Savannah morning news. [volume] (Savannah) 1868-1887, 1883-08-21
A Scheme of German Bondholders.

L Scheme OF German DonuhoAutfS-
1t seems that an effort is to be made to
test the liability Of the Federal Govern
ment TO pay certain bonds, issued or
guaranteed BY this state at the time when
the carpet-bag government had control
and the people had no voice in affairs 81
the state. The Missouri Republican treats
the matter as follows:
When the people Of Georgia came INTO
possession Of their state Government sew
ersI wears ago. the Legislature appointed
a committee 10 investigate the stare qeot
and report how Il was contracted ms
committee reported that all the debt was
valid. lawfully contracted ana olholns,
except about 5000. 900 bonds issued under
-ha caruet-bagger regime, without the
Zrer-anr Of suT sufficient law and without
the approval Of the people. large por-
tiou u the bonds having been
given away for insufficient consldera-
zion or divided among favOTites.
Il was recommended that these
bonds be disavOwed. as they were rot
legal Obligation on the people. and they
were not bound. either in law or morals.
u paw them. The legislature acted on
this advice. disOwned the bonds. and ever
since mas refused 70 pay the interest on
them. There was great outcEy al the
North against this act Of reputation. as
il was called. and il was predicted that
Georgia credit would be irreparaDly IN
iured. But this prediction was mol iuIhileu.
Georgia credit has steadily improved since
the disav0wal. and the state can borrow
money on very easy terms. Now we hear
that a new scheme Is proposed 70 secure
ravment Of the discredited bonds. some
ri them are held By Germans, and the
German Minister at Washington is
~ ask the United states supreme Court
70 decide whether the Federal Gov
eminent itself j. not bound for the
debt on these grounds: that when the debt
was contracted there was no lawful
government OF the people in the state: the
lnlv government in Georgia was a SEMI
military one imposed by the Federal
power. il was this semi-military govern
ment set up 10y the Federal authorities
that issued the bonds: the people OF the
state had nothing 70 DO with the transac-
ton. for they were debarred from the right
f Of Self-z0vernment hy the military. acting
under orders from " ashingtOn- The Fed
F eral Government. therefore. Is the only
{ power responsible for the debt contracted
under its supervision and by its crea-
lures. ana that government ought 70 pay
the debt.
/ -.Tbe case A. presented Is a strong one in
an international point Of view. Ii II were
. lu F-vpt. or some other feeble state. the
claim would be enforced 10y navy and
. embargo: hut that sort OF thing would
+ not as ulfh powerful country like the
f United states. sGG ~ there Is no law au-
faariZing the Federal Government TO as
sGIae the debts contracted by carpet-bag-
{ -,aT STATE governments. the Georgia bond
holders have d slim prospect for their
money"
The bonds referred TO were either issued
or guaranteed for the beneit OF the
Bainbridge.5 Cuthbert and Columbus
Railway. the Brunswick and Albany
Railway. and the Gainesville and Van
Vert Railway. A committee Of the Leg
islature. after the people got control OF
: the state Government. made a thorough
examination Of the state debt. and re-
ported against that portion Of It which
was clearly invalid. The report was
+ au0ptel and ordinances were passed pro-
hibitins the pas iacnt Of the bonds in some
cases. and in ether cases declaring them
/ void. These ordinances We're afterwards
Incorporated in the constitution, and that
ended the matter so ia - Georgia was
/ concerned. The position taken ~ the
/ German holders Of these bonds is novel
( and interesting. Unjust be acknowledged,
however. that it Is not without strength.
The cdrpet-baz government, WHICH
issued the bonds. was practically the
Federal Government. 1t was the creature
not Of the people Of the state but Of red
erai power Responsibility for its acts
rests anywhere, therefore, it rests
not en- the state which repudiated
it. but on the Federal Govern
ment which made its existence posi-
bic. II the German Minister pur-
( sue the course indicated. the progress Of
the case Ia tao SUPREME Court at Wash
ington viii be watcnea 9Th consider
, able interest.