| From the Memphis Appeal |
| |
| January 11, 1861 |
| |
| Sale of Railroad Stock |
| Editors Appeal: Should the city of Memphis
sell her stock in the Mississippi & Tennessee railroad to F. M.
White at $125,000? |
| 1. The stock owned by the city
in the way of subscription amounts to the sum of $250,000. |
| 2. The stock dividends ready
to be declared on the completion of the road will amount to $150,000,
thus making the interest of the city in the road, when completed,
amount to the sum of $400,000. This road is now nearly completed, will
be finished in a few weeks, as we are informed, and we are asked to
give this $400,000 of stock to F. M. White and others for only
$125,000. Is there any private individual who would make this sale on
those terms, if the stock belonged to him? I think not. If F. M. White
and others can buy this stock and make money on the speculation, why
can't the city hold it a few weeks and also make money on it? Lest it
will be asked upon what data do we base our calculation, that the
stock dividend will amount to $150,000m when the road is completed, we
answer that question in this way: The city of Memphis took $500,000 of
stock in the Memphis & Charleston railroad, and when it was
completed the stock dividend declared in favor of the so-called
purchasers of said stock amounted to the sum of $300,000, this making
in original stock and stock dividends the sum of $800,000. If $500,000
of stock in one road increases by the time the road is completed, to
$800,000, it is reasonable to suppose that the $250,000 of stock in
the Mississippi & Tennessee railroad will increase $150,000 and
thus make an aggregate interest of $400,000. If this stock shall be
sold at $125,000 it will readily be seen that the city is selling the
stock in that road at thirty-two cents on the dollar. Could not the
city do better to put it up at public auction to the highest bidder
and give every body a chance if she is bound to sell the stock at all?
But will not this stock, if held till the road is completed, be worth
at least 75 cents on the dollar, if not par? It is known to almost
every old citizen that a short time before the Memphis &
Charleston railroad was completed, its stock was selling at about 35
or 40 cents on the dollar, and as soon as it was completed, it went up
to par; then why not hold this stock till the road is completed? If
this sale should be made, does it not lose to the city the control of
the road? a very important matter to be considered, I think. |
| But it is urged that this
stock should be sacrificed in this way to relieve persons who have
become the indorsers of the city paper. While I would go as far in
reason as any other person to relieve them in a private point of view,
I do not think this would justify a total disregard of the interests
of the people, for in the first place, the city should stand or fall
upon her own credit, and should not be so broken down in credit as to
require bolstering up by the props of private individuals. Is not such
a course the inevitable result of bad financing, or bad management?
Would any sensible man expect that any private individual would be
required to bolster up the credit of the cities of New York, New
Orleans or Philadelphia by his credit? The very idea shocks the
sensibility of every reasonable man. |
| Is it not strange that just so
soon as the stock owned by the city in any project begins to pay, and
yield a revenue to the city, just so soon do you hear of, and are
importuned by generous, liberal minded outsiders, who, with an Argus
envy, find out that the financial condition of the city requires her
to sell off, give away and hurriedly get clear of her most valuable
interests, and kindly ask that the city sacrifice its interests in
such project to them? It is to be hoped that the taxpaying,
intelligent portion of the citizens of this city will not permit this
to be done. |
| NO SALE |
|