The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1901-11-27

The article by Judge Avery in Sunday
mornings paper, giving history of the
bonds upon which South Dakota is the
decoy duck that is bringing the suit,
throws more light upon the issuing of
the bonds and the compromise in 1879
than anything that has appeared. In adj
dition to giving a history of the bonds
judge Avery gives an insight into the
causes that actuated the Legislature of
only at twenty live cents in the dollar.
Upon that matter he says:
The bonds issued in 1867 to aid in the
construction Of the Western North Caro-
lima Railroad were delivered to the pres
ident of the company, upon the certifi-
cate that amounts above fifty thousand
in stock had been subscribed by solvent
individuals, and upon his bid on behalf
of the company of the face value to be
paid to the State in certificates of stock.
This was an evasion of Section 81 Of the
charter, which required the State Treas
urer to advertise for sealed proposals
for each batch of bonds sold, and to ac
cept the highest offer, being not less
than par but a similar provision in the
charter of the North Carolina Railroad
Company had previously been construed
and acted on in the same way. The
bonds were sold by the president in 1867,
as / recollect the facts, at probably
thirty cents on the dollar. Many of the
estimates on the work of construction
done by the subscribers for the one
third payment of the stock, in the ca
paefty of contractors, were SO large that
tWo-th of the estimate covered the
cost Of grading and cross-ties. The re-
suit was, that in many instances the
money realized from the sale of the
Stxte bonds built sections of the road J.
yielded a money profit to contractor,
who subscribed to the capital stock, and
inNaddition, gave him stock, the face
value of which was one third of the es-f
tiTnatcd cost Of the grading and cross
ties. Nominally subscriber for only
TWO thirds Of the stock, the State often
paid out OF the proceeds OF bonds sold
alta heavy.diseount for the stock of the
individual subscriber as we'll as for it's
own shares. When the act of 1879 was
passed the stock of the company was
not worth three dollars on the hundred
when Sold privately and nothing in the
stock markets The bonds issued in 1867
and upon some of which South Dakota
brings suit were secured by a statutory
lien upon the stock of the State in the
Western North Carolina Railroad Com
pany, as we'll as by statutory second
lien on an equivalent amount of the
States stock in the North Carolina
Railroad Company (See Charter Chap
ter 22S, Sec. 49, Laws of 1854 '55) But in
1879 the stock in the latter company was
not WORTH more than thirty cents on the
dollar, while that in the former COM
manded only the nominal price already,
mentioned. The State was justified NOR
ally in offering in bonds, as it did, more
than it received in stock than Tin 1879
worthless. My recollection is, that the
Swazey suit, in which the holders of the
construction bonds for the payment of
which the stock Of the State in the
North Carolina Railroad was pledged,
had sequestered the dividends, or the
State stock, and We're seeking to sub
ject the stock itself, was still pendil(g.
The litigation was compromised after
wards. The stock of the State is now
pledged for the payment of the new con-
struction bonds, but sufficient sinking
fund is being set aside to pay these
bonds at maturity.
THE present holders of the bonds in
question doubtless bought them for less
than twenty-five cents in the dollar. OF
the seventeen hundred thousand issued
all but thirty thousand have been sur
rendered for new bonds at the rate of
twenty five cents in the dollar of the
face value Of their old bond
The Morning Boast, the Caucasian and
to pay one hundred cents on the dollar,
when it realized only twenty-five cents
or less, are invited to give careful read
ing to the statements made by Judge
Avery. The men who settled the State
debt were not only among the honestest
men North Carolina has known but
and painstaking investigation to every
sort of bond issued by the State and
their adjustment was fair and honest,
winning for North Carolina the respect
and plaudits of the financial world. The
attempt at this late day, in the interest
of few schemers, to cast aspersions
upon the fairness and honesty of the
men who settled the debt in 1879
amounts to putting stain upon the
fair name Of North Carolina
The State has settled with all it's cred
itors who wanted only what was fair
and just. Nobody complains, except the
few who wish the pound Of flesh nearest
teh heart and those who have some pri-
vate scheme to get rich by attacking the
States fair name.
The Southern Tobacco Journal has
long been one of the best and most re-
liable trade papers in the United
States. Under the ownership of these
capable men-H. W. Kronheimer and
Garland e. Webb-we confidently look
IN coo If on forurarS IN ox,orv xx-oxy