The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1902-12-19


mortgage bonds are greatly priced by
their owners and command high prices
on the market. Their value, of course,
is based upon the fact that the collateral
or mortgaged stock is worth nearly
double the amount of the bonds, and the
further fact that while money on the
best securities commands only 3 per
cent, these bonds call for 6 per cent for
nineteen years. If the General Assembly
should take this matter into considera-
ton, 1t should also be subject of in
quiry as to whether, in the submission
! by the State to the courts, there would be
an element of bad faith toward the first
mortgage bondholders, who would per-
| haps contend that, as thesState, in 1880,
promised to pay them per cent until
| 1919, this promise should be performed
without regard to the claim Of the second
mortgage bondholders.
1t is to be observed that if the Legis-
| lature should decide to make available
| for the common schools and colleges and
charities this valuable asset Of the State
its thirty thousand shares of stock ir
| the North Carolina Railroad. or any part
Of it, there is no way to do it, except
| by discharging the liens upon it. be-
cause with these membranes outstand-
ing, purchasers could not be found who
would pay for a share of this stock the
same price as that which they would
Yay for share of private stock.
1t will be observed that Governor Rus
sell is very guarded in all his state
ments. He was writing to a Legislature
elected as anti-Russell men. But, in the
light of his present position, it is clear
that he was in favor of granting the
memorial offered by Mr.. Busbee. Toward
the close of his message he throws out
the suggestion that the Legislature might
make available for the common schools
and colleges and charities this valuable
asset of the State,' thus seeking, by
suggestion, to enlist all friends of edu-
cation and charity in support of the me-
mortal The whole trend of the argu-
ment is distinctly a special plea on the
side of the bondholders. Be it remem-
bered: it was before this message was
written that the subject matter was dis
cussed in the Governors office by his
former law partner, Mr. Ricaud, chief
counsel of the bondholders, Mr.. Busbee
and Mr.. Butler, associate counsel of the
bondholders. The then Governor is now
associated with Ricaud and Butler in the
attempt to compel North Carolina to sell
its stock in the North Carolina Railroad
(here is where certain Southern Railway
manipulators expected, or expect to make
their fortune) to pay the $3.50, OG0 involved
in the suit
4. Senator Butler, after talking with
Russell. Busbee, Ricaud, then or now
counsel for the bondholders. testified that
he had a conversation with Senator Petit
grew which probably led up TO the pas
sage OF the Act of the Legislature IN
South Dakota authorizing that State to
accept donations" The testimony is clear
that. as attorney of the bondholders and
while repr esenting North Carolina in the
Senate Butler interested his friend Pet
tigrew to help secure the passage of a
law by South Dakota, which would re-
suit in that State receiving certain of
the bonds in litigation ~upon condition
that South Dakota, as a sovereign State,
Carolina, in order to secure the payment
of these bonds. OF course nobody testi-
fees that this condition was annexed, but
circumstantial evidence establishes it: l.
Butler interested Pettigrew in October,
1900, while Butler was Senator and
Russell was Governor. They secured
lican lawyers and legislators ear
ly in 1901. 2. The Legislature
passed the act desired by Ricaud, Butler,
Russell and the bondholders. s. The bonds
were donated by Schaeffer Brothers to
the State of South Dakota. 4. The State
Of South Dakota brought suit in the Fed
eral Court against the State of North
Carolina. No sane man doubts the in
spiration or the previous agreement lead
ing to these successive steps necessary to
a hearing in the Federal court
5 This whole proceeding. based upon a
fraudulent attempt to secure juris-
diction to compel North Carolina to pay
500, 900 it does not owe. as we'll as to
procure the forced sale of the North
Carolina Railroad, is shown to have been
known to Daniel L. Russell while he was
Governor of North Carolina and to Ma
rion Butler while he was Senator from
North Carolina. if, indeed, it was not
concocted by Their in conjunction with
Ricaud and certain Southern Railway
bosses. In his testimony, Butler tells
enough to show that he was employed in
the case during his term as Senator, and
Russell, while denying that he was con-
suited professionally during his term as
| Governor, admits that the matter was
talked in his office while he was Cover
nor, and shows, by various statements,
that he knew as much about it as he does
now thaf no ic arnp1ove6 col