The Caucasian. (Clinton, N.C.) 188?-1913, 1910-02-03
THE FRAUDULENT CARPET-BAG
BONDS,

passed an act pEOFlulnR IOr the ac-
ceptance of donations and gifts and
directing that If the same were In
the form of securities 1t would be the
duty OF the Governor to proceed to
realize cash on the same, etc.
1t seems that following the passage
of this act. some New York par
ties, headed by former Secretary of
the Treasury. John G. Carlisle las
stated by the Governor of Rhode
Island), presented to that State,
through its Governor. about a half
million Of the carpet bag special tax
bonds OF North Carolina. 1t seems
that the Governor of Rhode Island
accepted the bonds. but awaited the
converting OF the Rhode Island Legis-
lature to report the same to the Leg
islature before proceeding to collect
the same by suit against North Caro-
lima.
In the meantime. however, the
Governor of Rhode Island had in
formed the Governor of North Caro-
lima Of the donation. and also as to
the nature OF the bond and ask
settlement for the same. Whereup-
on, the Governor Of North Carolina
proceeded to inform the Governor of
Rhode Island that the bonds in ques-
ton were fraudulent carpet-bag
bonds and that the State never re-
ceived any consideration for them,
and further proceeded to point out
that they were entirely different from
the Second Mortgage North Carolina
Bonds, the validity of which had been
recently upheld by the Supreme
Court of the United States and which
have been paid.
Upon receiving this information,
the Governor of Rhode Island called
upon the Legislature to repeal that
part of the law which made it his
duty to collect any bonds donated,
SO as to leave it to the discretion of
the Governor.
The Governor OF Rhode Island, in
an interview which was recently pub
lished in the News and Observer, with
reference to this matter, said:
When the act authorizing
their acceptance was passed by
the Legislature l had no intima-
ton of the intent of the donors.
l was hopeful that we would re-
ceive a substantial gift from
some source for our system of
parks that we are establishing.
When these North Carolina
bonds were presented to the
State, was told that many of
them were held by investors in
New England and Rhode Island.
l was under the impression that
they represented legitimate in
vestment and that North Caro-
lima had received full value for
them. Although they were pre-
sented to the State some months
ago, I decided not to take any e.
action and to await the assem-
blage of the Legislature. Until
HOU0rnnr lot
situation in an interview, I did
not know the real character Of
the bonds. I had been much i'm
pressed with the fact that John
G. Carlisle, representing the
donors, was identified with the
gift. AS soon as I read Cover
nor Kitchin's splendid statement,
the matter assumed an entirely
new aspect. The Legis-
lature will probably leave the
act SO that we can receive gifts
to the State, but the provision
making mandatory suits will be
eliminated"
This statement from the Governor
shows that he declined to enforce
the collection Of these bonds because
he was convinced that they were
fraudulent, but that if they had been
b onest bonds there would have been
no objection to accepting and collect
ing the same. (
A few days after this incident was
closed, as a result of the action of
the Governor and the Legislature of
Rhode Island. the Raleigh News and
Observer, in an editorial, said:
''The recent attempt of the
bond syndicate, which formerly
operated through the Republican
Governor and Fusion Senator
from North Carolina, has served
to call attention to the venal
acts Of the carpet-bag legislation
that cursed the South"
This shows that the Raleigh News
md Observer is not only attempting I
% mislead its readers. but also that |
t is maliciously dishonest. The ed
tor of that paper attempts to create {
he impression that former Senator {
Butler of North Carolina is to-day {
with the Carlisle syndi- 7
ate which has just donated |
he carpet-bag bonds to Rhode ISL a
nd. He either knows that this is I