The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1904-12-08
The Soutl's Repudiated Bonds.

The South's Repudiated Bonds.
In The December number OF the North
American Pnyicw is an article by Mark
sullivan, entitled present Status OF Re-
pudiated state Bonds" in which ms
tory Of the case Of South Dakota VS.. TIE
state OF North Carolina, recently de-
n cidcd nv The United States Supreme Court,
us given.
At the close OF the war the Southern
States found themselves loaded down by
enormous debt which had been con-
tracted in part before the war ana N
part bv carpet bag government III the
DAYS OF reconstruction. The debts OF
Alabama, Arkansas, Florida, Georgia,
Louisiana, Mississippi. North caro!1hla,
South Carolina and Tennessee amounted
TO .cso,se4,ono These, debts had been bur
d.s1sone in any event, but BY reason II
the impoverishment wrought by the war
they were simply unbeara bic. From 1851
to 1870 the taxable value OF MISSISSIPPI
declined e. r.sr cent; that OF -Alaeama'
GA per cent; that OF North Carolina, %
,..r cent. and so on. In short, these
M I'D
states were bankrupt, and in part they
wiped out their debt and started anew
lust as r.1any an individual has dono under
the BANKRUPT law. Virginia took some
what different course. After long aglta-
r,on she compromised with her creditors
and issued new bonds for the old, except
@4as 10 West Yirginia's part. AS the hoid-7
..:s OF Virginia bonds accepted the com
rrou,ise and surrendered their old bonds
for the new, Wrsinia's debt has been
forever settled and the decision IN the
case of South Dakota VS.. North Carolina
Will no, AFFECT her, unless she should pc
held for West virginia's portion. But the
decision may give serious trouble to those
states which repudiated outright and
whose bonds are stu outstanding.
Under the Constitution Of the United
states no State can be sued by an lndlVld-
na1 Hence the individual holders OF
bonds repldiatcd by the Southern STATES
had no means of proceeding in law to en-
force payment But in 1881 MI. SUM-
van, recalls, the STATE Of New Hampshire
passed bill providing that any citizen
Of that State. owning any claim against
any OF the other States, might assign the
same 10 the state OF New Hampshire. and
upon such assignment the attorney-sen-
eral should, if.Ac deemed the claim valid
proceed in the lrsnie OF the State to bring
suit and prosecute such action to final
Judgment for the collection OF said claim. .
IN other words the State OF New Hamp-
shire made itself a collecting agent to
perform for certain individuals the work
OF collecting their overdue claims
A test case was made and In due time
was heard before the Supreme Court; but
the court 1nade short work of It. The
decision was handed down by Chief JUS
tice Waite, and was, In effect, that While
the suits were in the nanlc Of the State,
they were under tho actual control OF
Individual: citizens, and were prosecuted
and carried on altogcthes by and for
them. such being the case" he con-
Guided, I'VE are satisfied that we are
prohibited, both by the letter and the
spirit Of the Constitution. from entertain
ing these SUITS
But the lawyers afterwards hit upon
another plan. On September TO- DOL n
broker IN New York wrote a letter to
Hon. Charles Burke. member of Congress
,rorn The State OF South Dakota, In which
he said that one of the members Of lbs
firm, after consultation with other hold
ers OF the second mortgage bonds ISSUED
by the State OF North Carolina, had de-
cided TO donate ten Of the bonds TO tn,
State of South Dakota He eXplainet
that the holders OF these bonds, hayin,
been advised that they could not main
tain the suit against the State OF Nortl
Carolina, hut that such suit could b
maintained by foragnSState or by on
Of the United States, preferred to Civ
The bonds away rather than to take In
rifle which he was offered by the dcbto,
Donors of these bonds" he said, In con
clusion, would be pleased II the Iegis
lature of South Dakota should apply tn
proceeds to the State University or /
some of It's asylums or other charities.
He intimated that II South Dakota Shout
succeed In collecting the bonds 1t woul
be the inclination Of the owners OF a ma
jolity Of the total issue TO make add
&tional donations to such governments 4
might be able TO collect from tho repud
4 atng STATE.
The matter was communicates 10 IL
Legislature OF south Dakota. ana tn.
body enacted Law providing for tho a
ceptance of all such gifts, ana ployidiI
further mat tie attorney-gcqrcral shou
lie directed TO take the necessary al
proper proceedings and 70 bring suit
The aans Of the State 70 collect t
-