The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-07-01
Governor Glenn On the
Special Tax Bonds.
WILL NEVER BE PAID
Neither the Governor Nor the General
Assembly Can Order Their Payment
as Long as Article | of the
Constitution is Un-
changed.

Governor Robert B. Glenn in a state.
ment yesterday relative to the Special
Tax Bonds issued by the Legislature
of 1S6S-'69, said:
THE Special Tax Bonds,
not being honest, but fraudulent
should for the following reasons,
never be paid:
They were issued by Legislature
not legally organized or constituted.
They were part of conspiracy and
plot to defraud the State.
They were placed on the market
sold for a mere bagatelle and the
State never received any value for
them.
They are now past due, the original
purchasers knew of their fraudulent
character; they have been repudiated
by both Legislature and people, and
anyone now buying them would take
with notice, and could not claim to be
an innocent purchaser for value
The Governor said that he would
oppose their collection, if attempted, to
the utmost limits of the law. In speak
ing further of the impossibility OF
their payment, Governor Glenn said:
II feel assured, that even if any
State could be found. SO low, as TO
make of itself a junk shop to aid
these fraudulent bondholders, no court
VIII ever give judgment against us,
or enforce the payment of such illegal
and void bonds
The people and the Legislature, he
said. have refused to recognize these
bonds, and so no Governor or not
even the General Assembly, could or
der their payment, as long as Article
/. Section s, of the present State Con-
stitution remains in force.
These statements by the Governor
are contained in letter written by
him in reply to a ton
from Mr.. f. II. H. Wilson, of Winston,
y. c.
Mr.. Wilson's lettgr, received by the
Governor few days ago. is as fol-
lows:
winston, N c.. June IS. 1905.
Hon. r. r. Glenn. Governor. Raleigh.
N G..
my Dear Governors recent
settlement made by the State of the
South Dakota judgment, and the bonds
held by Shaffer and others, met with
general approval throughout this sec
ton, and our people are gratiiieds to
know that through your great efforts
and intelligent management of this
matter proper compromise was ar
ranged.
mere HOW Springs UP
matter, which it seems was not con-
sidered at the time of this 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 outStand-
ing, and the State will be put to very
great expense should it be made to pay
leo te. h
is a matter of much interest to our
people i'm this section, ] would be glad
if YOU would let me know your opin-
ion i'm regard to the difference, IL any
exists. between the Shaffer bonds and
the Special Tax Bonds, and If the lat
ter can be enforced against the State
Of North Carolina.
ASSURING you of my very great re-
spect, / am.
Very sincerely
"E. II. WILSON"
Governor Glenn's reply in full:
Mr.. T. H. Wilson, Winston, \. c.
My Dear Sir:-Replying to your
letter of date June Goth, 1905, which
i'm terms is very similar to a great
many others that | am receiving from
different sections of the State, | deem
it best to make public answer, thus
trying to reach all inquiries and set
at rest their fears in regard to suits
against our State by persons holding
certain State bonds.
There is a vast difference between
the bonds referred to in your letter as
the Schafer Brothers and South Da-
kota bonds. and those designated as
the Special Tax Bonds.
In 1879 the Legislature of the
State composed of some of our ablest
and most patriotic men, appointed a
Joint committee, or rather commission,
to fully consider the question of the
States Indebtedness, and report what
debts we legally owed, and what were
unjust and fraudulent, to the end that
a bill might be enacted in accordance
with their findings. This commission
consisted of wise, honest and fair
minded men, who after a most search
ing and impartial investigation, re-
ported 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 forty per cent of the prin-
cipal.
Second Class. Bonds issued by vir-
true of the Acts of 1865. Chapter 3,
1867, Chapter Sc, 1861. Chapter 1877,
1854 and SIS. Chapter 228. 1S60-'61,
Chapter 142, upon which we should
pay 25 per cent of the principal.
Third Class. Bonds issued by vr-
true of Funding Act of March 10th,
1866. and August 10th. 1868, upon
which we should pay 15 per cent of
the principal.
Fourth Glass. All other bonds.
known as Special Tax Bonds they
recommended should not be paid at
any price.
This report was enacted into laws
as will be seen by reference to Chap
ters 90 and 26S of the Acts of 1879
Under the first act our creditors, rec
ognizing our willingness to pay al
our honest debts, Notwithstanding oui
poverty. brought on by the war and
days of reconstruction, with few ex-
cepitons came in and cheerfully set
tied upon the terms suggested, taking
new bonds instead of the old.
Under the second act the question
as to whether we should pay the
fraudulent special tax bonds was sub
mitted to a vote of the people. ant
by majority of one hundred ant
eleven thousand nine hundred ant
thirty. the people decided these bond;
should never be paid and made theil