Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1911-02-20
and General Assembly of the State of New Je

pay iitcLA D6iiB NAOJ,l4L. Int Company
also paid to the Canal Company $500
900, which was Immediately applied In
part payment of its debts, and the
Canal Company decided It's interest In
the Basin to the Lehlgh Valley Rail
road Company. The SAID sun of $3.50 o
was the present value in 1889. 1t
computed at 4 per cent. compound an
nually, Of 81 ,994.S20 If paid in 1874, the
year when the State was to take the
Canal; or II compounded at the rate
OF 5 per cent, It was the present value
of 50, so1, 62T: or, II compounded at the
rate II 9 per cent, was the present
value ct s6,411. 120.
On this terminal tract and the mud
fiat To the west of it known as the
New Jel sey West Line Grant, for which
the Railroad Company paid the State
$780, 600, the Company proceeded To
build the terminal of the Lehigh Val
ley Railroad Company, which has been
used and operated. and taxed by the
state as such. for the past twenty-five
years. During the hearing before the
Governors in 1908. after this property
had been occupied as a terminal rail-
road yard for nearly fifteen years, the
representatives of Jersey city raised
the question that the Riparian Com
missioners had no power to make the
grant of July Il. 1889. The Board or
Governors reported that that was a
legal question for the courts and not
for them.
In April, 1907, the Legislature passed
a bill Up. l.. p. g6l authorizing the At
torney General to attack the grant in
Chaneery, which he did in October,
1907. The case was tried at length and
argued before Vice-Chancellor Stevens,
June, 1910, and is awaiting his decision.
The State does not in this attack at
tempt to disturb the present possession
of the Lehigh Valley Railroad Com
pany, but to have it now declared that,
on repayment by the State OF a fair
sum to that Company for its ex-
p%enditures Cor on other equitable
terms), the land shall revert to the
State in 1874. The Morris Cana and
Banking Company appears to have no
further interest in any case n is not
made a party TO the suit. but the state
claims that II should ultimately have
back this land on terms. The State
will be protected by the pending suit,
whatever Its rights may be- and 1t
seems unnecessary to discuss this Basin
Va sots III III 1OAilitCNlChs ~
has been thus far discussed to correct
the Misrepresentation about it which APP
pears TO be very common. The sub
ject has, however been brought for
ward by both sides in the efforts made
to reach a basis of abandonment of
navigation. The State officers, as well
as the Railroad Company, recognize the
d~esirability of settling all questions
that are in dispute.
THE LEASE OF 1871 TO THE
BEHTGH VALLEY RAILROAD
COMPANY.
Ii 1886 the Legislature had psssed an
Act allowing the Canal Company to lay
4 rails at Phillipsburg and connect its
Canal with the Lehigh Valley Railroad.
which was done. In 1871 the Legis-
lature passed 81 Act authorizing the
Canal Company to lease the Canal to
any person 'perpetually or for a
shorter time" and 1t was accordingly
leased pe~rpetually on May Attn, 1871, to
the Lehigh Valley Railroad Company.
a Pennsylvania corporation. The Court
of Errors and Appeals after wards ap-
proved this lease and held that the
Lehigh Valley Railroad Company was
a proper corporation to take the lease.
Stewart VIZ. Lehigh Valley r. Co, 3
VI, sos. The Lessee took over the
property in 1871, agreeing to pay a
rental amounting to Ten per cent. per
Annum on $1,175, 900 of Preferred stock,
and Four per cent per Annum on
1,025, 600 of Common stock.
1t should be remembered that at the
time the Lehigh Valley Railroad COM
pany made this lease its line terminated
at Easton, Pa; 1t owned no railroad In
the State Of New Jersey and did not
begin the construction of any until
some time In 1872, more than a year
after It acquired the lease Of the Nor
ris Canal. Its object In making the
lease was to afford 1t protection from
and parity with the Central Railroad
of New Jersey, which then controlled
the route across the State of New Jer-
sey from the Delaware River at Phil
lipsburg to tidewater. That company
itself largely Interested in the trans
p~ortation of anthracite coal, made II
especially difficult for the Lehigh Val
ley, a Pennsylvania corporation with
it's railroad terminating in the middle
of the Delaware River between Easton
and Phillipsburg, to secure fair treat
! Hull Ill Tx LAalh9a1NANAA VI L
1t was believed hat this lease would
act as q regulator and enable the Lee
high Valley to secure equitable treat
ment from it's competitors upon its
own business. II soon became appar-
ent. however, that the canal was made
uuate, either for the volume of business
or for the purpose OF controlling COM
petition, especially as at this time came
the discovery of steel rails, resulting IL
lower rates of transportation and the
concurrent rapid development Of rail-
roads. The result was that TO protect
itself the Lehigh Valley was compelled
to construct the Easton & Amboy Rail-
road from P~hillipsburg to Perth Amboy
In the State of New Jersey. The con-
struction of that line was begun in
1872 and formally opened for business
In 1875. Subsequent to that the road
was extended from South Plsinheld to
tidewater on the Hudson River at Ter
sey City.
Instead OF the object of leasing the
canal having been to do away with
competition, the reverse was the con-
dition. II was leased for the purpose
of creating competition and protection
to the lessee. The changed conditions
surrounding the business of the country
proved this to be an error, and In order
to protect its tonnage from competing
railroads the Lehigh Valley was COM
PEELED to construct its own Dad to