Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1891-04-02
MA. ROYAL ReJolNs.
He Defends the Council of Foreign Bond
holders from "A yirginisn's" Attacks.
RICHMOND, March 80, 1891.

hitaMONDf AHoASN wv 1890
| To ne Editor of the DsDdtch:
A writer in yesterdays DISPATCH. sign
ing himself "Yirginien." takes up and at
tempts 10 reinforce the recent attack that
has been made on the Council of Foreign
Bondholders. He says:
II has been Indignantly denied that the Council
socks ~ mako money, but facts speak iouler
than words
A gentleman IN Richmond has the two con-
tracts under which the Council tried and failed
10 hive tho bonds. The first contract, dated De
cember, 1886, provided THAT depositors should
pay 10 the Council contribution Of $40 on each
81 100000 deposited In addition 70 previous
assessment Of Ike amount"
The second contract dated March, 1888, pro-
yided in substance that tho Council should re-
tain whatever 1t realized by seilng coupon
above lfty cents on the dollar. This scheme 20
soil coupons 10 Taxpayers was exceedingly
plausible, and would have been very lucrative
our people had consented TO tender coupons as
freely as they did ten years ago
THE SCHEME
The Council was to pay the bondholders nifty
cents and 10 sell the coupons Tor eighty
cents II our people had used Sl,0OO,OOO OF
coupons, ms they did In 1887 ana 1879, the COun-
Gil would have received 100000 year Win,
out any investment or risk And this would
have been In addition 20 the two assessments OF
$50 on the 81, 900 deposited.
The total amount deposited under both Of the
contracts above referred 70 was less than
| "a, 600, 900, and such small deposit indicates
| that the bondholders do not place much faith In
| the Council
This language is very vague. but 1t plain
| ly intends to charge that gentleman IN
| this city has in his possession copies OF
two contracts that have been made by the
Council which prove that 1t sought by
those contracts TO make money for Itself
out of the Virginia bondholders. l soy he
can produce no contracts that will prove
any such thing. / will tell you in detail
what ne refers to.
When il was determined to make Sc
rious contest with the state OF virginia
over her attempt to repudlate her coupons
the Council advised oil bondholders 10 de-
post with il $40 for each 81 900 bond as
fund with which to bear the expense OF
the contest. No sufficient sum coming IN
from this call the Council advised bond
holders to contribute $40 more for each
81 900 bond. The money produced from
these calls was to pay my salary and the
other expenses OF the contest. Bond
holders could pay OF not as they chose, and
no "hiying" or pooling Of the bonds was
contemplated. Not a cent of what was
thus raised could by any possibility go
into the pockets of member of the Coun-
Gil of Foreign Bondholders. Every dollar
of it that has been spent has been spent in
the legitimate outlays OF the contest.
2. The contract of MARCH. 1888, TO which
"Yirginian" refers, is this: After the
State passed her act Of Nav IL, 1887, direct
ing suits to be brought in her own courts
against all who rendered coupons and stood
on their tender, il became very PLAIN TO
mo that she would materially interrupt my
plans while ! was getting the Supreme
Court of the United States 70 break that
act up. / did not want this hiatus TO
occur. In order TO proceed under
the act for verifying coupons, the
only thing open to me, IL was necessary
| should have the bonds here. / therefore
advised the Council to call on the bond
holders to deposit their bonds with u for
use in the courts here as evidence. 1t did
"a l recommended. On going, over the
whole subject 1t was determined that fifty
cents on the dollar of the coupons was as
much as the Council would be safe in pro-
missing to pay the person depositing
bonds-that is, that the other fifty cents
would be consumed in the expenses
of collecting the coupon. 1t is easy
to see how this expectation was
justified. 1t was necessary TO make
it to the interest of the taxpayer to
use coupons. A large rebate on his bill
had, therefore, to be paid him. This ave
ragged about so per cent. of the tax-bill.
The bonds had to be listed and numbered
in London. which required the employ
ment of O large clerical force there. The ex-
pense Of their transportation from London
TO Baltimore and insurance on transmission
had to be paid. They were to be deposit.
ed with the Mercantile Trust Company, of
Baltimore, which bad to be paid for keep
ing the bonds aud doing the clerical work
necessary on my sending for them and re-
turning them and finally the bondholders
would not deposit their bonds unless
| il was agreed that whenever called on tho
trust company 10 send me bonds for use in
court the bonds were to be insured from
Al. 4 La
they were received back. Now, how,
after pay ing all these charges and lawyers
and clerks fees and commission TO their
agent, Mr.. Cooper, they could safely I'M
dertake 10 pay more than nifty cents on
the dollar to the bondholder do not per-
ceive. Not dollar of what was recovered
in excess of the fifty cents in the dollar
paid TO the bondholder could by any posi-:
bIlity go into the pocket OF member OF
the Council Of Foreign Bondholders. And
when the magnitude OF tie contest IS con-
sidered l believe al fair-minded men
will say that the Council has been
most moderate in its demands upon
the bondholders for funds with which
to conduct the fight. He tests at
scars who never felt a wound" Gentle
men who have never been in one may
think death struggle with great State a
mere trife. But we who have been in bat
tie with one know that it is o most
manly sportp which demands the "sinews
of war" and plenty of them. And now
that am on this topic IL is as we'll for me
TO say that the Council is so far from seek
ing to make money out OF the Virginia
bondholders, that in one emergency IT ap-
propriated $40, 600 out of its general funds
for the cost of this confectionery which
did not come from the holders of Virginia
bonds, but which had been contributed
from other public debts.
8. The Council has advised the Virgin Ia
bondholders TO pool their bonds with the
Cleveland lcott Committee, and has thus
secured the pooling of almost ell the debt.
The only other effort made by it TO secure
a pooling of them 10 what have described
above in paragraph. When sum amount
ing to little over 81, 000, 900 had been de-
posted under that plan found out could
use no more as evidence. 1t therefore pub
hshed O notice that it could receive no
more. OF soon ell would have been de-
posted with it.
4. repeat my offer. II the Governor,
the Attorney General and the Second
Auditor will act as O committee 70 decide
and 'Virginian" will, over his own name,
deny any statement / have made, will
prove what say before the committee or
confess myself to be quack.
8. shall receive no credit for what
am about to say. but it is nevertheless
true. am averse TO appearing SO much
before the public, but will not allow in
jurions statements to be made about my
friends without at least stating the facts as
understand them to exist. even II have
/ l.. -.