The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1905-07-07

tne oiu state debt had grown to S16.-
100000.
That was a heavy load for New
North Carolina to bear-an impover-
ished people, without money 10 pay
lawful taxes; without funds to pay in
terest on Ii old debt-to have S25,-
Wo,oOo added to IN existing debt OF
sl6,Ooo,OCo. And the treasury empty.
1et tnat was republican admlnistra-
ton!
In April the funds were running low
u Treasurer Dave jenkins was anx-
SGus Tor h legislature TO get away,
Tor they were an expensive set. To
pay them he had to do some more re-
publican financiering.
The Educational Fund owned $780,
90 or stock in the w. & W. Railroad,
and w. x NJ. railroad, which he sold
for sl5S,OOO and with this Educational
IN and with 100000 borrowed from
Swepson's bank. he paid them off and
they went away-went away in April
tC come back in November. What
would they find when they returned?
1t Is to be remarked that the S25,-
100000 of bonds authorized to be is
sued were not to be issued gradually
as the roads should be built-or as the
n were needed; o "a any Sc
curlty required for their proper use
no1 was any condition or limitation
impose in regard to them. That would
lave lnterfered with the due execution
of the agreement for the payment OF
one-tenth to the ring. They were to
be issued as called for. Swepson
drew his first-towards the close of
the year-and after that others as they
10nIu pPt them Ar Grcf tho nri.a va m p
ed about 80 cents but during the sum-
mer, when millions on millions were
thrown on the market, the bonds began
to depreciate. In the meantime the
Wilmington and Weldon railroad,
fighting the completion of the Chat
ham railroad brought a suit, Galloway
VS.. Jenkins, treasurer, to test the va
lidity of bonds authorized by the con-
ventiOn to be issued to the Chatham
railroad, and they were declared to be
unconstitutional; and in July, 1869, i'll
a case known as the University r. +.
Co VS.. Holden, the Supreme Court
held that appropriations made to cor
pOratiOnS not in existence were invalid,
and in consequence of that decision
and of the opinions filed by the differ
ent members of the court, many of the
appropriations fell to the ground as
unconstitutional. In another suit, call
ed the Kerhoe suit,it was said that Tim
Lee handed to Judge Watts, who heard
the case, a batch of $1,000 in bonds,
and the scandal Of this proceeding
brought Odium on the bonds.
AS a matter of fact only about $14,-
100000 out of So, 900, 900 of bonds au-
thOrlZed, were actually issued. Nor
was the validity of these unquestiOned
During the progress of the legislature
leading democrats and the public
press denounced the whole proceeding,
questioned the validity of the legisla-
ture, denied it's right to bind the peo-
pie and served notice on the world at
large that the taxpayers of Old North
Carolina disowned these bonds, dis
avOwed their validity and would never
pay them. ;,
Among other objections, it vas urg-
ed that the constitution established a
INIT of taxation, and that this limit
could not be exceeded merely by call
ne the uncOnStitutiOnal tax in excess
of the limit a especial tax; but the
promoters of these schemes held that
where a special AK" was laid the
constitutional limit did not apply. And
SO to pay the interest on these bonds
they levied especial taxes which gave
them their name. These taxes amount
ed to 81 cents on the hundred dollars
During the summer interest was de-
faulted and the value of the bonds de-
clined.
Swepson had deposited the greater
part of his bonds as collateral securi-
ty in New York for a loan of about
one million dollars, about $4,000 OF
which be invested in Florida railroad
stock and bonds, which, in the end,
yielded no money. AS the bonds sank
III value, they were thrown on the
market and the depreciation was has
tened.
At length. in September, a great eff
fort was made to restore their market
value. It was given. out the bonds
would soon advance and a combination
was made to bull them. SwepsOn, Lit
tlefield, A. J. Jones, president of the
Western r. R., and DIR. Sloan, presi-
dent of the W. c. & r. r. R., and 9TH
ers, along with the governor Of the
state andVthe state treasurer, had a
meeting in New York and the details
of the arrangement were agreed on.