FINANCIAL RESULTS. 



and they can be enforced by any court of equity within the judicial 

 district. The payment of railroad bonds is generally secured by 

 deed of trust to some known and responsible citizen of New York 

 as trustee, with full jtower given in the deed to the trustee to 

 take possession of the road, its income, franchises, personal effects, 

 &c., in case of default, and to sell the same for cash to the highest 

 bidder, at sixty days' notice, without the intervention of a Court 

 of Chancery. 



" 6. Nearly all the bonds issued by American railways have the 

 same general features. They are either secured by mortgage upon 

 the property of the roads themselves, or they are common bonds 

 for the payment of money. But they are subdivided into two 

 classes those which are convertible into stock at the option of the 

 owner, to the amount on their face, whenever the holder sees fit ; or 

 they have no such condition attached. Convertible bonds have an 

 advantage over the latter, inasmuch as they can be converted into 

 stock so soon as that stock rises above par. This condition has 

 been found peculiarly advantageous to many of the holders of the 

 bonds on the western roads, since the stocks of most of these 

 roads have gone above par as soon as they were completed. 



" 7. Nearly all the western railroads were projected and built 

 for the special benefit of the people themselves in those districts 

 through which they pass. Their sole object was to be brought 

 nearer to a market for their produce, and many municipal bodies 

 subscribed for stocks with no expectation that they would ever 

 become valuable in any other way. Capital was scarce in the 

 west, as it is in most new countries. There was a serious want of 

 outlets to New York and navigable streams. Hence these rail- 

 roads were undertaken with the expectation of general advan- 

 tages to the community. But cities and counties could not create 

 debts, or expend the money in their treasuries for such purposes, 

 without special authorisation from the State legislatures. The 

 object of this was to give character and legality to their acts, that 

 they might have binding force, and also to equalise the burden of 

 those debts over the owners of property in those sections. The 

 charters, therefore, of almost all the western railroads authorised 

 those cities and counties through which they passed to subscribe 

 by a uniform mode to the stock of those roads. But invariably 

 one safe condition was attached to this permission that such 

 action should also be authorised by a vote of the majority of the 

 citizens themselves. This voluntary principle has worked admi- 

 rably ; because no city or county has had the right to subscribe 

 for stock in roads until a majority of the voters thereof so decided; 

 and thus the highest sanction of the will of the taxpayers and of 

 law was imparted to their action. In no one instance can I 



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