Weekly national intelligencer. [volume] (Washington [D.C.]) 1841-1869, 1853-11-12

Extract from a Letter of W. O. Smedes, Esq. on
The subject of he Union Bank Bonds
CooPERs WELL OCTOBER 5, 1853
Without going large into the history Of these bonds
VIII be sufficient for my present purpose to state that
in the year 1887 the Legislature Incorporated bank
under the title of the Mississippi Union Bank the capt.
tai of which was to be Sl5,500,Oo0, which was to be
raised by loan the bank Of the State bonds that
amount against liability account Of which loan the
State to be secured by bonds and mortgages execu
ted by the stockholders.
The constitution of our State you are well aware
prohibits the pledge Of the faith Of the State for loan Of
money unless the which creates the pledge be pass
ed, after certain prescribed publications. by two success
sve Legislatures 1t therefore necessary before the
bonds Of the State could be issued that the charter should
pass the ordeal Of another Legislature Accordingly in
1888, it did pass the Legislature of that year. in the
same form in which it first passed, and became a
law Had the bonds been issued to this corporation as
loan with which to raise its capital stock according the
charter. presume no in the State would say that
the Legislature Governor had transcribed their powers
and that the bonds thus issued not valid and bind
ing on the State. But unfortunately the same Legisa-
ture of 1888 which passed for second time the Union
Bank charter few days and before any step
had been taken to organize the bank under the charter
thgs passed. enacted what is known the supplement
the Union Bank charter, in which provided that
the State should become stakeholder in the bank to the
amount of five millions of dollars and that her stock
should be paid for out Of the proceeds of the bonds
State to be issued according the provisions Of the ORR
gina charter This supplement, and the action Of the
Guilty Governor McNutt soon after the passage of the
supplement- issued the bonds of the State to the bank;
the bank sold them and received the money and in the
great commercial crash and embarrassments which
after befe the country most Of the money through
the insolvency Of those to whom it was loaned.
Gov McNutt the first to deny the liability Of the
State to pay these bonds but it must be observed that
he did not put his denial upon the ground of their
constionGy lie asserted that they sold for less
than their par value that the commissioners who sold
them had exceeded their powers, which he declared
leased the State But few agreed with him in this opn
ion. Others however following his example, assumed
the ground that these bonds void but gave better
reasons for their opinion These that the
bonds had been issued without the sanction of the Con-
stution because they had been issued in payment of
stock taken by the State in the Bank instead of loan
the Bank which loan to be secured by bonds and
Of the stockholders that the two succeeding
Legislatures had authorized the pledge of the faith Of the
State and the issuance Of the State bonds loan in
order to raise money to provide capital for the Union
Bank to commence banking operations on and in doing
they had protected the State against the possibility Of
loss by requiring the stockholders the bank to
the payment of the State bonds by their bonds and
of equal amounts but that the supplement had
made the State stakeholder directly, and ordered her
stock to be paid for out of the proceeds of these State
bonds which thus stripped from the State all security for
the payment of her bonds except that which the stock
in the bank owned by her might afford and that this
supplement- working these fatal changes, had
ceved single constitutional sanction; and So it
argued the bonds issued and sold pay for the stock ia
ken under it void.
You will observe am not arguing the question,
nor am stating all the upon which the anti
bond party based their opposition the payment of the
bonds have only given you the main one To my
mind it had great strength in it. 1t seemed to me
answerable.
Thus matters stood, as have hastily sketched them,
when the Legislature met in 1885, and Gov. McNutts
first regulating message sent to them. That body
received this message with considerable indignation and
declared that it insult to the dignity and charac-
the State say that she would not pay these bonds
adin
discussed and in 1872 the next Legislature passed the
famous repudatng resolutions declaring that the State
would not pay the bonds, principal or interest
The question remained in this condition until Mr. H. A.
H. Johnson holding one these State bonds for 81 000
due in the year 1850 tued suit upon it in the Su
peror Court of Chancey against the State That is the
Court in which is provided by the Legislature that the
State shall be sued by any one who may assert claim
against it. The Constitution Of the State requires the
Legislature to provide tribunal for deciding claims
against the State, and that body selected the Superior
Court Of Chancery with power of appeal to the High
Court of Errors and Appeals Mr.. Johnson prosecuting
this legal and constitutional right sued the State, as
have said in the Superior Court of Chancery The State
by her Attorney General resisted the suit denied her
bty the bond and took in her defence all the grounds
which that able and learned officer able to suggest IN
her behalf The Chancellor in elaborate opinion, de-
cded that the bond constitutional, that the State
liable it, and decreed her to pay it. The State,
by her constituted officers appealed from the Chance-
lors decision to the High Court of Errors and Appeals
you know the highest judicial tribunal in the State
Inc Whole question was again Iuy ana apy uiscusseu
and again decided against the State all three of the dis
tngushed judges of that Court concurrng in the opinion
that the bonds of the State issued behalf Of the Union
Bank constitutional and valid obligations and bind
ing upon the State And this is the present attitude OF
the case.
have thus hastily sketched the history and progress
of this question: not at all with the view Of going into the
argument either for against the consttutonaty Of
these bonds; that is settled question. 1t has been
adudicated by the courts, and lawabidng citizen,
whatever my individual opinion may have heretofore
been bound to yield it to the solemn judgment
Of the courts Of the country. You and may be conf
IDENTIFY convinced that certain person convicted of
der and sentenced to be hung not guilty of the offence
charged against him, and may be entirely satisfied
that he has been condemned by proof STILL not
wthstandng firm conviction the law takes its course
and unless the interposon of Executive
clemency the man is hung and this too though every
man in the county might believe him nnocent-and in
deed, though he might actually be nnocentand il any
body of people, influenced by this opinion of his inno
cence attempt by force to interfere with and
vent the nicon Of his punishment they would be gull
ty Of gross violation of law and If they carried it to
the extent Of armed opposition to the consuedauthor
ties might be guilty Of downright treason
Take another suit is brought against popu.
lar citizen involving his whole fortune lawyers Of char
and talents retained in his defence; the for
Of others depend the decision to be made
in his The plaintiff is a nonresident, and is pub
cly odious for various alleged offensive acts The suit
is brought to trial. is severely ltgaed and the inferior
court decides in favor Of this obnoxious claimant. AL
the persons interested in the question unite and create
great excitement about it, the press take up the ques
ton and adopt the side of their citizens, and at
tempt by bringing its whole influence to bear upon it, to
the supreme tribunal the members of which are
elected by the people, into decision favorable to their
views That court however acting under the sanctions
Of OATH In the honest discharge of its duty conemn
innu tbp al.