The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1901-08-03
HOLDERS OF SOUTHERN STATES
BONDS TO TRY.
Collection Agency Offers to Collect
Millions Repudiated by States in
Reconstruction Period

The North American Trust Company
has decided to make an effort to collec
or compromise the bonds issued by tn,
southern states curing the reconstruc-
! ton period following the civil war, anC
since repudated in whole or in part by
! those states.
An official of the company admitted
lately that a circular inviting CO.
operation in this venture had been sent
out to persons known to hold some OF
these repudiated bonds. He denied
| however, that the company itself held
| any of these bonds, but said that he did
! not know whether any of the bonds
were held by persons identified with
the trust company. He also stated that
! there were no southern interests in the
! company.
/ The circular, which is admittedly sent
out in response to large holdings of the
! bonds follows:
A very large amount of bonds were
| issued 10y the southern states during
| the recent reconstruction period, of
which many have been repudiated and
which today have no market value. At
intervals for years individual efforts to
collect these bonds have resulted only
in expense and annoyance to the holders
of the same. We believe that indiVi-
dual efforts will always prove futile,
and at the solicitation of large holdings
of these bonds we have consented to
make the effort to collect or compromise
same. with the fun belief that in a
united way satisfactory results may be
had. AS soon as sufficient bonds have
been deposited to justify such action,
propositions to settle on an equitable
basis will be made, to be followed by
other steps, if necessary, which, under
the advice of our attorneys, promise
good results.
We will take pleasure in acting for
you under the terms of the contract, a
copy of which is inclosed, which shall
not involve you in any extent, annoy
anCe of liability. We believe in this
united way there is a reasonable chance
to make valuable what is now absolute
ly worthless. We promise our best eff
forts in your interests in this direction.
The trust company, in its blank con-
tract with such southern bondhOlders as
choose to accept its offer, states that
the compensation to the trust COM
pany shall be 50 per cent of any amount
recovered or the privilege to retain so
per cent of the bonds in the event of
their proving to be of value.
A curious coincidence is shown by
comment by the Pail Mall Gazette in
London about four weeks ago upon an
effort on the part of Fairbairn & Wing
field, a firm of English chartered ac-
countants at GA Cannon street, London,
to obtain authority to act for holders of
consols of the southern states with a
view to a collection of some amount for
the holders of the consols of the recon-
structiOn period.
Alabama, which added greatly to it's
state debt between 1865 and 1870 by
granting aid to railroads through qua
anteeing their bonds to the amount of
81 900 per mile of completed road, by a
law enacted in the 1S94-5 session of the
To- riSl a M no of
state bonds not presented for exchange
before July l. 1896. OF these bonds there
were outstanding in September, 1896,
about $1S5, 400.
In Arkansas, during the reconstruct
ton period of 1896 to 1870, state bonds
to the amount of $5,350,00O were issued
in aid of railroad construction, and
loan of $1,9S6,77 was made for the
building of the leVeeS. the state supreme
court declared these bonds invalid.
In Georgia, after the civil war, reck-
less policy of state aid to corporations
was begun. and an immense debt was
incurred, but by constitutional amend
ment in May, 1877, some of the bonds
were declared invalid. and the debt re-
duced by about two-thirds, to $10,644
500.
OF the total outstanding debt of Loui-
siana, which amounted to 4,547 500 af-
ter the refunding of SIS, 55O,122 on Jan
uary l, 1870, only 1872, 500 was declared
fundable by a constitutional conven-
ton.
In North Carolina 81, 100000 of spe-
cial tax bonds We're issued in 1869, and
the same legislature later prohibited the
payment of interest thereon. In May,
1879, with a debt of $685. 531, 53S, the le-
gislature directed payment of forty
cents on the dollar for bonds issued
before 1861, twenty-five cents on the
dollar for bonds of 1865 to 1867 and fif-
teen cents on those of 1866 and 1868
Tennessee, in 1882, funded all of it's old
bonds with accrued interest, at 60 per
cent of the face Value.-New York