in the treasury, about 81, 500, 600
was drawing 3 per cent. for the Hannibal and
st. Joseph Railroad Company and the out
standing bonds were drawing g per cent
equal to 0 per cent. on the unexpended money
in the treasury after all the bonds subject tC
call had been taken up. The commissioner
availed themselves of the only remedy, an6
that was to go on the market and purchase such
bonds as could be secured. The holders Of
the bonds were fully advised from the public
records Just what the situation was. TIL
value of a 6 per cent. bond depended alto
gether upon the length of time it had to run
The Hannibal and st. Joseph renewal bonds
all had from eleven to twelve years t
run when purchased, hence the high price
paid. The apparent discrepancies shown a,
to the prices in the letter of wv. b. S. t
the Globe Democrat consists entirely in the
date of the bonds. Any banker can readily
explain this difference. OF the So, 090. O0(
paid TO the State Treasurer by the Hanniba,
and St. Joseph Railroad Company, 800, 0O(
was used to pay the interest on the Hannibal
and st. Joseph bonds. The purchase of the
bonds and the prices paid therefor can be
found in the Auditors report for 1854 OF
page l39.
During the 1885 session of the Legislature 8
Republican member, Mr.. Childs of Kansas
City, prepared a resolution asking the House
to appoint IL committee to investigate and as
certain if the fund commissioners had moi
paid an eXorbitaut price for State bonds
concerning the investment of the fun under
consideration. Mr.. Childs permitted a CORE
spondent of the ST. Louis Republican, TO copy
this resolution, and informed him that il
would be introduced the next morning. Il
was published the next day, but for some
reason Mr.. Childs was absent from the
House. Time dragged on, and still the reso
luton did not materialize. Mr.. Childs
made various excuses, and talked around
mySteriously about some wonderful develop
ments. Finally the fund commissioners pre-
pared 4 resolution asking the House to APP
point a committee with foil power to conducr
Il thorough examination of all transaction.
connected with the matter. The resolution
was adopted and the Speaker appointed
committee composed of both political parties
Mr.. Kellogg, the Republican member from
Holt County, conducted the examination o
witnesses. The men who had talked loudes
about the dishonesty ofthc fund commissioner.
fled like rats from a burning barn as soon Il.
the committee commenced an investigation
Mr.. Childs made IA poor showing before tht
committee. No doubt he had been imposed
upon, and at all events he was careful tt
make no charge against the fund commits
sioncrs. He did not recollcct showing hi
resolution To the correspondents of the Re
p,dblicIH and Post HtS, pat h, and in fact die
not think he was acquainted with them. II,
did not know much about the price of bond
and mad no reason for believing that the fun,
commissioners had acted IN bad faith.
Before the committee had ex
ahmed half a dozen witnesses
every member was satisfied that the invcsti
CATION was Il miserable farce. There wa!
nothing TO investigate. Prominent bone
brokers from New York, ST. Louis and othe
cities testified that the commissioners haC
not paid above the market price for bonds
and that none of the bonds purchased by tn,
commissioners could have been procured fo
| cent less than the price paid. Many wit
ncSSpS We're examined and not one sciutilli
ui evidence WAS procured to show that tn,
fluid commissioners had wrunCcd the State
either lgnOrautly or Intentionally, of on
cent.
The report of the committee to the Legis