The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1871-11-23
THE CONVERSION BONDS.
ANOTHER REPORT OF Il FRAUDULENT
- 1ss0E
How 1t was Managed-A Fair Case for
the Courts-Probe it to the Quick.

| An anonymous correspondent for the cor
rectness of whose statements we do not pre-
tend to vouch, sends The NEWS some inter
esting points touching the alleged over-lssue
of the so-called conversion bonds. The cor
respondent says:
"The article copied by you from the Coum-
bla Phoenix on Wednesday m orniug Is correct
as far as 1t goes In Its details OF the conversion
bond frauds. But the amount OF convert ted
bonds said to be issued is, however, under.
stated. The plunderers at first thought Of is-
suing bonds enough for their purposes under
the act for the relief of the treasury and the
acs for the payment of interest, but the Ring
were assured that 1t would be better to use
conversion bonds, as it was understood by in
yestors that these did not increase the debt OF
the State.
1.-THE Ring have admitted to Mr. Smalley, OF
the Tribune, that the State bonded debt now
amounts to sl5,s05, 600. The whole of the
increase lover s7,s65, ,7s5, the amount of the
debt reported by the TaygaYers' GQnyen-
tion, less two millions unGSF the relief act and
tfe interest act above mentioned, issued at
that time but since replaced by conversion
bonds) is In conversion bonds, which the pl-
rates own that they have issued to the amount
OF $4,000
"To quote from the writer In the Phoenix:
"'By referring to Section of Article 0 of
the constitution, 1t will be seen that this at
tempted increase of the debt Is unconstitu-
tional and void. That section reads as fol-
lows:
"'SEcT1oN I. For the purpose of defraylng
extraordinary expenditures, the State may
contract public debts; but such debts shall be
authorized by law for some single object, to
be distinctly specified therein, and no such
law shall take effect until It sh"l have been
passed by the vote OF two-thirds Of the men,
bers of each branch of the General Assembly,
to be recorded by yeas and nays on the jour
nails of each house respectively, and every
such law shall levy tax annually, sufficient
to pay the interest of such debt
"'The act OF March g. 1869, does not fnlfl
these provisions OF the constitution. The
bonds Issued under 1t, over and above the
amount legitimately used In the conversion Of
securities. are, therefore, so much waste
paper These are the bonds now selling at
twenty-1ine.'
"Rlght here may q case be made. Some
owners of State stock did exchange stock for
bonds. BY this fraudulent sale Of conversion
bonds the legitimate bonds received In ex.
change for stock have been deprecated from
eighty to twenty six and half, with the pros-
pect of entire reputation. Here is an evil
dent wrong done to such Legitimate holder,
for which there must be remedy either In
law or equity. Ifthe holder Of such legitimate
bonds is a citizen of another State, could not
suit be brought by him In the United States
Court to restrain the Governor, treasurer and
comptroller from recognizing the fraudulent
bonds as part of the State debt
"It would probably be useless to appeal to
the State Courts. Such Supreme Court as
we have would do but little to aid the tax.
payers in maintaining their rights"