Omaha daily bee., 1886-09-14
Condemning Repudiation.

bNcTN sl0Ic InaJ mas rcpUu!ateu ltS
honest obligations, in whatever way or
under whatever circumstances or pre-
texts, has sooner or later paid the pen
atty of its dishonest policy. Georgia is
the latest example. During the admins
tration of Governor Bullock, Georgia,
under her state seal, issued large guam
tity of negotiable obligations, among
which were an issue of 1,S00 Georgia
state per cent. gold bonds and another
issue of Georgia gold quarterly bonds for
81 900 each. These bonds were sold to
innocent parties by the state authorities,
most of them having been disposed of to
savings banks and others in New York
and vicinity. Before purchasing the Off
cials of these banks secured the opinion
of eminent lawyers that the bonds were
legally issued and were valid obligations
of the state
But after having used the proceeds for
the benefit of the state, the Georgia leg
islature passed an act rcpudiating the
whole issue of bonds, and there has been no
attempt since to right this injustice. Fur
thermore Georgia has always refused to
submit to her own courts the question of
her liability upon the repudiated bonds,
and has never done anything to punish
anybody for issuing selling or receiving
the proceeds of such bonds, except in
the case of Governor Bullock who was
tried on the charge of irrcgularlty and
misappropriating the proceeds of II part
of them and acquitted. The attorney gen
eral of New York and the superintendent
of the banking department of that state,
after an investigation ut the instance of
the savings banks holding these securi.
ties, rendered an opinion that Georgia
was guilty of bad faith in the matter,
and the savings banks of New York were
prohibited from further Investments in
any bonds whatever issued by Georgia.
Some time ago a member of the New
York stock exchange asked that a new
issue of Georgia bonds be put upon the
regular list OF the exchange 10 be dealt
in. A few days ago the governors of the
exchange met to pass upon the applica-
ton, against which protest had been
made, when the above facts were pre-.
scntcd in support of the protest. The
effect was to promptly defeat the appll-
cation by Il unanimous vote, with the
tntt IL IS llit ODlllOll VI lIlS
committee that no bonds of the state of
Georgia should be admitted to dealings
on the New York stock exchange so long
rs that state continues to repudiate its
former issues of bonds" Thus the state of
Grorgia after persisting for several years
in course of dishonesty, has her bonds
discrcdited in the leading stock exchange
of the country and an imputation cast
upon her credit which she will not speed
lily recover from, and which will uiti-
mately cost her much more than would
have been her outlay in keeping faith
with her creditors. If she succeed in
negotiating her new bonds mt all it must
be at II great sacrifice, but the chances
are against her being able to market
them at any rate that would be accepted
No one will care to buy securities that
are not negotiable in the money markets,
that cannot be made available as collat-
eral, except ut figures ruinous to the
issuer, and for these purposes the action
OF the New York stock exchange practic-
ally destroys the value of the bonds OF
Georgia, save, perhaps, among her own
people. 1t cannot be fairly questioned
that the action of the exchange was
proper and just, both rs a warning and
an example, and whether or not the effect
shall be to induce Georgia to take steps
to obliterate the stain upon her integrity
and restore her credit-and it ought to
convince her people of the wisdom and
eXpediency of doing this-it will Ger.
taInly have wholesome influence in re-
stMining reputation tendencies else
where.