The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-01-26
LEAVE NO LOOPHoLE FOR BOND
GRAFTTRS.

Democratic Senators are firm in oppo-
sition 10 the arbitration treaties un-
less there is an amendment making
certain that the question of repudiated
Southern bonds cannot be made the
subject of arbitra ton. Venezuela was
compelled to nay bonds that had pre-
viously been declared not a just claim
upon it, and there are powerful inter-
estS that have a great financial stake
in letting all the Southern States re-
pudiated bonds made lawful claim
upon the repudiating States. The
Southern States paid fair amount on
their honest debt-North Carolina Of
fered 10 pay in new bonds dollar for
dollar for all the money IL received or
such bonds as those held by South
Dakota and repudiated the fraudulen,
bonds. And yet on their face all those
bonds are regular. A few months ago
a distinguished North Carolina lawyer.
visiting New York on business for
large corporation of which he was At
torney, was asked by the officer OF a
wealthy, trust company: Can you tell
me where l can pet some North Caro-
lima special tax bonds"
What do you want with that worth
hess paper?''. asked the North Caro-
lima lawyer.
We'll" was the reply. ''our trust
company does not want them. but II
has been made the depository OF q
syndicate of capitalists engaged In
40 W
much for them, but We think the time
will come when the repudiatins
States will have to pay them We
will buy them, lock them up, and
watt
Interviewed about the pending arbi-
tration treaties and the danger of com
pelling the Southern States TO pay the
bonds now being collected. Senator
Bacon, one of the ablest lawyers in
the United States Senate, Is quotes as
saying:
1.-The first article of the proposed
treaties with the various EurOpeon
governments provide that there shall
De submitted TO the perisanen- cou't
of arbitration at The Hague all differ
ences which may arise of lpgai ma
ture The question of submitting the
|alleged differences to a court OF arbl-
tration will. under these proposed
treaties, be determined Icy the Prest-
dent without being referrc1 i'll any
manner to the Senate or Congress.
1T matters not how grave and mo-
mentous and far-reaching may DC the
subject matter of such difference, ii
IS under these treaties. 20 be deter
mined by the President alone. These
Of
constitute a very broad term. III
every case, where one government
makes a demand upon this COVERT
ment under a claim of legal right. ano
such demand is refused by this gov
eminent, there would be presenter
case of a legal difference. 50 soon a.
a legal difference had thus arise l, The
foreign government would be enutlcH
under the treaty to demand that the
question arising out of such Legal dlI-
ferenceS should be referred for tina!
decision to the court of arbitration at
The Hague.
Bonds Might Come In.
ITO make a practical Illustration,
| take the case of a legal difference
which may arise under the propose i
arbitration treaty with Germany IN
case it should be ratified in its present
| form by the Senate.
Suppose the German government
should represent to the government of
| the United States that German citl-
zens hold ten millions of bonds of a
state, with thirty-five years of unpaid
| interest, which are in due form, SiGn"u
;by it's Governor and atteStej by It's
great seal, and which the state had
refused to pay. Suppose the German
| government should thereupoI denland
i that the United States government
4 soly., OF ns
secure the payment iy the State OF
| these bonds--principal and interest TO
/ the German holders. Assume that
upon receiving such demands the
| United States would refuse TO cntel
| tain the same fayOr9b'r. and would
| reply to the German government that
| the matter is outside of the iuiisdic-
ton of the Federal government, and
that il will not undertake in one way
Tor another to collect an alleged in
debtednesS out of a State, and that i;
will not consider the question or EN-
ter into negotiations relative thereto.
Suppose the German government
lshould- reply To such refusal, that on
1.-THE contrary, under the constitution
function and duty of the ttuiteG States
government to entertain and consider
demands of a foreign government as t6
Iany matter arising within the terri
ltorial jurisdiction of the Cnitei
States; that there is no other authority
besides the United States government,
to which a foreign government car
present such demands; that foreign
governments can nor present them tc
a State, or negotiate with At State rcla-
tive thereto because such Stat has nC
foreign re DreSentati9, N. and can make
mo treaty or agreement with foreign
government; and that il is therefore
line legal duty Of the United States
government TO listen to these demand:
against the State. auG to undertake t,
stcIre the payment of this alleged II
idebtedncSs. AsSCnlr thar the s'n'tcC
States government would refuse to re
lcogniZe the correctness of this propJ
sition and would still refuse to admit
that there is any legal obligation on il;
part to consider this demand, or to al
tempt TO accomplish the payment o