TX, ET 7/8/1861

Office of the Eastern Texas Rail Road Co.
Nacogdoches
July 8th 1861
 
To the Board of School Commissioners
Austin City Texas
 
Gent.
   We solicit information in regard to your action upon our Power of Attorney, executed in favor of Mess. Moran Brothers Citizens of the State and City of New York authorizing them to receive the loan of the School fund to which our Road is entitled under the several acts of the Legislature of our State.
   Our late President accompanied by Game R. Connell a Citizen of the State of New Jersey, and acting as agent of the said Morans, started sometime ago to the City of Austin for the purpose of receiving the loan of the School fund upon the first section of 25 miles of our Road and carried with them the report of the State Engineer and annual report of the Treasurer and Engineer of the Company, as required by Law.
   Our late President was taken sick, and did not reach Austin. He responds to us however, that at first you refused to deliver the Bonds to Mr. Cornell agent of said Morans as they were our alien enemies being citizens of the City and State of New York, alleging that the act would be treasonable and in violation of the laws of the Confederate States. But that upon another interview with the Governor and upon representations made to him that the said Morans were not citizens of the U. S.  but were citizens of England or agents of an English House, & that it was the general wish of the people of our part of the country who were interested in the Road, and in the development of our country's resources by a quick & speedy construction of the same, that the Governor had concluded that you would deliver to Mr. Cornell agent of said Morans the bonds aforesaid, and had or would accompany Mr. Cornell to Austin for the purpose of delivering them to Him. Our late President being sick, and not able to go, also delegated all the necessary power to said Cornell to enable him to demand and receive said Bonds upon said first section of 25 miles of said Road.
   We are anxious to know if the Bonds have been delivered to Mr. Cornell the agent of said Morans, and upon what authority he demanded and received the same, if they have been paid out, whether upon the power of Attorney first mentioned, or upon the authority delegated by our late President. If upon the first we cannot conceive the motives that prompted you in paying the same to parties who are our alien enemies, in violation of international law and the laws of the Confederate States. And if the said Morans were represented as being Citizens of England or agents of an English House, to whom the bonds were to be paid, should you not have required the testimony of disinterested persons to have established those facts. (And if any mortgage be executed under such circumstances can it be enforced against a Company?) If not upon the authority of the first but the last, they have been delivered upon authority delegated by our late President, which he had no right or power to confer. We here enclose you a copy of our Charter, bylaws &c and call your attention to Section 4 of Act of December 19th 1857, page 28 which prescribes the authority by which any trust deed or mortgage is executed. Notice also the by Law, under head of loans Article 14 page 21 and you will see in what manner & by what authority a trust deed or mortgage shall be executed by our Company. There is no Resolution or other act of our Board of Directors which authorizes the execution of any mortgage bond or trust deed upon our Road in favor of the State of Texas for Loans. And if any have been executed by the former officers of our Company, should you not have required them to exhibit the power and authority under which the same was executed.
   And instead of its being the wish of the people here who were directly & materially interested in our Road, to have said Bonds delivered the opposite was the case, and the fact of our being required to receive them at par and pay them out at perhaps 30% discount was sufficient cause to justify us in wishing to withhold them. We will only further say that Mess Moran Brothers are citizens of the City and State of New York, have failed to comply with their contract with us, and more particularly lately to deliver us 10 or 1100 tons of iron now at Galveston, to our great damage and serious loss. And that the iron laid down on our Road on which they apply for the Bonds was purchased in the City of New York and not in England.
By authority of the Board of Directors
Yr Obt Servant
James R. Arnold
President Eastern Texas Rail Road Company

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