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State Road Betterments.
Governor Brown Writes a Letter. Refut
ing the Ideas That He and His Associates
Are Not Interested in the Settlement of
the Claim slade by the Lessees.
The following communication from
Senator Joseph E. Brown is published
for the purpose of showing that there
is no foundation for the assumption
that Governor Brown or the original
lessees have no interest in the claim,
which has been presented to the gener
al assembly by the Western & Atlantic
Railroad company for improvements
to the road:
Salt Springs, Ga., August 31,
1889. —Mr. E. B. Stahlman, Vice
' President Louisville & Nashville
Railroad company, Atlanta, Ga. —
Dear sir : You call my attention to
the fact that in the late debate in ■ the
hou»e of representatives, over the bill
to lease the Western & Atlantic Rail
road, some of the speakers are report
ed as having advanced the idea to the
house that ueither I, nor the original
lessees of the Western & Atlantic
Railroad company, have taken any
interest in the present application to
the general assembly to do justice to
the Western & Atlantic Railroad
company by making a fair settlement
for the improved condition of the road
and its appurtenances. That the
argument has been advanced that it is
only your company as purchasers of
the majority of the stock who are ap
plying for betterments, etc. If any
such remarks were made by any of the
honorable members of the house, it
must have been under a very gross
misapprehension.
I addressed a communication to the
last general assembly on this subject,
through the governor of the state,
which was published at the time in
several of the leading newspapers of
the state, and extensively commented
upon in the legislature, in which I set
forth, as well as I could, the case of
the Western & Atlantic Railroad com
pany and its claim for compensation
by the state for the improved condi
tion of the road, its rolling stock and
appurtenances. I have referred in
said communication to the contract
made between the state and the pre
sent lessees, which only requires the
lessees to return the road at the end
of the lesse in as good condition as
they received it, and pointed out cer
tain modes that might be adopted of
bringing the road down from its pre
sent excellent condition to a near
approximation of its condition when
received by the present lessees.
Again, early in the former session
of this present general assembly, I
sent a communication to it through
the governor, who was kind enough
to lay it before the two houses. It
has been extensively read, as 1 am
informed and I certainly think I
showed nothing like a want of interest
in the success of the movement that
looks like doing justice to the Western
& Atlantic Railroad company.
In other words, I have addressed
two communications through the
governor to the general assembly, and
have taken position strongly urging
the legislature to make provision for a
fair, honest and honorable settlement
with the present lessees at the expira
tion of the present lease. Ido not
know how to add force to the remarks
which I then submitted. It seems to
me that every fair-minded man who
examines the law and the contract
between the state and the lessees, and
the facts in the case, is obliged to
come to the conclusion that in equity
and honest good faith, the state of
Georgia justly owes to the lessees a
very considerable sum of money. If
this is true, the people of Georgia can
not sustain their representatives in
refusing to make provision for its pay
ment, as the state cannot hcve her
character tarnished by a wilful act of
injustice in refusing to pay a just
claim, whether she is legally liable in
the courts or not.
A sovereign state is supposed to
move upon a high plane, and is al
ways ready to do justice to the hum
blest citizen by the payment of any
sum justly due.
It is admitted, I believe, by every
body that the lessees have kept the
contract on their part scrupulously,
honestly and faithfully, that they
have not failed in a single particular
to comply with their obligation under
the contract, that they have never in
any instance permitted the payment
of a monthly installment of rental to
run beyond the day when it was due.
They have paid over five millions of
dollars in cash into the treasury of the
state as rental for rne use of the road,
without a default or complaint.
They have therefore, set the state an
example of good faith and honest deal
ing which cannot, I think, be disre
garded.
It is said, I know, that the lessees
have no legal claim for betterments.
I have not said that they have. I
have always admitted that the contra
ry is true, but I have always contend
ed that they have an honest claim
founded in equity and justice, of a
character that cannot be disregarded
if it existed between business men and
the state were not a party to it.
Much less can it be disregarded by a
sovereign state which is party to a
solemn contract.
I suggested in a former letter, as
the state cannot be sued in Georgia,
and as the lessees want to take no ad
vantage of the fact that a very valua
ble part of the Western & Atlantic
Railroad and its appurtenances lie in
the state of Tennessee, where both the
federal and state courts would be open
to the lessees, that a litigation be
avoided, which it seems to me is bet
ter for the state, and lessees, by re
ferring the question to honest, upright
citizens of the highest character, and
let them decide it upon its merit, and
let the state and the lessees be bound
by their decision. If the lessees have
an honest claim, it seems to me that
an investigation of this character can
not be denied by her representatives
to the party at interest. Have the
lessees a claim that could properly be
submitted to a court or to a board of
arbitrators for decision ?
The last legislature made it the
duty of the governor to appoint a
commission to examine carefully into
the condition of the Western & At
lantic Railroad and report the facts.
That commission, led by Hon. William
M. Reese, composed of gentlemen of
the highest possible character, dis
charged their duty faithfully and la
boriously. Neither of them was ap
pointed, nor was either of them sug
gested by the lessees. The act made
no provision for representation on the
part of the lessees in the commission.
The members of the commission were
to be appointed by the governor, and
I, as president of the company, was
never consulted, and I presume no
member of it was, but the commission
was made up, as already stated, of
men of very high character, who
could not afford to do injustice to the
party unrepresented, and while they
did not estimate the betterments as
high as the company think they
should have done they have stated in
their report that the road has been im
proved very greatly by the lessees,
and that it is in better condition by
THE KENNESAW GAZETTE.
seven hundred and fifty thousand dol
lars (I omir the hundreds) than it was
when it was turned over to the lessees.
Here is the case of a contract of a
lease between the state and a company
of lessees for the use of the Western
& Atlantic Railroad for a period of
twenty years. The lease has but a
little over a year to run. It is admit
ted on all sides that the lessees have
faithfully performed the contract on
their part, and it is reported by a
commission appointed by the governor
by the authority of the general
assembly, that in addition to this
strict compliance with the contract on
their part, they have improved the
property of the state in a sum equal
to seven hundred and fifty thousand
dollars. This improvement is in road
bed, rolling stock, and every depart
ment of the road. Now, is there no
equitable claim ? Is there no just
claim on the part of ♦he lessees to
have this amount refunded? The
contract with the state is explicit and
express, that they are to return the
road in as good condition as they re
ceived it. It is now found when we
are approximating the end of the
lease, that the road is not only in as
good condition as it was when we re
ceived it, but that it is, according to
the report or the said commission
three-quarters of a million better than
when we received it. We contend
that it is better by a larger sum. Is
it fair and honorable and just that the
state should put this three-quarters of
a million of dollars in her treasury,
and retuse even to hear us when we
appeal to her to do justice in the
premises, and refuse to permit the
case to be adjudicated in any court,
or by any board of arbitrators ?
Surely I cannot be mistaken, nor
can 1 be over-zealous, when I say that
such a claim is at least worthy the
consideration of the general assembly
and that they should deign to permit
it to be investigated.
In addition to this there is over a
hundred thousand dollars that the
lessees have paid to the state of Ten
nessee for taxes upon the portion of the
Western & Atlantic which lies in the
state of Tennessee: The supreme
court of Georgia, as I have heretofore
stated, has decided over and over
again that the lessees are liable to no
taxes except one-half of one per cent
upon their net income, which was the
amount of tax for which the Central
Railroad and Banking company, and
the Georgia Railroad and Banking
company are liable, and the lease act
makes the lessees subject to the same
public burdens which these companies
are subject to, and the supreme court
construed “public burden” there to
mean ‘taxation,’ but they have decid
ed very explicitly that the lessees are
subject to no other taxation. A por
tion of the road lies in Tennessee.
But the state of Georgia waived her
sovereignty when Tennessee permitted
the road to be built partly on her ter
ritory, and the matter was placed sub
ject to the jurisdiction of the courts
and authorities of Tennessee.
Consequently, Tennessee has a right
to tax that portion of the property of
the state of Georgia which lies within
her limits. This she has done. Who
should pay that tax, the landlord or
tenant ? Does an honorable member
of the legislature who leases part of
his farm for a number of years to his
tenant, expect the tenant to pay the
taxes, or does the landlord pay it ?
Unless there is a special contract that
the tenant pay it, I suppose the res
ponse will be general that it falls upon
the landlord or lessor.
Now, certainly, the lessor, the state
of Georgia, in this case is liable to the
state of Tennessee for the taxes, as the
lessees did not agree to pay it, nor is
there anything in the contract that
even hints at such an agreement.
The lessees to keep the property of the
state of Georgia from being sold at
sheriff’s sale for taxes in the state of
Tennessee have paid the tax, calling
the attention of the governor of Geor
gia again and again to the fact, and
requesting payment on the part of the
state, which, for various reasons
assigned at the time, have been neg
lected from year to year. The state
of Tennessee has never assessed the tax
against the Western & Atlantic Rail
road company, but has continued, as
in the old state of things, to assess
the Western & Atlantic Railroad, be
cause the authorities of Tennessee un
derstood the law very well that it was
the duty of the state of Georgia to
pay it and as the property belonged
to the state they taxed the state.
During the last four or five years the
Western & Atlantic Railroad compa
ny has paid the tax to a trustee who
has taken control of the fi. fa. issued
by the state against the Western &
Atlantic Railroad, and holds it subject
to future action for the benefit of the
Western & Atlantic Railroad compa
ny who advanced the money to take
up the fi. fa.
Does this not present a claim on
the part of the lessees for compensa
tion from the state of Georgia that is
worthy of consideration ? In this in
stance there is a legal claim, an equi
table claim, and a just claim. (Jan
the legislature of Georgia refuse to
recognize it ? lam aware that it has
been said that the lessees have put
improvements on certain lands in
Chattanooga, and have received some
rent, and that that should be credited
on the taxes, I deny that it should be
credited in any such way. The state
under the act of the legislature leased
to the present company the Western
& Atlantic Railroad, which is the
property of the state, together with
al) the houses, workshops, depots,
rolling stock, and appurtenances of
every character.
Now the lands in Chattanooga not
used for railroad purposes, but belong
ing to the Western & Atlantic Rail
road, are certainly appurtenances of
the Western & Atlantic Railroad,
which were leased by the company,
and the company had a right to do
with them as it pleased for the twenty
years, and improve them, and receive
income from them if they thought
proper to do so, just as it had a right
to use an engine, or any portion of
the side-track, or anything else that
was a part of or appurtenant to the
Western & Atlantic Railroad, To
show that was the understanding of
the parties at the time of the contract,
by reference to the bond given by the
lessees, it will be seen that the follow
ing language was used : “The condi
tion of this bond is such that whereas
the Western Atlantic Railroad
company, principal, in consideration
of the lease of the Western & Atlan
tic Railroad and its property and ap
purtenances for twenty years in com
pliance with the terms of an act,” etc.
Here not only the terms appurte
nances is used, but the term property
of the Western & Atlantic Railroad.
Clearly the land in Chattanooga
belonging to the Western & Atlantic
Railroad not necessary for use for
railroad purposes for the time, was
leased by our company as part of the
property and appurtenances of the
Western & Atlantic Railroad, and
we had a right to dispose of it dur
ing the period of the lease in any way
that might be most profitable to us,
with possibly this single exception.