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

Litigation South Dakota has
Commenced Against
North Carolina.
When Mr.. Fabius H. Busbee, attorney
of the Southern Railway, as attorney for
New York bankers, memorialized the Leg
islature of 1901 to set in motion machin-
cry for testing the validity of certain Sec
ond mortgage bonds which they held, this
paper declared that underneath that move
ment was deep-seated scheme to Sc
cure the sale of the North Carolina Rail-
way, as we'll as to compel the State to
That statement was made upon the au-
thority of one of the best informed rail-
road men in America. 1t was also stated
that, after becoming the vassal of the
Southern Railway. Governor Russell was
in the scheme which was far reaching and
inimieal to the true interests Of the State
OF North Carolina.
When the State Of South Dakota began
suit to compel the State of North Caro-
lima to pay the bonds there was sus-
picion that there had been collusion be-
tween certain former North Carolina off,
cent disclosures confirm that suspicion,
and disclose a condition of affairs as
disgraeeful as any that cursed the State
in the days of Radical rule in 1869
Radical rule Of that day sought to fasten
a dishonest debt upon the people of North
Carolina. The Russell Radical rule of
which Butler, Russell and certain South
ern Railway lights were the leaders,
sought-for sinister, selfish or dishonor-
able ends to compel the State to pay
par for certain Western North Carolina
railroad bonds which the State had hon
orably adjusted, and compromised more
tnan twenty-five years ago. Having set
tied the State debt rDcn an honest basis,
all the creditors, except few New York
bankers who held the w. N C. r. P.
bonds for speculation or to give trouble,
accepted the settlement upon the basis
prescribed by the Legislature. These New
York bankers for twenty-five years have
held these bonds ''for such day as this"
They may have held them during all these
years on their own speculative account,
certain railroad manipulators who wished
to hold them to force their own terms
upon the State. However that may be,
those who really own these bonds have
known all these years that they could
not in any legal or honorable way en-
force their payment except by accepting
new bonds at the rate of twenty-five cents
in the dollar. After Russell, in spite of
all his rant and buster, confirmed the
lease of the North Carolina Railroad,
certain Southern Railway folks. in posses
sion of the 99-year lease at an absurdly
low rental, wished to get the ownership
of the North Carolina Railroad, in order
to issue stock upon it for three or four
times its market value. 1t would be easy
to float 500 900 stock on the road upon
which only seven per cent rental on $4,-
O0O.0OO is paid. If certain promoters con-
Dected with the Southern Railway could
secure the North Carolina road, bound up
by lease so as to prevent bidding by
any other railroad, they saw profit va
riously estimated anywhere from five
to twelve million dollars in the transac-
tion. At one time-so Governor Russell
swears-it was their purpose to bring
case before the North Carolina Supreme
Court for the payment of the bonds upon
which South Dakota is now suing the
State Of North Carolina. Governor Rus
sell testiies that this plan was aban-
doned Just before the Legislature OF 1901
met. Is their no significance in this tes-
timopy? Mr.. Fab Busbee, Southern Rail-
way lawyer, was the attorney when
the Supreme Court ordered the
payment of money out of the State Treas
ury WHICH THE LEGISLATURE SAID
SHOULD NOT BE PAID, thereby violat-
ing the Constitution of North Carolina. If
that illegal and unconstitutional payment
had been acquiesced in, could not the
same Supreme Court have overridden the
acts OF the Legislature, forbidding the
payment OF the bonds upon which the
State OF South Dakota is now suing? If
the Investigating Committee appointed by
the Legislature, headed by Judge Michael