The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1901-01-19

As or other good security for a sinking
fund; TT the end Of the nineteen years
should pay over the sinking fund to the
Swazeys, and the balance due to the
Swazeys, the purchaser shall have the
right to pay and take an absolute title
10 the stock; if the purchaser should fail
to pay, the stock to go back to the State
but the purchaser to have the right to
call for a public sale of the stock, the
State having the right, of course, to bid
at this sale. so as to protect itself. For
the purchase on these terms. the pur-
chaser pays to the State, one million cash.
BY this transaction, the State realizes
enc million in cash. will thus be enabled
TO increase its appropriations to the
schools and charities and to meet its cur
rent expenses without increasing the
tax on railroads and banks and corpora
lions, the sources from which. in all
probability, increased revenue would have
TO core
AS / figure it, the sinking fund, if in
vested during the nineteen years so wisely
that It sustans no loss, would amount at
the end of nineteen years to, at least, one
million dollars. The purchaser would then
have to pay in order to get the stock ST.
0,O00. He would already have laid out
OF his one million nineteen years with
cut receiving for 1t one dollar. Add this
to the 81 900 and you have $2.720, 600
which the purchaser shall have paid. Al
low him ner cent. for his money for
nineteen years and you have $3.50. 900 to
be added to the 50, 72O 900, making So
100000 the price paid by the purchaser
for the stock-that is, about $116 a share.
Tho ctOck of nriVata ctockhoIdprc ic sell
ing IN ard around 100 a share but it
100000 as the price paid by the purchaser
Of the unencumbered share gets a very
different sort of property from that which
this purchaser would get. The former
gets something which instantly goes to
| work earning I per cent. and he has ali
the opportunity of taking care of himself
by selling If he thinks the stock is high,
he can turn it into money almost instant
ly. If he has reason to suspect that there
is something wrong with the lessee, he
may sell and get out. If he becomes per-
sonally involved and pressed for money
he can realize by selling. But the pur-
chaser from the State can do none of these
things for the long term of nineteen years
He takes all the risk Unless he is 81
young person, he will put out his million
and never see it back. because in the
course of nature. he will be dead before
i the nineteen years expire. 1t is easy
to see that no man would make such an
offer unless he is rich unless he has
. large surplus of money looking for in
vestment, and above all, unless he has
supreme confidence that the Southern
Railway Company will perform its con-
tract on the lease and at the end of the
will ha in htoyh oil
standing If during the nineteen years
reverses should come to that company, if
it should fail as it has in the past, if it
should default on its bonded debt which
/ is large, if by stock manipulations or
otherwise i should fall into the hands of
owners who would find it to their interest
to default and reorganize if events like
this should occur. the purchaser would
lose his million and the State would be
just one million ahead. 1t is true that
when the Richmond and Danville went
bankrupt the last time it continued to pay
the per cent rent on the N. G. r. r.
stock. But this was because the ~ C. R.
r. was Indispensable to the Richmond and
Danville. The court ordered the receiver
TO pay it because the Richmond and Dan
vile could not be conducted without it.
But now the Southern has virtually
paralleled the N. e, r. r. BY getting it's
line from Greensboro to Charlotte by
Winston.
Will you do me the favor to give me
answers which shall be confidential to the
following questions
First If YOU had millions looking for
investment would you give the State one
million for its equity of redemption on the
trust as above stated?
Second, Surprising this offer to purchase
being made to the State, do you think it
would be a good bargain for the State?
Very truly yours