The Washington times., 1905-11-03


State obligations. their holders were un-
able 10 discover any method for collect
ing them. Senator Pettigrew investi-
gated, and discovered the record of a
case in the Supreme Court in which thai
tribunal had taken jurisdiction of suit
brought by one State against another
State
Donated Bonds.
From this he devised the plan of hav-
ing some of the bonds donated to the
State OF South Dakota in trust for the
state University at VermiiliOn. The
State of South Dakota accepted the do
nation OF $4,000 of bonds. issued by the
State OF North Carolina. on which the
accrued interest amounted to nearly
twice as much as the face. Suit was
begun by South Dakota.
The case became famous, continuing
several years. The Supreme Court af-
ter repeated hearings and rehearings.
gave the verdict to South Dakota for
principal and intrest.
Tarheels Pay Up.
Having thus got standing in court
the bonds of the same issue held in the
east had TO be taken cognizance of,
and the State of North Carolina was
finally compelled to settle. with the
holders OF the entire issue.
1t is reported that the clever law
yers who organized this scheme of
collection receive 25 per cent OF the
amount secured. and that they have
made contracts with holders of other
Issues OF similar bonds, representing
five or six southern States, and aggre-
eating principal and interest, an i'm
mense figure. The total is stated var
iously al the way from s10O00,0O0 TO
$40,00o,o9o.
Other States Decline.
From time 10 time different States
have been offered donations OF these
bonds. exactly as South Dakota receiv-
ed the donation OF the North Carolina
bonds Most of the States have re
fused them
The latest development OF the
scheme. II IS reported, IS to have bonds
donated to foreign governments, the
courts having held that a foreign gov
eminent can S5Ieia State Of the Ameri-
can union in the same way that one
State can sue another. This would
AFFORD the same opportunity for inter-
Vention on behalf of the other bond
holders. and judging BY the precedent
established in the case of South Dakota
against North Carolina the Supreme
Court could not help giving judgment
on the securities.
KING IN castro.
Not the least embarrassing feature
about the situation is that the govern
ment of Venezuela is reported 10 have
been selected as the donee Of a choice
collection of sample securities. Presi-
dent Castro. Of that country, IS not
understood TO have any compunctions
about embarrassin~ the Government of
the United States. or Of any other coun-
try. II opportunity presents. in fact, he
is said 10 have been a very willing lis
tener 10 the PROPOSAL that his country
make a little easy money in this fashion
This development brings the matter
within the Durview of the Department
OF State. which IS reported now to be
worrying about how TO handle this new
est feature Of its relation with the in
cOrrigfble Castro.
Representatives Of the Southern States
natly declare that they viii not be held
up by Castro, and that If Castro and
venezuela propose to collect any re-
p1diated securities of theirs 1t VIII be
necessary 70 send an army for the {ob
So - believed the matter is now prac-
ttcally certain TO demand the attention
z &s&5ESSs the coming winter and
eoutheTn statesmen are urging the
President 10 recommend legislation that
VIII prevent such collection methods