Richmond daily times. [volume] (Richmond [Va.]) 1850-1853, 1852-04-28
visions Of the 9th chapter of the Code as relate

third is the only section of it relating to the pow
err of the Board to appoint an agent, or relating to
the agents compensation. 1t may be well to adj
vert to the history of that section. The act of
April, 1888, empowered the Board to procure
loans either in the United States or Europe, and
for that purpose to appoint agents and allow
them reasonable compensation. 1t allowed any
Bank incorporated in this State to act as agent of
the Board in negotiating the loan and transferring
the proceeds into the treasury. In 1889 another
act passed, authorizing certificates to be issued
without the previous payment of money into the
treasury and such certificates to be delivered to
the board or their agent. The board never avail
ed itself of the power given by these acts of 1888
and 1889 in regard to borrowing money abroad
and making the certificates payable elsewhere
than at the treasury; yet these acts had not been
repealed when the revisors acted on the subject
in 1847. In the meantime instances had occurred
of agents of States and public companies who had
been entrusted with their bonds for sale parting
with such bonds, and making the States and COM
panies liable without their receiving the money.
The reyisors desired to guard against the danger
of such a result in respect to bonds of Virginia.
With this view the third section of chapter 81
of the Code was framed and passed in these
terms
"Any of the Banks incorporated by this State
may act as agent for the Board, in respect to such
loan. Whenever money is received from the
lenders elsewhere than at the public treasury, it
shall be soreceiveds only through one of the said
Banks. The Bank through which it is received
SHALL by bills of exchange or otherwise, cause
the money to be paid promptly into the public
treasury. The Board may allow reasonable
compensation to the Bank or any other agent or
agents employed in the matter"
No authority of law exists for the contract that
has been made, unless it can be deduced from
this section, and this section does not give the
thority to do what has been done.
While it allows the Board to employ agents in
negotiating the loan, it imperatively requires that
the money, if received from the lenders elsewhere
than at the public treasury, shall be received
only through one of the Banks incorporated by
this State.
In other words the lenders, are not to have the
State bonds until the money for them is received
into the public treasury or in one of our State
Banks. And yet notwithstanding such is the
law. sort of contract has been made importing
that Selden, Withers Co., are constituted agents
of the State, not merely to negotiate the bonds,
but to sell and dispose of them and receive the
money for them.
Co., after receiving the money from the lenders,
pay it into the treasury or into one of the Banks
in :orporated by this State. The violation of the
law is in letting the bonds go into the hands of
the lenders or into the hands of Selden, Withers
& Co., before the money has been received into
the Treasury or one of our State Banks The
State is thereby subjected to a risk which it was
the object Of the law to guard against So far
as Governor Floyd and the Board of Public
Works could do it, they have empowered Seden,
Withers Co., to receive the proceeds of the sale
of the bonds upon their mere naked agreement
to pay over to the Board, or to such agent as the
State should select, those proceeds, minus the
compensation of Selden, Withers & Co.
This is the case to which the first resolution
applies The resolution might we'll go much fur
Their than it does; for the contract has been made
without lawful authority in other respects.
Where is the authority for this most extraor-
binary provision!
''To enable the said Seden, Withers & Co., to
redeem, III proper time the coupons of interest,
as the same shall become due, the said John 3.
Floyd, for himself for the Board of Public Works,
and for the State of Virginia, hereby covenants
to and with the said Selden, Withers & Co., and
with the survivors of them and the successors of
such survivors that the State of Virginia shall, at
least one month during every six months, before
coupons shall become due, place at the credit Of
Selden, Withers & Co., in some proper bank in
the city of Richmond, specie funds enough to
enable the said Selden, Withers Co., to pay
the coupons promptly, either in the city of Wash
ington, the city of New York, OF in any other
place places which the holders of the bonds
and the said Selden, Withers & Co., shall have
agreed on. And the right to pay every half year,
during the periods that the bonds have to run,
the said coupons of interest are hereby secured
to the said Selden, Withers & Co., to their sur
vivors and successors in business, unless miscon-
duct in the agency shall forfeit the right"
1t is in reference to this provision that the Com
mlttee OF Finance make these remarks:
cit does not appear that they" (Selden, With
ers Co.. "give any security for the proper ap-
plication of the funds stipulated TO be placed at
their control, and subject to their order, one
month before the interest is demandable. The
amount to be thus placed at their disposal being
the interest on four millions of dollars, is $780,
900 annually, or $4,000 semi annually; the in
terest on which for the month required to be at
their disposal, is equal to 81 900 annually one
half of one per cent. AS the interest on the four
millions of dollars is payable at any point which
may be agreed on by the agents. and the Com
monwealth must bear the expense of transmit
ting the funds, that expense will probably be
measured by the rate of exchange between Rich
mond and the point of payment, and will be such
as in connection with the $4,000 above referred
to, must make the loan of 1000, 900 stock cost
ing more than 6 per cent"
So far as the money is borrowed at rate of
interest exceeding six per cent, in other words,
so far as the bonds are really sold for less than
the sum appearing on their face to be owing
from the State, the transaction must be conceded
to be illegal. But the provision just referred to,
is obnoxious to other objections. The agency is
not only ''extended through the long term of
twenty years, as the Committee of Finance sup
poses, but is extended until the coupon bonds be-
come payable, which is not less than thirty five
years from their date.
AT a time when Convention is engaged in ma
king Constitution prohibiting Judge from ha-
wing term of Office longer than eight or twelve
years, however good his behaviour may be, we
find the Governor constituting Selden, Withers &
Co. agents for thirty five years to come-nay
more, not only securing the agency to them if
they live, but securing it to their successors in
the business, with no other qualification, than
that misconduct in the agency shall forfeit the
right