New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-04-07
SUING A SOVEREIGN STATE

"A new way has apparently been fOund n
compel a State TO pay its debts. Under tho
leueTaI constitution, as originally adopted the
supreme Court was authorized to try, in addi-
uOn TO suits to which the United States was
itself a party, suits between two or more
states, between a State and citizens of an
other State, between citizens of different
States, between citizens of the same State
cialmlng lands under grants of different States
and between State, or the citizens thereof
ana foreign States citizens or subjects" But
the latitude Of this grant of Jurisdiction was
soon objected to by the champions Of State
rights. They insisted that the power to sue
State should be abridged, and by the Eleventh
Amendment, ratified in 179S it was declared
that no State should he compelled to defend
suit brought against 1t by citizens Of another
State, or by alien citizens or subjects Protect
ed by this amendment States have from time
to time scaled or repudiated their debts, and
holders of bonds if citizens of other States or
aliens, have been debarred from redress through
federal action.
Not long ago an ingenious attempt was made
to get around the Eleventh Amendment and to
accomplish what it plumply fOrblds by indirec-
ton. The State of North Carolina issued in
1869 some bonds to aid in the construction Of
the Western North Carolina Railroad Some
years later the State Legislature "readjusted'
this debt, offering to compromise with the bond
holders. large part of the issue was taken
up on the States terms But certain owners
held out for redemption at face value. They
could not personally bring North Carolina into
court but they conceived the idea Of present.
ing ten of the outstanding bonds to the Univer-
sity OF South Dakota. State institution. South
Dakota thereupOn brought suit in the United
States Supreme Court to recover the face value
of the bonds, with interest. The case was hotlv
n lint hn
verdict against North Carolina. issuing a judg-
ment in South DakOta's favor for $27, 400. This
Judgment was to be satisfied by January /
1908. But stay was afterward granted until
the first Monday in April On Saturday, April
1, the Attorney General of North Carolina
deposited a check for 27,4OO with the clerk
of the Supreme Court, and the litigation was
ended.
On its face the suit left the individual bond
holders no better off than they were before.
except for the thanks of the commonwealth
which had profted by their experiment. But,
as a matter of fact the Supreme Courts YER
dict has led the North Carolina Legislature to
offer new adjustment Fearing. perhaps that
more bonds given to States would have to be
redeemed with interest, the legislature has
agreed to pay S215,O00 to extinguish the ont
standing debt, allowing nothing for interest
that has accrued. This offer is likely to he ac-
cepted, inasmuch as it reimburses bOndhOlders
who have no power TO enforce payment for
their own benefit. At the same time North
Carolina relieves itself Of obligations which, if
held and recovered on by other States would
make necessary an outlay of 100000. The liti-
CATION thus closed appears. therefore to have
had practical value in compelling a State to no.
tice claims against which it thought itself legal
ly protected. Happily, the days of debt scaling
in this country are over The States nowadays
are both able and willing to satisfy all their
just obligations But North Cardinals recent
experience suggests that, even if a common
wealth's sense Of honor does not prompt it to
pay its creditors, a way can still be found to
prod 1t into recognizing that honesty is the best
and cheapest policy