The Montgomery advertiser. [volume] (Montgomery, Ala.) 1885-1982, 1904-06-03


North Carolina, involving the latter
States liability upon certain of its
bends, has a tendency to impress one
with the belief that, at least. some of
those engaged in the discussion have a
sinister purpose in view. 1t is espe-
cially noticeable that pains appear to
be taken to parade in most of these
an ticles what purports TO be a list of
the States which are charged with
the amount repudiated by each State,
making a very large aggregate, for
which 1t is suggested these States may
BE- held liable under the rule laid down
by the Court in this case. For in
stance, the amount lowed" by the
$4,000 in an article published in The
Atlanta Constitution last Sunday
which was written by II. F.. Sullivan.
1, 1t were true that Alabama owes
this large sum and could be forced to
pay 1t under the law, as declared In
the South Dakota case, that fact would
have a very hurtful effect upon the
State at this particular time, when
most of our bonds whose validity Is
not questioned will soon fall due, and
must be funded in new issues OF
bonds. But Alabama "owes" no re
pudiated" bonds outstanding unless 1t
may be what are known as the Mont
gomery and Eufaula Railroad bonds,
amounting to 100000.
Inasmuch, however, as the decision
of the court in the South Dakota case
has been so frequently and so grossly
misstated 1t Is well enough to show
what the scope and extent of the de-
cision actually is. 1t appears from the
report of the case that by authority OF
two acts of the General Assembly the
State of North Carolina became
stakeholder in the North Carolina Kali
road Company. Both acts were passed
several years prior to the late war be-
tween the States. The State, under
the authority Of these acts, issued
certain amount OF it's bonds, each con-
tanning a pledge of an equal amount
of the States stock in the company to
secure its payment.
The Western North Carolina Railroad
Company was also chartered by the
General Assembly prior to the war. In
1885 the state was authorized to issue
its bonds to this company and TO de-
liver with each bond TO secure its pay
n,ent a pledge or mortgage for an
amount of the states stock in tho
North Carolina Railroad Company
equal to the amount of the bond. The
bonds sued upon by the State of South
Dakota were ten Of these bonds, with
coupons attached, Justice Brewer, who
delivered the opinion of the Court
says: There is in this case mort
rs ge of property and sale OF that
property under a foreclosure may sat
isfy the plaintiffs claim. If that should
b, the result there would be no neces-
sity for a personal judgment against
the State 1t has been settled by this
Court that the stale is necessary par
ty to a foreclosure OF the mortgage in
such. case Equity is satisfied by
dec rec of foreclosure and sale of the
mortgagea property, leaving the oues-
tior of a judgment over for any def
Gle ncy, to be determined when, IL ever,
It arises" A decree was accordingly
entered which, after finding the amount
due on the bonds and coupons ($27,4oo)
no interest being recoverable and that
the same were secured by 100 shares of
stock in the North Carolina Railroad
Company belonging to the state Of
North Carolina. ordered the State of
North Carolina to pay said amount and
costs in or before the first Monday of
January, 1905, and in default that the
Marshall of the Court, after advertise
ment, should sell at public auction at
the east front of the Capitol in WASH
ington City, all the interest of North
Carolina in the 100 shares of capital
stock. pledged for the payment of the
bonds.
1t will be seen that no personal judg-
ment was rendered against the State of
North Carolina. That question was left
to be determined when, If ever it
arises. That is, If after the sale of
the pledged stock there should be a
deficiency, then the Court will deter
Il
rcrder personal judgment against the
State of North Carolina for the de-
fciency. Even the decree of sale Of
tao pledged stock was made by bare
majority of the Court, Chief Justice
Fuller ana Justices White. McKenna
and Day dissenting quite vigorously.
Happily. 'the State of Alabama can
not be seriously affected by the decis-
ion in the contingency of deficiency
1t has no repudiated bonds unless 1t
be the small sum above mentioned.
Under the authority of the act of De-
cember II, 1874, the commissioners ap-
pointed for that purpose ascertained.
adjusted and liquidated all claims
against the State arising out of the
Issue or endorsement of bonds by the
State. This was done after a full, free
and frank conference with the creditors
of the State. The adjustment and set
Element was an amicable and satisfac-
tory one. The indebtedness of the
state was ascertained by the Commits
sion to be $30.O37, 563. which was ad-
Justed and liquidated for approximate
ly) $9,452,669. An the outstanding
bonds included in this settlement were
returned to the State and cancelled.
In addition to the above amount of
new bonds issued by the State in set
Element of the outstanding bonds. the
State transferred to the holders of the
ofarbf e,