The Bamberg herald. [volume] (Bamberg, S.C.) 1891-1972, 1904-12-22
Against All Southern States
Issuing Carpttbag Bonds.
MOST NEFARIOUS SCHEME
Ex-senator Peatisrew Heads Combine
10 Take Advantage Of a Decision
Against the State Of
-..- North Carolina.


letter4to Governor cummins. OF Iowa,
states that he is willing to donate to
that commonwealth, ten bonds for
$1,000 each of a southern state, not
named, if the state wants them.
He says he has owned them many
years; that the interest has been re-
pudiated for thirty-nine years; that a
private citizen cannot sustain suit TO
collect them, but 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 per cent Of the prin-
cipal. > - . =,
Governor aCummins was away from
the. state when the ofer was received
and no official answer has been made.
The offer, however, is recognized
readily by people familiar with. the
matter as a part of the grand scheme
Of Former Senator Pettigrew, OF South
Dakota, to collect about $20,OOO,000 on
ancient obligations of southern states.
These obligations were issued soon
after the war, when the southern
states were under carpet bag admins
-trations and were in the main for the
construction Of new railroads. When
Pettigrew was in the senate he learn
led that the safe Of North Caroline had
a great amount Of such bonds outstand-
ing. They were in private hands and
'uncollectible, because a private 1ndi-
vidual could not sue state. Petit
grew secured a contract under which
he was guaranteed 40 per cent OF all
he could collect on bonds Of North Car
olina, at that time held in New York.
He discovered that one state could
sue another and make It hold. Ac-
cordingly he had the owners OF the
North Carolina bonds donate $4,000
of them to the state of South Dakota
in trust for the state university at
Vermillion. Pettigrew, as senator,
was the state boss, and instructed his
governor and legislature to accept the
bonds and then begin suit against
North Carolina for collection. The
suit went to the United States sup
rene court and there argued three
times by Robert W. Stewart, attorney
general for South Dakota. After long
consideration the federal supreme
court, by vote of S to 4, decided that
the state of South Dakota was entitled
to collect and gave judgment for the
principal and interest Of the bonds,
amounting to nearly 100000.
Meantime Pettigrew had retired
from the senate. He did not appear
in the litigation, but he had hunted
up the holders of extensive issues Of
southern state bonds, and made con-
tracts with them for the collection CT
their claims. He had contracted 10
collect between s15OCO,0oo and $780,
100000 from North Carolina, South
Carolina, Georgia, Florida, Alabama,
Mississippi and Louisiana. He was to
receive from Is to 40 per cent of all
collections. This much is definitely
known. When the North Carolina
judgment was secured Senator Petit
grew confided to friends that it paved
the way to the collection of his entire
series of claims and that it would be
worth about 100000 to him. It
was understood that the plan was, in
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 Sc
cured. This done, intervention in be.
half of the other bondholders is to be
the next step. It will be set up that
one class of creditors cannot be paid
without consideration Of another, and
so the effort will be to bring In all
private bondholders, under cover #
the suits brought originally in thu
name of q state.