Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1877-11-07
PAY UP.
Proposition for Funding the Neglected
Bonds Of the Southern States.
! vi 4

cate Or association composed of promi-
nent banking firms, for the funding of
southern bonds. These reports received
a substantial basis when request was
received from the principal promoter"
of the enterprise, Mr.. J. j. McKinnon. Of
Messrs. McKinnOn Il Trewesbury, fnan-
cial agents, who made statement about
as follows:
Since the beginning of the war no in
terest had been paid upon the southern
states, county, or municipal indebted
ness, and since the panic little or no in
terest had been paid on the bonds of
some Of the western states. These
bonds,-state, county, and municipal
tho interest on which thus remained
unpaid, aggregated $5O0,000,OOO. Of
this sum the county, city, and town
debts exceeded 100000. 000, while the
bonds of the states amounted to nearly
5000 100000. Now it was known, said
Mr.. McKinnon, that the value of a bond
depended rather on the legislation which
authorized its issue than on the paying
ability or integrity of the community
which issued it. In order, therefore, to
secure this class Of bondholders, and to
enforce the absolute and speedy pay
ment of the interest, and, ultimately, of
the capital of this Indebtedness, a svs-
tenn of legislation had been matured
whose adoption by the legislatures Of
several southern and eastern states
would accomplish the end in view. To
secure this legislation the Funding AS
ISOLATION of the United States" had been
formed and would be incorporated I'M
der the general law Of this state. The
! firms composing the association were
the First National bank, which was in
terested through one of its leading
directors, Mr. Francis c. French, Hugh
McCulloch & Co., of London; l.. Van
Hoffman & Co.; Drexel, Morgan & Co.,
and Winslow, Lanier & Co. There were
others of equally high standing, whose
names Mr.. McKinnon did not care to
mention just now Mr.. McCulloch was
to be president, and Mr.. Holmes, for
merly of the First National bank, the
secretary of the association.
HOW PAYMENT Is TO BE SECURED.
Mr.. McKinnon now detailed his plan
for securing the payment of the interest
on these $5O0,O0OOO0 worth of bonds
(some of which sold at > per cent to
their present owners. He had drafted
a law which he should submit to the
governors and legislatures of the several
states, and which it was hoped they
would adopt. The law would compel
these states, counties, and municipalities
to comply rigidly with the terms of their
compact, and as an inducement for it's
adoption, the syndicate would offer to
fund all these bonds bearing s or 10 per
cent interest at and per cent.---the
state bonds at four, the others at six 1t
would provide that the auditor of the
state, with whom the bonds were to be
registered, should annually levy tax
upon the assessed property of the state
Tor county and municipality which
shall be collected through the proper
officers Of the state county, or munich
pality distinctly from all other taxes,
and sacredly appropriated for the
payment Of the interest and the raising
of sinking fund for extinguishing the
Indebtedness. Should any such officer
the bondholders shall have the right to
apply to any court Of the state, whose
duty it shall be to issue peremptory
mandamus to the official compelling
him to collect it. The law furthermore
provides that no injunction or stay of
proceedings shall be granted by any
court or Judge of the state to prevent or
delay the collection Of the tax Mr..
McKinnon said that this enactment
could not now be given in full, because
it might yet be subjected to serious
changes, but it had already undergone
the scrutiny of Mr.. Judah P. Benjamin,
of London, and S. L. NJ Barlow, of this
city, who both agreed that it would Sc
cure the desired end if adopted by the
several states. Those states which would
be asked to pass it were Virginia, North
Carolina, South Carolina, Florida, Ala
bama, Louisiana, Mississippi, Arkansas
Kansas, Texas, Nebraska, Minnesota
and Iowa.
NOT A "PHILANTHRoPIC ENTERPRISE.
Four years ago, Mr.. McKinnon said
he had formed in London a company
for this purpose, and had correspondence
with the governors of Virginia. Arkan-
sas, and Louisiana, who were favorable
to the passage of the law The only
reason why # was not then passed was
that the company was weak, and no
confidence was placed in the then back
ers of the project. Out Of the $780,,
100000 worth of bonds not ever one
tenth was held in this country, the re-
mainder being in Europe. When asked
how large q proportion of the bonds
was held by the incorporators he smiled,
and frankly said, very large amount;
but, of course, you understand that we
don't claim this to be charitable or
philanthropic enterprise" This frank
avowal was followed by statement of
what Mr.. McKinnon meant to do this
winter in the matter. He would first
begin with the state Of Tennessee, with
its $46,000,000 bonds; Arkansas, with
$1O,OOO000; Kansas, 1914 100000 (includ-
ing county and municipaD; Nebraska,
$10,O000OO county and municipaD,
and wind up the season with the city Of
New Orleans, with its $23,O00,00O mu-
nicipal debt When asked what reasons
he had for hoping that the states would
impose this burden upon themselves by
their own legislation in their present
embarrassed condition, he replied that