USA > West Virginia > Myers' history of West Virginia (1915) Volume II > Part 34
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value as of the first day of January, 1861. of $20,810,357.98; and.
WHEREAS, according to the apportionment of the debt made by the Supreme Court between the two states, West Virginia is entitled in equity, as a credit upon the part of said debt allotted to it, .235 of the aggregate value as of January 1, 18o1, of said stocks. bonds, securities and other property whether the same had been soll, retained or given away by the State of Virginia : that is to say, to the sum of $4,855,312.18, including cash on hand as of that date, and the additional sum of $225,078.06 collected by the Commonwealth of Virginia from West Virginia counties after June 20, 1803, which, if deducted from its allotment of $7.182.507.46, would leave a balance of $2.327,195.28 principal, to be paid by the State of West Virginia ; and,
WHEREAS, in consequence of the great lapse of time and the long delay on the part of Virginia to have its rights and the liability of West Virginia in the premises judicially determined: also in consequence of the fact that Virginia has received from time to time, in addition to the amounts hereto- fore set out, dividends upon the bonds, stocks and securities hereinbefore described to an amount equal to $5,782,240.09. and in consequence of the further fact that a part of said bonds has been mislaid, lost or destroyed and will never be presented for payment ; and many of the remaining bonds were pur- chased by the present holders thereof at nominal prices, and in consequence of the fact that Virginia at the time of the separ- ation of the two states retained, without an accounting unto the State of West Virginia for any part thereof, all of the pub- lic buildings including the capitol at Richmond, the peniten- tiary in that city. the State asylum at Staunton, the university at Charlottesville, and various other public buildings and in stitutions that had been constructed and equipped out of the joint funds of the two states, as well as much personal prop- erty consisting of libraries, arms and munitions of war, etc .. and in consequence of the further fact that Virginia has largely scaled her debt without West Virginia receiving her full pro- portionate benefit of such scaling, to say nothing of the legal reasons that might be presented in opposition to such a charge.
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History of West Virginia
110 interest should be charged upon West Virginia's allotted proportion of the principal of said debt; and, therefore, be it
RESOLVED, as follows : I. That this Commission propose, and it does here now propose to the Virginia Com- mission that .235 of $20,810,357.98, or the sum of $4,890,434.12 of the value of the stocks, bonds, securities and other property hereinbefore recited and described in the list hereto appended, be allowed by the Commonwealth of Virginia as a credit upon, and that the same be deducted from the sum of $7,182,507.46, ascertained, as aforesaid, to be the equitable proportion of the principal of the debt of Virginia assumed by the State of West Virginia, and that the balance so ascertained, that is to say. the sum of $2.327,195.28 be accepted by the Commonwealth of Virginia in full settlement, both principal and interest, of West Virginia's proportion of the Virginia debt.
II. That in the event the Virginia Commonwealth con- sent to the foregoing proposition, then this Commission will at once make a report of the fact to the Governor of the State of West Virginia, accompanied with the recommendation that the State of West Virginia pay unto the Commonwealth of Virginia the sum of $2,327,195.28, in full settlement of the present controversy ; and the Governor of West Virginia will at once, pursuant to the terms of the joint resolution of the houses of the West Virginia Legislature establishing this Com- mission, adopted on the twenty-first day of February, 1913. convene the Legislature of the State of West Virginia, for the purpose of adopting or rejecting the foregoing proposition of this Commission, and for the purpose, in the event of its adoption, of providing the funds without delay for the pay- ment of the amount so agreed upon.
III. That this proposition is made by way of settlement of the present suit and shall in no way affect the rights, or influence the action of the State of West Virginia, in the event of its rejection and future ensuing litigation. Be it further
RESOLVED, IV. That the Chairman of this Commis- sion at once transmit to the Virginia Commission a copy of this resolution, with the appendix thereto, with the request that the same be at once considered and acted upon at an early day.
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History of West Virginia
(Signed )
JOHN W. MASON.
WILLIAM D. ORD.
J. A. LENHART,
R. J. A. BOREM.\N. HENRY ZILLIKEN,
JOS. S. MILLER,
U. G. YOUNG,
JOHN M. HAMILTON.
W. T. ICE. JR .. West Virginia Debt Commission.
Analysis of Report of Accountants, Classifying the Credits to Which the West Virginia Debt Commission Believes the State of West Virginia is Entitled, Divid- ing the Same Into Classes Marked A to G. Inclusive.
Class A .- Cash.
The credit assigned to Class A consists of cash on hand in the treasury of the State of Virginia on the first day of January, 1861, amounting to $1.104.927.00, which sum was allotted to the following funds in the following amounts ; that is to say :
In the Commonwealth Fund. $ 252,847.67
In the Literary Fund. 26,876.08
In the Board of Public Works Fund. 5,958.28
In the Sinking Fund 819.250.03
Total $1.104,927.06
Class B.
Stocks purchased by the State of Virginia with the com- mon funds of the two states prior to January 1, 1861, unsold, still owned and unaccounted for by the State of Virginia.
The assets assigned in this class consist of 2,752 shares of stock in the Richmond, Fredericksburg and Potomac Rail-
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History of West Virginia
road Company, of the par value of $100 each. This stock was bought by the State of Virginia, under Acts of January 23, 1835, page 87 of Accountant's Report, and March 23, 1836, page 95 of said report, for the cash price of $275,200.00, and has never been disposed of by her, but is still owned by the State of Virginia, and had a valuation as of the first day of January, 1861, of at least $275,200.00. Total $275,200.00
Class C.
Proceeds of sales of securities purchased with common funds of the two states by the State of Virginia prior to the first day of January, 1861, and sold by the State of Virginia without the knowledge or consent of West Virginia, and with- out accounting therefor :
1. Orange & Alexandria Railroad Co., stock and loan $1,156,210.98
2. Richmond & Danville Railroad Co.,
stock and loan 1,653,423.04
3. Richmond & Petersburg Railroad Co., stock 578,404.13
4. Virginia Central Railroad Co., stock and loan 321,458.17
5. Blue Ridge Railroad, built by State of Virginia 705,280.82
6. Alexandria, Loudoun & Hampshire Rail- road Co., stock.
68,044.51
7. Winchester & Potomac Railroad Co., loan reduced by annuity 83,333.33
S. Virginia & Tennessee Railroad Co., loan 992,030.32
9. Southside Railroad Co., loan 91,897.66
10. Norfolk & Petersburg Railroad Co., loan 165,024.49
11. Roanoke Navigation Co., stock. 3.832.00
12. Alexandria Canal Co., stock. 816.00
13. Upper Appomattox Co., stock. 16,144.26
14. Dismal Swamp Canal Co., stock. 24.839.98
15. Loan to Washington College. 2,000.00
16. Richmond Academy Bonds. 400.00
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History of West Virginia
17. Claim against United States Government 298,369.74
18. Claim against Selden-Withers Co. 152,023.01
Total $6,313,532.47
Class D.
Interest on loans and dividends on stock accrued prior to January 1. 1801, upon common investments, and collected by the State of Virginia after January 1, 1861, and still unac- counted for :
1. Orange & Alexandria Railroad Co .. .$ 18,144.29
2. Richmond & Danville Railroad Co ... .
8,516.80
3. Richmond & Petersburg Railroad Co ... 43,048.00
4. Virginia Central Railroad Co. 182,436.36
5. Winchester & Potomac Railroad Co .... 833.33
Richmond, Fredericksburg & Potomac Railroad Co .. 157,662.07
7. Virginia & Tennessee Railroad Co. 211,891.82
8. Southside Railroad Co. 204,602.34
9. Norfolk & Petersburg Railroad Co .. 45,900.00
10. James River & Kanawha Company 250.00
11. Loan to Washington College 60.00
12. Richmond Academy bond.
12.00
13. Claim against United States Government
832,451.57
14. The Farmers Bank of Virginia 33,691.00
15. Bank of Virginia. 33,726.70
16. Bank of the Valley 16.936.50
17. Exchange Bank. 30,642.50
18. Northwestern Bank. 13,104.00
19. Fairmont Bank 1.500.00
Total $1.835,409.28
Class E.
Bank stock purchased by Virginia with joint funds prior to January 1, 1861, and in her possession on that date:
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History of West Virginia
1. Farmers Bank of Virginia. $ 962,600.00
2. Bank of Virginia. 963,620.00
3. Bank of the Valley 483,900.00
4. Exchange Bank. 875,500.00
5. Northwestern Bank 374,400.00
6. Fairmont Bank 50,000.00
Total $3,710,020.00
Class F.
Railroad stock purchased by the State of Virginia out of the common funds of the two states in various railroads, prior to the first day of January, 1861, and sold by her subsequent to the 20th day of June, 1863, without the knowledge or consent of West Virginia, and for which she has never accounted :
Prior to January 1, 1861, with common funds, bought stocks of and made loans to each of the following railroad companies :
Virginia & Tennessee Railroad Co., Southside Railroad Co., Virginia & Kentucky Railroad Co., Norfolk & Petersburg Railroad Co., and from time to time sold portions of said stock until she had left on hand stock therein and residue of loans that cost her :
Virginia & Tennessee Railroad Co., stock. $2.300,000.00
Southside Railroad Co., stock. 803,500.00
Southside Railroad Co., loan 708,102.34
Virginia & Kentucky Railroad Co., stock 82,000.61
Norfolk & Petersburg Railroad Co., stock ... 1.139,970.00
Norfolk & Petersburg Railroad Co., loan 134,975.51
Total $5.168,548.46
Which residuary stocks she subsequently, that is to say, on the 20th day of December, 1870, sold to the Atlantic, Miss- issippi & Ohio Railroad Co., for the sum of $4,000,000.00, the purchase price to be paid in installments, and took a second mortgage upon the property of the said railroad company to secure the payment of the same. This sale was made and this
History of West Virginia
security taken without the knowledge and consent of the Stat of West Virginia ; and finally after the lapse of many years, the nrst mortgage upon said railroad company was foreclosed and the property covered thereby sold, but did not bring enough to satisfy the second mortgage and pay the $4.000.000.00 purchase price agreed to be paid to Virginia for these stocks. After this foreclosure sale, that is to say, on the 1st day of March, 1882, the reorganization of the Atlantic. Mississippi & Ohio Rail- road Company paid unto the State of Virginia the sum of $500,000.00 for her second mortgage rights, whatever they may nave been. Virginia has never accounted to West Virginia, either for a proportionate part of the $4,000,000.00 original pur- chase price, or the $500.000.00 subsequently received.
It will be seen that the value placed upon these stocks, both by the State of Virginia and by the railway company pur- chasing them, was $4,000,000.00; and this can be taken as their reasonable value as of January 1, 1861.
Total $4,000,000.00
Class G.
Securities purchased with joint funds by the State of Vir- ginia prior to January 1, 1861, and subsequently given away without the knowledge or consent of West Virginia, together with certain other railroad and canal securities appropriated by her in one way and another, but not hereinbefore recapi- tulated :
1. James River and Kanawha Co., 104,000 shares $10,400.000.00
2. Residue of Securities :
Manassas Gap Railroad. 2.105,000.00
Roanoke Valley Railroad 307.402.00
Fredericksburg & Gordonsville Rail-
road 132,399.00
Richmond & York River Railroad 490,999.52
Rappahannock Company . 179,500.00
Rivanna River Navigation Company. 227,133.00
Smiths River Navigation Company 4,083.12
Slate River Company. 21,000.00
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History of West Virginia
Kempsville Canal Company 13,650.00
Hazel River Navigation Company. . .. 63,079.58
Goose Creek and Little River Company 58,255.35
Dragon Swamp Navigation Company 1,464.00
Chesapeake & Ohio Canal Company. .
281,111.11
Total $14,285,076.68
The foregoing $10,400,000.00 attributed to the James River and Kanawha Company was the par value of its stock, and, although the State of Virginia by an act of its General As- sembly passed on the 23rd day of March, 1860, something less than ten months before January 1st, 1861, placed a value of par thercon and made purchases thereof at such valuation, yet so much time has elapsed and the evidence of the actual value of this stock of that date has become so obscure, that it has been thought best, out of a spirit of compromise, to place a value thereon of twenty-five per cent of its par value, or the sum of $2,600,000.00.
The other securities embraced in this class (amounting to $3,885,076.68), have been treated in the same way for the same reason, and their value placed herein at twenty-five per cent of their par value, or the sum of $971,269.17.
Total $3,571,269.17
In addition to the foregoing the State of Virginia, after the division of the old Commonwealth into two states, June 20, 1863, collected large amounts of money from several counties then and now located in the State of West Virginia, aggregat- ing the sum of $225,078.06.
RECAPITULATION.
( lass A $ 1,104,927.06
275,200.00
Class B
Class C. 6,313,532.47
Class D 1,835,409.28
Class E 3,710,020.00
4,000,000.00 Class F
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History of West Virginia
-Ss G. . 3,571,269.17
Total. $20,810,357.98
West Virginia's equity .235. $4,890,434.12
Less Northwestern Bank stock $210,200.00
Fairmont Bank stock. 50,000.00 260,200.00
Balance $4,630,234.12
Collected from West Virginia counties 225,078.00
Total net equity $4,855,312.18
RESULT.
West Virginia's share of debt. $7,182,507.46
Less net equities, as above. 4,855,312.18
Balance $2,327.195.28
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History of West Virginia
NOTE .- Subsequent to the first of January, 1861, the Commonwealth of Virginia received as dividends and interest upon the securities and loans hereinbefore listed the sum of $5,782,240.09, as follows:
Interest.
Dividends.
Source.
Cash.
Virginia
Bonds.
Cash.
Total.
Orange & Alexan-
dria Railroad ....
$
113,459.00 $
81,311.34 $
66,516.09|$ 261,286.43
Richmond & Dan-
ville Railroad ..
380,497.66
281,322.35
249,605.67
911,425.68
Virginia Central Railroad ..
86,385.03
72,174.40
387,404.65
545,964.08
Richmond & York River Railroad ..
54,009.94
54,009.2.1
Richmond, Freder- icksburg & Poto- mac R. R.
24,012.71
1,282,198.74
1,306,211.45
Virginia & Tennes- see R. R ...
137,762.86
138,000.00
275,762.86
Norfolk Peters-
burg Railroad ..
69,561.41
82,800.00
152,361.41
2,800.00
2.800.00
Roanoke Navigation Co. Upper Appomattox Co.
6,150.00
6,150.00
Richmond & Peters- Furg Railroad.
1,703.81
227,504.00
229.207.81
Winchester & Poto- mac Railroad.
4,166.67
35,184.79
39,3 1.46
Southside R. R .. . . .
192,000.00
192,000 ( 0
Washington College
4,140.00 816.00
816.00
575,837 .: 2
Bank of Virginia ...
370,993.70
370,993.70
Bank of the Valley.
94,360.50
94,360.50
Exchange Bank.
343,633.75!
343,633.75
Northwestern Bank.
42,920.00
42,920.00
Total
$1,014,505.15|$1,045,830.40|$3,721,904.50|$5,782,240. 9
4,140.00
Richmond Academy U. S. Government .. Farmers Bank of Va
575,837.52
373,007.50
373,007.50
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History of West Virginia
REPLY OF VIRGINIA.
Washington, D. C., March -4, 1914. Virginia VS. West Virginia.
Hon. John W. Mason,
Chairman West Virginia Commission, Washington, D. C.
Dear Sir :- I beg to hand you herewith the resolutions adopted by the Virginia Debt Commission in response to the proposition submitted to them this day by the West Virginia Commission.
With great respect I am,
Very truly yours. (Signed) JOHN B. MOON, Chairman Virginia Debt Commission. Virginia VS. West Virginia.
Resolutions of the Virginia Debt Commission, adopted at a meeting held in Washington, D. C., at the New Willard Hotel, Wednesday, March 4, 1914.
The Virginia Debt Commission having received the proposition submitted this day by the West Virginia Com- mission, which contains statements and conclusions to which this commission cannot assent and concerning which it is 111- willing to engage in any discussion, adopted the following resolutions :
Whereas, the Supreme Court of the United States, in its opinion delivered at the October term, 1913 (November 10. 1913), in the suit of Virginia vs. West Virginia, on motion of Virginia to proceed to a final hearing, said :
"In March, 1911 (Virginia vs. West Virginia, 220 U. S. I.). our decision was given 'with respect to the basis of liability and the share of the principal of the debt of Virginia that West Virginia assumed.' In view, however, of the nature of the controversy, of the consideration due to the respective states and the hope that by agreement between them further .
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History of West Virginia
judicial action might be unnecessary, we postponed proceed- ing to a final decree and left open the question of what, if any . interest was due and the rate thereof, as well as the right to suggest any mere clerical error which it was deemed. migut have been committed in fixing the sum found to be due upon the basis of liability which was settled ;" and
Whereas, the matters left open and referred by the Co''t to the respective states for consideration and adjustment "in the hope that by agreement between them further judicial action might be unnecessary," were specifically stated to be (1) "what, if any, interest was due and the rate thereof," and (2) "the right to suggest any clerical error which it was deemed might have been committed in fixing the sum found to be due upon the basis of liability which was settled ;" and
Whereas, the proposition now submitted by the West Virginia Commission does not embrace either of said matters left open by the Court and referred to the parties litigant for adjustment between them, it is therefore
Resolved, That the Virginia Debt Commission is unwill- ing to, and respectfully declines to, consider the said proposi- tion ; and it is further
Resolved, That the Virginia Debt Commission hereby ex- presses its regret that the West Virginia Commission has not seen its way to respond to the opinion of the Court and sub- mit a proposition to adjust the question of interest.
(Signed) JOHN B. MOON, Chairman. (Signed) J. B. BUTTON, Secretary.
Approved :
(Signed) JOHN GARLAND, AAttorney General of Virginia.
REJOINDER OF WEST VIRGINIA.
Washington, D. C., March 4, 1914.
Hon. John B. Moon,
Chairman Virginia Debt Commission,
Washington, D. C.
Dear Sir :- In response to your communication of this ยท date declining the proposition of the West Virginia Commis-
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History of West Virginia
sion made this day looking to a settlement of the Virginia debt, we regret to be under the necessity of calling your at- tention to the fact that. although you deem the question of interest still open, yet you have offered nothing in reply to the reasons advanced in our proposition why no interest should be charged, and thus close the discussion upon the only point considered by you still to be open. And, so far as the credits advanced by us are concerned, you express an in- willingness even to discuss them, thus leaving us, in the ab- sence of errors therein pointed out by you, with the conviction that they are equitable, and under the necessity of adhering to the terms of a proposition made in an effort to do justice to all.
We deem it unnecessary to indulge in any interpretation or construction of the opinion of the Supreme Court at this time further than to say that, in our opinion, the Court ascer- tained West Virginia's proportion of the principal of Vir- ginia's debt to be $7.182,507.46, only because, as the record then stood, there appeared to be "no stocks of value on hand" to be applied to the reduction of the same. These stocks are now discovered and disclosed, and a portion of them at least were set forth in the proposition you have declined.
You have, therefore, closed the door to further negotia- tions, and it is with regret that we cease further effort along that linc.
Respectfully submitted. JOHN W. MASON. WILLIAM D. ORD. J. A. LENHART. R. J. A. BOREMAN. HENRY ZILLIKEN.
JOS. S. MILLER, U. G. YOUNG. JOHN M. HAMILTON. W. T. ICE. Jr .. West Virginia Debt Commission.
The Virginia Commission having refused to discuss the subject matter contained in West Virginia's preamble and resolution, the counsel for West Virginia gave notice to the Virginia representatives that a motion would be made to this
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History of West Virginia
supreme court on March 23d for leave to file a supplemental answer on or before April 13th, the date set by the court to take up the Virginia debt case, in keeping with Chief Justice White's opinion handed down November 10, 1913, heretofore given in detail.
The supplemental answer alleged, in brief, that the very debt-to the payment of which West Virginia was asked to contribute-had been created in the purchase of bank stocks, railroad securities and stocks in navigation and other trans- portation companies, and that, as had been held by the su- preme court, West Virginia was compelled to pay 231/2 per cent. of the value of the stocks and securities purchased with the proceeds of the bonds creating the debt.
The motion of West Virginia for leave to file the answer and of Virginia that the cause be proceeded with to final de- cree were argued together before the court on the 30th day of April, 1914. West Virginia was represented by Attorney General A. A. Lilly and his associate counsel, Charles E. Hogg, John H. Holt and V. B. Archer. The court entered a decree on the 8th of June, 1914, filing West Virginia's supplemental answer, and referring the cause again to Hon. Charles E. Lit- thefield, Special Master, with direction to hear any eviden e that might be offered by either state upon the subject. After conferring with representatives of both states the master fixed the tenth of August, 1914, as the time and the city of Rich- mond, Va., as the place, when and where he would begin his sittings in the execution of the decree of reference. Immedi- ately following this notice Governor Hatfield of West Virginia employed Mr. C. W. Hillman, an expert accountant, to pro- ceed to Richmond with his assistants and examine the archives, records and official documents of the State of Virginia relating to her public debt, and covering the period from 1823 down to the present time, reducing the information to tabulated form to be introduced as evidence upon the hearing. These instruc- tions were faithfully carried out.
The Special Master began the hearings at the time and place indicated above. West Virginia produced evidence that Virginia was, on the first day of January, 1861, the owner of many millions of stocks and other securities, and the va ue
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History of West Virginia
thereof as of that date. While Virginia admitted this to be a fact, she contended the value should be fixed as of June 20th, 1863, backing her contentions that upon that date, by reason of the ravages of war, the value of many of the stocks had been entirely destroyed, while others had been greatly depre- cinted, by virtue of which West Virginia's equity was of but little value. Virginia's theory was based upon the fact that West Virginia did not become a state until June 20, 1803; but West Virginia argued that since the debt against her had been fixed as of January Ist, 1801, her credits should be given as of the same date. This hearing was completed on the 21st day of October, 1914, and the case was argued before the Special Master on the 12th day of December, 1914, in the city of New York, by Attorney General Lilly of West Virginia and his associate counsel, Charles E. Hogg of Mason County and John H. Holt of Cabell County, West Virginia.
On January 22, 1915, Master Littlefield made his report, in substance, as follows :
1. That the assets or investments held by the Common- wealth of Virginia January 1, 1861, were not submitted to him or considered by him in the former hearing for the purpose of determining their value and applying the value as a set- f to reduce the gross debt of the Commonwealth of Virginia January 1, 1801.
2. That under West Virginia's agreement, as evidenced by the provisions of article 8, section 8, constitution of West Virginia, "an equitable proportion of the public debt of the Commonwealth of Virginia, prior to the first day of January, 1861, shall be assumed by this State," required Virginia to apply the assets or investments on hand January 1. 1801. at their fair value on January 1. 1861, so that West Virginia could know when the assets were so applied the amount of the real debt remaining to which West Virginia would be obliged to contribute.
3. That the liability of West Virginia for interest on her part of the net debt begins January 1. 1861. and runs at the rate provided for in the bonds that evidence that debt.
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