The Hattiesburg news. (Hattiesburg, Miss.) 1908-1917, 1908-10-19

ludu lue principal OD1SOT, IHlS trouble
will disappear. The former are to be
sold to make good a failure to per-
form the obligation, and in the latter
case the guarantor must step up and
pay. A bank lends money on collat-
eral securities with power of sale,
and also lends money on endorsements
the endorser guaranteeing payment if
the maker of the note fails to do so.
No one ever thought of selling an
endorser at par or otherwise.
Now there is no such thing as par
value of endorsers or guarantors. They
are either good or not good in the
opinion of the one accepting them as
sureties Now, if these surety COM
pany bonds, authorized to be taken by
the State of Mississippi, are not good.
then the State is committing an out
rage on its citizens in permitting them
to do business in it's borders. If
good enough to be received as sure
ties for the State Treasurer, when he
had million or more in his vaults,
and the law made it mandatory on the
Treasurer to give Surety Company
bonds, which it would not have done
if they were worthless; if good enough
to be received as sureties on every
State officers bond. on the bond of
every tax collector and sheriff, of
every city and county treasurer and
every county officer and city officer;
if good enough to be received as sure
ties to protect the property of every
orphan child in the State on guardi-
ans bonds; to protect the property of
every widow and orphan on the bonds
of executors and administrators. and
to protect the beneficiaries of every
trust in the State; and by the laws
of this State these bonds are to be re-
ceived for all these purposes, then in
the name of common sense why are
they not good enough to protect the
State itself when it's funds are in the
hands of banks, and never to an
amount in excess of thirty-five per
cent of the capital and surplus of that
bank?
One would think, from your letter,
that a bond to secure a faithful ac-
counting by one handling public funds
was a new thing in the State, where
as in truth. under the sanction of the
law, millions of dollars belonging to
the public. in State, county and muni-
cipal treasures. and belonging to es-
tates, widows and orphans, have for
years been secured in no other way,
and in all the cases. except State
funds, which were kept in the Treas
ury, the funds are in the various banks
throughout the State. If these bonds
are not security worth a cent" it
is passing strange, and in my judg-
ment. an outrage that the State law
permits them to do this business, and
our Governors ought to have RECON-
mended the repeal of laws permitting
1t.
Section / of this act, above referred
to, makes the bond company liable for
attorneys fees, costs and expenses of
collection and one per cent per month
if it does not pay up any shortage,
and, where there is no dispute as to
the liability, or shortage, of the de-
pository, it is inconceivable that
surety company would fail to pay up
at once.
If there were any disputes as to the
shortage or liability or the depository,
then there would be litigation. wheth-
err the security were collateral bonds,
deposited with the Treasurer. or sure
ty company bond for the sale of the
sale of the collateral would be en-
joined until the dispute were adjudi-
Gated A disputed liability is never
anything but a claim or right of ac-
ton" until adjudicated, however Sc
cured.
COLLATERAL SECURITY ONLY?
/ note what you say you will not
whatever be the law take any Sc
surity not collateral, and that only of
a character which has known value
the world over" and on which you
would readily realize in the time of
need"
This sounds we'll. but is it fact?
Let us see. l presume, you have TAX
en- Mississippi bonds. What are their
known value the world over? Didn't
the State have to go out and make
temporary loans from local banks
when she held some three hundred
thousand or more of her own bonds
which she could not sell at par, and
which she still holds in her vaults?
I presume you have some of the
Yazoo City bonds. as you boosted of
making a market for them" and in
passing. / ask how could you make
market for security with known
value the world over" What is their
value the world over? This city is
Continued on page three.)