8

Under this law, the Chesapeake and Ohio Canal Com-
pany has issued bonds to the amount of $500,000.00,
and the money has been spent in repairs on the canal.

Three successive defaults in the payment of interest
by the canal company, entitle the holders of a majority
of these bonds, to the right to institute foreclosure
proceedings. In this event the whole lien of the State
in the canal might be sacrificed. This should not be
allowed if it is possible to prevent it. Foreclosure
could easily be avoided, by the passage of an act of
assembly authorizing the treasury officers to invest
the moneys, belonging to the sinking fund in these
bonds, until a majority shall have been purchased.
These bonds are a first lien on the canal, and are as
good as the State's own bond, besides in doing this the
State would be protecting its own property rights from
loss and injury.

The Act of 1884, Chap. 383, confers upon the treasury
officers the power to invest the moneys, set apart to the
credit of the various sinking funds of the State, in pro-
ductive stocks or bonds other than those of the State.
But as these bonds, in the present condition of the
canal, could not be classed as productive, the treasury
officers, in the absence of any express authority upon
the subject, would not probably purchase them for the
sinking funds. That the interest on these bonds will
be ultimately paid, cannot be doubted.

New York State has long since, I understand, recog-
nized the impossibility of toll-paying canals competing
with railroads, and has made its canals free by sup-
porting them from its treasury.

The Chesapeake and Ohio Canal benefits the people
of the whole State, in the influence which it exercises
upon freights on coal, thereby reducing the price of
that commodity.

In order to prevent a forced sale of the canal and a
sacrifice, perhaps, of the State's interest, it will only
be necessary for the State to invest in the manner I
have indicated, two hundred and fifty-one thousand