Year: 1877

DELAWARE BoNDs.-We published a
letter to the financial editor of the Ledger
from Joseph c. Grubb, ESQ.,, a resident
Of Philadelphia, but temporarily sojourn-
ing in Wilmington, his native city. In
this letter Mr.. Grubb took the ground
that Delaware could not legally and hon.
orably call in her bonds and pay them
before their maturity in 1885, as she has
proposed to do, without buying them at
the market rate; that the notice given to
the holders of certain of these bonds TO
come forward and get what the face of
them calls for with interest to July next,
after which time all interest will cease to
be paid on them, is not sufficient. The
Ledger to-day refers to the matter and
says:


"These Delaware bonds have coupons at
tached for the remainder of the time to 1885
showing that at the time of their creation
1885 was considered the peroid of maturity
A bond is a contract whether made by the
nation, state, a city or an individual, and
contract implies at least two PARTIES
This Delaware bond is simply contract
made between the State and the holder and
as 1t is not perfected without the assent of
both, the natural inference is it cannot be
annulled or altered without the assent of
both. The point at issue is, do the words
''on or before" confer on the state the right
TO redeem the bonds eight years in advance
of the limit Of maturity without the assent
OF the holder, the only other party TO the
contract? We thidk not. The Government
as we'll as the state, has made many $40,
1910 and 1918 years bonds, but they have
always been SO clear and express in their
wording as to leave no doubt as TO their pur-
pose. Every holder of $40 bond knows
that the Government on giving the pre-
scribed notice after five years, may redeem
il and stop the interest. But we see or hear
of no such authority in the law or in the
contrast for anticipating the Delaware
bond, except the doubtful words ION or be-
fore" which may, in their literal reading,
apply as well to both the contracting par
ties as TO one-the creditor as to the debtor,
indeed, much more nationally to both than
TO either one. Before the State of Delaware
can pay the bonds in question, or stop the
interest upon them, the assent of holders
must be had and obtained. The length of
time TO maturity of bond is an i'm portant
consideration, too important to rest on the
equivocal expression of ION or before


1t is said the Bank of North America
has purchased very largely of these bonds
at premium as high as per cent, and
that it is probable contest will be made
through the courts as to the legality of
the refusal of the State to pay interest
after July on the bonds she has proposed
to take up. The last Legislature believed
the State had legal right to take I'D her
bonds; but if the courts decide other
wise she will be bound by their decision.
1t is expected, however, that the parties
holding the bonds will not resort to this
cost and trouble, but accept the tender
that has been honestly made by the State.
The Ledger is the property of monied
men and brokers whose interest NAV
have led them into error, although the
coupons attached to the bonds look very
like the bonds were to run until they
were all paid. Still wise buyers general
ly avoid dealing in titles that are ques-
tionable, and purchasers at premium
having already good investment at 5
per cent, may hope to make it better by
securing six for eight years to come,
whether the State intended it or not.