The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1875-03-02
bonds referred to in this report, as taking place
aitef the maturity or these coupons, was the
tSssf s..sasis.

sof sthsse bpuass s.ssssess.
That is positively incorrect, sto. my certain,
1knowledge. and has been sgaih sand .again
lisl,gwn 70 be 10. sThese bopAs arss alleged In
thst conmittse's report to have been :hypothe.'
Gated iusl 1878, audistatsd 50 as to appear that
this was their first hypothscation; whereas
they were hypothecated orsthe first time in
| 1869, soon after they were authorized to be
issued and doubtless may have been hypothe-
Gated twenty times between these two Pc
riods. The fact of these bonds having been
| hypothecated first in 1869 annihilates the
| conclusions Of the committee.
There is also an error of law implied, but
not expressed, in this part of rhe committees
report and which was more fully exhibited by
the committee in their examination of me
during the investigation.
The committee assnme-or at least. it's
chairman, Senator Dunn, does-that all cou.
pnns that mature upon bonds during their
| hypothecation and before their sale are the
property of the State, and, therefore, should
| not ne used in any manner whatever, and
should be cnt off whe. the bonds are sold
! and returned to the State.
1t is q well-establshed legal principle that
the party holding bonds as collateral security
have right to collect tho interest upon then,
which natures during their hypothecation.
"This principle OF law" says au eminent
authority, which allows PLEDGE to have
the benefit Of all interest or increment accru-
ing upon or from the thing pledged is familiar
and unquestionable and is specially stated in
Story on Bailmenls,' section 3l4, and else
where. The interest accruing on bonds under
hypothecation is part Of the pledge ITSELF
and is not the property of the plelgor in any
other sense than the honda themselves"
Before the committee, therefore, can sus.
tain themselves in the position they have
taken, it behooves them to show that the par.
ties to whom the bonds were pledged did not
exercise this their undoubted right
a. The committee declare that the funding of
$4,000 of coupons Of conversion bonds, which
matured before the bonds were used in ex.
change, is a fraud upon the State
The committee affirm chat these coupons
matured January and July, 1871, and that as
these bonds are shown by the records in the
treasury to have been issued at various dates.
between November, 1871, aud March, 1872, it
Is evident that these coupons, which matured
many months before, we're the property of the
State at the time of their maturity; and their
surrender and receipt for the purpose of fund
ing, and the issuing Of consolidation bonds in
their places, was a fraud upon the State"
The term =" issued " refers here, presume
to the period at which these conversion bonds
were permanently exchanged for othor bonds
1t is matter Of fact, to which Mr.. Parker and
Captain Little will testify, that these bonds
were outstanding prior to that time, in accord
ance with custom Of Mr.. Parker and Mr..
Kimpton, in pursuance of the oct of March
26, 1869 (see volume IA Statutes ut Large
page 259) enabling the financial agent to
hypothecate any securities he may have in his
possession belonging to the State.
The facts connected with this case are no.
culiar, and distinctly recolIect them.
The last time that ever sealed any bonds
of tho State while secretary Of state was in
October, 1871. 1t was then that first dis
covered that the conversion bonds were being
used In what deemed an illegal manner. aud
positively refused to seal any more The
process OF conversion. however. was contin.
ued by Mr.. Parker, and he had then to recall
such conversion bonds as Mr. Kimpton could
release from hypothecation in New York and
use them, when returned to the treasury for
the purposes Of conversion. These bonds
were returned with the matured coupons cut
off,
B. The committee declare that the funding
of $9,2O5 of coupons belonging to bonds ID
beled'' cancelled, unused" is a fraud against
the State.
The committee do not state at what time
these particular coupons were funded. If
that fact were stated, could more easily verify
or disprove this statement. 1t would consume
very great amount Of time for me now 10 ex
anime every one of the Ss64.03 of detached
coupons which the eight members of the
| committee took two weeks to examine. It
would be very easy for them TO furnish the
data necessary to prove this statement, as
thoy examined the packages of detached cou.
pons in the chronological order in which they
were put up as vouchers.
My object IN thus dwelling on the impor.
tance OF the verfcation of this statement of
the funding Of the coupons of these partcu
lar bonds, while Indifferent to the vcriiicat,on