On March 2, 1881, the legislature passed an act, the general purpose of which was to adjust, with the consent of the holders, the outstanding bonds, at the rate of fifty cents on the dollar, and contained the curious provision that the supreme court should decide whether it must first be submitted to the people in order to be valid or not, and if the supreme court should not so decide, then an equal number of the judges of the district court should act. The supreme court judges declined to act, and the governor called upon the district court judges to assume the duty. Before any action was taken by the latter, the attorney general applied to the supreme court for a writ of prohibition to prevent them from taking any action. The case was most elaborately discussed, and the opinion of the supreme court was delivered by Chief Justice Gilfillan, which is most exhaustive and convincing. The court holds that the act of 1881 is void, by conferring upon the judiciary legislative power, and that the amendment to the constitution providing that no bonds should be paid unless the law authorizing such payment was first submitted to and adopted by the people was void, as being repugnant to the clause in the constitution of the United States, that no state shall pass any law impairing the obligation of contracts. With these impediments to a just settlement of this question removed, the state was at liberty to make such arrangements with its bond creditors as was satisfactory. John S. Pillsbury was governor at that time. He had always been in favor of paying the bonds, and removing the stain from the honor of the state, and finding his hands free, it did not take him long to arrange the whole matter satisfactorily, and to the approval of all the parties. The debt was paid by the issue of new bonds, at the rate of fifty per cent of the principal and interest of the outstanding ones and the surrender of the latter. This adjustment ended a transaction that was conceived and executed in folly, and was only prevented from eventuating in crime by the persistent efforts of our most honorable and thoughtful citizens throughout the state. The transaction has often been called by those who advocated repudiation, "An old Territorial fraud," but there was nothing in it but a bad bargain, made under the extraordinary pressure of financial difficulties. THE FIRST RAILROAD ACTUALLY BUILT.