The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1901-01-22
OPPOSES THE SALE
Why RusseIps Advice Should
be Disregarded.
The North Carolina Railroad is Worth Seven
Million Dollars. Opposes Sale of the
A & N C. Railroad.

To the Editor: -While in the opinion
of your correspondent the recommended
tions of ex-Gov Russell to the Legisla
ture are worthy of consideration, and
the major part of them meet the unquali
fed endorsement of the people of all par
ties, that recommendation of the sale of
the States interest in the N. c. r. r.
and likewise the sale of the Atlantic and
N. c. R. R. ought not to be carried into
effect.
1t is useless to go over the details of
the 80 years lease by which the Southern
acquired property worth $7,000,000 and
costing 81, 900 at rental of per cent
on $4,000, 000.
The opposition to the lease was not
by any means confined to the business
feature of the lease. Everybody admits
Z per cent a good rate of interest, but
in reality it is only 80 per cent on real
value. The great objection to the lease
was the dominating influence in State
politics it would give the Southern Rail-
way. The Southern Railway now appar-
emily dominates the Atlantic Coast Line.
1t will in course of time own or control
the Seaboard Air Line. This calamity
ought. if possible, to be averted. This
Legislature ought to forbid the consoli-
dalton, direct or indirect, of the South
ern and Seaboard Air Line.
The Western N. C. was built by the
State at a cost of several millions AND
sold to the Southern for 100000, or
thereabouts. 1t has been bonded at $12.-
600, eco, and the people will have to pay
Fear and Yadkin Valley was in great
part built by the State with convict
labor, for which the State received no
compensation. The Southern now owns
or controls that road
The late John Cuttings favorite quota
tion from Virgil was. "Timeo Danaoset do
ma ferentes-I fear the Greeks, even
bearing gifts.
This quotation is certainly appropriate
in considering the present question. The
lease was made in opposition to the wish
of the people of North Carolina. Who
believes that the able representative of
the Southern did not know of this second
mortgage on the States stock in the
North Carolina Railroad? The State has
made provision for the redemption of these
$3.50, 900 at the rate of twenty-five cents
goo cost the present owners The private
stockholders had nothing to do with the
lease of the N. c. R. r. After the lease
was made they sanctioned it. Their
interests ought to be protected by the
State. 1t may be that the would be-
purchaser of the States interest would
give these private stockholders so per
cent premium for their stock. If so the
no Inv ho Tot oh
not sell its interest. At $50 the road is
worth $6,4O0 O0O on the par value, approx
mating my valuation of 81 00O, 900.
The bonds of the State issued for the
construction of the n. c. R. R., known
as the Swazeys, ought to be redeemed
at the same rate as the other bonds of
the State of the same class. The Swazey
suit ought to have been carried to the
United States Supreme Court, and doubt
less would have been decided in favor
of the State. Who prevented the appeal
to the United States Supreme Court? If
in the providence of God, by some unex-
pected and unforeseen blessing the South
ern should ever default in the payment
of interest and thus forfeit the lease, and
the magnificent N. C. R. r. again become
The property of the State would not there
be rejoicing from one end of North Car
DINA to the other. But the lease will
stand. 1t is too good an investment on
the part of the Southern to be forfeited.
Instead of selling the States interest in
the ~ c. r. r., would it not be better
at the end of the nineteen years for the
State to issue its bonds at per cent and
redeem the $2,7O0,O0O and continue to
draw { per cent on the So 600, 900? The
interest on $2,7O0.O00 at 3 is ISL, 900. The
interest on the States stock in the North
Carolina Railroad at per cent is $210,.
OOO The difference. s129,OOO per annum
could be applied to the public school
fund. The State can easily dispose of its