, 1859-07-15
LETTER FROM HON. 4. n. MACK.
Correspondence of the Jouru.1,1

write you according to promise in relation
to the McAllister Stebbins bonds RECENTLY re-
funded in New York. At present hare oniv
time to mako brief statement Of the facts. suf.
tIcaent to correct tic many false rumors atloat in
regard to this transaction.
Tae Aeclan1cs' Banking Association ;n New
iork, Rnd the New York Uowery Fire Ipsur-
ance Company held Of these old McAllister /
Stebbins bonds in all $114, 900 which thtv aNf -
we're purchased By them some sixteen Years am
ut public auction, without auy knowledge On
their part Of any refusal Of the Stutc 10 pay tic
bonds at their rar Tnlue. After the passage Of
thc Law OF 1857, these parties made application
and reiunding Of these bonds The Governor
aarinE declined Mt that time to act in the mat
ter, some Of the parties in interest sued out u
maodatnps before the Supreme Court to comnel
him 10 Issue the bonds. TIC Court decided
that they had no power over the Governor to
compel him to do an Official net, and therefore
the mandamus was refused, but no opinion wps
expressed by the Court in relation to The Dowcr
OF the Governor to issue the bonds as required.
Upon subsequent examination Of I'll tic
tacts, the Governor came to the conclusion tf,ut
the holdera of these bonds arc e4uitably enti-
tied TO hare them refunded for their full amount
and that under the Law Of 1857, authorizing Liu1
to tund the arrears Of interest upon alt tie ill.,
dehtcdaess Of tie Statc, lie Lad' full authority
TO settle this claim. In bis correspondence with
the transfer agent in New York, the Goyer1,.r
expressed himself rs favorable 10 the payment
OF this claim, and also that he had tue puwcr
to direct the Issuing of new internal improve
ment n t bonds tor the old bonds held By the
Mechanics Banking Association und the How
cry f1re Insurance Company. The New York
agent regarded this correspondence as m
informal recognition by the Governor. Of hi.
right to refund the old bonds, aud notified
tue parties to surrender them for That pur-
pose, but before taking any lnal action up-
..1 on 5ne subject, the agent, (Mr. Dement,) a
70 the Governor for more explicit orders:
Sllll surprising TIM. he had full power under Tie
law 10 order the new settlements to be moie
and new Internal improvement bonds to bc is.
sued, toEernpr Bissel Immediately Forwarded
to W. Hement letter authorizing lin to refund
.ne ca bonds, Shortly utter giving tie order,
tAe Gorernors attention having beeu called 10
more careful examination of the Inv. he b.
came doubtful Of his authority in the mater.
and Immediately telegraphcd to Mr. Dcmcnt to
stop refundiug, which was done at once. Il
the time Of receiving this order, there was s7s.-
66oo 90 TUG arrears Of interest due the bond.
ho'dsra that bad not been funded, 50 that, rs
had been disposed Of By the issne Of new bonds,
Immediately after telegrapLlng to Mr. Re-
tnent, the Governor informed the Auditor Of The
TACT that portion Of the bonds Ind been re-
funded in New York, aud also that be had no.
hhed AZ. Bement not to proceed any further IN
0osernor thst the issue Of the bonds were
wholly illegal, and that he should not recognize
them in any wuy, and in this opinion the Other
State officers subsequently fully coiucided: for
WITHOUT seeking to prejndgc the matter, or to
decide upon the amount that might be equita-
BY due 70 tue bond-holders. they were satisfied
tlat under tue cxisting laws Of the State. the
Governor had no power to settle with thesc nar-
ties upon any other terms than those proposcd
by the Inv Of 1s39.
correspondence was Immediately opened
~ tue Governor with Mr. Demcnt and he hold.
ers Of the bonds, to negotiate With them for
surrender Of the boEas that had been issued
ana ioF reinnding Of the entire amount, inclul-
ing the arrears cf interest, $7B, ,GB00a, still M
funded under the provisions Of The Law Of ls49..
which authorised settlement Of the lii s)i;strr
and Stebh1ns claim aud the refuuding Of the old
bonds INTO Liquidation honda" to the amount
Th'ch the Statc acknowledged as being actually
aue upon tue OLD bonds. viz rs 64-l00 centa
on the dollar, with interest at tue rate Of per
cent. -
8As the bonds that lad been Issued were in.
scf1bed bonds, and. official orders had been |
gtren NOT to hare them transferred, there was |
20 necessity in making public m act which /
had been performed under a nisnpprehensjon |
ot the law, and from which no possible ipjurv /
SNA"-% -eAs*H <AA kANk AAN AEluAlF 0f&n done I
vas TO issue to the holders Of the old bonds
Tor portion Of the amount clriucd "a due
aereon. nex internal improvement md inter.
~ hoods OF lh47, in place Of old interpul 1.
improvement bonds previously held by them.
inc oad bonds were coupon bonds and ttau*-
cradle upon delivery; the new bonds were in
'c'19ed bonds, end could not be transferred upou
he books Of the Stalc 80 that in fact the hold
rs OF these bonda hare only becn placed by this
Inhsact'on Ia position where they cannot now
1tspose OF the bonds they hold even for What
he old bonds are actually wortl, under In i.w
u le4e. Taa old bonds could har: been sold
ihd transferred to any party that would buy |
hena. but the new bonds cannot be used at anv
'r7ee, a. tue State refuses 10 allow their trnns.
en-. Under the instructions from the Goyer.
'or, Auditor md Treasurer, the payment of
ny portion Of interest has been refused ana
i no t1n1e during any portion of the nroeeed. I
ogs has one single dollar Of money, either in
be form Of interest or principal. been mid 10
he holders Of these bond&.
II Il only necessary, in conclusion, 10 sav
hat no fraud upon the State cau possible b.
etpetrnsed. or loss in my way grow out Of
bis transaction: The State Department viii
ot recognize the new bonds II any war, and
either accruing or arrears Of interest viii be l.
aid On any portion Of the debt Should tue
o!dess Of the bondB decline 10 settle under +
be Law OF 184e, they will have to wait untit by
ONE act ot the Legislature their claim IL r..
o9u'1ed. At present they will be compelled !
take what the law Of ls49 gives them. or
ct nothing. ReSpectfulIy i " W,cr