Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1904-12-20
|HA1 BOND DONATION
Some Interesting Incidents Re
called In Connection With
James Bond Offer
PETTleREW HAD A PROJECT
He Secured Contract to Receive Per
Cent Of All the Bonds Of Southern
States He Could ColIeot--Millions of
Thorn Had Been Issued - General
Iowa Ncws. ~

VIVA tNVW0s
Sioux City, Dec. 20.--John James OF
Philadelphia, in q letter to Governor
Cunrmins of Iowa, states that he Is
willing to donate to this commonwealth
ten bonds for $1,000 each Of q SOUTH
ern state-not named-if the state
wants them. He says that he has own
ed them many years, that the Interest
has been repudiated for thirty-nine
years, that q private citizen can not
sustain suit to collect them, but that,
as one state can sue another. the state
of Iowa could bring suit and collect
the amount. He adds that the accrued
interest amounts to 1876 Yer cent of the
principal.
Governor Cummins was away from
the state when the offer was received
and no official answer has been made.
This offer, however, Dis recognized read
lily by people familiar with the matter
as a part in the grand scheme OF for
mer Senator Pettigrew of South Da-
kota, to collect about $20,000,000 on
ancient obligations Of southern states.
These obligations were issued soon af-
ter the war, when the southern states
were under carpet bag administrations
and were in,the main for the construc-
ton OF new railroads.
When Pettigrew was in the senate
he learned that South Carolina had
great amount of such bonds outstand-
ing. They were in private hands ana
uncollectable, because private indi-
yidual could not sue state. PettlgreW
secured contract under which ne was
guaranteed per cent of all ne coulu
collect on bonds of North Carolina, at
that time held in New York. He dls-
covered that one state could sue an
other and make 1T hold. Accordingly
he had the owners of the North Caro-
lima bonds donate $4,000 of them to
the state Of South Dakota, In trust Tor
the state university at vermillion. Pet
tirrew. as senator, was the state boss
and instructed his governor and legls-
lature to accept the bonds. and then
begin suit against North Carolina for
collection.
The suit went to the United States
supreme COuTI, dlTN eHSiS 49,
three times by Robert w. stewart, a.-
torney general for South Dakota. Az
ter long and painful consideration the
federal supreme court, by vote VI
five to four, decided that the state ol
South Dakota was entitled TO coiiee.
and gave judgment for the prlhclPaai
and interest on the bonds, amounting
to nearly 100000 49,,
Meantime Pettigrew had retired from
the senate. He did not appear IN the
litigation But he had hunted up 1lle
holders of extensive issues of southern
state bonds, and made contracts Win
them for the collection of their claims.
He has contracted to collect between
fifteen and twenty million dollars from
North Carolina, South Carolina, Geor-
ria Florida, Alabama, Mississippi ana
I Louisiana, He was to receive from 10
to 40 per cent Of all collections.
This much is definitely known. When
the North Carolina judgment was Sc
cured Senator Pettigrew confided 10
his friends that it paved the way TO
the collection of his entire series OF
claims. and that 1t would be worth
about two. million dollars to him. ~
was understood that the plan was, IS
each case, to have few OF the bonds
OF each state. given to some other
state. This would give standing IN
court and Judgment could be secur-
ed. This done, intervention, in behalf
Of the other bondho1ders, Is to be the
next step. It will be set up that one
class of creditors cannot be paid with
out consideration OF another; and so
the effort will be ia bring In all pri-
waite bondholders under cover of the
suits brought originally in the name OF
a state. One state may sue another;
and one state having done SO. there Is
no reason why q private individual
may not intervene.
In the North Carolina case 1t has
been ordered by the United States SUI
preme court that there shall be judg-
ment issued against the stat early in
1905. for the principal and accrued In
terest. Meantime various dfsinterested
states are to be asked to accept gifts
Of bonds. in order that suit may be be-
gun in their names. Iowa, SO far as
known Is the first to be offered a do
nation. It is generally believed, on ac-
count Of the publicity Of the matter,
that the state will reject the offer.
There is little disposition In Iowa to
make the state catspaw for collecting
claims against other states.