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The Eastern Texas Rail Road Co.
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| New Orleans |
| Nacogdoches Jany 17th 1862 |
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| Hon B. F. Sexton |
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| Dear Sir, |
| In addition to what I have said to you on
the subject of the Iron at Galveston, I wish to say that upon my
arrival in this City, and conferring with Gentlemen here engaged in
business who are Englishmen, I am of opinion that arrangements can be
made with reliable parties, to take the US 5% indemnity bonds, which
the Railroad Companies are entitled to receive from our State at a
loan, and purchase Iron Rails in England at not a greater price than
55$ pr ton delivered, supposing that the US bonds should be negotiated
at 26% discount. |
| If my Company could get possession of the
US bonds, to which they are entitled upon the first Section of 25
miles of our Road we believe we could use them on the purchase of Iron
Rails at the above rate, and perhaps at better rates. I am forcibly
impressed that this is the best and may be the only use to which these
bonds can applied, believing too that the price of Railroad Iron will
largely advance in England upon the restoration of peace. These bonds
can only be made available through English or French Agents, and if
this war should be of long duration these bonds in our Texas Treasury
will so much depreciate as to be worthless. Whereupon the necessity to
make them available as early as practicable. |
| Under our Contract with Mess Moran Bros
they were to receive said Bonds, and sell them for the account of our
Company and apply the proceeds to the payment of the Iron Rails
purchased of them (excepting the res?? of such proceeds as might
remain after paying to the Iron Rails of such & every Section of
Said Road as the same has laid down which was to be held subject to
the order & control of Said Company the State loan being 6000$ per
mile & the Iron Rails costing about 5000$ this surplus would be
about 1000$ pr mile which is withheld from our Company in as much as
the loan cannot be made on part. M. Company executed to Mess Moran
Bros then Power of Atty to draw the State Acct, which they might
become entitled to receive which is deposited in the office of the
Comptroller of our State, and upon the completion of 25 miles of our
Road, our Company executed and filed their Mortgage bond in favor of
the State for $150,000 to enable said Morans to apply for &
receive the loan. The Board of School Commissioners of my State
refused to deliver said Bonds to said Morans for reason they were
Alien Enemies and afterwards the Mortgage Bond of said Company was
returned to them. The debt onely our Company for 2500 tons of Iron
Rails laid down on our Road has been sequestrated and will be payable
to the Confederate States, and as the latter succeed to all the
benefits of the Contract with Moran Bros as far as Complied with they
are entitled to receive said bonds from our State upon the same terms
as with Moran Bros. Our Company is paying interest upon this debt, and
the US bonds will be withheld from the Company, as well as the
Confederate States, until the termination of the War or until the same
can be adjudicated under the Sequestration Act, this works a great
hardship upon our Company and is of no benefit to the C. S. We
therefore desire that the C. S. will say that they will receive in
relation to the sum of $56,000.00 which our Company owe for Rolling
Stock It may be necessary to say that our Company executed notes
payable to order and deposited with the parties as collateral security
the Mortgage Bonds of the Company for double the amount of such note,
with authority to sell the same, at ????? sale. If such notes were not
paid note within sixty days after their Maturity. We are not advised
of any of those bonds have been sold, but suppose as a matter of
course they have. |
| I think that our Company cant be required
to pay the Notes to the C S Government. |
| J. R. Arnold |
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