The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1904-07-01
SALE OF THE c. F. & Y. v. r.. r.

IN last sunday issue OF the IA
leigh News and Observer:
One of the greatest crimes in history
not punishable with the penitentiary
was the crime by railroad wreckers
against the owners OF the ape Fear
and Yadkin Valley railroad. A syndi-
| cate of something like a dozen patriotic
and progressive North CarolinianS pur-
chased that road when ii was in opera
/ ton only from Fayetteville to Sanford.
They extended it to Greensboro and to
Mount Airy on the west and Whining
ton on the east. They put in ii their
fortunes. their brains, their lives and
were building up an independent home
railroad system that promised great
things for North Carolina. The VIII
mington extension made il necessary
to borrow a large sum Of money. Ar
rangements had been about perfected
| TO secure the loan when certain inter-
! ests, hostile to the construction of that
| system or any other strong indepen-
| dent railroad system in the south that
might become competitive, in ways
known only to the Wal street gamblers
and wreckers, systematically and Per
! sistently set or foot rumors and re-
| ports that shook the faith OF capital
| lists in the ability of the road to pay
| operating expenses and the interest on
| bonds. The gentlemen who owned the
! road were not able to cop with the
men who were destroying their credit.
nd, without any reason that should
| weigh, the road vas put by a federal
| court judge into the hands of a receiv-
| er, the fortunes of the owners were
| wrecked, the road was dismembered.
and his strong North Carolina system
was destroyed.
The federal courts have sins enough
| Of their own to bear without those Of
the legislature of North Carolina, Gf
it's action in this case be a SIM being
put upon them.
The News and Observer is clear off
| the line in it's facts in the above article.
What "dismemberment" of this road
that was done was the work of the leg
i~sIature of this state and not of the fed
eral court nor was there any systematic
wrecking of the road by rival corpora
TONS, as the facts in the case will
show, facts which The News n OBJ
| server could have gotten from the re-
| cords Of the federal court.
h ese facts show that in 1896 the
Cape Fear and Yadkin Valley Railroad
Company gave a deed in trust to Sc
curo bonds, divided into three sets, is
, sued upon its road. The O was divided
| into three divisions-'A,' from Green's
boro to the South Carolina line by way
Of Fayetteville; "B,' from Greensboro
to the Virginia line via Mount Airy;
&C." from Fayetteville to Wilmington.
Each set of bonds was made a first
lien on one of these divisions and a Sec
ond lien on the other two. In October
1889 the DAD attempted to execute a
! second trust deed for the purpose Of
taking up these bonds n issuing 9TH
ers in their place, but the bondhold-
ers would not agree to this.
The failed to pay the inter-
est On their first lien bonds which felt
due December 1893 and having failed
to pay such interest up to May 81,
1894, the trustees under the deed in
trust, at the request of the ~bondholders,
brought suit in the federal court for
appointment Of a receiver and fore
closure and sale of the property under
the terms of the trust deed. The court
appointed John Gill OF Baltimore re-
ceiver.
In addition 20 d%efaulting on it's in
terest DR.. Lash. of Greensboro, presi-
dent of the road made a report to the
b~ondholders which showed the road to
be insolvent. The answer in the suit
admitted that in 1923 and up to the
bringing of the suit in 1894 the road was
not paying fixed charges; that there
was a deficit in this item Of over s140,-
600 and there was a large floating debt.
A decree of foreclosure was made in
May 1897 after two reports had been
made to the court by Eugene Martin,
Esq, a member Of the Wilmington bar,
who had been appointed specia, master
to gather all the facts connected with
the status of the road and it's indebt-
edness. This dual report was necesSi-
tated by the fact that some of the
bondholders sought to hav the road
sold in sections. After MI. Martins
report the court decided against these
bondholders and decided that the road
should be sold as a whole. Judge ST.
monitor, who made this decision, was
sustained by the circuit court of ap
peals.
The road was sold in December 1898
and was bought by the Atlantic and
Yadkin Railroad Company, a corpora
ton chartered by this state.
Under an act of the legislature pass
ed at the session of 1899 the Atlantic
and Yadkin Railroad Company was
given the authority to sell all or any
part Of this or any other railroad it
owned, Under the power thus conferr-
ed it sold a part of this DAD to the
Atlantic Coast Line and a part to the
Southern.
These are the facts in brief re-
garding what The News Observer
declares to be the throwing, without
any reason that should weigh, the road
into the hands of a receiver, and the
ACKNOWLEDGMENT of a railroad owned by
home people. The federal court de-
cided that the road could not be di-