The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1889-04-09
WILL WAIT FOR A DECISION
If the Supreme Court Sustains the Loan
Act, the Bonds Can Be Readily Placed.
Suit to Be Brought at Once to Test the Law
1t Is Believed the Money Needed Can
Be Had Within a Few Weeks.

State Treasurer Lemcke returned from
New York yesterday at noon, after failing
TO place the State bonds unde the new
loan act. His trip, however, was not bar
rem of results, for he brought back with
him the papers that make the S370.O 900 for
interest secure. When he reached New
York he found that Mr. Landers, attorney
for the German Savings Bank, had ex-
amined the act authorizing the loan bf
100000, and had expressed doubts as to its
eonstitutionality. In the meantime the
bank also asked Mcdonald, Butler 81 Snow,
their attorneys here, for an additional
opinion. The bankers gladly accepted
the $4,000 of interest bonds, but
refused to accept the others until
they had heard from their Indianapolis at
torneys. The day after his arrival the
opinion of Mr.. Butler reached the bank,
and then there was a positive refusal to ac-
cept the bonds. In order 70 have an ex-
plicit understanding about the matter,
Treasurer Lemcke addressed Philip Bes-
singer. the president of the German Savings
> Bank, a letter, in which he wrote: The
temporary loan bonds of the State of In
diana, dated April 1, 1883, payable in ten
years, amounting in the aggregate to $780,
600, and which were awarded to you in the
city of Indianapolis on March % last, at a
premium of 1 62-1O0 cent on the 500, are
now here in the city of New York, at the
clearinghouse Of Messrs. Winslow,
Lanier g. Co., ready for delivery
to you, and in conformity with
the advertisement and bid you made,
which was accepted by the State of Indi-
ana now ask you to receive the said
bonds and make payment for anne as
agreed and contracted" To this Mr.. Bes-
singer replied by letter to Treasurer
Lemcke that 1.-The act of the General AS
sembly of your State authorizing the tenn
porary loan of April 1, 1889, for 100000,
dated April l. 1889. awarded to this institu-
ton, being held by counsel of questionable
constitutiOnality, we are debarred from re-
ceiving the bonds for the same"
The bank" said Mr.. Lemcke, regretted
very much that under the legalaspect of the
matter it was debarred from taking the
bonds. Its officers expressed themselves
as we'll pleased with their treatment by the
State in past financial transactions. and
they said hat in case the courts held the
act to be constitutional they would be glad
to receive the bonds at the price they bid.
Mr. Bessinger told me that the bank had
100000 idle money, for which no invest
ment could be found, and it was for that
reason the bid was made at the figures
given. He was not at all disturbed over
the bonds of 1885, of which the bank holds
over a half million dollars. Those bonds
were issued under an act identical with
banks officials were satisfied the act
would never be contested, and that when
the bonds became due the money would be
paid. because the honor of the people of
liz MOULD NO Aprnr N ole e.
be DONE"
did you make an effort to place the
bonds with any other bankp
During my stay in New York / made my
headquarters at the clearinghouse of
of the State. There L had calls from others
who had bid or had been willing to bid.
Among the first to send a representative
was Beake Brothers & Co. He said his
firm would have been glad to have taken
the bonds had it not been for the adverse
opinion concerning the act. This bank is
an excellent one, on Nassau street, and
stands high in financial circles, l also
had q call from Molten ~
the others they were anxious to have the
bonds if we could get a favorable decision
from the Supreme Court of Indiana. Mr..
Leach, of Farson, Leach 81 Co., called and
Auditor Carr was with me all the time, and
everything we did was done under the adj
vice of Winslow, Lanier g. Co."
you think that if a favorable decision
can be obtained in the courts there will be
no trouble IL placing the bonds?D
All the bidders, especially the Savings
Bank. as | have said, express themselves as
anxious to a the bonds. The neeotia-
tions will have to be approved by the State
Bank Inspector of New York, after the SUI
preme Court has held the law to be good.
However, / think there will b. no more
bitches in case the law is sustained"
will the loan of $4,000 you succeeded
in negotiating relieve the State anyl"
'It will not. That money is ali interest
money, and can be only applied toward
the payment Of the interest on the State
debt. A portion of it has already been
s PATTI 0q Mr. 10 L ,raS Way Stated n t inpthe nn fonv the
law was held to be constitutional the
State would. of course, be unable to negO-
tate the additional loan of $685. 900 on Dec.
L. The total amount involved is 81, 400. 900.
house yesterday afternoon he, Governor
Hovey and Attorney-general Kitchener held
a consultation. The Treasurer reported
the results of his trip, and the situation
was thoroughly canvassed. 1t was decided
that, under the circumstances, there was
but one thing ITO do; that was to test the
law in the courts. Owing to the emergency
existing for financial relief, the Supreme
Court will be asked, in case a suit is brought,
to hand down q decision as soon as possible.
The matter is left in the hands of the Gov
ernor and Encouragement.
At the conclusion of the consultation At
tOrney-general Michener said to a Journal
reporter: THE present purpose is TO get
some person to bring suit against the Gov
ernOr, Auditor and Treasurer of State to
enjoin them from making q loan under the
act in question. This can be done in the
Circuit Court, and taken from there to the
Supreme Court. where / think / can get q
decision next week. / am still confident
that the act is constitutional, and I think
the course l suggest is a sure and safe one
out of the difficulty" 1t is possible
not, as soon as the papers can be prepared.
At present the State officers are not con-
sidering what may be done in case there is
an adverse decision. All believe that the
law will be held valid. and that inside of "a
German Savings Bank.