The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-02-12
Governor Glenn On Dako-
ia Bonds.
CONTINUED From Page Nine.)


North Carolina construction bonds and
the state. rs set forth IN the PROV isions
CT an act passed in 1879. chapter 1885,
for the purpose of adjusting ard re-
newing part of the State debt, all of
these bonus have beei. settled ana paid
Tor, save two hundred and fifty-two
bonds of 100000 each. Two hun
dred and forty-two of these bonds are
now held or controlled by Schafer
Brothers. Ten bonds were alleged to
have been donated by Schafer Broth
ers TO the State of South Dakota Upon
The bonds so donated suit was brought
by that State against North Carolina
in the Supreme Court of the United
States and judgments by divided
court of five to four was given for
100000 and interest. the amount
of the Judgment being $27,4O0.00 and
cost. These two hundred and fifty-two
bonds have been bearing interest for
twenty years st the rate of six
per cent per annum making the total
amount of principal and interest now
due, about $500, 4S0.00. These bonds
are secured by stock of the North
Carolina Railroad Company, worth to-
day $i42,000.00. In the South Dakota
suit an order was also made by the
United States Supreme Court that un-
less judgment was discharged on or
before the first day of January, 1905,
the stock securing said judgment
should be sold, and out Of the pro-
ceeds. after first satisfying the first
mortgage bonds. the residue should be
applied to the payment Of the judg-
ment Afterwards, Mt the request of
The State, stay proceedings was OBJ
tanned. pending the sitting of this ses-
zion of the Legislature, to the end that
Won might take such action as you
deemed proper. The stock of the
North Carolina Railroad Company Sc
curing this Judgment is valued in the
markets AT from $1T.200.00 II ST.
10000. and the proceeds of same if
sold. VIII be applied to the Judgment.
leaving the question of Judgment over
for any deficiency to be determined by
the court when ii arises"
As 10 tho Dakota judgment. there
remains only three courses to be pur-
sued:
First. 4 possible compromise such
Judgment or some just and fair terms
Second. pay it.
Third. let the stock be sold as Or
dered by the court. and proceeds be
used to satisfy Judgment.
Unless some action is taken by your
body the last course will be pursued.
as the executive is powerles to act, UNI
less you direct what shall be done.
AS TO The remaining 242 bonds now
TO be done
This is a most serious question and
one that your honorab BILE body should
not too hastily decide.
Attorneys for Schafer Brothers have
been here during the session Of the
Legislature and have had several in
formal interviews with the cxecut We
looking to the possibility of a settle
,nent. At ore meeting with said coun.
sci, when the attorneys for the State
and the Chairman of the Committee
on Claims, of both the Senate and the
House, were present. it was suggested
that counsel sec their clients and get
the lowest amount that would be con-
sidered by them III full settlement and
discharge Of the bond held by them.
tn S was done. but counsel for the
Dondholders refused TO submit d prop
osition, unless beforehand / would
state what recommendation, if any
would be made. This of course, l de-
clined to do.
On January 30 counsel for the bond
holders addressed a letter to me, de-
clining to submit a formal proposition
to the State for the settlement of these
bonds. but in the letter they stated
that they We're authorized 10 accept
for the 242 bonds the sum of s1,25o.oN
per bond, making u total of $302,-
10000. Ti.is letter was not trans
mitted TO the General Assembly for the
reason that it was positively stated
that 1t was not proposition, but |
wrote the ATTORNEYS for Schafcr Broth
ers that If they had any formal offer
10 make | would cheerfully transmit
il 70 your honorable body, with such
recommendations as 7 thought right.
On February 2 l received another
letter from the attorneys of the bond
holders. in which they in substance
suggest that | ask your body TO APP
point a commission TO confer with
them TO the end that some adjustment
satisfactory to all parties might be
reached
In accordance therefore with what
consider their wish. and not desiring
to throw any obstacle in the way of
fair and honest adjustment, but
wishing to give you all information
in my power. ] herewith transmit to
YOU both of the letters received from
the bondholders, to the end that you
may consider the same and do what
to you seems proper and right under
the existing circumstances.
1t may not be amiss for me to state
TO YOU my views upon. this matter,
made after u most careful and thor
ough investigation.
These bonds are honest-not belong
ing to the fraudulent tax bonds class, |
and as stated before, were issued by
patriotic men. trying To build up and |
develop the State. However. as before |
suggested, they We're sold in the mar
ket, after the State mad passed into
the hands of incompetent men, below |
par and paid for in deprecated cur
reEcy, thus making the actual amount |
paid Tor them no more than one |
fourth OF their true value. Ne have |
III the past made an honest effort to
settle these bonds. but the bonihol- |
.ters refused TO accept our price As |
long as these bonds remain in the |
hands OF Schafer Brothers VIC caunot |
be mclested, fer an individual cannot |
sue Sovereign State and Schafer |
Brothers will therefore have TO find |
some State willing TO purchase their
bonds before we can be interfered |
With by any more suits.
In my opinion, considering the diff |
cuitieS in the wav of collecting the |
obtained on these bonds. |
and further on account Of the odiun |
attaching 20 any State purchasing
claims against another State for the |
purpose of instituting suits to collect
the same, no State will give any con- |
amount for these bonds.
| therefore cannot and VIII rot 1