The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-08-12
DEFAULTING STATES.
How the Bondholders Will Try and
Compel a State to Pay Its Debts.
An Act of New Hampshire's Last Leg
islature-The State to Assume
the Claim Of Its Citizens
Against Other States.
concord IN. e.. Monitor. August A.

concord IN H. Monitor August Al
Among the acts of the last Legislature is
one entitled, can act to protect citizens Of this
State having claims against other States.
The bill Involves some very important legal
principles, and is likely to be the means q
creating no little sensation. 1t is well known
that number of the States do not pay Chelf
bonded debts. The aggregate OF tnelr uis,
honored paper, including overdue ana unp ano
interest, is now said to!amonnt 70 s1oo.ouu,uout.
Some of them make no attempt TO pfotect
their credit, treating the holders OF their
promises 10 pay as II they had no rights tfat
they, as debtors, We're bound 70 respect.
Others plead poverty ana olieL 20 cohIpronilise
for such a percentage OF their outstanding
obligations as they have concluded IT will be
convenient for them to take care OF. L. both
cases lamentable lack OF moran ana Dasl-
ness integrity Is manifest
Much Of the ind Inference to their obligations
shown by defaultiIIg and repudiatlng COM
monwealths is, undoubtedly, due to the com
monty entertained belief that they are above
the law. An individual who refuses to pay
his debts can be brought into court and COM
PEELED to respond according to his means.
But so-called sovereign State, 1t Is popu
larly supposed, cannot be sued. 1t ts true
that State is not suable by citizen, no mat
ter how great or Just the claim he may have
against 1t, although the same citizen may be
sued by the same State II the liability ~ re-
yersed. This unreasonable distinction did
not always exist. Under the constitution as
il was first framed States We're liable to be
proceeded against Ia the Federal courts
equally with individuals. But the number OF
claims growing out OF the Revolutionary war
that were pressed against the States fright
and the public to that extent that, in 1904 the
eleventh amendment was adopted, which pro-
yides that The judicial power of the United
States shall not be construed to extend to any
suit in law Or equity. commenced or prose-
cuted against one OF the United States by cit
liens Of another State. or by citizens or SUBJ
jects of a foreign State"
The amendment was intended solely to cut
off war claims, the most OF which were I'M
reasonable, and no one at the time Of it's adop-
ton dreamed that States would ever SO far
lower themselves as to avail themselves Of it
for the purpose Of cheating their creditors.
But since States have shown that they are
capable Of that dishonor, some Of our best
lawyers have been examining the question
whether they are not amenable to legal pro-
cess, the eleventh amendment to the contrary
Notwithstanding. An affirmative conclusion
has been reached.
States. although not suable by citizens, are
subject to be sued in the United States Su-
preme Court by other States. Such being the
case. what is there to prevent States from &C
ceptlng an assignment In trust OF claims
against other States belonging to their own
citizens, whose interests they are under obi
CATION to protect against outside or foreign
com munities, and proceeditg upon them, &C.
c0rding to law, to judgment and collection?
Acting upon that hypothesis, some OF the citi-
zens Of New York, holding the repudiated
bonds of other States had a bill prepared with
that view, and submitted to their own Legis-
lature. The New York Legislature passed the
bill almost unanimously, bus the Governor OF
that State, either because of his being AL ui-
ira State rights Democrat, or as an intimate
political friend OF Mr.. Samuel J. Tilden, sup
posing 1t would not answer for his name to
appear attached to bill authorizing
more than half of the Democratic States of
the Union to be sued, retained it in his hands
until the Legislature had adjourned, and then
vetoed and killed It. Relief in that quarter
being shut off, the movers in the matter
looked about to see if action to the same end
could not be had elsewhere. The Legislature
OF New Hampshire was In session, and N ew
Hampshire was known to be a State having
no sympathy with reputation, and with a
Legislature and Executive without fear or
favor for regulators. The consequence was
that John F. Hume, formerly editor of the
Globe Democrat OF st. Louis, and now a resi-
dent of New York, appeared in this city as the
representative Of certain State creditors, for
the purpose Of comforting with citizens Of this
State similarly Interested. and also with the
leading members OF our Legislature So sat
isfactory was the result that bill, almost
Identical with the one that had failed In New
York, was introduced under the title above
giyen-the rule forbidding the introduction of
suspended for the purpose-and 1t Is now a
law.
The bill provides that any citizen of this
State, holding a dishonored claim against
another State, may assign the same to New
Hampshire, and upon giving security to
cover all the costs of the proceeding, the
attorney general Of the State, being satisfied
that the demand Is a meritorious one, shall
Institute an action upon it In the Supreme
Court OF the United States In the name Of the |
State of New Hampshire, the proceeds of the
Judgment, when collected. to be made over to
the bondholder. Such an action, and posi- |
bly, several such actions, may soon be looked |
for. Attorney General Tappan is not a man
to shrink from responsibility. Moreover, it
is understood that the eminent New York law
firm Of Arthur, Phelps knevaIs Il Ransom
OF which Gen. Chester a. Arthur and Ben
lamin X. Phelps, district attorney for
New York, are members, representing many |
Of the largest holders Of defaulted State Sc
curities, are prepared to give their active co
New Hampshire will soon enjoy the distnc-
ton OF opening and leading campaign
against that spirit Of Republication which has
become so shamefnly conspicuous in portions
of our country rs to bring dshonor upon our
whole people Of course, III New Hampshire |
succeeds In enforcing the rights OF her cti- |
ZeDS against repudlating commOnwealths-
and Of that there seems to be- certainly a |
fair outlOok-the citizens Of other States, with |
the same interests, will not be slow to compel |
their legislatures and officers to begin similar |
The movement is therefore |
really national, and has an interest for the |
Whale country.