The news & observer., 1905-06-08
is NEW YORK, TO FOLLOW SOUTH
DAKOTA {?

On May sixteenth a law was put on
the statute books of New York which
gives the Empire State the right to sue
a sovereign State in somewhat the
same manner that South Dakota OBJ
tanned bonds of the State of North
Carolina and brought suit upon GER
tain bonds that were recently COM
promised. The act passed by the New
York Legislature is as follows:
Section /. Whenever any person or
persons, copartnership, corporation or
association 2hall give, bequeath or as
sign 20 the State of New York any
bonds, warrants, chooses in action or
other obligations of any other state
the Governor is hereby authorized, in
his discretion, to receive and accept the
same for the benefit of the State, and
the right ard title thereto and therein
shall thereupon pass to and vest in
this State, and the same and all the
proceeds thereof when collected shall
be held by the Comptroller in special
account or fund subject to be appro-
priated by the Legislature only for. the
support of common schools, or for the
promotion of some educational inter-
est in the State.
Sec. O. Whenever it shall be neces-
sary to protect or assert the right or
title of the State to any such bonds,
warrants chooses in action or other OBJ
legations SO received, or to collect or
enforce the same or any part thereof,
principal or interest, the Attorney
General is hereby authorized and di-
rected to take the necessary and prop
er proceedings or to bring suit there
on in the name of the State in any
court or competent jurisdiction, State
or Federal, and to prosecute all such
suits or proceedings TO termination.
When the above was introduced in
1T was printed in these columns with
the statement that this was additional
proof that the same crowd that en-
gineered the South Dakota bond az
fair, (Russell. and Butler were their
spies and agents. had been buying up
special tax bonds and would soon
seek to enforce their payment. The
suit was first brought on bonds that
had collateral in order to more easily
get a standing in court. With the decis-
ion then obtained, backed by the most
powerful financial interests in Amer
lea, it is expected now to force the col
lection of the other bonds. not
only in North Carolina, but prob
ably also in the entire South.
This State owns certain stock
ceeds of any of the bonds the New
York syndicate proposes to sue upon)
and because of the fact that this State
owns railroad stock, the New York
crowd intends to begin their hight first
against North Carolina. They first
sought to put in the Arbitration treaty
a little nice sounding clause that would
have been construed 10 make the South
pay all the reconstruction bonds. con-
ceived in sin and brought forth In ini-
quity But that snake was scotched.
Now comes the New York statute. and
Mondays New York Sun has haring
double column advertisement. signed
by Edward l.. Andrews, of 10 Wall
street, addressed TO John G. Carlisle.
Jefferson NJ. Levy, Henry ii. Melville,
| and E. L. Whicher Committee of
North Carolina special tax bondhold-
ers'' in reply to on inquiry with ref
erence to the course of action to be
pursued by the committee, statement
of the financial condition of North
Carolina, and an outline of the policy
adopted to secure the satisfaction of
the special tax debt" He says North
Carolina is we'll able to pay this debt
sis exceptionally situated in respect
to the ownership of property not ded-
icated to public use" having railroad
stock to the value of $7,02S,000, only
$2.S76, 900 of which is pledged to Sc
cure Indebtedness of the State. Mr..
Andrews goes on to say:
.1f the bonGholders were willing to-
accept these railroad properties In
full settlement of the special tax debt.
they would receive values equal TO
more than 25 per cent. of the principal
of their claims. Such an arrangement
would not affect the taxation of the
State to the extent of single dollar.
The State is now levying for the inter-
est on all her debt on which she is
paying interest, except for\the debt Sc
cured by the pledge of these railroad
securities. If the special tax bond
holders accepted in satisfaction of
guaranteed stocks, subject to the ex-
listing pledges, the financial result to.
the bondholders would be about $3.50
per bond and the taxpayers of North
Carolina would not be called upon III
the premises. If such an arrangement
We're made, it should be dependent
upon prompt action by the officials of
the State 1t is only as a speedy solu
ton that it possesses merit, in view
of the more ample resources of the
State and it's moderate liabilities.
The substance of the manifesto of
Mr. Andrews is that if North Caro-
lima will give to rne holders of these
fraudulent bonds. the men holding the
bonds will accept it as a compromise.
That suggestion is a sort of Stand and
Deliver" propositions, or take a sand
bagging, for Mr.. Andrews proceeds to
remark:
There should be no question of the
acceptance by North Carolina of such
a reasonable basis for the adjustment
of this debt. The coerciVe measures
which may be brought to bear leave
no other recourse to the State.' The
dilemma presented lies between q