The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1891-03-07
Misleading Public opinion.

CIJdntiHg the canal to the WdShIngt0H ana
Cumberland Railroad for a bed for their rail
road, an disregard Of the rights Of these bond,
holders, iceye right The effect of the bill
passed at the last session is suspended and
practically destroyed. The experiment OF
running the canal on business principles will
be watched with interest, as many OF its friends
have contended that it could be made to pay
if run on business basis.-CecH Democrat.
The bill referred to in the above article in
no way ignored the rights of the bondholders
of 1914, but on the contrary provided for the
payment. conditioned upon its acceptance, OF
twenty-five per cent. of the principal of these
bonds, when at the time, and for a long while
previous, they were quoted on the market at |
ten cents on the dollar. The bill, in further |
recognition ofthe rights of these bondholders, |
provided that in case any of the holders OF
those bonds should refuse to accept the terms
proposed the canal and all its works should
be sold under the power of sale contained
in these mortgages, which were liens upon the
corpus of the canal, and such sale and the
distribution of the proceeds thereof were TO
be submitted to the jurisdiction of the circuit
court for any of the counties of Allegany,
Washington, Frederick or Montgomery, with
the right of appeal; and in the event that it
should be determined by the court of last
resort that the holders of the bonds of 1874
we're not entitled to any part of the proceeds
of such sale, the state should receive such
portion of the amount paid into the hands of
the state treasurer for the redemption Of these
bonds rs had not been applied to that purpose.
Do the conditions above recited show lack
of regard for the rights of the bondholders of
1874, as our esteemed contemporary alleges
| At any time for years past these bondholders,
upon application to the courts, could have had
possession of the canal upon the same terms
aud conditions as they have it now. But not
until the carrying trade of the Baltimore and
| Ohio Railroad from the coal fields of Allegany
/ to tdewater was threatened with serious com
petition was it thought necessary to claim the
/ equities which attach to these bonds by virtue
| of their lien effect alone upon the tolls and
revenues Of the canal.
| The Washington and Cumberland Railroad
4 Company was not party to the action, nor
was the proposed lease considered by Judge
! Alvey orthe Court of Appeals in passing upon
the various interests involved in the contro-
versy Therefore the decision of neither
court proves anything so far as the lease or its
/ supporters in the Legislature are concerned.
| 1t is doubtless true that the effect of the
lease is suspended, and it is also true that the
I I Il Il pa;Ir,ad Ntrtuallv u
possession Of the canal, and the people who
are dependent upon it for means of transpor-
1 tation in the hands of a mercilcss monopoly,
and denied the benefits of competing carrier
for their products, such as the bill passed by
the Legislature would have assured them had
it ever gone into effect.
The result of the litigation over which our
neighbor is so elated will in no way benefit
the state, for, however successful the canal
may be under its changed management, it
cannot earn enough TO liquidate those claims
to which the State gave priority. Neither
is it to be expected that property along the
line of the canal will increase in value over
and above that which it had when it was for
the basis of taxation by single dollar. By
the lease the state would have received an
annuity of fifteen thousand dollars, or the
Capitalization of that amount-thFee hundred
thousand dolars-and in addition the benefit
Of railroad development, which always mani
tests itself by increased values upon which the
commonwealth could levy for revenue, and to
that extent tighten the burden of taxation
upon other sections of the state. Nor will the
bondholders of 1914 find any relief under the
new regime, for sufficient ''tolls and revenues
cannot be earned to level the mountain of
debt which stands in their way, and should
the conditions as prescribed by the court,
under which the canal is to be operated, not
be complied with, and its sale be ultimately
decraed, it has already been judicially deter
mined that they will be entitled to no portion
of the proceeds of the sale Of the corpus of
the canal, and they will also have lost the
opportunity to get the twenty-five per cent. of
the principal of their bonds, TO which they
would have been entitled under the terms Of
the lease. The bonds of 1878 are neither
better nor worse for the failure of the lease,
they being secure under all circumstances,
So it would seem that the only beneficiary
of the litigation referred to is the Baltimore
& Ohio Railroad Company, which, we are told,
is to run the canal on business principles,
and we doubt not they will do it. When this
company obtained from the state an irrevo-
I'LL, ob,rtor fornyor n van,nt;un II from, tav,.
ton, it did iton business principles" When
the canal was its competitor for the traffic of
the region through which it passes. it fought
and destroyed it on business principles
When the representatives of the people of the
state had provided for the construction and
preservation of competing line of railroad
ON the towpath of this same canal, it bought up
the bonds of 1874 and went into the courts
and circumvented them on "business princi-
pies. Now that the canal is wholly under
its control, and occupies place that would
otherwise be Glled by competitor, it will
doubtless deal out to it sufficient tonnage TO
pay running expenses, if it eau do SO on
business principles" But we caution such
as propose placing boats upon the canal that
shonld it be ascertai1ed that along with the
railroad it cannot be operated at profit, they
and it will be promptly abandoned upon
"business principles" Until then we will
earnestly unite with our neighbor of the Cecil
Democrat in watching with interest what it
terms the experiment of running the canal on
business principles.
New Subscribers.
New subscribers have been coming in quite
lively for some time past. Not that any effort |