The Caucasian. (Clinton, N.C.) 188?-1913, 1905-07-06

cesesner Glenn. In Reply TO a. Open
Letter. Makes Public IN Open Letter
In which He Discusses q Msosea
Question for the BENEFIT Of the Pee
ME

Question for the eeneh. Of the PEG
pie.
Raleigh. Special. Glenn
has made public the following CORES
pondencs:
Mr.. E. II. Wilson, OF Winston, wrote
him: The recent settlement made
by the State OF the South Dakota bond
suit and the bonds held by Schafer and
others met with the general approval
through this section and our people are
gratifed to know that through your
great efforts and intelligent manage
ment OF this matter q proper compro-
mise was arranged. There nov springs
up another matter. which. IL seems,
was not considered at the time OF the
settlement AS understand. certain
brokers or financial agents In New
York are collecting what are called
special tax bonds, and propose TO make
the State pay them. | learn there are
very large number OF these bonds
outstanding and the State will be put
To very great expense should IL be
made to pay them, even by ccmpro-
mise. AS this Is matter of much
interest to our people in this section.
| would be glad If you would let me
know your opinion in regard to the
difference, IL any exists, between the
Schafer bonds and the special taa
bonds. and il the latter can be en-
forced against the State of North Car
olina-"
The Governors reply Is in these
words:
Replying to your letter, which in
terms is very similar to great many
others that have received from many
sections OF the State, l deem it best to
reach all inQuirers and set at rest
their fears in regard to suits against
our State by persons holding certain
State bonds. There is a vast differ
ence between the bonds referred TO ir
your letter as the Schafer Brothers and
South Dakota bonds, and those desig-
uated as the special tax bonds In
1879 the Legislature OF the State. COM
posed of some of our ablest and most
patriotic men. appointed joint COM
mittee, or rather commission, to fully
consider the question of the States in
debtedness, and report what debts we
legally owed and what were unjust and
fraudulent, to the end that bill might
be enacted in accordance with theil
findings. This commission consisted of
wise, honest and fair-minded men, who
after a most searching and impartial
investigation, reported that our bonded
Indebtedness should be divided into
four classes
First class. Bonds issued before the
goth of May, 1861, upon which we
should pay 40 per cent of the princi-
pal.
Second class. Bonds ISSUED by vir-
tue Of acts Of 1865, chapter 8; 1867,
chapter 22S; 1860 and 1861, chapter l42,
upon which we should pay Is per cent
of the principal.
Third class. Bonds issued by vir-
tue of the funding acts Of March 10,
1856, and August 20, 1868, upon which
we should pay Is per cent of the prin-
cipal.
Fourth class All bonds known as
special tax bonds they recommended
should not be paid at any price. This
report was enacted into law as will be
seen by reference to chapters SO and
PCS of the acts of 1879. Under the first
act our creditors, recognizing our will
ingness to pay all honest debts, not
withstanding our poverty, brought on
by the war and days of reconstruction,
with a few exceptions came in and
cheerfully settled upon the terms sug
gested, taking new bonds instead of the
old. Under the second act the question
as to whether we should pay the frau
dnlent special bonds was submitted TO
vote of the people, and by a major
ty of one hundred and eleven thousand
nine hundred and thirty the people de-
cided these bonds should never be paid
and made their decision article /, sec
tion of our State Constitution.
Thus we see that not only the Leg
islature but the people refused to rec
ognize these bonds. and so no Cover
nor, or not even the General Assembly,
could order their payment, as long as
the above article of the constitution
remains in force. Schafer Brothers
and a few others, refused to accept
the compromise in 1879, and $4,000
of the bonds included in the second
class were donated to South Dakota
by Schafer Brothers, and a suit was
brought in the Supreme Court of the
United States, and by divided court
of five to four the court held that as
North Carolina had always recognized
the validity and honesty Of these
bonds, which were also secured by
mortgage on the States stock in North
Carolina Railroad Company, the same
could be collected, at least to the
amount of the security. In view of
their decision. acting under the ad-
vice of the Governor, the council OF
state and joint committee of the Sen
ate and House Of Representatives, the
last General Assembly, compromised
the Schafer Indebtedness by paying
25 per cent. on the principal (the
amount offered in 1879, with interest
on same till the present time. While
these bonds did not bring par when
sold, still we regarded them as hon
est, and were therefore willing to pay
what the commissioners of 1879 found
the State realized from their sale, with
interest on the amount. The special
tax bonds, however, issued by the Leg
islature of 1S6S69, are on an entirely
different basis. and not being honest,
but fraudulent, should for the follow
ing reasons never be collected: First,
they were issued by legislature not
legally organized or constituted; Sec
ond, they were part Of a conspiracy
and plot to defraud the state; third,
they we're placed on the market, sold
for a mere oagatelle, ana the State
never received any value for them;
fourth, they are now past due, the ORR
ginaI purchasers knew of their frau
dulent character; they have been re-
pudiated by both the Legislature and
the people, and anyone now buying
them would take them with notice.
and could not claim to be an innocent