The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1904-05-31
STATE BOND COMPROMISES.

Since the decision of the federal
South Dakota bond suit against the
state of North Carolina there has been
a great deal in the newspapers of all
sections of the country about what
some editors are pleased to call the
repudiated bonds of the southern
states. From some Of these articles
one would judge that the southern
states had put their bonds upon the
market, reaped benefit from their sale
and deliberately refused to recognize
them as evidences of Indebtedness,
and also that the matter of adjusting
n settling bonded indebtedness was
peculiarly a southern feature. 1t
seems that there are other states
besides those south of Mason and
Dixon's line which have adjusted
their bonded indebtedness in proper
ton to the benefit received from the
sale OF the bonds. Minnesota is n
of these. and the following letter to
The Boston Transcript from a citizen
of st. Paul shows that his state has
taken the very same course as did
North Carolina in 1879 in reference
TO her outstanding bonds, and in
Minnesota's case the transaction was
considered all right.
The letter to The Transcript is as
follows:
To the Editor of The Transcript:
Mr.. Mark Sullivan, in an article
under the caption "A State VS.. a
State" in The Transcript of March
80, classes this state among those
which have refused payment of their
bonds and charges us with an unpaid
debt OF $500, 600. In making so
paper as is The Transcript, he should
have verified the statement of the
= broker made some twenty years
ago." Since then Minnesota has adj
justed that old debt and paid it off.
a brief statement of the facts is made
necessary by his inclusion of Mime
sofa with states still under the cloud.
In 1858 the first legislature of this
state authorized the issue of five mill
lion dollars in bonds. in aid OF rail-
way construction. sever compa-
MES formed and began work. Local
opposition, the general financial
condition and lack of operating CAPT.
tai on part of the contractors, led to
a suspension of all work. The state
had secured itself against loss by a
mortgage on the LAND grants and
right of way. OF the total issue au-
thorized, s2.275,OOo were put out.
The state foreclosed it's mortgage,
recovered the land grant and about
$50 miles of graded track. Several
propositions were submitted to vote
for adjustment under an amendment
of the constitution prohibiting any
payment of the bonds unless approx
ID by general vote, but all were re-
jected. The grounds of opposition
We're many-charges Of fraud among
them-but the real motive was dis
inclination to pay for hat had not
been received. The fact that the
state had received all the securities
it o was disregarded. A later leg
islature gave away, without restric-
ton these securities to other COM
panieS, which built the railways. 1t
left the state in an indefensible posi-
ton, a fact that gradually grew into
acceptance among the people. In
1881 the legislature provided for an
adjustment of the demands and made
the judges of the supreme court a
commission for that purpose. In a
suit brought TO restrain this action,
the supreme court held the act un-
that the restriction on the power OF
the legislature to settle the demands
was also unconstitutional. as n i'm
pairing the obligation of a contract.
Under this decision q special session
of the legislature accepted a propos-
al made by the principal stockholders.
by which they agreed to accept fifty
cents on the dollar of the amount
then due, including principal and in
terest. An issue of bonds for s4.2S2.-
900 was made and the old bonds
called in and cancelled. The state
school fund took over nearly all this
issue, for the payment Of which the
act set apart 500, 600 acres OF the
land granted for internal improve
ments by congress.
p. J. SMALLEY.