The Hillsdale standard. [volume] (Hillsdale, Mich.) 1851-1909, 1878-02-12
THE STATE CREDIT.
% ueminescenee OF Is73-The splend-
Id Financial RePute OF Mich-
tgan.

|
igan.
From the Lansing Republican.
On January ], Michigan State bonds
to the amount OF S243, 900 fell due, anC
State Treasurer McCreery had the mon
ey on deposit in the American National
Exchange Bank OF New York City tC
meet these obligations. Up to the
present time but s2l7,00a Of thes,
bonds have been presented, which
shows that the holders of Michigan
securities have the fullest confidence
in the integrity OF the state to meet it'
financial obligations. The State Treas
urer also paid S29, Clio worth OF coupons
at the beginning Of the year. The to.
tai interest bearing State debt at the
present time is 81, l57, 900. Michigan's
record for fair dealing is untarnished.
although there has been an attempt 10
blacken her good name by charging
her with being stained with the crime
of reputation. The Chattanooga Dis
patch not long since in an article on re-
pudiation said: "But three States in
this Union have ever repudiated their
debts, viz: Michigan, Mississippi aud
Minnesota. One of these, Michigan,
long since settled with her creditors,
leaving but two States in the black
list" This is n mistake for Michigan
never belonged to the black list. This
reference OF the Dispatch probably
comes from what has usually been
termed the unrecognized, or part paid
portion of the IS, 900, 900 loan, which
was sadly mismanaged, in the good old
Democratic days, but the State never
went back on a dollar OF it's just obliga-
tions. Deputy Auditor, General Pratt,
Who has lately had occasion to look up
the history OF the IS, 900, 900 loan bonds
finds the facts in this alleged repudia-
tion as follows:
BY an act approved March 81, 1887,
a loan not exceeding s., 900, 600 was
authorized by the Legislature, to be
expended for internal improvements.
Bonds TO thefull amount.o of the loanwere
accordingly prepared and executed and
a contract made with the Morris Canal
and Banking Company OF New Jersey,
to place the loan on the market in in
stallments, the company to be paid
commission for it's services. A portion
OF the bonds were disposed OF under
this contract, and the proceeds paid
over TO the State. A new contract was
then made, by which said company be-
came purchasers from the State OF that
portion OF the bonds then remaining
unsold, payments to be made in Install
ments. The United States Bank OF
Philadelphia, became surety for the
fulfillment of this contract on the part
of tie Morris Canal and Banking Com
pany. and the bonds were delivered.
Under the two contracts the State
received pay in full for 81 ,38S, 900 OF
bonds. For the remainder but a small
portion of the amount was paid to the
State when the Morris Canal and Bank
ing Company failed. A further small
portion was paid by the United States
Bank OF Philadelphia, as sureties, when
that bank also failed. It's ascertained
that large amount Of the bonds for
which only partial payments to
the State had been transferred by
the Morris Canal aud Banking Com
pany to the United States Bank OF
PHILADELPHIA, the latter necessarily
having full knowledge of the fact that
they had not been paid for. As soon
as the State became aware that II would
not receive full consideration for the
bonds, notice was given that 1t would
itself bound to repay only the
money actually received. This was done
bv act No, 60, approved February II,
1912. which required the Governor to
issue proclamation to be published in
New York and Philadelphia requiring
the holders of .part-paid bonds to re-
turn them TO the State and receive new
bonds for the amount OF money that
had been paid to the State thereon.
Such proclamation was issued in 1912.
A report made by the State Treasurer
December 6, 1912. states these part |
paid bonds we're principally paid by
the United States Bank OF Philadel- |
phia, and that they had been hypothe-
Gated to different houses In Europe. |
This hypothecation was reported To the |
to bnve been made under |
that did not affect the |
equities of the State. The action on |
Tue part Of the State was taken before |
the bonds had gone into the hands OF
innocent holders.
Such is the brief history OF the case. |
lie hcllOu VI but ObaNc "oo BtiASN'ig 4
honorable in giving notice that 1t
would consider itself bound to repay
only the money actually received, as
the bonds were still held by a bank |
that had full knowledge OF the facts. |
This State has always recognized every |
dollar OF her just obligations. What |
money she did receive on those 81, ,000,- |
)00 bonds was squandered, with the |
exception Of the amount realized on |
The sale OF the Central and Southern |
railroads.
AS an illustration OF the manner in |
which Michigan has stood by her finan-
,ial agreements and kept her faith, il
Is only necessary TO refer to the
early days when she loaned her credit |
by issuing bonds to certain railroad |
with the understanding that
such companies were TO take care OF
both pr ,ipsl and inteie (. The com. I
panies failed to keep their pledges, and
.he State paid every cent OF such bonds
Among these defaulting corporations
we're the Allegan and Marshall, Ypsi.
anti and Tecnmseh, and Detroit and
Pontiac railroads for 800, 900 each.
Our Michigan Z per cent. bonds. is.
sued for war purposes, in the pinch OF
the rebellion when money was difficult |
10 obtain, aud which fall due in 1891,
IRE now held in Wall street at 100, be-
ng 20 per cent premium. What other |
State in the Union can show better
credit?