The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-02-02
Letter of Argument Made
No Offer.
NO THREAT MINDED
Correspondence Between Messrs. Rio.
aud and Busbee and the Governor
in Reference to the Bonds of
Shafer Brothers. Why Was
Not an Offer Made?


home and his blithe disappearance
in the midst, the subjoined communi-
cation indicates the extent Of the
proposition in regard to the bonds of
the State now held by Shafer Broth
ers and associates, a part of which
were given to the State of South Da-
kota for the purpose of sustaining a
suit and creating threat against the
credit and the financial ability of the
State.
Although Mr.. Ricaud, in interviews
published in this paper has said that
he had transmitted an offer of set
tlement of $350,000, approximately,
he declined to state to what quarter
he made such proposition.
The gentleman Is coy to excess of
shyness. He is as it were fearful of
being taken up, or he is overly sus-
picious Of being turned down. Even
now he does not come forward with
STRAIGHTFORWARD proposition or offer.
He would and he would not. To
Busbee, both of them bright men,
SEEK Il hearing Of specious arguments
'r1 d'~-enge n"orS pleading bV
Legislature which they say in effect
49,, ~ not care to approach unless
they have in advance the approval or
Governor Glenn. They would make
him the conduit, the mouth-piece or
such argument to the Legislature
which, EXCEPT as to the authority
gained by reason of the decision or
the court fol owing the gift of bonds
by their clients for the admitted pur-
poses OF litigation, has been heard
until Il is as an oft-told tale TO baoes
and children.
Such a pseudo proposition, luke
fpnfAtiEH,
scarcely cut much ice, for all the fact
that it has gained another bit of no
toriety for shop-worn theory GOV?
ernor Glenn in his reply, dashes cold
water on the scheme. He sees through
the pretense. The Legislature is the
sole judge, and 1t Is not sitting 10 near
any proposals with a string afflXed.
There is a difference between the
present Governor and he who sat in
he Executive chair five years ago.
Mr.. Ricaud is perhaps mistaken IN ms
dates.
Governor "Bob" Glenn is not a cats
paw, at any event.
The hot chestnut of the South pa
kota. bond decision must be handIed
in another way.
January 80, 1905.
.To His Excelency, The Governor or
North Carolina
sSir-We think it due to ourselves
as attorneys for Schafer BROTHERS
owners of certain bonds issued by thH
State of North Carolina and trustee
for holders of these bonds, and due
also to the State OF North Carolina,
that we shall state in direct language
the reasons which have induced us 70
submit no forma. proposition TO the
State for the settlement OF these pohus
THE facts concerning these bonds
although misrepresented III almost
every recent publication which mas
been made concerning them, are not
questioned.
"Schafer Brothers in their own right
and as representatives of others, are
in actual possession of two hundred
and twenty-four bonds of one tnou-
sand dollars each, issued under the
circumstances detailed below They are
authorized to say for the owners OF
eighteen additional bonds that any ad-
justment reached VIII be accepted by
such owners, SO in effect they repre-
sent two hundred and forty-two bonds
The only other bonds of this issue of
which any one has any knowledge are
the bonds which have been reduced toI
Judgment by the State of South Da-
kota.
"Schafer Brothers, and those for
whom they are trustees, are purchasers
for value Of these bonds, and in their
and credit of the State of North Caro-
line, and upon the pledge of North
Carolina Railroad stock endorsed
thereon.
'"Schafer Brothers naturally have no
knowledge of the prices paid for the
bonds held by the other present own
ers, or by those of whom the present
owners bought. AS to their own bonds
now amounting to 112, most Of them
were purchased before there was any
default in the interest, and the price
paid for the entire lot, including some
bought at so after the default in in
terest. would average siXty-siX cents
on the dollar.
1.-The firm happened to preserve the
original bills of sale for some forty
five of these bonds, which are subject
to inspection by any representative of
the State.
THE bonds were issued under the
Acts 1854 and SIS, Chapter 228, and
under an act amendatory thereof,
Chapter 106 of the laws of 1866 and
1867, ratified December 10. 1866, en-
titled IAN Act to enhance the value
Of the bonds to be issued for the COM
pletion of the Western North Caro-
lima Railroad and for other pur-
poses
'"rhe provisions of this act are
familiar to all who have. kept advised
of the progress of recent events. BY
it the Treasurer OF North Carolina
was required 10 mortgage as collateral
security for the payment Of each bond,
ten shares of stock of the North Caro-
lima Railroad Company.
This act gives no intimatior that
this stock of the North Carolina Rail-
road Company was subject TO a prior
lien in favor of the holders of the
bonds issued for the construction of
the North Carolina Railroad Com
pany, and the purchasers at the time
had no knowledge of such first mort
gage lien.
Shortly after the purchase Of these
bonds by Schafer Brother, the State
defaulted in the payment of the in
terest and up to this date has paid
nothing on the principal or interest.
Soon after such purchase the holders
of the North Carolina construction
bonds brought suit to enforce their