tract. The Nashville and Chattanooga road obtained an abatement of nearly 100 per cent. upon a similar purchase made at or near the same time. Other roads have obtained similar abateinents. The bonds are not collectable, because they have, upon their face, an illegal rate of interest. The bonds were made and signed in Tennessee. The property was at Nashville, and the contracts made there. Therefore I think the law and the justice of the case is with us. Under the law, if the State cannot be made liable upon the bonds, there is no liability against her. But there is no desire to make this question. We only wish a fair and equitable adjustment.

Upon the second proposition, permit me to say that the Memphis, Clarksville and Louisville Railroad, and the Edgefield and Kentucky road, were in the hands of receivers appointed under the internal improvement laws of Tennessee, at the time they were seized by the military authorities of the United States Government. Bridges were afterward destroyed, as well as other property, by the United States authorities, and rolling-stock and other property removed and appropriated by the Government. And whether, as an original proposition, the companies or the State would or should recover anything from the United States Government, is not the question. The point is, that the State having already lost over $3,000,000 by these roads, is it, not right that the credit should be allowed as against such a demand as is now made against her? I think she ought. The claim is on file in the Department, well fortified by proof.

As to the third proposition, I must inform you that the Winchester and Alabama Railroad was in the hands of a receiver, under the internal improvement laws, at the time it was seized by the military authorities of the United States Government in 1863. This road was about thirty miles in length, and had been built only two or three years; the track was laid of the best English rail. The military authorities having but little use for the road, took up and removed the rails, cross-ties, &c., to another road, and used them during the war, and they have never been returned, and no compensation allowed from any source. After the war, the general assembly loaned the credit of the State to that road to purchase iron and relay their track, and to purchase rolling-stock. The road has since been sold for $300,000, and the State loses nearly $1,000,000 entirely. But before the sale, the directors of the road filed their claim against the Government and proved it, and then assigned to the State, as a payment in part of their indebtedness to the State. You will find the claim, amounting to over $300,000, in the proper Department.

I can see no good reason why this claim cannot or should not be allowed.

To meet the objection urged by the Quartermaster-General, I propose that an appeal be made to Congress for an enabling act, and inclosed you have a hastily drawn bill. which I beg of you to reform, (if you think necessary,) and introduce at the opening of the session in December proximo, and press its passage.

You would render a great service to the State if you could get the matter adjusted, or rather secure legislation that would result in a speedy adjustment. I will either visit Washington, or send an agent, if you think it necessary or desirable.

I have written very hastily, and without much reflection. I feel sure, however, that all the important facts are furnished. Please write me your opinion, as well as the progress of the business.

SIR: In reply to your letter of the 28th ultimo, I have to state that the State of Tennessee is indebted to the United States for rolling-stock and railway material, purchased in 1865 for the Memphis, Clarksville and Louisville Railroad, in the sum of $454,613.37, and for rolling-stock and railway material, purchased for the Edgefield and Kentucky Railroad, $170,4×1.81, making the total due July 1, 1872, $625,095.18.

These debts were incurred by the receivers for the State of the respective roads, Mr. George T. Lewis being the purchaser, receiver, and purchasing for the Memphis, Clarksville and Louisville Railroad, and Mr. R. B. Cheatham being the receiver, and purchasing for the Edgefield and Kentucky Railroad. The property was sold the State for those roads, and to other roads in Tennessee and elsewhere, under the provisions and upon the conditions of Executive orders of August 8 and October 14, 1865. Copies inclosed.

Bonds were executed by the governor of the State, under the express authority of the legislature thereof for the payment of the debts. Copies inclosed.

I inclose, as requested, statements of the accounts with the roads above named to July 1, 1872, showing the debits and credits.

The Memphis, Clarksville and Louisville Railroad has presented a claim against the United States for use of road and property taken and destroyed during the war, amounting to $232,166.48. The Edgefield and Kentucky Railroad has presented no claim, but is understood to have one.

The claim of the Memphis, Clarksville and Louisville Railroad has been disallowed by this office for the reason that the road and property belonging to it were captured from a public enemy and thereupon became the property of the United States, so as to relieve it from all charges for its use and destruction. See acts of August 6, 1861, July 17, 1862, and March 12, 1853, and for the further reason that payment for the use of such property is prohibited by law. See acts of July 4th, 1864, and February 21st. 1867, and acts above named. The above furnishes, I believe, all the information specifically called for in relation to the two roads in your letter, but I desire to add that the debts are now more than four years past due, and yet no provision has been made, so far as this office is informed, for their payment. This Department is specifically charged by the Secretary of War with the collection of the amount due. The bonds also require payment to be made to the Quartermaster's Department. I shall therefore be pleased it the governor will provide for the early payment of the debts. Papers have been prepared and submitted to the Attorney-General for the purpose of instituting suit against the State to recover the amount.

One of the conditions upon which the property was sold is that the postal earnings shall be applied to the liquidation of the debt. To carry it out the Post-Office Department requires that an agent shall be appointed by proper authority to give drafts or orders in favor of the Quartermaster's Department for the amount due and to become due. The requirement in the case of the Memphis, Clarksville and Louisville Railroad has been complied with and credits properly made, but in the case of the Edgefield and Kentucky Railroad it has not been complied with since 1867; there is, therefore, four and one-half years' postal pay due that road uncredited. I suggest that the governor designate some person as required by the mclosed circular for that purpose, and that the person so appointed give Major M. I. Ludington, quartermaster, United States Army, an order on the Postinaster General for the amount due, (the amount need not be actually stated,) that the same may be placed to the credit of the road.

There is due the United States from the McMinnville and Manchester Railroad Company $70,332.86. Suit is pending against the company to recover the amount.

The United States have no claims against the State of Tennessee, except those mentioned above for purchases of railway material.

I shall be pleased to furnish you at any time any further information you may de

sire.

Very respectfully, your obedient servant,

Quartermaster General, Brevet Major-General, United States Army.

Hon. AND. B. MARTIN,

Grand Central Hotel, New York City.

RAILROAD INDEBTEDNESS, FORM E.

The Edgefield and Kentucky Railroad Company, in account with the United States, for railway material purchased under executive orders.

The Memphis, Clarksville and Louisville Railroad Company, in account with the United States, for railway material purchased under executive orders.

AN ACT to incorporate the Tennessee and Pacific Railroad Company.

SECTION 57. Be it further enacted, That the governor be, and he is hereby, authorized to execute a bond (for the purchase of railroad machinery, cars, and all other material purchased for the use and benefit of the Memphis, Clarksville and Louisville Railroad, from the United States military railroad department and at Nashville) to the United States.

SECTION 62. Be it further enacted, That this act shall take effect from and after its passage.

Passed May 24, 1866.

WILLIAM HEISKELL, Speaker of the House of Representatives.

Speaker of the Senate.

I, Andrew J. Fletcher, secretary of state of the State of Tennessee, do certify that the foregoing is a copy of so much of an act of the general assembly of Tennessee, passed May 24, 1866, as relates to the execution of a bond by the governor to the United States for railroad material, the original of which is now on file in the clerk of the senate's office, not signed by the speaker of the senate, but is now the law.

In testimony whereof I have hereunto subscribed my officia Isignature, and by order of the governor affixed the great seal of the State of Tennessee, at the department, in the city of Nashville, this 5th day of June, A. D. 1866.

[SEAL.]

True copy.

A. J. FLETCHER,

Secretary of State.

M. LUDINGTON,

Brevet Lieutenant-Colonel and Quartermaster, United States Army.

Bond.

Know all men by these presents that the State of Tennessee, by the act of the legislature of the State hereto attached, and made part hereof by Wm. G. Brownlow, governor of the State, for and in behalf of the said State of Tennessee, does hereby acknowledge itself held and firmly bound unto the United States of America in the full and just sum of $94,142.85, with interest thereon at the rate of 7.3 per cent. per annum, from November 30, 1865, lawful money of the United States, for which payment, well and truly to be made to the disbursing quartermaster of the United States military railroads at his office in Nashville, or to such other disbursing quartermaster as may be designated by the War Department, within two years from the 30th day of November, A. D. 1865, the said State of Tennessee, by its governor, hereby binds itself and its successors firmly by these presents.

Sealed with its great seal, attested by the signature of its governor, and affixed by the express authority of the legislature, this 1st day of June, in the year of our Lord

1866.

The nature of the above obligation is such that whereas the above bounden State of Tennessee has purchased and received from the War Department of the United States (for the use of the Edgefield and Kentucky Railroad) rolling-stock, iron-rails, cross-ties, chairs, spikes, timber, and other material for repairing and operating said road in quantities, at prices, and to an amount and value which shall be evidenced by the receipts given for the same by R. B. Cheatham, receiver on the part of the State of Tennessee, to the proper officer of the War Department, upon a credit of two years from the 30th day of November, A. D. 1865, payable in equal monthly installments, with interest at the rate of 7.3 per cent. per annum, within the said two years, either in cash to the disbursing quartermaster of the United States military railroads at his office in Nashville, or to such other disbursing quartermaster as may be designated by the War Department for this purpose, or in transportation of the troops or military supplies of the United States under the orders of the proper military authorities, at the rates of fare and tolls allowed for such service to northern railroads; and whereas the said State of Tennessee desires, and by these presents intends to secure to the United States, the complete and punctual payment, as aforesaid, of the amounts which may be due for the said materials received by it from the United States; and whereas no payments have been made, up to the date of these presents although large sums are due, in accordance with the terms of purchase of the materials aforesaid: Now, therefore, if the said State of Tennessee shall well and truly pay to the United States of America as aforesaid, within thirty days from the date of these presents, all arrears of interest and installments due the United States upon the date hereof, to wit, the sum of twenty-six thousand nine hundred and sixty-two dollars and fifty-four cents, and shall thereafter pay in equal monthly installments, either in cash or in transportation as aforesaid, to the United States, within two years from November thirtieth, A. D. one thousand eight hundred and sixty-five, then this obligation shall be void and of no effect. But if the said State of Tennessee shall fail to pay to the United States all or any portion of what may be due to the United States on account of the said materials received from the United States, within two years from November thirtieth, A. D. one thousand eight hundred and sixty-five, either in cash as aforesaid, or in transportation as aforesaid, or shall fail to pay any of the monthly installments aforesaid punctually when due, then this obligation shall remain in full force and effect to the extent that may be necessary to fully repay to the United States for the full amount which may be due on account of the said materials so received as aforesaid, and all loss or damage which may have been incurred by the United States, by reason of the failure of the said State of TenBessee to pay for the same what shall be due therefor, when the same shall be due. And, as a further security for such payment and indemnity to the United States, the United States shall have a lien upon the property sold to said State of Tennessee, and in default of such complete and punctual payment of all moneys which may be due on account of the aforesaid purchase of materials, be fully authorized to take possession of and sell said property, and also to place in charge and control of the said Edgefield and Kentucky Railroad an agent of the said United States, who shall be fully empowered, and by these presents is fully empowered, in case of such default as aforesaid, to collect all the revenues of the said railroad, and apply the same to the payment to the United States of all the moneys which shall be due at the times of such application of such revenues to the United States for any such material which shall have been delivered by the United States to the said State of Tennessee for the use of said railroad, or by reason of any loss or injury to the United States, resulting from such default in payment of the same. And the said State of Tennessee shall have no authority to sell or convey out of its possession without the consent of the United States, first in writing obtained, any of the property referred to in this agreement, but shall hold and retain the same to the exclusive use of said Edgefield and

Kentucky Railroad in carrying on the business of transportation of persons and property over its line of road until the whole is fully paid for as aforesaid.

In witness whereof the great seal of said State of Tennessee is affixed hereto by authority of its legislature, and attested by its governor. WILLIAM G. BROWNLOW, Governor State of Tennessee.

Witness: [SEAL.]

A. J. FLETCHER,

Secretary of State.

Know all men by these presents that the State of Tennessee, by the act of the legis lature of the State hereto attached and made part hereof by W. G. Brownlow, governor of the State, for and in behalf of said State of Tennessee, does hereby acknowledge itself indebted and firmly bound with the United States of America in the full and just sum of three hundred and thirty-seven thousand nine hundred and ninetythree dollars and seventy-two cents, with interest thereon at the rate of 73 per cent. per annum from November thirtieth, eighteen hundred and sixty-five, lawful money of the United States, for which payment, well and truly to be made to the disbursing quartermaster of the United States military railroads, at his office in Nashville, or to such other disbursing quartermaster as may be designated by the War Department, within two years from the thirtieth day of November, A. D. eighteen hundred and sixty-five, the said State of Tennessee, by its governor, hereby binds itself and its successors firmly by these presents, sealed with its great seal, attested by the signature of the governor, and affixed by the express authority of the legislature, this first day of June, in the year of our Lord one thousand eight hundred and sixty-six.

The nature of the above obligation is such that, whereas the above bounden State of Tennessee has purchased and received from the Wai Department of the United States, for the use of the Memphis, Clarksville and Louisville Railroad, rolling-stock, ironrails, cross-ties, chairs, spikes, timbers, and other material for repairing and operating said railroad, in quantity at prices, and to an amount and value which shall be evidenced by the receipts given for the same by George T. Lewis, receiver on the part of the State of Tennessee, to the proper officer of the War Department, upon a credit of two years from the thirtieth (30) day of November, A. D. eighteen hundred and sixtyfive, payable in equal monthly installments with interest at the rate of 7 per cent. per annum within the said two years, either in cash to the disbursing officer or quartermaster of the United States military railroads at his office in Nashville, or to such other disbursing quartermaster as may be designated by the War Department for this purpose, or in transportation of the troops or military supplies of the United States under the orders of the proper military authorities, at the rates of fare and tolls allowed for such service to northern railroads; and,

Whereas the said State of Tennessee desires and by these presents intends to secure to the United States the complete and punctual payment as aforesaid of the amounts which may be due for the said material received by it from the United States; and whereas no payments have been made up to the date of these presents, although large sums are due in accordance with the terins of purchase of the materials aforesaid : Now, therefore, if the State of Tennessee shall well and truly pay to the United States of America as aforesaid, either in cash or in transportation as aforesaid, within thirty (30) days from the date of these presents, all arrears of interest and installments due the United States upon the date hereof, to-wit, the sum of ninety-six thousand eight hundred and one dollars and forty-four cents, ($96,801.44,) and shall thereafter pay in equal monthly installments, either in cash or in transportation, as aforesaid, to the United States within two years from November thirtieth, A. D. eighteen hundred and sixty-five, then this obligation to be void and of no effect.

But if the said State of Tennessee shall fail to pay to the United States all or any portion of what may be due to the United States on account of the said materials received from the United States within two years from November thirtieth, (30,) A. D. eighteen hundred and sixty-five, either in cash as aforesaid or in transportation as aforesaid, or shall fail to pay any of the monthly installments aforesaid punctually when due, then this obligation shall remain in full force and effect to the extent that may be necessary to fully repay to the United States for the full amount which may be due on account of the said materials so received as aforesaid; and all loss or damage which may have been incurred by the United States by reason of the failure of the State of Tennessee to pay for the same what shall be due therefor, when the same shall be due, and as a further security for such payment and indemnity to the United States, the United States shall have a lien upon the property sold to said State of Tennessee, and in default of such complete and punctual payment of all moneys which may be due on account of the aforesaid purchase of materials, be fully authorized to take possession of and sell said property, and also to place in charge and control of the said Memphis, Clarksville and Louisville Railroad an agent of the said United States, who shall be fully empowered, and by these presents is fully empowered, in case