NP, MAP 1/11/1861

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

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