The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-12-24
CLAIM
AGAINST STATE
Owners OF Old Canal Securities
Seek to Hold Virginia to
It's Guarantee.
COURT TO ADJUDICATE CLAIM
General Assembly i'll 1912 Placed
Limit of Time for Refund
ing Old Issue

BY authority of an act OF the Cen
&. Jones. executors of the will OF Il.
III. Stuart. flcd a petition yesterday
afternoon before Judge r. Carter Scott,
In tho City Circuit Court against the
Board of Sinking Fund Commissioners
OF Virginia. to determine the validity
of Il claim for $500 against the Com
monwealth as Euarantor of certain out
standing bonds of the old Chesapeake
and Ohio Canal Company Process re-
turnablc at the first January rules OF
the court was issued against mem
be's of tho commission
The petitioners are represented by
w. D. Cardwell and II. w Hunter. who
will nle their declaration before jan
uary Z.
In 1914 tho Chesapeake and Ohio
Canal Company was authorized by the
General Assembly Of Maryland TO issue
bonds not exceeding S1,700.O00 in
amount. secured by mortgage only
on the net revenues of the canal BY
an act OF the General Assembly of
Virginia. in lS47. the treasurer of this
State was authorized TO indorsc the
bonds of the company, not TO exceed
$1,000
Commonwealth Recognized Liability.
Certain Of the bonds were thus guar
antccd and In due course OF time be-
came the property of the late X. IL.
stuart and have been held by his os-
tate down to the present time The
faith of the State, It Is claimed. is
pledged for the punct,Ial payment Of
tho interest and the ultimate redcmp-
ton of the principal sum OF money APP
pcaring on the face OF the bonds The
Commonwealth recognized this liabil-
ity down to and including the year
1864. but since that time no interest
has been paid upon the bonds held by
tho petitioners
The canal was constructed and opcr-
ated under many difficulties. but has
never earned any net revenue which
could be applied to the payment OF the
bonds. and on which alone the bonds
were secured. Other bonds Of the com
pany are secured by the property of
the company, and amount to more than
it's actual value. ana 1t is impossible.
the petitioners state. that any net reve-
nue. can ever be sufficient to pay the
bonds OF the petitioners or the inter
est on them.
The company has been frequently de-
clarcd insolvent by the courts OF
Maryland, and its insolvency has been
repeatedly admitted by all parties in
terestcd i'll it's operation. Efforts by
certain bondholdcrs to produce Il net
revenue by means of receivers have
been futile.
Bonds Issued In 1910.
The bonds held by the petitioners
were issued in 1919 and are payable
thirty-five years after date. with inter
est at per cent. Application was
made to the Board of Sinking Fund
commissioners for their redemption UNI
.l.a,-
Assembly OF 1912. but, acting under the
provisions of the act. the commission
refused To fund the bonds until after
the liability Of the State shall be as
certained and determined by the court.
Although the state guaranteed the
payment of $500. 600 OF The bonds. there
is now s2S7,000 outstanding. on March
., 1912, an act was passed entitled IAN
net to amend and re-enact an act APP
proved March IL. 1905, etc, III relation
To tho public debt and 10 authorize the
adjudication of tho claims OF holders
OF certain bonds and coupons. which
have been guaranteed by the Common
wealth and the funding OF same when
adjudicated"
The act specifically states that IT
applies to claims filed within two years
after its passage. Claimants must max g
application to the board, which refuses
payment. and the case Is then brought
before the court for adjudication. The
members of the commi ssion are: Ros-
we'll Page. Second Auditor and presi
dent OF the commission; c. Lee Moore,
Auditor OF Public Accounts, and y. w.
Harmon, Treasurer OF Virginia.
Should the court hold the claim of
the petitioners valid. the State will he
required to redeem the bonds with its
own century" bonds No other such
claims can be brought after March -
1914 Virginia paid $4,000 to the
United States government in 1909 on
this same bond issue. Mono OF the
others had been presented for rcdcmp-
tion until yesterdays action was
brought.
No Quorum.