Year: 1877

Sleaiiy HoHtsl, leSai aHu lfcc lTUin taint of fraud, we would be in favor of sealing when we were convinced that the debt was greater than the State could discharge; but in so much as the Gazette itself acknowl- edges that a large portion of our SlS,000, 900 indebtedness is vitiated by fraud, we cannot see how the

 State can honorably submit to pay anything on the fraudulent part when it defrauds our honest creditor out of . share of his claim which is just and free from all taint of fraud.

 We fail to see the force of the Ga zette's argument. Here IS the way our esteemed contemporary puts it:

 But Arkansas can never pay the interest on eighteen millions and run her State Government. Very we'll. She is not expected to do so. Very much of the debt is fraudulent and for the bonds that stand against us-all of them-the people received very small consideration. But there is an amount variously estimated at from four to five millions, for which the State is legally and firmly bound. Now let us suppose that our credit ors agree that for this amount, four or five millions they will relinquish all evidences of. indebtedness that stand against us, what objection can there be to the proposition? Sup pose they say to us: ''We know that much of this debt is fraudulent and we do not expect to exact what is nominated in the bond, but we pre- fer, as business matter, that all bonds shall be included in one settle ment in order that the new bonds which you are to issue may go on the market under more favorable auspices" What objection could there be to such a settlement, provl- ded it includes no more than the amount of our legal indebtedness?"

 The objection is simply that it is not half as honorable to pursue this course as it is for the State to say:

 "Gentlemen, we owe but about five millions dollars of valid debts; the remainder of the indebtedness which is made to appear against us is fraud. We are able to pay our just and valid debts, and we will make provision for them in full. We will not allow holders of fraudulent claims to bull -doze us into a con- promise whereby holders of just claims will lose seventy Live cents on the dollar and holders of illegal claims receive twenty five cents on their bogus bonds. We will pay as far as we are able to pay on our hon. est indebtedness"

 This, it seems to us is the true course to pursue and will give the world far more confidence in our in- tegrity than the Gazette's plan of submitting to any terms, just so as to get in ALL the paper against us.

 As smart "BUIsNEss STROKE" if we care nothing about our honor, the Gazette's plan would do very well; but if we are able to pay $5,- 100000, honor compels us to protect honest creditors by paying it to them. The "odium of repudiation" is great bug boo with some of the State papers, and is about the only argument they make in favor of tilching the greater portion of money due honest creditors to divide it out among holders of fraudulent bonds and quiet them. The Gazette says: "It is nothing to us if holders of le gal bonds desire the fraudulent bonds included ir the settlement, for in the discussion of the question we must always bear In mind that the creditors who hold the fraudulent bonds do not regard them as traudu- lent, and the holders of the bonds which are legal believe that the rec ognition of all classes of indebted ness would materially strengthen the credit of the State and give in creased value to the new bonds"

 Such argument is ridiculous. If our honor is nothing to us then this argument would be o. K. Would it be honorable to man to admit he had done something which he had not done, for the sake of getting rid of being leased about it2 Yet this is what the Gazette would have the State of Arkansas do.

 So far as the holders of fraudulent bonds are concerned we would be lit tie else than simpletons to expect them to come up and acknowledge them as fraudulent. They would cut a nice figure coming up with $l2,- 000,000 fraudulent claims and saying