The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-11-12
GEORGIA AND THE DEFAULT
Danger That the State Is in for a
Loss Of Si5O,O0O to 100000.

The Northeastern Road Said to Be
Worth Not Over S1oo,ooo-The
Bonds the State Is Responsible for
Foot Up $3.50, ooo-The Law En-
towering the Governor to Seize
the Road-A Possibility That the
Default win Affect the Chances of
Senator CoIquitt for Reelection.
Atlanta, Ca, Nov. I.-GOv. Northen
has not yet received notice in conformity
with the law of the default on the bonds
of the Northeastern railroad, upon which
the state is endOrser, but such legal no
/ tice viii very probably be awaiting him
when he goes to the executive office on
Monday morning He does not recognize
the notice served by the Richmond and
Danville Railroad Company, which is OPP
Grating the Northeastern under a lease,
which lease guarantees the payment of
the interest on the bonds now in issue
Under the law the notice of default must
come from some of the bondholders.
Even when this is done the state will not
recognize the Richmond and Danville,
but will proceed against the corporators
of the road, or the Northeastern Railroad
Company.
THE LAW IN THE CASE.
The law directing how the governor
shall proceed in the case of default is as
follows:
In the event any bond or bonds indOrsed by
the state as provided in the seventh section
OF the act, or the interest that may accrue and
become due shall not be paid by the railroad
AT maturity when il gha1l no
the duty OF the governor. on information OF
such default by any holder Of the said bonds,
to seize and take possession of all the prop
erty OF the railroad company and apply the
earnings of the said road to the extinguish-
ment Of the unpaid bond or bonds or cou-
pons, and he may, at his discretion,
upon continued default in such payment
by said company for a period Of six
months, sell the road in such manner and at
such time as the best interests Of the state
and property viii serve. Provided further
that said road shall never, directly or in
directly, be controlled, managed or worked by
the Central railroad which if it occurs il
shall forfeit its charter.
THE OUTLOOK DIsCOURAGNG.
The governor declines to be interviewed
upon the subject, but it is understood
that he does not take very encouraging
view of the situation. To-day specula-
ton as to the outcome, has been the chief
topic of discussion among the legislators
and others. II is the general impression
that the state will have to shoulder a
heavy loss in the end. The Northeastern
is valued at S343,599 by the state, but rail
road men say it could not be
sold for 100000. 1t is poor
pieceof property, almost worthless to any
body but the Richmond and Danville, and
not worth much to that road when a
rental has to be paid. Alone it would not
begin to earn its fixed charges. The sta te
is endOrser for $3.50, 900 of the bonds, and
has only the road for security There is
already default on interest of $50, 900,
which would make the states net loss
something like $780, 900 if the road is
forced to a sale, and does not bring any
more than railroad men estimate it at
MAY BE A SCHEME.
The fact that the road is worthless to
anybody but the Richmond and DanVille
has given rise to the theory that the
Richmond and Danville wants to force it
to a sale and then bid it in for a song. If
the Richmond and Danville people could
get it this way it would be very good
investment. as the fixed charges based
upon the price they would expect TO pay
for it would be much less than the rental
heretofore paid, and which eats up all
the profit. The state could hardly buy
the road, because it would have to be run
at dead loss, unless, as stated, the
Richmond and Danvllle had it. If sold
by a foreclosure of the states claim the
state would have to pay off the $3.50, 600
bonds upon which she is endorser whether
the road brought that much or not
Gov. NOrthen has already received sew
eral applications tor the appointment of
agent of the state to manage the road,
but, of, course, can not consider these un-
til seizure is determined upon,
EFFECT ON oOLQUITT's CHANCES.
A point in the situation, that is being
discussed is the effect any loss that might
be enCdiled on the state will have on Sen
atOr Colquitt's chances of reelection
next year. The policy of Gov Colquitt's
administration, in indorsing the North
eastern bonds, was severely criticised
at the time and ugly charges were made,
though Gov. COlquitt's exoneration was
complete. At the same time, if the state
now has to shoulder a loss of $780, 900 or
100000 on account of the policy of Gov.
Colquitt's administration, it will be hard
to soOthe the taxpayers when the sena-
tOrial election comes around.
DIVISION OF THE COTTON.
go !, D, 4 n, y.