I wired you this morning to hold up the Noland resolution about the Southern and Western Railway, which was rushed through the House yesterday without notice to anybody, until you heard from me. This attack comes at a singularly unpropitious time for those of us who have been engaged for so many years, and who have spent so much time and money in the promotion of the construction of the South Atlantic and Transcontinental Railway.

The projectors of that enterprise, as you are no doubt aware, are entirely North Carolineans, and a large majority of them citizens of Buncombe and Haywood. I believe all the stockholders are originally from Buncombe and Haywood; they organized the Company and have done what has been done to secure the construction of this road. It is impossible to go into detail within the limits of an ordinary letter, of the enormous amount of labor, anxiety and effort generally, which has been expended in attempting to secure the success of this road.

I enclose you herewith copy of a letter from Mr. Stayton, of New York, the President and counsel of the Construction Company, with which we have a contract to finance and build this road. Mr. Stayton is a lawyer of New York, and a gentleman of the highest and cleanest character, and his business connections are of very wide and excellent character. Whenever he states a fact of his own knowledge you may rely upon it absolutely, and whever he states a fact upon information, or gives his opinion, you may be assured that it is not an unadvised statement or an unconsidered opinion.

The amount of actual cash which has so far been contributed and expended by that Construction Company and the Railroad Company, I should say, may be safely estimated in the neighborhood of $200,000,- all of which, except the value of the convict labor furnished by the state of North Carolia, and which does, at the present time, not represent more than $20,000, I am told, has been contributed by private individuals. You can, therefore, see how unjust and unfortunate would be any serious attack upon a home enterprise at this juncture, with negotiations with the people in Europe who have undertaken to furnish the money to build this road. I do not know what effect the resumption of hostilities in the Balkans will have upon these negotiations; my own judgment is that while the London bankers are ready to go on at any time, the Continental bankers will not do so until things are settled on the Danube; that is the course a prudent banker would take under the circumstances; but all those who are in a condition to form a correct judgment, believe that if hostilities are resumed seriously they willnot continue long.

I have no doubt that Mr. Noland, the introducer of this resolution in the House, was either the conscious, or the unconscious, agent of the Champion Fibre Lumber Company,- a Company which has bought, and now controls, that little spur of the railroad from Newport, Tennessee, up the Pigeon River, to about the State Line, and proposes to continue in that direction on to Canton. There has been some friction between it and the Transcontinental Railway people about the location of their lines in the Pigeon Gorge,- the merits of which, it is not necessary for me to go into here now, save that I think I may safely say, from my examination of the question, that the Transcontinental people have the prior right of location under our laws; but, however that may be, there is ample room for both, it being only a question of expense of location and construction. Early in the history of these enterprises, the Transcontinental road made a proposition to the Champion Fibre Company road for a settlement of their rival claims in this pass,- the chief idea in the proposition being that we would build the line and arrange for their use of it, or, if they would build it, we would contract for the use of the track; but these propositions were rejected or accompanied by such absurd conditions that made their objection inevitable,- a result for which those objections were undoubtedly made.

We have already done very considerable work for the grading of our road in that pass, and are yet at work with a small force. We did not think it right to call upon the State for further convict labor until we had succeeded in raising money enough to put the whole line, from the State line on the Pigeon River, to Rutherfordton, under contract and construction. Of course, the knowledge that the state of North Carolina is inimical to our enterprise, and assailing it through its Legislative Department would be fatal at once to our negotiations abroad, and necessarily would be destructive of all hope for the construction of the road, I am decidedly of the impression that while Mr. Noland may be utterly unconscious of this aspect, those who inspired it, with devilish ingenuity, selected this particular juncture for this assault with the object of bringing about the very result which I have indicated.

You will find in the Governor's office a copy of the correspondences between Col. Jones and Mr. Stayton, dated January 24th and 25th, 1912, which will throw some light upon this matter.

I, therefore, beg that you will at once take such steps as may be necessary, in your judgment, and have the representatives from Buncombe County, to whom you may show this letter, and with whom I wish you to consult, to check-mate this movement. There is no objection that I know of to the fullest and most complete investigation of the affairs of the Transcontinental Railway Company, since there has been no concealment of its purposes, plans or methods,- perhaps, from a prudent business point of view, too much publicity has been given to them, as it furnished its enemies with an opportunity to make just such an attack as this one now under consideration; but the great danger is in the form of the resolution and its manifest spirit of hostility to our enterprise, which, I repeat, if brought to the attention of the people abroad, who are negotiating for the financing of this scheme, would be immediately fatal.

Please keep me advised of the status of the matter, and if it becomes necessary we will see that some one goes to Raleigh with the necessary information for the guidance of the General Assembly.

Kindly return to me the enclosed copies. I think you will find the originals on file in the Governor's office.