The courier-index., 1921-04-01
Arkansas Will Not
 Repudiate Bonds

Little Rock, March 29.-The pub hcation in several eastern newspa- pers of articles written by staff correspondents severely criticising Arkansas good roads program, and the effect it will have on the many millions of dollars of bonds sold to eastern capitalists, has created profound sensation throughout fi- nancial circles and caused many telegrams to be sent here and other sections of the state making in quiries as to what Gov. McRae told the correspondents. The New York Times today asked Gov. McRae if he had been correctly quoted by the correspondents and the governor sent the following reply this even ing:
 Responding to your telegram, quotations from my interview sub stantially correct, but one bad re- suit would seem to be unwarranted disturbance among stockholders out side my state. Conditions bad enough to warrant what I said, but am determined not to permit repu- diation or impairment of contracts already negotiated. Only wanted to sound note of warning for the benefit of the whole people, inside Arkansas and out.
 Arkansas must not put herself in attitude of standing for impairment of contracts or repudiation of obli- gations involving bond issues. The public in Arkansas understands full we'll my position, and understands that l will not countenance repu- diation if can help it. | used the following language last week in veto of road bill sffecting Arkansas county: While this bill does not repudiate the bonds, in form, it's effect is to make more difficult and uncertain the remedy to enforce their payment, to cast doubt upon the validity of the proceedings brought to foreclose the lien of the mortgage, to destroy confidence in their titles under such sales, to re- duce the amount that could be col lected for their payment, and final ly, to reduce the estate that could be sold by four years below what was covered by the mortgage
 ''Furthet, I said: Mistakes of former legislatures cannot be scor- rected at the expense of the states good name and honor, or at the cost of those who have made investments in reliance thereon. The enactment at this time of any statute giving color to charge of disregarding public obligation, of repudiation in any form, or to any extent, would be fraught with untold ills. It would impair the credit of the state and of it's subordinate agencies, alarm the holders of the state and munich pal securities and depreciate the value of their holdings, precipitate demand for the immediate liquid ation of all public obligations as they mature, and shut the doors against temporary accommodation and extensions that may be neces- sary in the public interests, and above all, it would bring reproach upon the honor and good name of the state, whose preservation now, as heretofore, far transcends in im- portance to the state and people all benefits that could possibly flow from this class of bill.
 Believing that the enactment of the proposed law would do a great wrong to the bondholders of the dis trict, that it would impair the credit of the state and bring reproach up- on its good name, the duty of the governor to withohld his approval is plain, and that duty must be per formed
 "This is the only phase of the un- happy road situation in Arkansas which I care to be quoted upon at this hour. I only want to make it clear that conditions are alarming, but that obligations already incur red must be met honestly and man. fully.
 "THOS. c. M'RAE.~