828 



TENNESSEE. 



fails to show more than presumptive bribery 

 and undue means, or to trace them to any mem- 

 ber of the Legislature. 



The bill, as it was afterward modified by 

 amendments, embraced the proposition of fund- 

 ing the greater part of the debt at the rate of 

 50 cents on the dollar, with 4 per cent, inter- 

 est. This settlement was to be subject to the 

 acceptance of the bondholders and the ap- 

 proval of the people. The bill as amended was 

 finally passed by a close vote on the 28th of 

 March. Before the vote was taken the Gov- 

 ernor had transmitted a message to the Assem- 

 bly announcing a proposition from the mana- 

 gers of the different railroads to waive the im- 

 munity from taxation extended to the rail- 

 roads in their charters, and contribute to the 

 State taxes from $80,000 to $100,000 annually 

 for the extinction of the principal and interest 

 of the State debt. In accordance with this the 

 actual burden of the debt would be reduced to 

 40 cents on the dollar and 4 per cent, interest 

 if the compromise at 50 cents should be ef- 

 fected. 



Governor Marks appointed B. A. Euloe and 

 Nathaniel Baxter, Jr., to communicate with the 

 holders of the State bonds and procure their 

 acceptance of the compromise voted by the Le- 

 gislature. Ex-Governors Porter and Brown and 

 others were deputed by a mass-meeting of cit- 

 izens to present the case to the creditors and 

 citizens of the East. At a dinner in New York 

 in the middle of April they received the ap- 

 proval of many bondholders, merchants, and 

 bankers of the proposed settlement. The pro- 

 visions of the bill required that the Governor 

 should secure the acceptance of bondholders 

 possessing an equal amount of bonds with 

 those who had agreed to the proposition of 60 

 cents with 6 per cent, interest, before calling 

 for a popular vote on the question. After ful- 

 filling this condition, Governor Marks ordered 

 the popular vote to be taken. On the 7th 

 of August, the day appointed for this pur- 

 pose, the proposed settlement was rejected by 

 a large majority, 30,920 voting against it and 

 19,669 in its favor. This action of the people 

 left the question of the final settlement still un- 

 resolved. Although understood to have been 

 an expression of a popular sentiment in favor 

 of total repudiation, it had only the effect of 

 postponing the decision of the question, which 

 belongs to the State Legislature. 



The following is a statement of the funded 

 debt and registered debt of the State on De- 

 cember 21, 1878: Registered (act of 1873), 

 $14,665,000, at 6 per cent, interest; $292,300, 

 at 5 per cent. ; $397,000, at 6 per cent., not 

 required to be registered; and $4,867,000 at 6 

 per cent, in funding bonds (1873). On the 

 same day the unpaid interest amounted to $4,- 

 201,902.50. The bonded debt, including un- 

 paid interest under the present laws, would 

 amount to about $25,676,500 on January 1, 

 1880. This sum does not include the school- 

 fund certificates ($2,512,000), the railroad debt 



due to the United States ($671,045.45), the out- 

 standing notes and debts of the Bank of Ten- 

 nessee, or the debts due to laborers on delin- 

 quent railroads while the State government 

 was running them. The last three items men- 

 tioned amount to about $2,700,000. Should 

 these sums be added to the State debt proper, 

 it would amount to about $31,560,000. 



By the improvement act of 1852 bonds of 

 the State, which constitute the greater portion 

 of its present debt, were issued and loaned to 

 the railroad companies on the condition of the 

 completion of stipulated portions of their roads, 

 as a credit to encourage improvements of pub- 

 lic benefit. By the original act these bonds 

 were made a primary lien on the railroad prop- 

 erty. This lien was removed by subsequent 

 action of the Legislature, and the railroads 

 were permitted to redeem the bonds by deliv- 

 ering into the Treasury State bonds of equal 

 amount of any series. At a time when the 

 securities of the State were sold in the market 

 at a discount of 60 per cent, and over, several 

 of the railroads availed themselves of this per- 

 mission and redeemed their obligations to the 

 State by returning bonds of other series. Oth- 

 er roads were afterward foreclosed upon by 

 the State authorities and resold to other par- 

 ties. Many of the holders of the Tennessee in- 

 ternal improvement bonds, while the matter 

 was awaiting the decision of the people and the 

 Legislature, brought as a test case a suit of fore- 

 closure against the railroads, upon the advice 

 of Charles O'Conor of New York, upon the 

 ground that the lien on the railroad property 

 was a part of the original contract contained 

 in the bonds, and could not constitutionally 

 be revoked by any subsequent action of the 

 Legislature. The following is the amount of 

 bonds claimed to be secured by a lien on the 

 railroads named under the act mentioned, and 

 which are still outstanding against those roads : 

 Roads operated under what is known as the 

 Wilson system of railways Cincinnati, Cum- 

 berland Gap, and Charleston, $377,000 ; East 

 Tennessee and Georgia, $1,102,000; East Ten- 

 nessee and Virginia, $1,237,000 ; Memphis and 

 Charleston, $841,000 ; total, $3,557,000. Roads 

 included under the name of the Louisville and 

 Nashville and Great Southern Railroad Lou- 

 isville and Nashville, main stem, $308,000; 

 Memphis, Clarksville, and Louisville, $819,000; 

 Memphis and Ohio, $1,199,000; Tennessee and 

 Alabama, $479,000 ; Central Southern, $364,- 

 000 ; total, $3,169,000. Roads now embraced 

 under the name of the Nashville, Chattanooga, 

 and St. Louis Railway Nashville and Chatta- 

 nooga, $120,000 ; Nashville and Northwestern, 

 $1,422,000 ; McMinnville and Manchester, $360,- 

 000 ; Winchester and Alabama, $479,000 ; total, 

 $2,381,000. Other roads Mississippi Central, 

 $488,000 ; Mississippi and Tennessee, $105,000 ; 

 Mobile and Ohio, $960.000. The St. Louis and 

 Southeastern Railroad is sued for bonds issued 

 to the Edgefield and Kentucky road. The 

 amount of bonds originally issued toward the 



