The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1875-03-02
bonds reforred to in this report, as taking place
AFTER the maturity Of these coupons, was the
first thyp0thecatou of these bonds sssss,ts'tss'

flrSt hypothsoation Of these bonds
That is positively incorrect, to my certain
knowledge. and has been again and again
shown to be 50. These bonds are alleged in
that committees report to have been hypothe.
Gated in 1879, and stated so as to appear that
this was their first hypothecation; whereas
they were hypothecated for tue 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
| hypothecatcd first in 1869 annihates the
conclusions of the committee.
| There is also nm error Of law implied, but
rot expressed, in this part Of the committees
report, and which was more fully exhibited by
the committee in their examination of me
during the investigation.
| The committee assume-or, at least, its
chairman, Senator Dunn, docs-that all corl.
| pDns that mature upon bonds during their
hypothccation and before their sale are tho
property Of the State, and, therefore, should
not no used in any manner whatever, and
should be cut off when the bonds nre sold
| anu returned TO the State.
| 1t - n well-established legal principle that
| the party holding bonds as collateral security
have right to collect tho interest upon them
which natures during their hypothecatlon.
"Thls principle Of law" says an eminent
authority, (which allows pledge to have
the benefit Of all iutorest or increment accru-
ing upon or from the thing pledged is familiar
and nnquestionable, and is specially stated in
Story on Baments,' section 3l4, and else
where. The interest accrung OIL bonds under
nypothecation is a part of tho pledge ITSELF
and is not the property of the p'e,lgor in any
other sense than the bonds themselves"
Before the committee, therefore, can s,is-
tain themselves in the position they have
taken. it bchoovcs them to show that the par.
ties to whom the bonds were pledged did not
exercise this their undoubtcd right
4. The committee declare that the funding of
$4,000 of coupons of conversion bonds, which
matured before the bonds were used in cx-
change, is n fraud upon the State.
The committee affirm that these coupons
matured January and July, 1871, aud that, "as
these bonds are shown by the records in tho
treasury to have been issued at various dates,
between November, 1871, and March, 1872, it
is evident that these coupons, which ulatured
many months before, were the property of the
State at the time of their maturity; and their
surrender and receipt for tho purpose of fund
ing, and the issuing of consolidation bonds in
their places, was fraud upon the State"
The term "issuod" " refers here, presume.
were permanently exchanged for other bonds.
1t is matter of fact to which Mr.. Parker and
Captain Littlo 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 act of March
2G, 1869 (seo volume IA Statutes ut Large,
page 250), enabling the financial agent to
hynothecate any securities he may have in his
possession belonging to tho State.
The facts connected with this case arc pc
culiar, and distinctly recolIcct them.
The last time that ever sealed any bonds
of tho State Willie 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 manuer. aud
I 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
| of.
S. Tho committee declare that the funding
of $o,205 of coupons belonging to bonds la
beled Il cancelled, unused" is fraud against
the State.
The committee do not state at what time
these particular coupons were funded If
that fact were stated, l could more easily verify
or disprove this statement 1t would consume IL
very great amount OF time for me now 10 ex.
amino every one of the SS6i,O3G of detached
coupons which the eight members of the
committee took two weeks to examine. 1t
would be very easy for them 10 furnish tho
data necessary to prove this statement, as
thoy examined tho packages Of detached co,l-
pons in the chronological order in which they
were put up as vouchers
My object IN thus dwelling on the mpor.
tance OF the verficaion of this statement of
the funding of tho coupons Of these particu-
| lar bonds while indifferent to tho ycriIicatlon