The log cabin Democrat., 1921-03-30
STATE WILL NOT REPUD|ATE BONDS M'RAE ISSUES STATEMENT Veto of Bills Need Not Worry BOnd- holders, Declares Arkansas
 Executive.

Little Rock, March 30.-The publi- cation in several eastern newspapers of articles written by staff cores pondents severely criticizing Arkan- sas' good roads program, and the eff feet it will have on the many millions of dollars of bonds sold to eastern capitalists, has created a profound sensation throughout financial circles and caused many telegrams to be sent here and other sections of the state making inquiries as to what Governor McRae told the correspondents. The New York Times today asked Gov ernor McRae if he had been correct ly quoted by the correspondents and the governor sent the following tele gram last night:
 Responding to your telegram, quotations from my interview sub stantially correct, but one bad result would seem to be unwarranted dis turbance among stockholders outside my state. Conditions bad enough to warrant what I said, but am deter mined not to permit repudiation or impairment of contracts already ne gotiated. 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 obliga tions involving bond issues. The public in Arkansas understands full well my position, and understands that 1 will not countenance repudia- tion if 1 can help it. I used the fol- lowing language last week in veto of road bill affecting Arkansas coun- ty: While this bill does not repu- diate the bonds, in form, it's effect is to make more difficult and uncer- tain the remedy to enforce their pay ment, to cast doubt upon the validity of the proceedings brought to fore close the lien of the mortgage, to de stroy confidence in their titles under such sales, to reduce the amount that could be collected for their payment. and finally, to reduce the estate that could he sold by four years below what was covered by the mortgage
 Further, I said: Mistakes of for mer legislatures cannot be corrected at the expense of the states good name and honor, or at the cost of those who have man investments in reliance thereon. The enactment at this time of any statute giving color to charge of disregardng public obligations, 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 state and municipal securi- ties, and depreciate the value of their holdings, precipitate demand for the immediate liquidation of all pub lie obligations as they mature, and shut the doors against temporary ac- commodation and extensions that may be necessary in the public inter- ests, and above all, it would bring reproach upon the honor and good name of the state, whose preservation now, as heretofore, far transcends in importance to the state and people all benefits that could possibly flow from this class of bills.
 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 upon it's good name, the duty of the gov ernor to withhold 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 hourt. I only want to make it clear that conditions are alarming, but that obligations already incurred must be