The Dallas daily herald. [volume] (Dallas, Tex.) 1873-1887, 1875-01-01
luicrlpt On lhe nov bonds rs q falla


due,
THE MApmNflf
prlylded ur lhp collecting 81 lie TAX
L. NV ile Interest aud Wlslng q pro
prf slnklng fund nr thN new hands la
Il provision lhnl every year lhp auditor
OF ihe stats shall levy a tax ON the as-
seard property uf lhp state and collect
n thlnugh nc proper officers THIS
lax f. No he levied and collected sepn-
mio.y and Distinctly nom all other
alto iages, mad tho mopey raised uf
ii ia 10 be Kent Hparl ana sAeftlly lpr
prOprialed % the payment ~ NE ~
irrtst ana the raising ofR hlnklng lunl'
The law, which isunderslopd 10 nave
Leen prepared hy Non knapp, ll lief'
lin, aud Judah i, Benjamin, ~ Lon
don, the highenl foreign aulllorl les oh
American law, also provides that ~
case tire auditor refuses or nrRlerls W.
levy aud collect this tax ~ provided
aud required 10y II, then any b0hdhpll'
on may apply 10 any court state or led'
eral, having general common law Jur'
lsdiGlIOn, for an oder requiring hlm 10
do 80 nnd authorizing The officers ol
such court 10 enforce the order Thus |
aud here II Is where the
MIsAPpREnENsloN Exlsra'
There viii be no suit against state
hut the court operates directly ON hll
officer of the state ns was done 10y Tie
suprenIG court Of the United States ~
| the cnsG OF the Tennessee and ArkAn,
sas bnnk notes, where the treasurerh Ol
those atntos were forced 10 receive GER
tain bunk notes IN payment OF taxes
and debts due the states THIS law has
been carefully prepared TO meet every
difficulty that might arse, proNlued
tho Legislature Of cprl Of the Hlnlen
agrees 10 II, and surrender tholro0ntrol
of the state finances, II VIII lao seen
that the state viii not ho involved ~
any litigation, but That II viii he be-
tween the bond holders and the auditor
or tronsiror m tho cas) may be- and
the law expressly states that TINS flghl
TO cnioro collection Of this tax II u con.
tract between the state aud the bona
holders. have given this much 0i
the legal operation OF the .pfopGseu
plnn, which can he safely taken as nm
abstract of the law that each leglsln-
turo will be required 10 pass before he-
coming participation IN ltA results,
whether they bc beneficial on other
wise. There " no doubt whatever
from all can learn, that though the
proposition has 30 far been mvombly
received, II will be atOntly and stub
bOrny fought IN some OF the southern
legislatures. So far ~ can hc Ascer-
talned with the limited information NJ
hand, the scheme Of the American
bond funding aud banking association,
Limited, of London, TX TO revive the
credit of the southern states hy iund'
ing their debts and placing them ON
tho markets of the world on n invDrn-
bic basis, alike beneficial to the bond
holder and the creditor.
IT'S ORIGIN AND HISTORY.
The council of foreign bondh0lders
of the London stock exchange have
: for some years been struggling with
, the difficulties presented by the default
in the payment Of the interest on the
debts of the southern states OF Amer
: len, and their action eliminated last
! spring i'm resolutions den0unclng Viz
ginia for not complying with the
terms OF her own funding bill of 1870.
This attracted the attention of capltnl-
lists largely interested in southern se-
curities, and they consulted with n
lawyer formerly Il resident Of Chicago
10 and now of London, whom the Times
- calls the "leading authority on Amer
ical railway securities" This gentle
. man for twenty-five years had been
n employed by English bondholdcrs to
l. enforce their rights against railway,
a cities and counties of Iowa, Illinois aud
Y Wisconsin. He had been the pioneer
), in all that litigation whereby the su
i preme court of the United States had
n been got to decide that municipal aud
a other bonds, when issued 10y political
y corporations, are binding upon the
II whole property of the citizens, and can
It be collected through the courts. the
i supreme court of Iowa had originally
. held the same way, but the people
y made new constitution and elected
3 new supreme court which reversed
Y the former decisions, and the aid
If of the supreme court of the Uni
20 ted States was, therefore, neces-
20 sary to protect the rights of the
l. bondholders. In some of this liti-
n CATION, where the courts would order
" the mayor aud city council to levy a
tax and pay debt and those anthori-
e ties would refuse to do so, because they
e were restrained by injunction from the
d state court, the federal court would put
q the whole city government in Jail UNI
:, til they did levy the necessary tax. In
" some cases the court would direct its
d marshal TO levy and collect such tax
II Us was necessary to pay the debt. This
line of decisions governs the policy
to be pursued by the foreign boudhold-
1 ers and they further decide that when
4 bonds are issued, and the law which
e authorizes the issuaalso provides tax
II to pay the interest on them and a sink
l. ing fund to pay the principal when
II due--then such law is contract be-
e tween the state and the bondholder
Is and
% CANNOT BE REPEALED OR MODIFIED,
1t but that the tax thus provided must be
?, collected, and the proceeds applied tt
l. the use to which it is pledged, Upor
o the principle of these decisions, whirl
1t was applied to the southern debts, il
g has been arranged to float all the debts
l. of all these states on the terms propos
Q ed. For this purpose this American
bond funding aud banking association
IS has been organized with sufficient
y capital to accomplish its objects. 1t
Il capitalists are among the strongest