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Proceedings of the Senate, 1876
Volume 414, Page 424   View pdf image (33K)
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The State claimed that the six per cent, dividend on this
preferred stock must be paid in gold—the Company that it
was payable in currency. In this case, the decision of the
Court of Appeals of Maryland, and of the Supreme Court of
the United States, were adverse to the State.

Upon the principle now conclusively determined, the Com-
pany had based its counter-claim against the State for the
sum of $289,529 65, for moneys advanced by the Company to
pay the interest on the State's sterling debt in London. The
Company was only required to pay six per cent, in currency—
in the language of the law creating the obligation, ''a per-
petual dividend of six per cent, per annum out of the profits
of the work, as declared from time to time."

At the urgent request of the State authorities, during the
period of very serious financial embarrassment, which re-
sulted from the war, when the premium on gold was high,
the Company advanced the additional sum beyond this six
per cent, dividend, which was needed by the State to
pay the interest due in London on the sterling debt of the
State. For such advances, the Company made its claim. In
order that there may be no doubt that this claim of the Com-
pany is not only one of "strict law," but also of "equity"
and justice, we cite not only the Act of 1835, chapter 395,
which prescribes that the State, as a stockholder, shall be
paid its perpetual dividend of six per cent, "out of the pro-
fits of the wotk as declared from lime to time," and that the
excess of profits, above that sum should be divided among
the other stockholders, but we quote from the opinion of the
Supreme Court of the United States, namely:

* * * "On the contrary, there is much in the Statutes to
repel any possible implication of an engagement to indem-
nify, and to make it apparent that such an obligation was
not intended to be imposed or assumed."

"No distinction was made between the kind of money the
Company might be compelled to receive, and that required
to be paid to the State. Nor was any distinction attempted
to be made between the kind of money with which the divi-
dends to the State and other stockholders could be paid."

"For these reasons, we think, the contract between the
parties exhibits no just ground tor an implication that the
Company assumed an obligation to pay its dues to the State
in gold, or in any other manner than in money generally,
and the fact that the Company did pay the State's interest in
sterling funds in London down to 1865, cannot change the
construction of the contract.''

The Company was compelled to receive legal tender from
those who used its road, and the State could, therefore, in


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Proceedings of the Senate, 1876
Volume 414, Page 424   View pdf image (33K)
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