The Russellville Democrat., 1876-03-30
ARKANSAS FINANCES.
How the Debts Against the State Were Created and
 on What Account.
The Old Real Estate ana State BankS---HOw they Were Established and Man.
 aged.
How the Directors "PruAent- ly" Expanded the Circula-
 tiOn of the Bank.

l
 BY W. D. BLOCKER.
 From the Little Rock star.1
 [Continued from last week.
 HOLFORD BONDS. As this was 2 subject of much
 after difficulty and much has been
 said in reference to it by the press
 of the state during the past few years, it may not be improper to
 refer at some length to these
 bonds popularly known as "Hol-
 ford Bonds" The five hundred bonds were hypothccated on the lst of January, 1S4O, the bank obtaining loan of $l21,336.59. The entire loan was to be $25, ,000, but only the sum here stated was actually received. On the 1st of December following the hypothe- cation, the North American Trust and Banking company pledged these bonds in bad faith, as stated by Messrs. Miller and Gougc to James Holford & Co.,, of London, upon which they obtained loan of $35O,OO0. and soon after the Trust and Banking company was declared insolvent. 1t was against the funding of the whole five hundred of these bonds and the interest, that so much oppo- sition was aroused to the funding measure passed by the legislature in 1868, about winch more will be said hereafter. This question was at one time before the Supreme Court of the state, and is treated at length by Chief Justice Eng fish in the 24th volume of Arkan- sas reports. In the case then before the court, the Chief Justice said:
 "The ninth section of the char acter of the Real Estate Bank pro- hibited the sale of the bonds of the State at less than the par val. ue thereof. It might be held upon adjudications entitled to re. spect that the disposition made of the five hundred bonds in ques- tion by the agents of the bank to North American Trust and Bank ing company was a transaction illegal and void. But the bank having thought proper to receive and appropriate to it use the $l2l, 336.59 advanced to it's agents by the New York Banking company upon a pledge of the bonds, it is but just and reasonable to con clude that the bank thereby be- came bound in equity and good conscience to repay the money so advanced to it, with interest, upon a re-delivery of the bonds"
 The amount of money obtained by the bank for the five hundred hypothecated bonds, as stated above, was $12l, ,336.59, with in terest up to the time of the pas sage of the funding bill in 1868, amounting at that time to $2l3,- All, making a total of $334,74 Instead of funding this amount, and assuring It's payment, the state was made to assume the payment of the entire five hun dred bonds, amounting, interest and all, to $l, ,035, 253 more than the courts had decreed that the state owed. gnT "tt . ! ASSIGNMENT OF THE BANK ASSETS.
 On the 2d of April, 1S42, the executive board made an assign ment of all the effects of the bank, to certain of their own num- Der, and other directors of the bank, fifteen in all, but carefully excluding from the trust all the directors appointed on the part of the state. On this point Messrs. Miller and Gouge say:
 This proceeding did not give universal satisfaction. The local boards at Little Rock and Wash ington refused to surrender such effects of the bank as they held. The local board at Little Rock inscribed on their minutes fifteen reasons for so doing. Among the most prominent were that the cen tral board had done what they had no authority to do, the charter not having granted to them and the stockholders not having dele gated to them the power to make an assignment. Also, that the trustees are indebted to said bank, in . large amount, at least $l50,- 900, and that no provision is made m the deed by which the same can be collected, it being a well settled principle in law that tras- tees cannot sue themselves.
 z "The trustees sought to compel the local board at Little Rock to surrender the aAsetts in tbeir hands by bringing the case before