This amount of debt for a State of the wealth and position of Missouri was but nominal. The State had, however, done nothing for works of internal improvement up to the time that the project of a railroad to the Pacific was broached. It soon became evident that Missouri was the proper point of departure for that great work, and in March, 1819, the Pa cific Railroad was incorporated by the State, by an act which was amended. March, 1851; and Congress, following its policy of land grants to Ohio, Indiana, Illinois, &c., in aid of public works, granted, in 1852, the right of way and a portion of the public lands in aid of certain railroads. In January following the State invested the Pacific Railroad to run from St. Louis to a point on the western boundary of the States, with the portion of lands so donated by Congress and applicable to the purpose, and the State agreed to loan its bonds to the several roads, on which to raise money. The conditions of these loans to the several roads are thus:—When the directors report that $50,000 are subscribed, bona fide, by individuals, the State issues its bonds for a similar amount; and for each similar subscription of $50,000, until the appropriation is exhausted. To secure the State, the entire franchise of the roads, their lands, building, furniture, and equipment are mortgaged to the State, and the interest must be promptly paid as it accumulates. The proceedings under this law, to July last, were as follows: This comprises only the direct 6 per cent debt of the State. The $4,500,000 bonds of the Southwest Branch were indorsed by the State, and bore 7 per cent, but these did not sell as well as the 6 per cent direct debt of the State. When the panic overtook the country last fall, the sales were as low as 694 for Iron Mountain, 45 for the Pacific, and 80 for Cairo and Fulton. The bonds not sold were held as follows: The panic, as a matter of course, put a stop to the negotiation of the bonds, and made it requisite to suspend the works. For this purpose a law was passed, of which the following is a synopsis : Section 1st suspends the further issue of bonds under the law of 1855 until March, 1859, except for the purpose of completing work now nearly done, on the following roads to certain named points, the Governor may issue bonds to the following amounts: These bonds must not be sold less than 90, and those to the Southwest Branch are 6 per cent, in lieu of the indorsed bonds of the State, which bear 7. The failure to pay interest gives the Governor the right to proceed against the company. Section 2d regulates duties of the Board of Public Works. Section 3d requires the Pacific Railroad to deliver all the State guarantied bonds, and receive direct bonds in lieu, bearing 6 per cent. dated July 1, 1857, payable in the city of New York. Section 4th. When any guarantied 7 per cent bonds are returned in exchange for State 6 per cent bonds, the company shall pay semi-annually one-half of one per cent, to form part of an interest fund, and on any failure to pay this sum shall be proceeded against. Section 5th levies a tax of one-tenth of one per cent on every $100 of property, to be paid over to the Commissioner of the Interest Fund. This tax to be levied in 1859. Section 6th authorizes the Governor to appoint a Commissioner to settle accounts with the Federal Government, and to pay over the proceeds to the Commissioner of the Interest Fund. Section 7. To meet the interest that may fall due in 1858 or January, 1859, authorizes the Commissioner to use any funds in treasury except school or land fund. In case there should be no such funds, the Governor may issue 10 per cent bonds, called revenue bonds, payable in St. Louis or New York, which the Commissioners are to sell, and apply the proceeds to the interest. Section 8th. The funds not required to pay interest. during the year, to be invested in State stocks for the formation of a sinking fund to redeem the State bonds. Section 9. The railroads must accept the provisions of this act before the issue of the bonds. $352,000 reported sold at an average of 751. + In hands of fiscal agent, Boston, a portion of which has been sold. Section 10. The Commissioners of the Interest Fund to appoint some bank in the city of New York where the interest on the bonds shall be paid, and the bonds registered and transferred. Section 11. Legislature may repeal tax after 1862. Section 12. These provisions do not apply to the Platte County Railroad. It is not likely that there will be any further issue of bonds by the State of Missouri for some time to come, except the $2,120,000 for which the bill provides. This will make $18,006,000, the interest on which the State will be responsible for. During the prevalence of the recent panic, in some instances which came to our knowledge, these bonds were disposed of as low as 60, and at the date of the last report of the Iron Mountain Railroad Company, an abstract of which has recently appeared, 67 was mentioned as their maximum market value. Since then we have seen them quoted at from 84 to 85, at which figures large amounts have changed hands. The State debts will then have reached $18,006,000, and the population is now fully 1,000,000 souls. The assets of the State, in return for this debt, are given below. The following amounts have been expended on the different roads mortgaged to the State for the loan of her bonds : Pacific Railroad to July 1, 1857.. North Missouri, to July 1, 1857 $9,717,680 606,372 5,185.628 St. Louis and Iron Mountain, to July 1, 1857. Cairo and Fulton, to July 1, 1857.... Total amount expended. 3,824,218 3,367,142 198,000 $22,899,040 In addition to this amount the State holds as security, besides the mortgage upon the Branch Road for her guaranty of its bonds, one million acres of land along the line of said road, valued at $5 per acre.... 5,000,000 She has bank stock and other property, as per schedule of 1856, valued at.... She holds in her own right, donated by Congress under the acts of March 2d, 1849, and September 28th, 1850, three million acres, valued at $125 per acre.... 3,750,000 254,000 $32,603,040 The railroads already begin to give great activity to the development of the State's resources. These rapidly increase in volume, and were, according to the report of the State Auditor, in 1857, as compared with 1850, as follows: The revenues proper are derived from taxes on polls, on lands, on lots, on slaves, on notes and bonds, and on personal property, and from licenses on merchants and sundry trades and occupations. The present State tax is 20 cents on the $100, or 2 mills on the dollar. The Auditor, in his biennial report to the Legislature last December, calculated the revenue for the two years ending with October, 1858, at $1,191,361, or $595,680 a year. The estimate of expenditures was for a "just and economical administration," $500,000 for the two years, or $250,000 a year. This would leave for the two years a surplus of $691,351. The revenue for the first of the two years exceeds the estimates of the Auditor about $10,000; and it is probable that the whole revenue for both years will considerably exceed his calculations for the two years. From this surplus of $691,361 has to be deducted a quarter part of the whole revenue for the use of schools. Deducting that quarter, and there remains for the two years $393,521, or $196,760 per year aplicable to interest on bonds. The law above quoted levies a tax of one-tenth of one per cent on every $100 of valuation, which, for 1858, is given at $265,000,000, and would give $265,000 applicable to the interest on the bonds. This, it is supposed, will meet the interest on the bonds that the railroads may not be able to meet themselves. Should none of the railroads be able to pay interest, and the whole come upon the State, it would require to meet the amount an additional tax of three-tenths of one per cent on every $100 of present valuation, but the quantity of new lands coming under taxation is large. The quantity now taxed is 18,441,839 acres. This will be increased this year by 4,000,000 acres, that was last year entered at the land-office. It is to be remarked that the valuation of St. Louis alone is equal to the valuation of the whole State in 1850, and that a mill tax, such as that now levied in aid of the interest fund, would have yielded this year $265,000, in place of $79,000 in 1850; that is to say, the same rate of levying would give more than three times the revenue in 1857 that it did in 1850. Under the influence of the railroads, when they shall have come more fully into operation, the increase of resources will lighten the burden, while the roads themselves may be able to relieve the State of the interest payments. The sale of the 3,000,000 acres of land must give at least $10,000,000 towards the extinguishment of the bonds. It may be remarked, that of the personal property taxed as above, $17,772,180 was, in 1850, the value of 90,000 slaves, leaving about $8,000,000 for other personals; at the same rate of valuation now, the slaves count $24,000,000, leaving $60,000,000 for other personal property, showing an increase of more than seven fold. Under all these circumstances, it will be seen that, although the State of Missouri has embarked in the perilous course of lending her credit to corporate companies, she has thus far well protected the rights of the creditors. Many States have loaned their credits to banks and public works, but in every case the operation was a failure. Florida, Alabama, Arkansas, &c., are instances of the ruin which results from lending State credit for banking purposes. Ohio, Illinois, Indiana, Michigan, New York, all attest the evil that arises from State credits loaned to canals and railroads. It is no doubt the case that where the State loans its credit to a railroad, and the work is constructed, that the State reaps collateral advantages equal at least to the cost of the work. In the case of State banks, the loss is utter and irretrievable. The railroad, on the other hand, opens the way to market, and makes the industry of the settler effective. JOURNAL OF MERCANTILE LAW. LAW OF FACTORS, CONSIGNEES, AND COMMISSION MERCHANTS-RIGHT OF CONSIGNEES TO PLEDGE GOODS AS SECURITY FOR ADVANCES-PLEDGE BY TRANSFER OF BILL OF LADING OR OTHER DOCUMENTARY EVIDENCE-PLEDGE BY TRANSFER OF GOODSNEW YORK" FACTORS' ACT" OF 1830--ENGLISH ACT OF 1825--practice under WAREHOUSING ACTS OF 1846 AND 1854, IN RELATION TO CUSTOM-HOUSE PERMITS, AND WAREHOUSING PERMITS UNDER TREASURY REGULATIONS OF 1857. Superior Court, City of New York. Charles Bonito and Antonio Duque, appellants, vs. Tomas Mosquera and others, respondents. We have seldom laid before the readers of the Merchants' Magazine a case involving more important points of mercantile law, or heavier pecuniary interests, than the decision of the Superior Court of the city of New York, at General Term, which we now report. The opinion of the four judges was delivered by Chief Justice Duer, and we have been favored with an official copy of his learned and elaborate review of the law of factors in reference to their right to pledge goods consigned for sale to secure advances, by delivery of the goods or the bills of lading or other commercial documents of title. Great looseness of practice is said to prevail among merchants under our warehousing acts in the use of permits and other documents of mercantile title, which this decision, if affirmed on appeal, will be very likely to correct. There can be very little question as to the principles ably laid down by the learned Chief Justice, and as to the facts of the case there is probably as little doubt. A similar case is now pending in the same Court between Cartwright & Warner, an English house, and Harris & Acker, and Wilmerdings & Mount, of this city, involving a large consignment of hosiery upon which advances were made to the factors. In that case we understand the goods were all in warehouse, and the invoice, by which it appeared that the factors held for the purpose of sale alone, was not produced at the time of making the advances, nor was there a transfer of permits. The case was very elaborately argued by Mr. C. Van Santvoord, for the plaintiff. The following may be considered the points decided in the present case :—— 1. The New York Factors' Act of 1830, (1 R. S., 2 ed., p. 762,) provides that (33)-Every factor or other agent entrusted with the possession of any bill of lading, custom-house permit, or warehouse-keeper's receipt for the delivery of any such merchandise, and every such factor or agent not having the documentary evidence of title, who shall be entrusted with the possession of any merchandise for the purpose of sale, or as a security for any advances to be made or obtained thereon, shall be deemed to be the true owner thereof, so far as to give validity to any contract made by such agent with any other person, for the sale or disposition of the whole or any part of such merchandise, for any money advanced, or negotiable instrument or other obligation in writing given by such other person upon the faith thereof." 2. There are only two modes by which a valid pledge of goods of any description can be effected. If the goods are in the actual possession of the owner, that possession must be transferred to the pledgee. If the possession of the owner is merely constructive, the pledge can only be effected by the transfer of such a document as will enable the pledgee with certainty, at the proper time, to reduce the goods into his own possession, and in the meantime prevent any other |