Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-06-09
VAR GLA|NS
State Soon to Get United States
Warrant FOR Nearly a Half
Million Dollars.
Allowance Made as Interest
Paid on Bonds Issued During
the Civil War.
Something About the History
OF Iowa and Other States
Claims.
to Times-Republican.

days the treasury of Iowa will be aug
mented by the deposit of United
States warrant for nearly half mil
/ lion of dollars. There is an interesting
story in connection with this prospec-
tive wind-fall.
The state of Iowa filed with the
auditor for the war department, fol
adjudication and allowance. a claim OF
S456,433.29 for interest paid upon its
civil war bonds issued TO pay the eX-
penses of equippng soldiers for thai
struggle A few weeks ago the auditor
certified to congress for an appropri-
S456,417.S9. Accompanying this GER
tificate was the following explanatory
note.
.sThis allowance is based upon the
decision of the comptroller of the
treasury dated April IA, 1902. If this
claim had been settled in accordance
with the principles announced by the
court of claims, and followed by the
auditor for the war department, in the
settlement of the claims of the states
of Maine, Pennsylvania, New Hamp
shire and Rhode Island, already al
lowed and paid under the findings OF
that court, there would be due the
state of Iowa from the United States,
on this claim s229,699.62 instead of the
amount certified"
From this it will be observed that
by this late ruling of the comptroller
of the treasury Iowa has benefited
S226,72L27.
1t may not be uninteresting to the
people of Iowa to have a brief history
of these state claims against the United
States, and of the evolution of judicial
opinion by which Iowa received tho
whole of her claim instead of about
fifty per cent as did some of the states,
notably New York and Pennsylvania
BY the law of April 81. 1861 congress
provided that the United States would
refund to the several states all sums
by them properly incurred in equip
ing soldiers for the SUPPRESSION of re-
bellon. The terms used We're costs,
charges and expenses" Tie loyal
states had promptly responded to the
call for troops but in many cases to
meet the emergencies they had to bor-
row money on bonds running for a
series of years. The general rule Is
that, in the absence of special statute,
the government is not bound to pay
interest for money advanced to it. But
a various times in the succeeding years
the following states, Connecticut, New
York, Rhode Island. Illinois, Indiana.
Kentucky, Ohio, Michigan and Oregon
filed with the proper accounting Off
GERS of the treasury their claims for
interest upon the bonds by them is
sued. The claims aggregated s3.291,-
701.76. With the exceptions of the
claims of New York and Indiana the
auditor disallowed the claims upon the
grounds that interest was not costs.
charges or expenses" in equipping
troops, but simply a method of obtain
ing the money in the first place by
which to equip troops.
The cases of New York and Indiana
hung fire until many years later when
in proper manner New York got its
case referred to the court of claims
That court allowed a portion of the
claim for the interest where New
York borrowed money in the open
market on it's bonds, but disallowed
the claim for the interest upon the
money borrowed by the state from it's
own canal sinking fund. Both parties
appealed to the supreme court of the
United States where, in 1896, it waa
held that in view of the objects and
purposes OF the loan, the preservation
of this union, most liberal construc-
ton ought to be given to the inten-
ton of the statute, and it was de-
cided that the total interest was in
fact. from the point of view of thu
United States, a charge or expense up
on the part of the states in equipping
Judgment was given for
the whole of New York's claim.
After this decision the other states
proceeded to ask for rehearing in their
cases. This was finally allowed How
ever. one of the first questions which
now presented itself, was what is the
rule of computing interest In these
cases?"
To cover all the questions raised, one
Of the claims was referred to the court
Of claims for It's advisory opinion. That
court held that the proper rule of COM
putting interest was to allow interest
untll a payment by the United upon the
then deducting that payment
from the principal of the bonds, take
The remainder as a new principal from
which to compute interest until the
next payment. In fact the result Of this
holding was that, if state had issued
us bonds for term of ten years, and
the year following their issue the Unit
ed States paid the whole principal. the
state would only receive interest for
one year While having to pay interest
Cor years more. Upon this advisory rule
Of the court of claims the auditor for
he war department acted and certified
he claims of Maine, Pennsylvania, New
and Rhode Island to Con- |
sress and on February IA, 1902, that
Body appropriated sI054.652, in full of
.hese claims. This is probably half of
heir total claim.
Indiana was not satisfied with that !
,ule and appealed it's case from the
decision of the auditor to the comptrol |
er of the treasury. He is an Indiana |
gentleman, and naturally took pride in
arriving at just decision in the case.
\ rule adopted by the court of claims
lot being binding upon him, was sub
ect to review as to it's reason. Mr.
Tracewell soon found that it was mar
'ow, Illogical inequitable and unpatri-
,tic
The supreme court had held in the
New York case that the state was the
tgent of the government, and he holds,