Lease of the Western and Atlantic Railroad [1889]

LEASE OF THE
I western & Atlantic
R A I L R OAD.
I_ _ _ _

Lease of the Western & Atlantic Railroad.

No. 660.

An Act to provide for the Lease of the Western and Atlantic Rail

road; to define the rights, powers, liability and duty of the Les-

...

see, and for other purposes therewith connected.

SECTION I. Be it enacted by the Senate and House of Repre.~ent

atives of the State of Georgia in General Assembly met, That the

Governor of the State be, and he is hereby authorized to lease the

Western and Atlantic Railroad, together with all its houses, work-

shops, rolling stock, depots and appurtenances of every kind and

character, to a company or corporation, or to any party or parties

who shall give good and sufficient security, as hereinafter provided

for. The said lease to take effect and become operative from and

after the expiration of the present lease, Ttlpon the following terms,

and according to the following provisions : The said lease to be for

a term of not less than twenty years, and for a sum of not less than

thirty-five thousand dollars per month. Or, for a term of not less

than thirty years, and for a sum of not less than forty thousand

dollars per month.. Or, for a term of fifty years, and for a sum of

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not less than forty-five thousand dollars per month; the rental to be

paid monthly into the Treasury of the State, for the use of the

State.

SEc. II. Be it further enacted, That the Governor shall adver-

tise for four weeks, weekly, (immediately preceding the 27th of

June, 1890), in such newspapers in. the State of Georgia ashe may

designate, the number not to exceed four, and also one leading

newspaper in each of the following. cities: Chicago, Ill., Cincinnati,

Ohio, New York,. N.Y., such advertisement to be a definite. pro-

posal for bids as authorized by this Lease Act for the lease of the

Western and Atlantic Railroad and other property in this Act re-

furr~~.

.

SEc. III. Be it further enacted, That all bids for the lease of

said road shall be submitted in writing to the Governor of the

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State on or before the 27th day of June, 1890, and accompanied by a certified check for twenty-five thousand dollars on some good and solvent bank in this State, as a guarantee of the good faith of the bidder, to be forfeited to the State if the bid is accepted by the State and the terms thereof shall not be complied with by the bidder. And the Governor, Comptroller-General, Secretary of State, Treasurer and Attorney-General, or a majority of them, within three days after the expiration of the time allowed for the reception of bids, shall open and examine said bids in the presence of the public and the bidders, or their representatives who may be present; and the Governor shall give due notice of the time and place of such opening and examination of the bids by publishing tire same in daily newspapers in the city of Atlanta one time, and determine which shall be accepted, with the right to reject any and all bids; and in accepting bids, everything else being equal, the highest and best bidder for the longest term shall be accepted. In the event all bids are rejected, then the Governor shall, in ten days thereafter, re-advertise the road under the same terms and conditions. In case the bidder accepted by the State shall fail to comply with his bid anQ. take the road, it shall be re-advertised, and the bidder shall be liable to the State for whatever damages may result to the State from his failure to comply with his bid, in addition to the twentyfive thousand dollars forfeited under this section; Provided, that no price less than that named in section one for the several terms shall be accepted.
SEc. IV. Bf! it fnrther enacted, That any contract. of lease entered into under this Act shall be drawn and prepared by the Attorney-General of this State, signed in duplicate by the parties leasing said road, and the Governor of the State. And within twenty days after the acceptance of the bid, the successful bidder shall execute the contract required and make the deposit of bonds with the Treasurer, to which bonds he shall have access for the purpose of drawing the interest thereon.
SEc. V. Be it {ttrther enacted, That said lessees shall deposit with the Treasurer of the State recognized valid bonds of the State of Georgia, or of the United States, of the par value of five hundred thousand dollars, and should Paid bonds, at any time, depreciate in value below their par value, or be reduced in payment of penalty in the nature of forfeiture, said lessees shall, within thirty days, make good said deposit on being notified thereof by the Governor, by the deposit of other bonds of like kind as above, so that bonds of the par and market value of five hundred thousand dollars shall at all times be deposited with the Treasurer, as aforesaid,

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and in default thereof the Governor may; in his discretion, declare

said lease forfeited, with all the incidents of forfeiture herein pro-

vided. It shall be the duty of the Governor and Treasurer from

time to time to enquire into the value of said bonds so deposited,

and report the same to each session of the Legislature, and said

bonds shall be held as collateral security by the State for the faith-

ful performance of all the terms, obligations and contracts of the

lessees under said lease.



SEC. VI. Be it further enacted, That the bonds deposited under

the requirements of the fourth section shall be regarded merely as

collateral security for the faithful performance by the 'lessee of the

terms of the lease contract, and shall not be held as exhaustive of

other rights of the State as lessor. And after said bonds have been

applied, in whole or part, as damage, penalty or forfeiture for any act

done, or omitted to be done, or any violation of the terms of the

lease as herein provided, the original party to the lease, whether

corporation, person or persons, as well as the company chartered

hereby as Western and Atlantic Railroad Company, shall be liable

further to the State of Georgia for any damage caused the State by

any breach or forfeiture under said contract of this Act. In addi-

tion to the deposit as security required by the terms of this Act,

and the personal and corporate liability imposed by the terms of

this Act, the Legislature may at any time require the lessee or

lessees to enter into bond with good security, to be approved by the

Governor and Attorney-General, in such sum, not to exceed five

hundred thousand dollars, as the Legislature may deem necessary

to fully protect the interest (}f the State.

SEc. VII. Be it further enacted, That when the road is leased

under the provisiol'ls of this Act, it shall be, and is hereby, distinct-

ly provided that all improvements, betterments, or ameliorations,

whatever, shall be made at the expense of the lessee or lessees, and

no claim for such will ever be entertained or allowed by the State.

All attachments to the realty shall be considered permanent. It is also distinctly provided that the lessee or lessees shall, at aJl.JiJp._~, ,

keep the said road in the condition of first-class roads in Georgia,

safely and expeditiously to carry on the business of said road. The

Governor of the State shall have the power to appoint a Board of

Examiners, to consist of three, and the Board of Examiners so appointed shall have the power to subprena witnesses and examine



them, and also the power to require the production of books, con-

tracts, and any and all kinds of writing that may throw light or

information upon the subject matter or matters under investigation.

And if, by report of the examiners appointed by the State's author-

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ities, it shall appear that the lessee or lessee,; have permitted said road to be reduced to a condition below the first-class roads of this State, or any of f'aid property has been lost, consumed or permanently removed from the State, the lesEee or lessee8 shall be liable for such depreciation, or deterioration, or loss, consU11l]Jtion or removal, and the Governor of the State shall apply a sufficiency of the bond8 deposited as security to reEtore said road to its condition at the date of the aforesaid previous examination ; Pl'ovided, that before proceeding under and by virtue of any report of said examiners, to apply any of the bonds deposited by said company as security, the Govemor shall cause a copy of such t'eport to be delivered to the President, or some other officer of said company, and the company shall have ten days from the receipt of such copy within which to file objections to said report with the Governor. And upon such objections being filed, the Governor and the company shall appoint two men cach, and these four shall appoint a fifth man, all of said men to be railroad experts, and none of them connected with said railroad, nor with any railroad interested therein, and sai.d five men so selected as aforesaid, shall constitute a board of arbitration, who shall examine the matters referred to in the report and exceptions, and shall make up an award, which shall be final and conclusive in the premises. And it shall be the duty of said lessees, on or before the first day of October of each and every year, to make and file with the Governor of this State an official report of the condition of :,mid Western and Atlantic Railroad, and all the property connected therewith, which report shall contain and set forth the following facts: \Vhat improvements have been made by the "lessees, or additions made to the track, bridges, depot buildings or side-tracks; what rolling stock has been purchased by said road; the amount received from passengers and freights; the expenses incurred in the operating of said road; the amount of freight carried over said railroad and the rates charged for the same, and any and all other facts necessary to the furnishing complete information of the condition and operations of said railroad for each year during said lease.
SEc. VIII. Be it jwther enacted, That the Governor shall appoint five citizens of this State, of high character, two of whom
are experts in railroad management, who, after making oath that they are neither directly or personally connected or interested in the present or future lease of said road, except as citizens of this State, shall proceed, sixty days before the expiration of the present lease, to examine the road and its houses, work1:1hops, depots and rolling stock, and all other appurtenances of every character, and

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shall make out in writing, a schedule or inventory of the same,

carefully describing and setting forth the true condition of the road

and its rolling stock and appurtenance,;, and property of every

character, with the value thereof, which ,.;hall be recorded in the

office of the Secretary of State, and filed in tJ:le Executive office,

and a copy furnished the lessees under this Act; and as soon as the

terms of the lease are agreed upon between the Governor and

lessee or lessees, and the name or names of the company, or corpo-

ration, or parties leasing the road and its appurtenances, has been

entered on the minuteR of the Executive Department as the persons

or corporationR proposing to take said lease, and the acceptance of

the proposition by the Governor shall also have been recorded, and

a receipt given to the State by the lessees under this Act for all the

property turned over to them, the persons, associations or corpora-

tions accepted as lessees under this Act, if not already a corporation

created under the laws of Georgia, shall, from the time of such

acceptance, and until after the final adjustment of all matters spring-

ing out of this lease contract, become a body politic and corporate

under the laws of this State, under the name and style of the \Vest-

ern and Atlantic Railroad Company, which body corporate shall be

operated only from the time of their taking posse;,;sion of said road

as lessees; aud it shall have the power to sue and be sued, on all

contracts made by said company, in any county through which the

road runs, after the execution of said lease, or for any cause of

action which may accrue to said company, and to which it may

become liable. After said lease is executed, it shall have power to

make all rules, by-laws and regulations for the government of said

company, and for the working and management of said road, which

are necessary and usual with railroad companies in t_his State, and

which are not in conflict with the Constitution and laws of this

State or the United States. The principal office and place of busi-

ness of said company shall be in this State; provided, that nothing

in this Act shall be construed as ar1 amendment of the charter of

any corporation which may lease said road; provided, further, that

if said lessee is a corporation already incorporated under the laws

of Georgia, it shall operate said railroad as the " Western and

Atlantie Railroad," and such lessee may be &uecl on any contract or

cause of action arising out of said lease for the operation of said road. in any country .through which said road runs.



SEc. IX. Be it further enacted, That said lease company shall

be subject to and required to observe and obey all just and reason-

able rules, orderr:;, schedules of freight and passenger tarifis as may

be prescribed by the laws of this State and the Railroad Commission

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of this State; and said lease company shall charge no greater rate

per ton per mile on through freight on said railroad than the local

rate allowed and fixed on similar freights by the Railroad Commis-

sion for said railroad; and said company shall not dismiminate

against any railroad company or persons or parties or places having

business connections" or relations with said Western and Atlantic

Railroad, but all schedules of freight and passenger tariffs shall be

so arranged as to give all connecting roads and all places and per-

sons having business relations with said road a fair and equal

chance, doing equal justice between them in everything connected

with the management of said road; and that said lease company

shall have the exemptions, privileges, immunities, rights and guar-

antees, and shall be subject to the same laws, liabilities, disabilities

and public burdens on other railroad companies in this State and no

more, in all cases where this Act is silent and has made no provi-

sion on this subject. And it is further enacted, that the State

pledges her faith to redeem all bonds on said road which have been

issued by the State and now recognized by the State and on which

interest is now being paid, together with all interest coupons as

they fall due, and to save the lessees harmless against said bonds

and coupons.

SEc. X. Be it Jurther enacted, That the said lease shall in no

way interfere with the contract now existing between the State and

the present lessees ; and the lessees under this Act shall receive the

road-bed in its condition at the time the lease contract is made,

ordinary and natural wear and tear, until the expiration of the pres-

ent lease excepted; and the Governor shall appoint three expert

railroad men, not connected with the lease company or any corpo-

ration having shares therein, whose duty jt shall be to examine

the road-bed and its appurtenances within ten days prior to the

opening of the bids, and make a full and complete report of the

condition of the same to the Governor, to be filed in the office of

the Secretary of State, which report shall be taken as the true con-

dition of the road at that time. In the event the road is re-adver-

tised for lease, a like examination and report shall be made prior to

the opening of the bids, together with that part of the personalty

received by the lessees, except old iron, not in nf']e, wood and cross-



ties, and material in car-shops and machine-shops, and which is shown by the inventory of file in the Secretary of State's office,

taken under the lease Act of 1870, and supplementary inventory

of 1872, subject to the right of the present lessees, at option, to

deliver the property therein specified, if in as good condition as when

received, or property of like kind and character, in a like condition,

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or of increased capacity, or upon failure to do so, then to account for the full value of the same in money. The money so received shall be reinvested in engines or cars by said lessees, acting with the concurrence of a competent and disinterested railroad expert, to be appointed by the Governor. Said property so.purchased shall helong to the State, subject to the provisions of the lease, and an inventory of the same, signed by the lessees and the said railroad expert, shall be filed with the Secretary of State; Provided, that the State shall not be bound, nor the rights of the State limited, by any statements or conclusions made in said report of said arbitration, of date December 19, 1872. In case the lessee or lessees under this Act shall fail or refuse to pay whatever sum may be agreed upon according to the provisions of this Act as a monthly rental into the Treasury of the State within twenty days after the end of the month, the lessee or lessees shall forfeit to the State six _ months' rental as damages, to be collected out of the bonds deposited under this Act. For failing or refusing to comply with said lease contract, the Governor, at his option, may declare the lease forfeited, and take immediate possession of said road and its appurtenances; and if any resistance is offered by the lessee or lessees, it shall be the duty of the Sheriffs of all tbe counties in this State through which said railroad runs to aid the Governor, with the posse cometatus of their respective counties, to take possession, and expel the lessee or lessees who have failed or refused to make payments when due, as aforesaid ; and in ten days after he has terminated the lease and taken possession of the road for the State, the Governor shall apply the remaining bonds deposited as damages on account of the forfeiture as far as the same may go.
SEc. XI. Be it further enacted, That said lessee or lessees shall be required to pay all taxes and assessments upon the property of this State in the State of Tennessee, and in Georgia upon all property owned or controlled by them, not received from the State, and such further taxes upon their income as is now paid by the Central Railroad and Banking Company, and shall not sub-let said road, or any part thereof, to any other company, corporation or party; Provided, the lessees may sub-let any property not needed for railroad purposes; Provided, that, in the opinion of the AttorneyGeneral, this can be done without invalidating the State's title thereto; and all improvements put on said property by the lessees or their tenants shall belong to the State at the expiration of said lease.
SEc. XII. Be it further enacted, That all payments required to be made under said lease shall be made in gold, or its equivalent.

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The railroad shops of the Western and Atlantic Railroad shall not be removed beyond the State of Georgia, and the principal office of the Western and Atlantic Railroad shall be within the limits of the State of Georgia.
SEc. XIII. Be it further enacted, That in the event of a failure to lease the Western and Atlantic Railroad, or in the event of a forfeiture of the lease at any time, the Governor shall operate said road under the provisions of the laws of this State until a lease can be made under this or any subsequent Act of .the Legislature.
SEc. XIV. Be it further enacted, That all laws and parts of laws in conflict with this Act be, and the same are hereby repealed.
Approved November 12, 1889.