The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1874-04-14
S. G.
Tuesday Morning. April ID. 1874.
Tho Fraudulent ConversioA' Bonds.
We cheerfully givo place to the COM

Tho Fraudulent Conversion Bonds.l
We oheerfully givo place to the com.
munication OF ''W. s. B." The bonds
in which he seems to be interested have
been overthrow by the late Legislature.
and it was about the only sensible thing
it did. Besides. the State is bankrupt
and there is little prospect of it's paying
even the interest Of it's just debts.
Holders OF conversion bonds would
seem, therefore, to be in blue way,
unless. as is stoutly maintained by some,
whatever has steal in it has a better
ohanoe than whatever is honest, of being
paid. However this may be. we recog-
nize the right Of our correspondent to
bo heard. We can appreciate his com
plant, hG! :. the same time, We dc nok
see the force Of his argument in this
letter. We might consent to the pro.
position that the State, even in it's pre-
sent abnormal condition, is bound by
tho acts of it's proper officers, acting
under authority, however unwise those
acts may be; but we are quite sure that
the State is not bound by the acts of
any officer acting. without authority.
If the Legislature authorizes the State
Treasurer to issue given amount of
bonds, and he issues larger amount, it
may be question whether the innocent
purchasers of the bonds, or tho State
itself, is responsible for the over issue,
with the preponderance against the
State, for the obvious reason that it has
the means and power of detecting the
abuse of its authority. which tho pur-
chaser has not. But if the Legislature
authorizes the State Treasurer 10 issue
bonds to certain class Of persons, on
certain express conditions, and he issues
bonds to persons not of that class, and
not in conformity with the conditions
expressed, the persons who receive them
are responsible for the fraud, for the con-
elusive reason that they are cognizant
OF it. and parties to it. They must
know upon what grounds and authority
the bonds which they buy were issued.
The State may be held liable for any
authority it actually gave, even if
abused, but not for the unauthorized
assumption Of authority in its name.
The acts done in its name without it's
authority. are the same to it as if not
done at all. What is true of the re-
ceivers is also true of any purchasers,
innocent" or not. The fraud which
attached to such bonds in their issue,
attaches to them ever afterwards. Nor
are any. in any proper sense, innocent
purchasers. They are not purchasers
without notice." The Act of the Lee
gi i,lature is public one, to be seen and
read of all men, and which should be
read OF all men, who propose to obtain
rights under it. Being q plblic Act,
the State thereby gives an advertise
ment," which is standing and perpetual.
This is precisely the condition OF the
fraudulent conversion bonds. As we
have heretofore shown, the Act under
which they we're fraudulently issued did
not propose to make a new loan
or create a new debt. It was, in its
title and purpose, can Act to provide
for the conversion of State securities. It
authorized the State Treasurer, on ap.
plication of the holders OF coupon bonds
or certificates Of stock, to take up the
same, and issue new bonds and certifi-
Gates of stock in "lieu Mereof." It Was
contemplated that it should be done at
the treasury, for it was made lawful that
theTreasurer should charge and receive,
aud appropriate to his own use, q stipu.
lated sum for each certificate of stock or
bond that he exchanged. The power, it
will be seen, was express and limited
The State Treasurer had no more autho-
ri!y TO issue bonds outside Of the terms
and conditions prescribed in the Act,
than to issue bonds without any Act ut
nll. And every person who received a
boud outside Of the terms and conli.
tIons prescribed in tho Act, knew that ho