Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1914-04-13
$75.239.37O

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OF these debts the report, which is
signed by Viscount Goschen, the new
| chairman, says:
1T is indeed deplorable that these
prosperous and progressive states of
the great American Union take no
steps to settle their defaulted debts,
and it seems, to say the least of it,
an anomaly that the United States
should insist on compliance with it's
obligations by country like Santo
Domingo when so many of the states
| within it's own borders are not OBJ
| serving their own engagements.
''The excuses put forward by these
| states for non-payment are manifold,
but they may be generally classed un-
| der three heads:
"O North Carolina pleads that
her defaulted obligations were con-
| tracted while the state was being adj
ministered by the federal government
after the civil war. The answer to
this, Of course, is that the bondhold.
ers have nothing to do with differ.
ences between the states and the fed.
eral government. One or the other
must be responsible for the issue OF
|
unfair that the state should refer it's
creditors TO- the federal government
and that the federal government
should refer them back again to the
state. Tennessee for many years
adopted the same attitude as North
Carolina; but the former was wise
enough to realize that no state can
maintain it's position in the world OF
credit which attempts to- justify the
reputation of obligations by excuses
which, in the case of individuals
would not be tolerated in any civiliz
ed court of law, and therefore came
to a settlement with the holders of its
bonds.
"(2) Louisiana alleges that there
were irregularities of some kind OF
another in connection with the issue
Of most of her repudiated bonds. II
| would, of course, put an end to al
credit if state, on discovery that its
own officials had acted incorrectly in
the course of the issue of a loan
repudiated all responsibility for the
! money obtained from the public
There is, however, one issue, or part
of an issue, known as Baby bonds
concerning which not even the fore
going excuse can be pleaded. In this
case, in spite of the fact that the
bonds are expressed on their face t
be issued by the state OF Louisiana
in accordance with the states consti
tuition, and although they are special
ly secured. on arrears of taxes col
lectible by the state, which, it is ad
mitted, were diverted to other pur
poses, payment is denied on the as
tonishing plea that the bonds were
not guaranteed by the state.
"t3) Mississippi's excuse for no
recognizing her defaulted debt is the
worst of all. Between 1881 and 1885
the state issued two loans, for which
she obtained full value and the pro
ceeds Of which were invested in the
establishment and development OF two
banks. So long as the banks flourish
ed and made good profits the interes
on the loans was paid; but when
owing to oVer-speculatiOn, bad time!
came and the banks got into Difficult
ties, Mississippi made this the eNcus.
for Ceasing all further payments t
the bOndhOlders. For a state to repu
dat" its ObligatiC MS to its creditor!
because the investments it choose
to make with their money do not tur.
out protltably is absolutely ind"cpnsi
bic, and, as far as the council ar,
aware, such an argument has npvo
been resorted to by even the mos
backward of the Spanisl-AmericaI
republics.
Tn" report intimates that a propo
sal is now before the foreign oftic
to secure settlement Of the claim
against Honduras, but very little hop
is entertained of it being successful
The amount due by Honduras includ
; As no interest has been pajI a,ur,
lNI2. and tn" rate on two Of TIE loan
Was ten per cent, the amount is lorg"l,
: lining interest is roughly $12l ,"Uu. 0"n
made Up of unpaid interest
Donations to the University Of chi
caEo duri"" the last Year amounted
Obn