USA > Washington DC > Washington DC > The chronicles of Georgetown, D.C., from 1751-1878 > Part 20
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"But, notwithstanding the obvious policy of the State, the Legislature of Maryland at the December session, 1843, were not yet prepared to adopt the meas- ure suggested. The report of the company had been published too late to have any decided effect at that time. The elections had all previously taken place, and the members had been chosen under the influence of long cherished prejudices against the company in
سيادة المطر
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consequence of the misfortunes or improvident meas- ures of a former period of its history, and in ignor- ance of the real issue they were called upon to decide. No act was accordingly passed at that session.
" At the December session, 1844, the application was renewed with unabated ardor and an array of ad- ditional arguments. The officers of the company stood almost alone in the vindication of the measure. The friends, who, on former occasions, had gathered to- gether to aid and support the company in its times of difficulty, were no longer seen. There were no gath- erings in primary meetings and no State convention to encourage and sustain it in its struggles for relief. Instead of friends to help, it was, indeed, surrounded by enemies to oppose. The city of Baltimore, oblivi- ous of its past support and of its earnest advocacy in former years of the completion of the work to Cum- berland, now took decided grounds in opposition to it. The columns of the press of the city teemed with essays and communications adverse to the measure which had been proposed. The railroad company also, after all their previous protestations of enduring amity, with more diplomatic skill, sought to crush the effort by statements intended to show that a connection be- tween the railroad and the canal at dam No. 6 ren- dered a further prosecution of the latter work wholly unnecessary. They likewise, and doubtless with a similar object, asserted that 'many years would elapse before the demand for coal would require more than one hundred thousand tons in any one year, whatever facilities of transportation may be afforded.' If the
كاملة
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same powerful opposition had been arrayed against the completion of the canal at the December session, 1834, or even at that of 1835, the work at either of those periods would, most probably, have been stopped ; for, even with the active and combined exertions of the im- mediate friends of both of the great internal improve- ment companies, backed by the whole influence of the city of Baltimore, the appropriations on those occa- sions were obtained with great difficulty, and, as re- gards the latter, only after a prolonged struggle. But the subject in 1844 presented a very different aspect. It was now no longer a question of internal improve- ment merely, but also a question of finance-not whether the vast treasury of wealth which was locked up in the bosom of the mountains of Alleghany County should be opened and its contents added to the general aggregate of the State's resources by some facility of internal improvement, but whether the inil- lions which the State had invested in the Chesapeake & Ohio Canal Company should be given up as irre- trievably lost, or an effort be made to save and render them productive. Maryland had already expended seven millions of dollars in the prosecution of the canal, and had never anticipated a return from it until after the work should be finished. Neither more money nor the State's credit was now solieited. All that was asked of her was, that as she was herself in pecuniary difficulty, arising mainly from her support to this company, and as her investments in it must re- main valueless and unproductive until the canal should be completed to Cumberland, she would waive her
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الجماع لـ
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unprofitable liens on the revenues to such an extent only as would enable the company to finish the work upon a preferred pledge of its future resources. Al- though, as we have remarked, the opposition was in- fluential, there was not wanting upon the floor of the house of delegates at the December session, 1844, Marylanders who fully appreciated the deep import- ance of the completion of the canal, and whose strong judgments and fervid eloquence were earnestly enlisted in favor of the plan that had been recommended. After a long and arduous struggle, the act waiving the liens of the State (1844, ch. 281,) under which the canal has now been completed, was passed. But it was only finally passed on the 10th of March, the last day of the session by the limitation of the constitution, and received merely a majority of one vote in each house of the general assembly ; and it was not passed even thus and then, until the bill originally proposed, which fairly embodied the application of the company, had been rejected in the house of delegates, and ulti- mately so materially modified that some of its most prominent advocates pronounced it valueless, and were disposed to abandon its support.
" The act authorized the board of president and di- rectors to borrow or raise on the bonds of the com- pany, to be executed in a prescribed manner, and se- cured by a pledge of the revenues and tolls that may hereafter accrue on the canal and its works between Georgetown and Cumberland, such sum or sums of money as would be required to pay for the completion of the canal to Cumberland, under a contract or con-
£
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CHESAPEAKE & OHIO CANAL.
tracts thereafter to be made by the board and approved by the Maryland State agents, and the necessary ex- penses appertaining thereto ; and also to pay the inter- est on the bonds issued under the act, in aid of the net revenues, until they became sufficient for the purpose after the debts in arrear for repairs and officers sala- ries are discharged ; with a proviso that the whole amount of the bonds issued should not exceed one million seven hundred thousand dollars. The bonds were directed to be countersigned and approved by the Maryland State agents, or a majority of them ; and the company was forbidden to sell or hypothecate them at less than their par value; but it was author- ized to make contracts payable in them at par, and to pay thus for the whole or any part of the work, in- stead of raising money for the purpose, if the presi- dent and directors should deem it most expedient. The rights and liens of the State upon the revenues of the company were postponed and waived in favor of the bonds, so as to make them and the interest to accrue thereon preferred liens on the revenues, as above mentioned, with an express reservation, how- ever, that the president and directors shall, at all times, have the authority to use and apply such portion of the revenues and tolls as, in their opinion, may be nec- essary to put and keep the canal in good condition and repair, provide the requisite supply of water, and pay the current expenses of the company.
" The interest on the bonds, at the rate of six per cent. per annum, was to be made payable on the first of January and July in each year, and the principal
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in not less than thirty-five years; the State, however, retaining the right to redeem them, upon payment of the principal and interest due thereon, at any time that, in the opinion of the legislature, the interest of the State might require it, but in no event was it to be held responsible for such payment.
" So soon as the revenues should be more than suffi- cient to pay the interest on the bonds and the interest on the certificates of debt issued to the creditors of the Potomac Company, under the 12th section of the charter, which is not to exceed five thousand dollars per year, the company was required to pay to the treasurer of the State, out of the surplus net revenues, such sum, not exceeding an average of twenty-five thousand dollars a year, dating from the first of Janu- ary next after the completion of the canal to Cumber- land, as may be necessary to constitute an adequate sinking fund; and the treasurer was directed to re- ceive such annual payments, under the responsibilities of his office, and to invest and accumulate the same, until a sufficient amount should be thus obtained to pay the principal of the bonds that may be issued, which he was directed to pay at maturity. Until the bonds were paid the said fund was to be considered as held for that purpose by the State of Maryland as agent for the company.
" The president and directors were authorized to execute any deed, mortgage, or other instrument of writing that should be deemed necessary or expedient to give the fullest effect to the provisions of the act; and the company was required to execute to the State 40
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of Maryland and deliver to the treasurer a further mortgage on the canal, its lands, tolls, and revenues, subject to the liens and pledges made, created, or au- thorized by this act, as additional security for the pay- ment of the two million loan made by the State under the act of December session, 1834, ch. 241, and the interest in arrear and to accrue thereon.
" This act was, however, not to take effect until its provisions were approved, assented, and agreed to by the stockholders of the company in general meeting assembled; and it was expressly provided that no bond should be issued under it until after one or more of the incorporated companies of Alleghany County, or other corporations or individuals, should, by an instru- ment or instruments of writing in due form, with ample security, to be approved by the agents repre- senting the interest of the State in the company, or a majority of them, and the governor, guaranty to the company an aggregate transportation, on the entire length of the canal between Georgetown and Cumber- land, of not less than an average of one hundred and ninety-five thousand tons of tonnage per year for five years, dating from the end of six months after the canal shall have been completed to Cumberland. Such is the synopsis of the leading provisions of this impor- tant measures.
" At the same session of the general assembly, the company, upon application, also obtained the passage of an act, amendatory of the charter, in regard to the adoption of by-laws, and the protection of the canal from injury, with some necessary provisions to pre-
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السبت
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vent frauds upon the revenues, which was ratified and confirmed by Congress, after many efforts for the pur- pose, in September, 1850.
"In the charter of the Chesapeake & Ohio Canal Company, prior to the year 1844, there was no express power given to the company to borrow money for the construction or completion of the canal, and its right to do so had been much doubted. Even the force and validity of the mortgages which it had executed to the State of Maryland to secure the payment of the two millions loan had been called in question. Besides this, the time limited by the charter for the completion of the canal to Cumberland had expired in 1840, and since that period, the corporation had existed merely by the sufferance of the sovereignties which had created it. No steps had previously been taken to procure amendments in either of these vital points. In the confident belief that the measure which had been suggested by the company at that time for the completion of the work in some shape, must, sooner or later, prevail; and that it would prove ineffectual un- less the omissions and defects in the charter, to which we have referred, were first remedied and supplied, the board of president and directors, at the session of 1843, transmitted a memorial to the Legislature of Virginia, asking for the passage of an act providing for the amendments indicated, and also enlarging the powers of the company in regard to the right of ex- tending the canal by a slack-water improvement to the mouth of Savage River, whenever it should hereafter deem it expedient to do so. A draft of a bill embrac-
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ing the provisions desired, and containing a reserva- tion as to the liens of Maryland, accompanied it. The Legislature of Virginia promptly acted upon the sub- ject and passed the bill in the form in which it was pre- sented, with some slight and unimportant additions, on the 20th of January, 1844. The act provides for an enlargement, and extension of the time for the completion of the canal to Cumberland, to the 1st of January, 1855 ; and an express authority is conferred on the president and directors, or a majority of them assembled, to borrow money, from time to time, to carry into effect the objects authorized by the charter of the company, to issue bonds or other evidences of such loans, and to pledge the property and revenues of the company for the payment of the same, and the interest to accrue thereon, in such form, and to such extent, as they may deem expedient, with a proviso, saving the prior rights or liens of the State of Mary- land, under the mortgages which had been executed by the company to this State, except in so far as they should be waived, deferred, or postponed by the Legis- lature of Maryland. The amendment, in regard to the slack-water improvement beyond Cumberland was to the effect already mentioned. The assent of the Legislature of Maryland was given to this act on the 8th of February, 1844, and it was confirmed by Con- gress, and approved by the President of the United States, on the 17th of February, 1845.
" At a general meeting of the stockholders of the company, assembled at the office of the company in Frederick, on the 29th of April, 1845, the president
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and directors submitted authenticated copies of these several acts of Virginia, Congress, and the State of Maryland, amendatory of the charter, and they were duly accepted, and thus became a part of the charter of the company. At the same meeting, and on the same day, the president and directors also submitted to the stockholders the act of the general assembly of Maryland, entitled, 'An act to provide for the comple- tion of the Chesapeake & Ohio Canal to Cumberland,' which we have already explained; and they passed a resolution accepting and agreeing to its provisions, . and authorizing the acceptance to be communicated to the treasurer of Maryland in the manner prescribed, and the mortgage to the State to be executed as re- quired. The acceptance was immediately communi- cated to the treasurer of Maryland, and the act there- upon went into effect. The mortgage, which was exe- cuted to the State, and delivered to the treasurer, pur- suant to the provisions of the seventh section of the act, bears date the 8th of January, 1846.
" The important amendments to the charter, which have been described, were finally ratified by Congress about one month before the passage of the act, waiv- ing the liens for the completion of the canal. They were appreciated by the professional gentlemen who occupied seats in the Legislature of Maryland, in their consideration of the merits of the measure, as may be inferred from the provision made for the new mort- gage to the State. Without them, as we have here- tofore intimated, the act of the 10th of March, 1845, would have been wholly unavailable. Even fortified
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and sustained by them, serious doubts were generally entertained whether the conditions of the act could be fulfilled and complied with, or, if complied with, whether, with the limited amount and kind of means contemplated and authorized by its provisions, the com- pany could secure the completion of the canal to Cum- berland. These doubts, unfortunately, tended to in- crease the intrinsic difficulties of the act.
" In the year 1841, the chief engineer made a detailed estimate of the work done and to be done on the fifty miles above dam No 6, and on the 1st of December, 1842, after the operations on the line had ceased, he estimated the amount then required to complete the canal to Cumberland at one million five hundred and forty-five thousand dollars.
"In consequence of a change made in the charac- ter of certain portions of the masonry, and for other causes, requiring a variation in the previous estimates, the chief engineer made a revised estimate in August, 1845, and, with an allowance of fifteen per cent. for land damages, superintendence, and other contingen- cies, estimated the cost of completing the canal at one million four hundred and four thousand four hundred and seventy-one dollars. The work previously exe- cuted between dam No. 6 and Cumberland, amounted, as then ascertained, to two million eight hundred and ninety-two thousand dollars.
" The first requirement of the act of December ses- sion, 1844, ch. 281, to give effect to its operative pro- visions, was the execution of the guaranty of tonnage, and its approval in the mode prescribed. Until this
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الديسك ودعوات
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CHESAPEAKE & OHIO CANAL.
should be accomplished no bond could be issued under it. A condition of similar character had rendered abortive the act of March session, 1841, authorizing a loan of two millions of dollars of State securities to the company, as has been shown. The same result was generally predicted for this, and the impression produced an unfavorable effect, and caused a listless- ness on the part of the incorporated companies of Alle- ghany County, whose assistance had been most confi- dently relied on. But, by persevering exertions, and the active and efficient co-operation of the friends of the canal in the District of Columbia and the western counties of Maryland, the full amount of guaranty re- quired by the act was obtained. Three of the incor- porated companies ultimately joined in the measure to a limited amount. The instruments of guaranty were prepared in such a form as to divide the responsibility, and enlist the largest number of guarantors. Twenty- eight instruments of this description were executed and delivered to the company. They were laid before the governor and the Maryland State agents, and received their approval on the 29th of July, 1845.
" By the fulfilment of this embarrassing condition, the president and directors of the company were placed in a situation to avail of the benefits of the law, and, after a long and toilsome struggle against difficulties, which at times seemed almost insurmountable, they finally succeeded in completing the canal under it.
" Without dwelling on the details of the various nego- tiations and proceedings which took place, or averting to the critical position of affairs on several occasions,
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we will trace, briefly, the progress of events to the final accomplishment of the purposes of the law, and, after a reference to a few antecedent transactions, which it is proper to notice, hasten to a conclusion.
" It has been seen that the act of 1844 did not place any money at the disposal of the company for the com- pletion of the canal, furnish it with State bonds, as on previous occasions, nor even waive the liens to the ex- tent recommended, and clothe it with available power to raise money on its own bonds to be issued under the act; but, in effect, merely authorized the board of president and directors to issue the company's bonds, upon a pledge of its disencumbered revenues, to an amount not exceeding one million seven hundred thousand dollars, for the purpose of completing the canal to Cumberland, then estimated to cost one mil- lion five hundred and forty-five thousand dollars in money, and of paying certain expenses necessarily growing out of a fulfilment of this provision, which, at a moderate calculation, could not have been com- puted at less than one hundred and fifty thousand dol- lars, and which have actually somewhat exceeded that sum; and to render this limited amount of the bonds of the company sufficient for the objects indicated in the act, the liens of the State, then having priority, were waived and postponed in their favor. Little more than one year previously, these liens, together with the whole interest of the State in the company, amounting in all to upwards of eight millions of dol- lars, had been advertised for sale in the money mar- kets of Europe and America, upon an offer to receive
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£
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therefor the sum of five millions of dollars in Mary- land State bonds, which then commanded less than fifty cents on the dollar, without attracting a bid or eliciting a single inquiry upon the subject; and their waiver, by the State, could only give value to the liens that were to be preferred to them, in proportion as it gave assurance of the completion of the canal.
" In the general depreciation of American securi- ties at that period, with Maryland herself in discredit, and in view of the comparatively small means allowed for the accomplishment of the ends proposed, a sale of the bonds at par was utterly unattainable, and a resort to a contract, payable in the bonds, and covering all the subjects necessary to be provided for, became the only practicable course for the company to pursue, and it was accordingly adopted. After duly advertising for proposals, the board of president and directors, with the approval of the Maryland State agents, con- cluded an agreement to that effect on the 25th of Sep- tember, 1845. The contract was full of details, and guarded with the utmost care in all its provisions. For the consideration of one million six hundred and twenty-five thousand dollars of the bonds to be issued under and pursuant to the act of 1844, ch. 281, the contractors, four in number, bound themselves to com- mence the work within thirty days, and within the period of two years finish the canal to Cumberland, according to the plans and specifications of the 1st of December, 1842, estimate as modified and explained by certain memoranda attached thereto, to pay to a trustee, for the use of the company, in twenty-one
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الحديد للسـ
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monthly instalments, an aggregate sum of one hund- red thousand dollars in money, to enable the board of president and directors to liquidate land claims, engi- neering and other incidental expenses, and to pay the interest on the bonds to be issued under the act until, and including the half year's interest that would fall due, after the work had been finished. The bonds were to be paid at their par value only as the work progressed and the respective provisions of the con- tract were complied with. The payments for construc- tion were to be based upon the chief engineer's esti- mates of work actually executed, which were to be made out monthly, the company reserving the right to retain a certain percentage as security ; and by way of superadded obligation to the execution of the in- strument, the parties executed their bonds, with ap- proved security, to the company, to commence the work within thirty days, and to prosecute it at an ex- penditure of at least one hundred and fifty thousand dollars. The contractors also bound themselves to cash, at par, the remaining seventy-five thousand dol- lars of bonds authorized to be issued by the act, if re- quired to do so by the company. To the board of president and directors was reserved full power to de- clare the contract abandoned upon a non-compliance on the part of the contractors with any of its mate- rial provisions. And with a view of guarding all the bonds issuable under the act from depreciation, and of insuring the accomplishment of the undertaking, a provision was incorporated that no bonds should be paid to the contractors for the execution of the work
جدا السدالعالى
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المحاولات
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until they had given bond with ample security for the fulfilment of the entire contract, or concluded an ar- rangement for the negotiation of such amount of the company's bonds to which they might become entitled, as would afford to the Maryland State agents and the board of president and directors a reasonable guar- anty of their ability to comply with their engagements.
" The above is a concise outline of the principal pro- visions of the original contract. 3 It was not at the
time deemed probable that the security for the large amount that would be required could be given, and the avowed reliance of the contractors was on an ar- rangement for the disposal of the bonds. They did not, however, we believe, suppose that this could be effected until after the State of Maryland had pro- vided for the resumption of the payment of interest on the State debt, because they had ascertained, and, indeed, the company had previously been distinctly informed, by its London correspondents, that capital- ists regarded ' the interests of the company and the State so interwoven,' that whilst the State's securities were dishonored the company's bonds could not be negotiated. The contractors thought that their own private means and resources would enable them to prosecute the work until after the close of the ensuing session of the legislature, and it was confidently be- lieved, on all sides, that at that session provision would be made for the public liabilities, and that they could then make a satisfactory negotiation. Soon after the date of the contract, therefore, they commenced the work between dam No. 6 and Cumberland, and prose-
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