52 FEDERAL nnromuu.
erty, superior to the lien of mortgages and statutory liens, has been so
frequently aflirmed by the supremecourt of the United States that it is
not open to be questioned. A But, as was said by the supreme court in
Wallace v. Loomis, 97 U. S. 146: "It is undoubtedly a power to be ex-
ercised with great caution, and, if possible, with the consent or acquies-
cenoe of the parties interested in the funds." In some instances certifi-
cates for verylarge amounts have been authorized. In Kennedy v. Rail-
road Oo., 2 Dill. 448, the receiver was authorized to borrow $5,000,000,
and issue certificates therefor, which were made the first lien on the road
and lands ofthe company. But that was done at the instance of bondhold-
crs, to enable the receiver to complete the unfinished portion of the road,
and prevent a valuable land grant to the company, which was the prin-
cipal security to the bondholders, from lapsing. The total length of the
line of the road was 700 miles, the land grant was of 10 sections to the
mile, and it was admitted or shown that the average value of the lands
was six dollars -per acre. That was a case where there was a morally
certain outcome for the road upon its completion. ‘ But what have we
{ in the case before the court? A wrecked road, irretrievably insolvent. Its
business is altogether local; and its future, even if it be put in complete
running order, and furnished with an equipment ot" its own, altogether
problematical. No certain prediction can be made. Apparently, the
only thing to be done for the interest of the bondholders, whose rights
are vested, and to be fully protected by the court, is to sell the road, and
distribute the proceeds. If the court authorizes certificates to be issued
and made a lien upon the railroad superior to the mortgages, for the
purchase and laying of steel rails, for the purchase of equipment, and for
the completion of the road, the result may be to cause those things to be
done at the expense and to the detriment of the bond and lien holders,
and for the benefit of the purchasers, or of a syndicate holding a major-
ity in amount of the bonds and liens, having peculiar advantages as bid-
ders, and intending to become purchasers at the sale; for it rarely occurs
that improvements and betterments add to the salable value of the road
anything near their cost. In this case the court cannot say that they
would at all increase the bids at the sale, which, in the condition of the
railroad company and of the road, is the proper test. The showing in
favor of the second item ot` the receiver’s petition, relating to the com-
pletion of the road between Sciotoville and Portsmouth, made a strong
impression, at the time, upon my mind, that for that purpose certifi-
cates ought to be issued; but subsequent examination led to the conclu-
sion that it was extremely doubtful whether, if that work were done, it
_ would add a dollar to the selling price of the road. Moreover, objec-
tion has been made to that item since the presentation of the petition,
I upon the ground that the Scioto extension is entirely problematical, and
that there is no certainty that the Scioto Valley Railroad Company will
rent the property. That company’s road is now in the possession of a.
receiver, who, it is reported, has taken possession of that property. The
fourth item of the receivers petition is altogether inadmissible. _The re-
ceiver has no interest in it. It is hisbusiness to represent all thebond-