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Foreign Bondholders and the Repudiated Debts of the Southern States

Published online by Cambridge University Press:  12 April 2017

Bessie C. Randolph
Bessie C. Randolph*
Affiliation:
Florida State College for Women
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Extract

Since the close of the World War, there has been a continuous and often acrimonious discussion of the issues involved in the war debts of the Allied Powers to the Government of the United States. In estimating the mutual obligations of debtor and creditor governments, the issues involved in the “ repudiated debts” of the Southern States have been revived anew. In the British Parliament the matter has flared up again. On April 1,1925, Austen Chamberlain stated that His Majesty's Government had never made representations on the subject to Washington. “ I hope,” he said, “ that my noble friend (Lady Astor) will apply her persuasive eloquence to the legislatures and governments of those states.” On March 15, 1923, Stanley Baldwin, and on April 14, 1924, Ramsay MacDonald, had answered questions to the same effect. During the London Naval Conference of 1930, a debate on these debts took place in the House of Lords. On both sides of the ocean it has been suggested that the amount of the unpaid bonds be deducted from the amounts due to our government from those European Powers whose nationals now hold these state bonds.

Type
Research Article
Information
American Journal of International Law , Volume 25 , Issue 1 , January 1931 , pp. 63 - 82
Copyright
Copyright © American Society of International Law 1931

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References

1 Parliamentary Debates: H. Commons, Vol. 182, pp. 1286, 2205, 2414, and Lords, H., Vol. 76, No. 60, p. 862 Google Scholar

2 The following statistics are taken chiefly fromRepudiation of State Indebtedness, issued by the U. S. Treasury Department, June, 1925, a compilation based partly on Repudiation of State Debts, by Wm. A. Scott, of the University of Wisconsin (1893). Dr. Scott's work is a careful and sympathetic study of the whole problem. Other sources are Tenth Census of U. S. (1880), Annual Reports of Corporation of Foreign Bondholders, London, and information received from some of the state governments. Many of the figures are only approximate; others do not exist, as officially correct figures are impossible to secure. A large amount of authentic material may be found in the files of the Bankers Magazine and of the Financial and Commercial Chronicle (cited herein as Financial Chronicle) for the period in question.

3 Tenth Census, VII, 583.

4 Laws of 1866, p. 95; Laws of 1868.

5 Financial Chronicle, Jan. 24, and March 4, 1871.

6 Laws, 1874-5, p. 202; 1879, p. 183; Scott, op. cit., p. 76.

7 See History of S. C. Fraudulent Bond Issues, compiled, 1929, by A. J. Beattie, Comptroller General of S. C.

8 For statutes cited, see Laws of S. C. 1866, S. Sess. 383; 1868, pp. 18,22,26; 1869, pp. 182, 241, 258; 1871, p. 616; 1872, p. 93; 1871-72, p. 278; 1873-74, p. 518; 1877, pp. 318, 670; 1879, pp. 104, 221; Tenth Census, VII; Scott, op. cit., pp. 78-93.

9 Walker v. S. C., 12 S. C. pp. 200-313.

10 Tenth Census, VII, 583.

11 Georgia Laws, 1872, p. 5.

12 Georgia Laws, 1870, p. 336; 1875, pp. 12-13; 1876, p. 9; 1877, p. 11.

13 Laws of Florida, 1833, also Exec. Doc. I l l , 26th Cong. 2d Sess. IV, 298.

14 Sen. Doc. 409, 24th Cong. 1st Sess. VI; Ex. Doc. 226, 29th Cong. 1st Sess. VIII, 746.

15 Tenth Census, VII, 588.

16 15 Fla. 455-549. See also 10 Fla. 145, as to the right of railways to build, and 13 Fla. 699, for advisory opinion to Governor Reid as towhether railroads are public works.

17 For brief facts as to these debts, see Compiled General Laws of Florida, 1927, Vol. V, 4721, a statement arranged by Justice James B. Whitfield, senior member of the Florida Supreme Court and formerly State Treasurer of Florida.

18 Tenth Census, VII, 592.

19 See State Auditor's Reports for these years.

20 Laws of Alabama, 1875-76, p. 130.

21 Scott, op. cit., p. 63; also Financial Chronicle for years mentioned.

22 Laws Mississippi, 1838, pp. 9, 33.

23 See articles in Bankers Magazine for December, 1846, and for November, 1849, the latter containing Jefferson Davis' statement of hisreasons for supporting repudiation.

24 A reprint of this and other documents is found in a special pamphlet, Debts of the State of Mississippi Repudiated Before the CivilWar, issued by the Corporation of Foreign Bondholders, London, May, 1929.

25 7 Miss. 625.

26 25 Miss. 625-882, contains a long history of the bond dispute.

27 Wilson v. Griffith, 24 Miss. 468, and Swann v. Wilson, 24 Miss. 471.

28 Walker, Robert J. , Repudiation Recognition and Slavery, London, 1863 Google Scholar. See also his Jefferson Davis-Repudiation of Arkansas Bonds, London, 1864.

29 Curry , J. L. M. , History of the Peabody Education Fund, p. 141 Google Scholar.

30 Tenth Census, VII, 598.

31 House Misc. Doc. 211, 42d Cong. 2d

32 State ex rel. Saloman & Simpson v. Jas. Graham, Auditor, 23 La. 402; State ex rel. Forstall v. Board of Liquidation, 27 La. 577; State ex rel. Citizens Bank of Louisiana v. Funding Board, 28 La. 249.

33 See Financial Chronicle for Aug. 15,1874.

34 27 La. 577 (supra); State ex rel. Attorney-General v. Clinton and Dubuclet, 28 La. 219; 28 La. 249 (supra); State v. Clinton and Dubuclet, 28 La. 393

35 See note 51 below.

36 See Tenth Census, VII, p. 603.

37 Acts of Arkansas, 1868-69, p. 115; 1874-75, p. 72; 1875, p. 14.

38 State v. Little Rock, Mississippi, River & Texas Ry. Co., 31 Ark. 701.

39 Repudiation of State Indebtedness (supra), pp. 3, 5, based on Tenth Census, VII, on Scott, and on annual reports of Corporation Foreign Bondholders, London, considered everywhere authoritative.

40 Scott, op. cit., 152.

41 Curtis, Benjamin R. , later of the U. S. Supreme Court, in “ Debts of the States,” N. Am. Review, January, 1844, gives a finely sympathetic analysis of the causes of state debts and repudiationGoogle Scholar. For reconstruction years, see James Ford Rhodes, History of United States, Vol. 6; also J. G. deR. Hamilton, “ Those Repudiated Southern Bonds,” Virginia Quarterly Review, October, 1927.

42 Richardson's Messages and Papers of the Presidents, IV, pp. 47, 74.

43 Dip. Correspondence, Vol. 49, No. 13 See note 41 (B. R. Curtis) also.

44 House Doc. 197, 27th Cong. 3d Sess.

45 Dip. Correspondence, Vol. 12, Nos. 4, 8.

46 See note 56.

47 Consular Letters, Vols. 22, 23, 25.

48 Porter, R., in International Review, November, 1880; Tenth Census, VII, 8 Google Scholar.

49 Sen. Doc. 161, 58th Cong. 3d Sess.

50 Sen. Doc. 98, 62d Cong. 2d Sess.; Sen. Doc. 353, 62d Cong. 2d Sess.

51 New Hampshire and New York v. Louisiana, 108 U. S. 76.

52 192 U. S. 286. Also Kentucky v. Dennison, 24 How. 66; Louisiana v. Jumel, 107 U. S. 711, on Louisiana bonds and mandamus to state officers; Virginia v. West Virginia, 238 U. S. 202, 241 U. S. 531, 246 U. S. 565.

53 Republic of Cuba v. North Carolina, 242 U. S. 665, brief memorandum note on withdrawal of the suit by Cuba. See also brief filed by Attorney-General of North Carolina, Raleigh, 1917.

54 Borchard, E. M., Diplomatic Protection of Citizens Abroad, for cases of responsibility of the state where political subdivisions are formed out of the national state; Lippitt, , Francis J., “ State Repudiation and the U. S. Supreme Court,” International Review, May, 1883 Google Scholar.

55 Sen. Doc. 153, 26th Cong. 1st Sess.

56 Case of Florida Bonds in Reports of Decisions of Anglo-American Claims Commission, 1854, p. 246; Moore, International Arbitrations, 3594.

57 Treaties, etc., of U. S., I l l, 2619.

58 Federal Aspects of Debts of Mississippi, Corporation of Foreign Bondholders, 1930.

59 See note 52 (supra). Also Woodruff v. Trapnell, 10 How. 190, on Arkansas bonds; Louisiana v. Jumel, 107 U. S. 711; New Orleans v. New Orleans Waterworks, 142 U. S. 79; Griffith v. Connecticut, 218 U. S. 563; Johnson, Bradley T., “ Can States Be Compelled to Pay Their Debts,” Am. Law Review, July, 1878 Google Scholar.

60 See note 52 (supra).

61 House Doc. 263, 54th Cong. 2d Sess., and annual reports of U. S. Treasury.

62 H. R. Exec. Doc. 59, 40th Cong. 2d Sess.; XXI Op. Attorneys Gen. U. S. 478; 136 U. S.

63 Revised Statutes, Sec. 3481.

64 Howland, Charles P., “ Our Repudiated State Debts,” Foreign Affairs, April, 1928 CrossRefGoogle Scholar.

65 U. S. v. North Carolina, 136 U. S. 211; U. S. v. Texas, 143 U. S. 621; Kansas v. U. S., 204 U. S. 331.