The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1879-01-08
The State Debt All Valid.
DISSENTING OPINION OF JUDGE
HUDSON IN THE BOND
CASES.

Every lCTeSutuTlty Ill tue otu noh'N'
Waived or Validated by the State,
and every Consolidation Bond n
Stock Il Valid Obligations. Irrespect-
i've Of the Regularity Of the Fouch-
crs on which it is Based.
The dissenting opinion Of Judge Hudson IN
the Bond cases Is as follows;
The State of South Carolina, City OF C0inm-
biu-In the Court of Claims. Geo. w: AK
or. Cashier, Plaintiff; ysIhe state OF ~ vs
The State of South Carolina. and SundrS
other holders of consolidated i,onus us
Plaintiffs. against the state Of south Casoll-
M, us defendant. Actions On eouPons Vi
consolidation Bonds.
These are cases made up for the purpose OF
testing the validity Of certain bonds OF tne
state of South Carolina, known as consollua-
ton bonds. issued under act OIL Decenloei -,
l>1i, ITO reduce the volume Oh the Puoiie
debit
The plaintiff. in each Of the nine Scveral
cases above, alleges. respectively. that ne Is
the lawful owner II holder Tor va'ue Ui tmE
coupons sued upon. and of the bonC: 10 wnlGn
the same belongs; that demand has been niaac
upon the proper officers of the State for pay
men! which has been refused. and demands
judgment against the state, &C. llclenccs nse
set up BY the State in her answers 10 tnesc
several suits, which, when grouped togelher'
may be c!aSSed as follows;
OFFENCES OF THE STATE.
l.FThat n portion of the vouchers surrender
cd and for which these Consolidated DonuS
were i'm part issued. had been by the nnanCiai
agent clipped or detached from certain ne
lief of the Treasury bonds which were never
issued. andnevcr became n charge against the
State. The coupons 50 detachcd, IL IS alicSeu'
amount to over s9,WN
That q portion of the vouchers. surren-
lcrcd. and for which some Of the bonds In
.,,y = ,,.oro Il, nnrf iSSi1pI had been 0oGlcncu
from certain Conversion bonds, ana III the
process of conversion should nave peen aE
tachcd to the certificates of stock dSa ..
which the Conversion bonds were lsstsxy ~
flied away with said certificates OF scses4S
vouchers. The coupons thus detR&N
amount TO nearly Sl0,OO.
8. That n portion of the vouchers surIehoei,
cd. and for which some of the bonds IN suit
were in fact issued, were coupons maturing
on or before July !, 1877, and as the State pald
the interest on thep public debt up TO mat pc
Rod, these coupons must have been ply.
The amount of coupons thus maturing;and IN
exchange for which Consolidation oud were
issued, Is SiSG, 021.
j. That a portion of tho vouchers entering
into some Of these bonds sued on embraces
coupons surrendered by y. il. owens as
agent. by Governor Scott, and l.. \. ZealF,,
amounting to SS3l 800, which coupons nau
been clipped by the financial agent from
bonds before being issued, and had been ny
him sent to n. q. Parker to DC ~fraudulentiy
consolidated, and were consolidated IN lrauo
of the act.
). THAT a portion of the vouchers surrender.
cd, and in exchange for which. some OF INC
bonds in suit were in part issued, consisted oi
bonds and coupons In the hands OF the imam
cial agent, which had been by him hypotme-
Gated after the time allowed 1y la". me
amohnt thus hypothecateu is alleScu W h"'e
been s., lGj,U39. ,
crs which enter into someof the bonds IN sun
J consists of the second issue Of bonds FOR the
J rnyfnpnf nf interest on tlC OuDllC ucDl, ~
legged to be fraudulent.
:. portion of the vouchers represented IN
part in some of the bonds In suit are the
Land Commission bonds, all OI winch aie III
legged to be fraudulent.
: That n large number of the bonds which
were consolidated and which are In part rep
resented in some of the lands In SUIT, were
never registered in the treasury as Is re-
ouired in Sec, II, Art. IX of the Constitu'
ton. +.
8. That the Consolidation act In SO far as II
creates Il public debt is unconstitutional ana
void, because not passed by a two thirds vote
OF each branch of the General Assembly,, re-
corded by yeas and nays. 80,
10. That several of the acts unde which
ed (and which bonds were subsequently, CON
solidatedl were not passed by the requisite
two-thirds vote of the General Assembly, and
were therefore void
.Algreat deal of evidence, oral and documcnt
airy. was introduced to substitute the afore.
said facts alleged by the State In her de-
fence.
We propose first to consider the question Of
the validity OF the various bonds In suit upon
the hypothesis that the allegations OF fact by
the State arc true in other words, MS II u de-
murrer to the swc had been filed by the
bondholders.
REVIEW OF FINANCIAL LEG1sLNTIoS
To arrive at n correct conclusion upon the
Issues we will be greatly aided by a brief
statement OF the financial legislation OF the
ct.t. fr,,, tho fn tfGrafin on nf tho nrpSpnf(O m.
StitutiOn until the present period.
When the first Legislature under the new
Constitution assembled they found an empty
treasury, and a State debt exceeding In tho
aggregate seven millions Of dollars, including
the obligations known as the Bills Receivable
and the liability Of the State for the outstand'
ing bills OF the Bank Of the State, AND ex
Guiding the debt contracted In aid or the re;
bellion, SO called, which had been declared
void.
All rejecting men foresaw that under the
administration OF ignorance and cupidit!
there would be mismanagement Of the finan
ccs Of the State, and the speedy result was
the Inauguration of a system OF reckless eX
travagance and protilgacy on the part OF tho
state officials and Legislature, which soor
rendered bankrupt the treasury OF the SEtt(
and destroyed her credit.
In the following order were enacted those
acts which rapidly Increased the volume o
the public debt;
EPITOME OF THE ACTS.
2. On the 18th August. 1878, IAN Act to au
thoriZe n loan TO redeem the obligations
known as the Bills Receivable OF the State o
South Carolina"
This act authorized the Governor to Dor
row upon Coupon bonds OF the State, within
twelve months from the passage of the act
so much be necessary. The outstanding Bits
Receivable amounted TO about S3eo,00. XIV
Stat, II.
loan to pay the interest on the public debt
by this act the Governor was authorized "a
borrow upon Coupon bonds Of the state. with
in twelve months from the passage of the act,
the sum of one million dollars, II so much be
deemed necessary. XIX Stat. Is.
The number Of bonds to be issued under
these acts Is not limited the sum Of money to
he raised IS limited. Whatever number OF
bonds may be necessary to raise the REQUISITE
TO sign and issue. Under the trst named ACT
S5U0,O 600 of bonds were issued. Under the last
named yet 81, 100000 of bonds were first issued,
and upon the face OF each was the recital that
loan to pay the interest on the public debt"
This gave the bonds Il bad odOr In tine mar
ket, whcreupon q second million OF dollars OF
bonds were issued for the purpose OF retiring
the first, OF the face OF each OF which was
the less prcjudicial recital that 1t was Issued
under Actof August 2G, 1867 by this sec
ond issue S5O,0N of the first were retired,
and at q later period nearly. $4,000 more
were called in, leaving less than $4,000 OF
the first issue outstanding, and all Of the sec
ond.
5, September Is, 1865. A act to close the
operations of the Ban of the State Of South
Carolina" BY this act the bills of the bank
outstanding and issued prior TO December
~, 1860, were authorized to be funded by Is
suing in lieu thereof bonds Of the State.
Under its operation about Sl,9O,0W of bills
were fundedi in bonds to that amount. XIV
Stat, y.
i. February II, 1859, "An net to authorize a
loan for the relief OF the treasury"
by this act the Governor Is authorized to
borrow, within twelve months from It's pas
sage, upon Coupon bonds of the State, 81 .O0D,-
WW, If SO much be deemed necessary ; and the
limit of time mentioned In the acts Of Au-
. gust ~. 1858, aforesaid, Is extended TO twenty
four (2i) months, instead Of twelve months.
XIV Stat, Isl.
No limit TO the number of bonds to be is
sued under this act Is given. Enough bonds
are to be sold or pledged to enable tho Cover
nor to borrow $l,COO,WV, If 50 much be deem.
ell necessary.
5. March y, 1869, IAN act to provide for the
conversion of State securities"
The purpose Of this act was TO retire all the
outstanding stocks and bonds of the State by
issuing in lieu thereof Conversion bonds, and
thus to produce uniformity in the bonds, and
stocks of the State by having but a single
class. XIV Stat, 24l.
over $6,000,GNU of these bonds were issued,
but few, however, in accordance with the
terms of the act, the greater portion to wit
So, 965, 900, being issued in fraud of the net.
&. March %, 1867, AN act TO authorize the fl