The news & observer., 1901-11-12
IS IT ANOTHER SOUTHERN RAILWAY SCHEME?|
Much Like Another Attempt Being the
North Carolina Railroad.

passed an Act entitled "An Act to adjust
and renew a portion of the States
debt" (Acts of 1879, Chapter 1881, which
Act Is made a part of this bill as if
fully and at large set forth; that under
said Act of 1879, commissioners were
appointed who negotiated with the hold
ers OF the first mortgage bonds, and
agreed upon a settlement and compro-
mise with the said bond holders, as bS
said Act authorized and directed. Ry
the terms of the said compromise, the
Public Treasurer was directed to Issue
bonds OF the State, dated April 1st, 1879.
payable forty years after date bearing
interest at the rate of six per centunl
per annun; that by section eight Of the
said Act it was provided that these new
bonds should in all respects stand in the
place of and be entitled to the same Sc
curities as were the bonds originally is
sued, under the Acts of I348-'49 and
1854 '55, above recited and it was pro-
vided that the new bonds should have
the same lien upon the stocks of the
State in the North Carolina Railroad
Company as the bonds originally issued
under said Acts: and it was also pro-
that the new bonds were not to be in
payment, nor discharge, nor extinguish-
ment, but in renewal and extension of
the old bonds and without prejudice to
the lien of the said old bonds on the
States stock, which lien was by said
compromise agreement declared to be
preserved unimpaired for the security nf
the new bonds as fully as the OLD bonds
were secured thereby. But notwithstand-
ing this provision written in said COM
promise agreement, the old bonds, as a
matter of fact, and strictly liz accord
ance with said compromise agreement,
were surrendered by their holders and
delivered up to the defendant, the State
Of North Carolina, the obligor OF said
bonds, and were discarged and caneell-
ed in exchange for other bonds Of the
same obligor, the defendant State, which
were in substance ard in form. new
bonds of the State, dated April 1st, 1879,
and to become due, April 1st, 1919, and
the said new bonds SO issued as your
orator is informed and believes and so
alleges, did not at all correspond as TO
their total amount, including 1heir cou-
pons, with the total amount Of The Old
surrendered and cancelled. And there
was no substitution of bonds AMI cou-
pons for an equal amount of bonds and
coupons, but on the contrary there was
q surrender and cancellation of The
whole issue of old bonds win coupons
by their holders, and an acceptance by
them &C new promises for 4 different
amount.
7. The terms of the compromise agree
ment between the defendant, the State
Of North Carolina, and the holders Of
the first mortgage bonds. are set forth
in a statement a copy of which is here
to appended, and made copy of this
bill, marked Exhibit &C."
s. Your orator is advised and be-
lieves and so AYERS that neither your
orator nor its assignors, nor any prior
holders Of bonds herein declared on, nor
any other of the holders of the second
mortgage bonds, We're parties to or con-
sented to the so-called extension of the
first mortgage bonds. And If the COM
promise agreement, exhibit &C." was
not discharge and extinguishment of
the first mortgage bonds, but was sim
ply an extension of the time of their
maturity, then such extension, in so
far as it affected the holders of the
second mortgage bonds, was and is un-
lawful and void in that it extends the
maturity of the first mortgage without
the consent of the second mortgages
who took their mortgage long before
such attempted extension, and who by
their second mortgage executed by the
Act of 1866, acquired the vested right
to pay off and discharge the first mort
gage, according TO it's terms as it then
existed. And your orator is further
advised and believes and so alleges, that
If the compromise agreement. exhibit
&C." was not an extension, but was an
extinguishment of the first mortgage,
then the second mortgage held by your
orator and the other holders of the same
issue of bonds became and now is
first mortgage on the stock owned by
the State in the North Carolina Rail
road Company to an amount of par of
said stock equal to the principal or par
of said bonds now outstanding.
.. That the defendant, the State OF
North Carolina, by it's Act of 1879, Chap
ter 13S Gts Compromise debt law Of
fered for the second mort gage bonds
twenty-five per cent. on their princi-
pal, which was equivalent to only about
fifteen per cent. of the amount then due
on them: and this was an offer, not to
pay the fifteen per cent. in cash, put
in new four per cent. bond of the
State. And the defendant State has re-
fused, and does refuse, to pay the sec
ond mortgage bonds or to offer any
fair or reasonable compromise OF the
same, although the market value or us
stock in the North Carolina Railroad
is about five million dollars while the
amount of the first mortgage is now oniy
two million seven hundred and twenty
thousand dollars, ($2,720,0o0) Tne
amount of the second mortgage bonds
now outstanding can only be ascertain
cd with certainty by such orders anu
processes of this court as may require
by publication the holders of all saia
bonds to produce and prove them oeiore
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