of the Company should be applied : charging that the Com-
pany had misapplied it funds, but had then on hand $100,-
000, of net revenue, which ought to be applied to said
claims.

The said "Trustee," and certain holders of repair and pre-
ferred bonds, were also made defendants.

The Canal Company, by its counsel, (of whom I was one,)
filed its answer, which, in substance, admitted the legisla-
tion of Virginia and Maryland, and the issue of the preferred
and repair bonds, and the guarantee by Virginia, as alleged.
It admitted, that, as guarantor, Virginia had paid interest,
but that the Company being ignorant of the amount, prayed
"that the complainant may be required to furnish proof
thereof:" it admitted its inability to pay the interest cou-
pons as they fell due, but insisted that its inability was with-
out the fault of the respondent ; it admitted that it "borrow-
ed money of Seldon, Withers & Co.," to pay interest on said
bonds, "pledging the future revenues of the Company, sub-
ject to existing priorities, for the, repayment of said money :"
but "refers to said agreement between it and said firm, when
produced, for the terms thereof," admitted the issue of cer-
tificates of indebtedness to Seldon, Withers & Co., but did
not "admit that they have become the property of the com-
plainant, but insisted on proof thereof;" and submitted "the
legal rights of the complainants as holder, when that fact
shall be proved" to the Court; admitted its failure to pay in-
terest coupons, and called for proof of sums paid by com-
plainant as guarantor ; admitted the issue of certificate for
$35,000, but left complainant to prove present ownership.
The answer submitted to the decision of the Court, the claim
for interest upon the said certificates, and upon amounts paid
by complainant for redemption of interest coupons, "upon
proof of such payments, and upon the proper construction of
the contracts and obligations, under which said payments
were made, and upon the true construction of the power
and obligations of this respondent in the premises." I
further submitted, that in order that it may be fully pro-
tected in any decree that may be passed, and that the rights
of all parties may be duly regarded, whether or not, the
creditors of the Potomac Company, and the State of Mary-
land should beparties to this suit," and asserted its willing-
ness and readiness to apply its surplus revenues, "in such
manner as may be deemed lawful and right, in view of its
powers, duties and obligations, and in view of the rights,
powers and obligations of all persons concerned."

The other defendants having answered, the case was
argued in June 1868, and subsequently, upon the Court's de-
cision that the State of Maryland was a necessary and proper
party, the complainant obtained an order to serve a copy of