Wilmington journal. [volume] (Wilmington, N.C.) 1844-1895, 1873-08-15
y INN OCENT IIOLDEIkS, AND
THEIR FRAUDULENT BONDS.

1t Is rarely that so much sound,
good, hard sense is to be found in SO
small a space as that contained in the
following article from the Chicago
Tribune. We commend it most cor
daily to or readers:
In cases where State or municipal
government has been made nomirally
responsible by the unlawful and fraud
ulent acts of public officials, and when
ever it is clear that public bonds have
been issued in fragrant violation of the
law, there is no more obligation upon
the Government TO redeem these
bogus pledges than there would be
upon an individual to pay forged
note issued by one of his clerks. As
an instance of public duty in such
cases, may be cited decision of Judge
Dillon. OF the United States Circuit
Conrt..in Kansas, relative to municipal
bonds issued in violation of law. A
question arose in Usage county whether
taxes should be levied to meet the
manufacturing companies, and it was
the State, who decided that ''no Of
pay such a tax" This decision was
based upon one of Judge Dillon's, in
which he declared all municipal bonds
issued in aid of purely private enter
prises to be null and void. The At
torney- General of the State added
that, in this decision, "Judge Dillon
merely gave voice to the unanimous
Judgment of the bar of this State. -
t., T., of
bonds, the municipal governments of
Kansas cannot be charged with repu-
dintiOn.
OF the same class with the municipal
honda described above are many of
the State bonds issned by the carpet
bag governments of Southern States
1t IS announced that the State Treasurer
of South Carolina has prepared state
ment showing what proportion of the
State bonds are bogus, and it is pre-
dicted that the State will refuse to pay
them. Thereupon the Philadelphia
Press says VERY likely these were
frandulently issued, bnt if repudiated
on innocent parties" If there is no
doubt that the bonds were fraudulently
issued. then it is not easy to see how
ie circumstance that portion of the m
may be held by innocent parties makes
it incumbent on the State to pay obli-
cations which it never assumed. The
'sinnocent parties, if there be any in
this case, have their remedy against
tine guilty parties who swindled them.
But the State, being an inr.,cent party
itself in case the bonds were frahldu-
lently issued, cannot reasonably be ex-
l. I
good the thefts of common swim.
dlers, because the crime happens
to have been committed in it's
name. If the State goes into
this kind of business, it will hence
forth be principally engaged in rob
bing its own people to pay ''inno-
cont parties" the money out of which
they may be swindled. The fact is,
however, that carpet-bag State bonds
of the class described seldom find their
way into the hands of innocentparties.
It is not reasonable 70 suppose that
many men have invested their money
legitimately in this class of securities.
The money was advanced upon these
fraudulent bonds, it is well known, by
a certain clique of specializing bank
ers, who went into the game with their
eyes open, and took a large risk with
the prospect of large profit. They
shaved these bonds enormously with
good reason to suppose that they were
fraudulent. Even if they were not
| acquainted with the details of the
fraud, which is unlikely, there was
pri,,a0 tfcic evidence of fraud in the
anxiety of carpet-baggers to dispose of
their bonds at any price. Indeed,
there is some reason to think that the
| original purchasers of these securities
| bought them in the belief that their
| party influence would some day induce
Congress to give national guarantee
for their payment. A movement OF
this kind, it will be remembered, was
actually developed in the last Con-
| gress.
The same rule that applies to bogus
State and municipal securities also
applies to fraudulent bonds and stocks
Of every description. andEespecially to
what is known as watered stocks.
| The Nation claims that the whipping
out of these fictitious and fraudale nj
issues of stocks would also throw the
burden of loss upon innocent parties,
and talks feelingly of widows and
orphans. We decline to be moved by
such appeals. The bulk of watered
stocks is in the hands of the Wander
bilts, Goulds, Tom SCOTS and othe,
speculators. It is constantly changing
hands, but it rarely finds its way
among the widows or orphans. About
the very last investment sought by
people of small means or in regular
business is watered railroad stock
Its character is we'll known by the
people who deal in it. But. if it ii
true that limited number of unsus
pecting holders would suffer by il
cancellation, this fact furnishes NJ
argument why it should not be can
ceTed, It's issue was in most cases un