The Palatka news and advertiser. [volume] (Palatka, Fla.) 1902-1905, 1904-04-29

in Middle Florida, and st. Andrews
bay, in West Florida, and line
from Amelia island, on the Atlantic,
to the waters of Tampa bay. in South
! Florida, with an extension to Cedar
Keys, in East Florida; also Il canal
from the waters of st. Johns river,
on Lake Harvey, to the waters OF
| Indian river. In December, 1855, an
amendment was enacted declaring Il
| line from Pensacola or st. Andrews
bay to the north line of the State n
proper improvement to be aided from
| the Fund. The canal scheme was
undertaken but afterwards aban-
doned.
BY the act the companies which
might undertake the construction Of
any part of any of said lines of rail-
road were authorized to issue coupon
bonds to the amount of ten thousand
dollars per mile on each section of
ten miles of completed railroad they
might construct, and addltlonal
bonds for brid) es over the Suwannee
river and other rivers, and struc-
ture to cross from the west side OF
Nassau river to Amelia island.
Such bonds were to fall due not lon
ger than thirIy-fve years from their
date, aud to bear interest at not more
than seven per cent, per annum. pay
able semi-annually, aud be first
lien on the road. The bonds issued
bore interest at the rate stated. The
Trustees were authorized to and did
endorse upon these bonds guaran-
tee that the Internal Improvement
Fund was pledged to pay the inter
est on said bonds.
1t is well that the exact character
of this guarantee under the law
should be understood as between the
company and the Fund, for it was re-
markably liberal, and shows an IN
tention of bestOwing very material
aid from the Fund to the companies,
instead of being mere guarantee.
DURING the construction by any
company of that part of the line it
had undertaken to build, the cOmpa-
nv was to pay to the Trustees every
six months but fifty per cent OF Its
net income, and this fifty per cent,
however little, was to be applied by
the Trustees to the interest on the
bonds, and the Fund was to make
up and pay the balance of the inter
est. But this was not the full extent
OF the liberality of the system as to
interest, but even AFTER the COM
pletion by company of that part of
the line it had undertaken, if its net
earnings should, after deducLing
therefrom, to create sinking fund
to pay the principal of the bonds at
maturity, an amount equal to the
amount of one per cent. per annum
on the amount of the bonds outstand-
ing be less than six per cent. per an
mum on the aggregate of the capital
stock paid in and the bonded debt OF
the company, then such net earn
ings (less said amount of one per
cent. on the bond debit was to be di-
vided pro rata between the stock
holders and the bonded debt; or, in
other words, part thereof applied to
the interest on the bonds, and the
other part to go to the stockholders,
and the balance Of the interest was
to be paid out of the Fund, from time
to time, us interest might fall due.
For any payments of interest by the
Trustees out of the Fund the only re-
turn to the Fund was that the TruS-
tees should receive us such, equal
amounts of capital stock of the com
pany, and the Fund thereby became
entitled to the privileges and advan-
tages of private stockholders.
Whenever the net earnings of Il COM
pleted road were over six per cent.
Oh the capital stock of the company
actually paid in and the bonded debt,
and the said one per cent. for the
sinking fund, the company was then
required to pay III not only the one
per cent. sinking fund but also the
entire interest on the bonds. This
was payable to the Trustees, and
they paid the coupon holder, whose
right to rely upon the guaranty Of
the trust fund was not affected by
the earnings of the road. 1t was
simply saying to the the companies,
while you are constructing your road
all you have to do is to pay us one
half of your net earnings, however
small, and after you have completed
your road we will require you to pay
the one per cent. annually for a sink
ing fund (one-half every six mOnths)
and ii after So paying, the amount of
net earnings left is not equal to six
per cent. on the amount of the bond
ed Indebtedness, and the bona fide
stock, you can divide them between
the trustees and the stockholders up
on Il pro rata of the amount of the
bonds and stocks, and the trustees
will pay the interest, instead of re-
quiring you to pay all of your net
earning toward such interest.
RAILROAD BONDS ENDORSED.
The railroad companies which is
sued bonds, and the amount to which
they were issued and endorsed by
the trustees as above stated, were:
Pensacola and Georgia Railroad Co. 81 Pc, 900
Tallahassee Railroad Company ........ 2J6 900
Florida Railroad Company ............. 1,61G, 900
Fla, Atlantic 4 Gulf Central Il. K. Co, $4,000
Total....,, ...,,,, ACKNOWLEDGEMENT 3,591OOO
The first named railroad company
built the railroad from Lake City to
Quincy; the second, reconstructed
that from St Marks to Tallahassee;
tee third, built that from Fernandina
to Cedar Key, and the fourth built
that from Jacksonville to Lake City.
The annual interest on this am
cunt guaranteed by the fund, was
$261 10000, payable half every six
months. Without going into figures,
it may be stated as fact that prior
to the war the trustees had to pay
large amounts of interest for the
companies.
Without pursuing this subject
through all its various phases we
think we have shown cOnclusively
that the Legislature of 1866, COM
posed of men who were perfectly
familiar with this subject did not
view this matter in the same light
that Mr. BrOward does. The war
coming on prevented the completion
of tbp roads rs contaminated and