Evening star. [volume] (Washington, D.C.) 1854-1972, 1901-07-17
SOUTHERN STATE BONDS.
Trust Company Seeks to Collect
Regulated Securities.


The New York Times today says:
| The North American Trust Company has
decided to make effort to collect or
| compromise the bonds issued by the south
arn states during the reconstruction period
| following the civil war, and since repu-
dated in whole or In part by those states.
| An official Of the company admitted yes
| terday that circular inviting cooperation
| in this venture had been sent out to per-
sons known to hold some of these lepudi-
ated 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 We're held by persons ident-
| fled with the trust company. He also
| stated that there were no southern inter
| eSts 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 Is
! sued by the southern states during the le-
| cent 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 ard annoy
| ance to the holders of the same. We be-
lieve that individual efforts will always
| prove futile, and at the solicitation of
| large holdings of these bonds we have con-
| sented to make the effort to collect or COM
| promise same, with the full belief that in
| united way satisfactory results may be
| had. AS soon as sufficient bonds have been
! deposited to justify such action, PROPOSE
tons 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, q copy of
| which Is inclosed, which shall not involve
| you in any extent, annoyance or liability.
| We believe in this united way there is
| reasonable chance TO make valuable what
| IT,, oI> 1l,,fa ,iSa
| our best efforts in your interests in this
| direction.
| The trust company in its blank contract
| with such southern hondholders as choose
| to accept it's offer, states that the compen-
sation to the trust company shall be 80 per
| cent Of any amount recovered or the
| privilege to retain 80 per cent of the bonds
| In the event of their proving to be Of value.
| curious coincidence is shown by
comment by the Pail Mall Gazette in Lon
| don about four weeks ago upon an effort on
the part Of Fairbairn & Wingheld. firm
| Of English chartered accountants at 81
| Cannon street, London, to obtain authority
| to act for holders Of consols Of the south
ern states with view to coll'ection of
| some amount for the holders of the consols
| of the reconstruction period.
| Alabama. which added greatly to its
state debt between 1855 and 1870 by grant
ing aid to railroads through guaranteeing
| mile of complet I'd road by a law enacted
! in the 1S94-5 session Of the legislature,
| barred the collection Of old state bonds not
| presented for exchange before July l, 1896.
| OF these bonds there were outstanding in
| September, 1885, about S1S5, 400.
| In Arkansas, during the recontruction
| period of 1868 to 1870 state bonds to the
| amount of So $50. 600 were issued in aid of
| railroad construction and loan of 81 $780,
773 was made for the building Of the levees.
| The state supreme court declared these
! bonds invalid.
In Georgia after the civil war. reckless
| policy Of state aid to corporations was be-
| gun, and an immense debt was incurred,
| but by constitutional amendment in May,
| 1877, some Of the bonds were declared in
| valid, and the debt reduced by about two
| thirds, to SIC, ga. 500.
| OF the total outsta ndirg debt of I1ouisi-
| ana, which amounted to &4o47 SD after
| the refunding of $40, $50, l22 on January 1,
| 1879, only 1912 $40 was declared fLYidable
| by a constitutional convention.
| In North Carolina 81, $4,000 Of special
| tax bonds were issued in 1859, and the
| same legislature later prohibited the pay
| ment Of interest thereon. In May. 1879.
| with q debt Of $25, 531, 53S, the legislature
| directed payment of forty cents on tho dol
| lar for bonds issued before 1851, twenty
| five cents on the dollar for bonds Of 1885
| to 1867, and fifteen cents on those Of 1890
and 1868.
Tennessee. in 1882. funded all Of its old
bonds with accrued interest. at 90 per cent
| Of the face value.