Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1914-04-13
follows:
S75,239,370

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, 1t seems, to say the least of it,
an anomaly that the United States
should insist on compliance with its
obligations by country like Santo
Domingo when so many of the states
within its 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 IN
der three heads:
"f1) 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
eHees between the states and the fed
eral government. One or the other
must be responsible for the issue Of
the loans in question, and it is most
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 its 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 settlement with the holders of it's
bonds.
"(2) Louisiana alleges that there
were irregularities of some kind or
another in connection with the issue
of most of her repudiated bonds II
would, Of course, put an end to all
credit If state, on discovery that it's
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 to
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
! Iecttble by the state, which, it is ad-
mitted, were diverted to ether DUR
poses, payment is denied on the as.
tonishing plea that the bonds were
not guaranteed by the state.
"(3) Mississippi's excuse for not
recognizing her defaulted debt is the
worst of all. Between 1881 and 1888
J 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
t ed and made good profits the interest
! on the loans was paid: but when,
! OWING TO OVer-SpeCulatiOn, bad times
| came and the banks got into Difficult
! ties, Mississippi made this the excuse
! Tor ceaslng all further payments to
! the bondholders. For a state to repu-
dl2te its obligations to its creditors
! because the inve stments it chooses
| to make with their money do not turn
out profitably is absolutely indefensi-
| bic, and, as far as the council are
aware, such an argument has never
been resorted to by even the mos
Backward of the Spanish-Ampricap
| republics"
The report intimates that a propO,
sal is now before the foreign offico
20 secure a settlement of the claim
against Honduras. but very little hope
| IS entertained of it being successful
IN" amount due BY Honduras incmd.
| AS no interest has been paid sinrn
! M. and tho rate on two Of the loans
was ten per cent. tn" amount IS largely
! lhlnG interest is roughly $121 .0n0 600
made up of unpaid interest.
donations to the University Of Chi
h., loo, 4