The news & observer., 1895-08-18
THE STATE GETS LESS
WITH THE STOCK AT I4O,l THE
STATE WOULD GET ONLY
4.SG PER CENT EVEN
UNDER A so YEARS
LEASE.
UNDER THE OLD, IT GOT OVER SIX

UNDER THE OLD, IT GOT OVER SIX.
Under the Thirty Years Lease at 90,
the Stale Got Go Per Cent--ShOuId
the Stock Go to 200 Under This 90
Years. Lease, the State Would Get
not MoreThan 3 Per Cent, Thus
Combating Alcxander's Idea--Opin-
ions in thIs City and Justice Bynum's
Views as to the Power of the Direc-
tors to Lease.
With a few exceptions yesterday, the
| indignation was outsDoken at the action
of the directors in having, Friday night,
leased for ninety nine years the North
| Carolina Railroad to the Southern Rail
way. The word lease was not used in
most instances by those condemning the
action, for ninety nine years lease is
considered both in business and legal
parlance to be a sale, and nothing less.
But the expression of the people did not
stop at Indignation; it went further into
a search of the remedy against the doirg
to see if there could not be some way by
which it could be undone.
Suggestions toward such an end took
different forms, but were in the main the
same. 1t was conceded by several law
yers that an action by a stockhOldor to
annul the contract would bring the mat
ter properly before the court, and this
may be done.
The average statement embracing the
sentiment above referred to, may be
found in what was said by Mr.. Wesley
N. Jones:
II do not know" said Mr.. Jones
''whether the lease of the North Caro-
lima Railroad is a hard bargain for the
State OF not. If it is, under the cir
cumstances, the people of the State
ought not to allow the contract to stand
without an effort to have it rescinded.
If the consideration is as grossly made
quate as is indicated in this morning
paper, compared with the lease of other
roads, the contract ought not to stand.
| The directors are men of high character.
They ought not to be condemned with
out hearing their side of the matter. 1t
seems to me there was too much secrecy
about such an important affair and the
lease comes as a surprise to the public
/ for whom the directors are acting for the
most part. But what | desire to say is
simply thls-that if the directors have
leased the road for 80 years for grossly
| inadequate consideration their contract
can in my opinion, under the circum-
stances be rescinded by the courts and
ought to be. Whether the consideration
was grossly inadequate I do not know,
| but if it is the courts can deal with the
matter in my opinion, and if they can't
what are they forl
The directors are but trustees 70 man
age the property not to sell it and
this lease for 80 years is practically
sale. In the original charter of the
North Carolina Railroad the directors
are given the power to farm out the
road, but no such power was contem-
plated or given as was exercised at Bur
lington yesterday by the directors--cer-
tainly not without consulting the ceStu5
! QlLt trusts or bene fetal owners, who are
the private stockholders and the people
of the State at large. This was not
done. In fact the lease was made rather
secretly, and that too in the face of the
protests of the people of the State,
| whether wise or otherwise. If there is
anything wrong about this lease it ought
not to stand. | hope the light will be
turned on fully"
The people, really, were so much in
the dark concerning the doings of the
directors that they were at a loss how to
discuss the whole matter intelligently,
but upon one thing all were agreed,
namely, that the leasing of the road
either for ninety nine years or for fifty
years was out Of the question, and even
the few that might have been aVerse to
thirty years lease under proper condi-
tions, were outspoken against the man
ner in which the whole negotiation was
consummated. For against the express
wishes of the people, there had not been
so much as a whisper from their
agents explaining the basis of what
would be the probable outcome. One
gentleman, of high character and re-
sponsibility in this city, took the ground
that the plans should have been made
public before any action.
But the remedy: that was uppermost
in the minds of most. Can anything
| now De uDQe anu III UillS COuuCCtlOuS
section 10 was looked up in the charter,
under the nominal authority of which the
directors let the road go.
S. ction 10 reads as follows That the
said company may, when they see fit,
farm out their rights of transportation
over said railroad, subject to the rules
above mentioned, &c.
The express power to lease under this
section is denied by many, and was de
MED by Bynum, j., in 70, n @, p. GA,
lin the case of the State of North Caro-
lima VS.. the Richmond and Danville
Railroad Company The court, Judges
| Pearson, Reade and Settle, delivered the
oninion that this section authorized the
lease. Judge Rodman did not sit because
he was a stockholder in the road, while
I Judge Bynum, in one of the ablest opin-
ions be ever wrote contended that the
power ''to farm out the right of
transportation, did not confer the
right to lease the corpus thereof
saving, ''ln the opiaion of the court, it is
| held that the power to farm out the right
of transportation over road Is the
power to lease the road itself, and under
This limited and specific grant, that the
company can in the words OF the deed
of lease demise, let, hire, and form out
the entire railroad withall its franchises,
rights of transportation, works and
nrOperty. including its superStructure,