Year: 1879

Col. sykes oIa Railroad aubserfp
tfon and Bends.


I'VE are Indebted to the courtes,


of Col. Sykes for the ability to Civ


a correct statement of his proposed


method for county subscriptions t,


railroads, and for the issuance o


bonds by railroads.-ED. CHRoNI
GLE.


In regard to town and county


subscriptions, Maj. Sykes said he


was not for asking any more than


was absolutely necessary, that he


preferred getting as much as posi-.
: bic by private subscription. In fact,


he said there was properly speaking
no such thing as a town and county


subscription it was a misnomer ;


they were, under our laws, mere


loans. He then referred to Sections


1,155-6 and of the Code, which


read thus:


/ 1l55-The Tax Collectors, as fast


as collections are made, shall pay


the amounts over to the company.
/ Il56-He shall also, as he receives


the tax, give to each taxpayer a
certificate in such form as the rail-


road company may prescribe, show


ing the amount of such tax paid by


him, of which he shall retain a du-


plicate to be delivered to the Presi-
/ dent of the railroad company, and
! such certificate is negotiable by


assignment or delivery, and with a
/ deduction of the proportion Of the
! cost of collection is receivable in
: payment of either freight or passage
on the railroad in which the sub


scription is taken, after the expira-
ton of one year from the completion


of such road.


1l57-The holder of such certifi-
Gates to the amount of one share or


more of the stock of such railroad
company, is entitled to demand and
receive from the company in lieu
thereof certificate of stock in the
capital stock of such company,
which will give him all the priVi-
leges of any other holder.


These sections of the Code, which
have been sustained by our Su-
preme Court, show that the taxpay-
ers can elect either to receive freight
and passage certificate or can get for
them stock in the company. In
most of the instances of county and
town subscriptions heretofore, they
agreed to turn their tax receipts into
stock, but they could have obtained
for them freight or passage. So the
law now Is, it thus appears, that
they are mere loans. Ifa man pays
a railroad tax Of ten, twenty, thirty
or any number of dollars, he can
use his tax receipt on the road or
transfer it to any other person, and
that person may use it. The people
are really to get back what they
pay. Maj. Sykes said he would
even go further; he would issue
notes or bonds bearing six per cent,
interest and make them receivable |
on the road i'll payment Of freight |
and passage. These notes and tax
receipts would become local cur
rency and would be taken by mer-
chants and others in payment of
debts or in the purchase of goods, |
because they could be used on the
road in payment of freight and pas
sage. The fact that such notes or
tax receipts were out would very
greatly increase the business of the
road fully as much, he thought, as
the amount of the notes and tax
receipt. For instance, suppose
road fifty miles in length should be
built in this manner. The entire
cost of this road would be, through
this country, $400,0O0; six per cent.
interest on which would he $4,000
per annum. If the gross earnings
of this road should be, at low esti-
mate, $48, 200, then it could pay for
operating expenses $4,000 and take
up easily the $4,000 which was
receivable in freight and passage.
If it SHOULD be necessary to borrow
$500, 900 payable in money, then it
would only be necessary to take up
ST., 900 in freight and passage. The
road could pay its running expenses,
$24 600, the interest upon its debt,
$4,000, and easily take up the
$12, 900 of tax receipts and notes
payable in freight or passage. A
railroad company that can pay for
its construction in work to be done
ON the road must be a success. The |
cars have to be run, and the more
business they can do the greater
will be the profits, for it costs very
little more to run full cars than 1t
does to run empty ones.


These tax receipts, which can be
used on the road, will increase its
business to an extent that will be
truly astonishing. I'm reply to
question he said these tax receipts d
and notes were debts, and when
they were paid, the individual
would own the road by
fair and legitimate purchase. He
thought the less money that was
borrowed the better, as it would
enable the company to call that
their own road and not be COM
PEELED to part with it to pay debts.
1t is much easier, said he, for road
to pay its debts in freight and pas
sage than in money, and if this ex-
pertinent should be tried it will be ,
a success.