UT, ET 5/23A/1861

From the Minutes of the Board of Directors of the Eastern Texas Railroad
 
Nacogdoches, May 23, 1861
 
   The President stated verbally to the Board that it was convened to take into consideration the condition of the Contract with Messrs Moran Bros of the City of New York for railroad Iron &c furnished by them for the E. T. R. R. Co and payment provided for the same in the US Bonds set apart by the State of Texas for Railroad purposes.  And as said Bonds in consequence of the political difficulties & actual State of War which has taken place in what was once the United States of America since the confirming of said Contract have caused a depreciation in the face value of said US Bonds. He respectfully submitted to the Board the subject for their consideration and action.
   Whereupon the Board adopted the following Agreement and Authorized the execution of the same between the President of the E. T. R. R. Comy. and Isaac R. Cornell (now present) Agent for and representing said Moran Bros in the premises'
 
The State of Texas
County of Nacogdoches
   Articles of Agreement entered into this 23d day of May A. C. 1861 in the town of Nacogdoches, county & state aforesaid, Between Isaac R. Cornell Agent of Moran Bros of the City of New York, State of New York, on the one part and the Eastern Texas Rail road Comy of the other part
Witnesseth. Whereas on the 21st day of August A. D. 1860, the Eastern Texas Rail road Company through their authorized Agents Geo. W. Cochran, L. H. Witman and H. H. Edwards, entered into a Contract with Moran Bros of the City of New York for 12,500 tons of railroad Iron to be delivered by said Moran Bros to said Rail road Company in Texas as specified in said Agreement, which said Iron was to be paid for out of the Loan provided for and set apart by the State of Texas for railroad purposes, and which State Loan then consisted of United States Bonds which the said railroad Company was required to take at not less than their face value. And whereas at the time of said Contract said Bonds were marketable at their face value and over including Interest theron -- But since that time owing to the present state of political difficulties, and actual state of War, between the different sections of the United States, said Bonds have depreciated in value which depreciation was not contemplated by either party to said contract at the time of the execution of the same, and whereas the said Moran Bros in pursuance of said Contract have delivered t said Eastern Texas Rail road Company the first 2500 tons of Iron provided for in said contract and the same is now readily all laid down on the Road of said Company, and they are now about ready to draw from the State of Texas their portion of State Aid, Due upon the first section of said Road which under their said Contract with Moran Bros the said Moran Bros are authorized to draw and apply as specified in said Contract to payment of themselves for said Iron and it becomes necessary for the said Eastern Texas railroad Company to execute a Bond to the State of Texas to enable them to draw said aid. And there arises a question under all the circumstances as brought about by the present difficulties existing between the different sections of the Country, as to what is just and equitable between the said contracting parties as to the loss to be sustained by reason of the unanticipated depreciation of the said State aid. It is now Agreed between said Moran Bros through their agent Isaac R. Cornell and the said Eastern Texas Rail road Company (through a majority of the Director) that said question of loss, or account of the depreciation of the State Aid which under the Statutes of Texas the said Company are compelled to receive at their par, or face value, including interest shall hereafter be adjusted between said original contracting parties by arbitration -- One arbitrator to be selected by each party (of good moral standing & integrity) and having no interest in this matter, to determine & adjust this matter between said contracting parties, with power in case they cannot agree among themselves to select an umpire to determine fully on the question at issue.
   It is further Agreed that any benefit which said Moran Bros may derive, or may hereafter derive by reason of any Deduction of Duties on said Iron from the amount it was at, at the time of said Contract which ash been brought about by the same causes, as the depreciation of the said State Aid or which may also be effected by or through the exertions or instrumentality of said Eastern Texas Rail road Company shall also be taken into consideration, and adjusted in like manner for the benefit of said Company.
   It is further agreed that if the said Moran Bros shall now receive the said State Aid that is now due at Ninety Cents on the Dollar, all Arbitration in regard to the matter shall cease.
   Under this Agreement the Iron now in Galveston is to be forwarded to Sabine pass, and there delivered to the said Eastern Texas Rail road Company. The State Aid to be hereafter drawn on account of said Iron when laid down to be then subject to matter of Agreement between the contracting parties.
   In testimony whereof Isaac R. Cornell as Agent for Moran Bros of the one part has affixed his hand and scroll for seal, and on the other part the Eastern Texas rail road Company by the signature of its President attested by the Treasurer with his signature and the Official Seal of said Company. The day and year first herein written
singed by Isaac R. Cornell, Agt for Moran Brothers
H. H. Edwards, President Eastern Texas Rail road Co.
attest
John Forbes Secy
E. T. Rail road Co

Home