The Durham recorder. [volume] (Durham, N.C.) 1879-19??, 1910-09-29

o0ls
more republican financiering. N
The educational fund owned $780,
900 of stock in the w. and w. r. R.
and w. and NJ. R. r., which he sold
for Sl5S,0o0, and with this educa-
tional fund and with 00,000 bor-
rowed from Swepson's bank, he paid
them off and they went away---went
away in April to come back in 4 No
vember. What would they find when
they returned?
1t is. to be remarked that the $780,
100000 Of bonds authorized to be
issued were not be issued gradually
as the roads should be built-or as
the bonds were needed; nor was any
security required for their proper
use.--nor was any condition or .limi-
tation imposed in regard to them.
That would have interfered with the
due execution of the agreement for
the payment of one-tenth to the ring.
They were to be issued as called for.
Swepson drew his first-towards the
close of the year--and after that
others as they could get them. At
first the price ranged about so cents,
but during the summer. when mil
lions on millions were thrown on the
market, the bonds began to depre-
ciate. In the meantime the Whining
ton and Weldon railroad, fighting the
completion of the Chatham railroad,
brought a suit, Galloway VS.. Jenkins.
treasurer. to test the validity of
bonds authorized by the convention
to be issued 10 the Chatham railroad,
and they were declared to be uncon-
stitutional: and in July. 1863. in a
case known as the University r. r.
Co. VS.. Holden, the supreme court
held that appropriations made to cor
porations not in existence we're in
valid, and In consequence of that de-
cision and of the opinions filed by
the different members of the court,
many of the appropriations fell TO
the ground as unconstitutional. In
another suit. called the Kehoe suit.
it was said that Tim Lee handed TO
Judge Watts, who heard the case,
batch. of $4,000 in bonds. and. the
scandal of this proceeding brought
odium on the bonds.
As a matter OF fact, only about
s14.000,000. out of s25,O00.000 OF
bonds authorized. were actually Is
sued. Nor was the validity OF these
unquestioned. During the progress
OF the legislature, leading democrats
and the public press denounced the
whole proceeding, questioned the
validity of the legislature, denied its
right to bind the peop,e, and served
notice on the world at large that the
taxpayers of Old North Carolina dis
owned these bonds, disayowed their
validity and would never pay them
Among other objections, II was
urged that the constitution estab-
lished a limit Of taxation, and that
this limit could not be exceeded
merely by calling the unconstitu
tional tax in excess OF the limit I
special tax" but the promoters o
these schemes held that where I
special tax" was laid the constitu
tional limit did not apply. And 81
to pay the interest on these bond
they levied special taxes" whicl
gave them their name. These take
amounted to "a cents on the 500.
During the summer interest wa
defaulted and the value Of the bond
declined.
Swepson had deposited the create
part OF his bonds as collateral secnr
ity in New York for a loan OF abou
81. 10000 about 1000 of whicl
he invested in Florida railroad stocl
and bonds. which. in the end. yielde
no money. As the bonds sank &
value. they were thrown on the mar
ket and the depreciation was has
tened.
At length. In September. a gres
effort was made TO restore their maj
ket value. II was given out III
bonds would soon advance. and
combination vas made to bull then
Swepson, Littlefeld. A. J. Jone
president OF the Western r. r.. an
DIR. Sloan, president OF the w. c. an
Il. n. r., and others, along with n
governor Of the state and the stat
treasurer, had a meeting ia Ne
York and the details Of the arrang'
ment we're agreed on.
Soutter and company had been N
financial agents Of the state. and no
these were discharged and Clews an
company succeeded them.
An agreement was made by n
) railroad presidents to the effect thi
/. they should go into a pool and vi
their bonds on hand as a maGin
buy in other bonds on the marke
and that certain other parties shou
go in with them TO make the NOV
E ment lively and create the impre
4 zion that there was an extensive al
: more general demand for the bond
!. The pool being formed. Andre
Jones, LittIeield. Swcpson, AZ
2 Branch and company put their bon
I with a firm styled UtIey and Doug
< erty as a margin TO carry out N
program. And the speculation b
4 gan. Latin, Martindale. Moore al
others were also parties TO the spec
Iation.
II was agreed that the treasur
: should make advertisement that q
{. interest. then long In default. wou
4 ha oofd nm nroaanfaffon nj cnuuo