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PAGE FOURTEEN A-y : ;i’ar* - WW’K» • aw*. .. THE BULLOCK BONDS. A Full History of Georgia’s Fraudu lent They Were De clared Invalid —They Were Bonds Endorsed by the State, But Were issued Fraudnulently-TAnd the Legislature Afterward Declared Them Invalid—Henry Clews is Still Harping on Them. What are the Bullock bonds*/ That is a question which thousands of people ask, but few know other than that they were fraudulently is sued bonds which Georgia has since declared invalid. There were $6,709,000 of them. Tney were issued oy Uie reconstruc tion uuininisuanon in Georgia lor the benem ol liie crowd tuen in cnarge of uie state, Tlie state received none of Uie benents supposed to be derived from tne issuance of bonds. When alter a thorough investiga tion tne succeeding state governments found them to be fraudulent they were so declared. it happened that Henry Clews & Co., me i\ew lora banners and brok ers, got control of a large portion of inese bonds at a song, pernaps knowing tneir full cnaracter. bince they were repudiated Mr. Clews has been striKing at Georgia through his syndicate newspaper letters. He has been vicious m ms attacks, thinking, peinaps, by taat means to so injure the credit of tne state as to force her to pay these bonus. That, however, is out of tne question as under ner Constitution Georgia cannot pay one dollar on any one of them. Mr. Clews' last utterance on this subject is as follows: ‘ ‘ The worst swindle ever perpetrat ed upon the men of Wail btreet was the work of the sovereign state of Georgia. Soon after the close of the war, the state named, needing money for internal improvements, is sued bonds to large amounts, and these securities were freely purchased in the north and in Europe, several million dollar's of good northern money thus contributing to the en hancement of the taxable value of the property of that state. These bonds were repudiated in 1373 by a special act passed by the legislature of that state and the confiding northern men, who, believing that no good could come of trampling upon a fallen foe, and regarding the south as an erring brother to be welcomed back to the family fold as a sharer in its mutual sympathy and material prosperity, had loaned their money to one of its most prominent states, w r ere swindled out of every cent they had thus in vested. At the time of the passage of this swindling legislative act, I held bonds of the state of Georgia to the amount of several millions, while many other northern financiers had also invested very largely in these securities and suffered equally with myself by that infamous repudiation.” Now, let us see what these bonds were. Governor Bullock took charge of the government of Georgia in July, 1868. At that time the indebtedness of Georgia was $5,827,000, as shown by the treasurer’s report in 1872. He resigned bis office on the 30th of Oc tober, 1871. At that time the in debtedness of Georgia, exclusive of railroad endorsements, had been in creased to $12,450,000. From that $12,450,000 should be deducted sl,- 800,000 bonds that appear on their face to be gold bonds of the state of Georgia, but which as shown by the act of the general assembly, were issued in exchange for the second mortgage bonds of the Brunswick and Albany railroad to bond that com pany, and therefore, not properly classed among the state’s own in debtedness. During the same period the treasurer reports $5,733,000 bonds endorsed by all railroads. To that $5,733,000 should be added the sl,- 800,000 in aid of the Brunswick and Albany railroad. Six hundred thou sand dollars of this should be placed to the Bainbridge, Cuthbert and Co lumbus railroad, though only $240,- 000 can be found as now outstanding; but there were $1,450,000 bonds en dorsed during this period in the aid of the Macon and Brunswick railroad. Thus the total of the state’s indebtedness at the end of Governor Bullock’s administration was some thing over nineteen millions of dol lars —an increase in three years of from five millions to nineteen mil lions of dollars. At the time the press of the state charged fraud. Governor Bullock left the state and the succeeding leg islature appointed a committee to in vestigate the debt of the state. All the bonds issued after July, 1868, were called in to be registered. All were examined upon being regis tered and the committee reported . some of the bonds were valid and some invalid. Outside of the railroad bonds the debts Georgia declined to pay was an alleged on open account to Mr. Clews of $4/,500, an alleged debt to Clews Habiscnt & Co., of .London, of $90,- 000, an alleged debt to Boorman, Johnson & Co of SBO,OOO, and an al leged debt to the Button Bank of Brooklyn of $30,000, all of whom claimed to hold certain of her bonds as collateral to secure their alleged claims. The amount of the alleged indebtedness dn her own bonds that Georgia declared invalid was $252,- 000. Her reason being, that even admitting the validity of the bonds themselves, she did not owe the debts for which the parties claimed to hold them as security. In addition, she found a large num ber of debts that had been contracted in aid of different railioads, and she declared not all of them invalid, but only the first mortgage bonds of the Brunswick and Albany railroad, the bonds of the Bainbridge, Cuthbert and Columbus railroad, the second mortgage bonds of the Macon and Brunswick railroad, the Cherokee bonds, the Cartersville and Van Wirt bonds and the Alabama and Chatta nooga bonds, and added to them she declared invalid the $1,800,000 of semi-annual interest gold bonds issued under the act of October 17, 1870, to aid the Brunswick and Albany rail road Company, making in all $6,709,- 000. The Railroad Bonds. The first railroad bonds endorsed were $194,000 for the Alabama and Chattanooga. They were issued under an act of the 20th of March, 1869. The act recites that the endorsement should be placed on the second mort gage bonds. In the face of this was WATSON’S WEEKLY JEFFERSONIAN. a provision of the stats constitution < that no aid should be granted to any railroad or to any private enterprise, except on three sonditions: First, that private parties must have al ready invested in the company an. amount equal to the aid asked; sec ondly, that the company must give to the state a first lien upon all the property that it owned; and, thirdly, that even when these requisites were complied with the state had no righ: to grant aid unless the enterprise was one for public improvement. Now, on the face of the act that provided* for the aid to the Alabama and ChatDfhooga Railroad Company, it wits provided that the endorsement should be placed upon the second mortgage bonds, second to the lien of the state of Alabama, for $15,000 a mile. Acting upon that endorsement the legislature declared it invalid in 1875. There was, further, no evi dence to show that there was that proper amount paid in cash by private parties. The next was the Bainbridge Cuthbert and Columbus. Sixty thou sand of these bonds were issued. They were to be issued when twenty miles of the road should be complet ed. “Not a mile of the road was ever built, and not a dollar was invested in it by private parties. Governor Bullock himself afterwards said the bonds were not valid. Cartersville and Van Wirt. The Cartersville and Van Wirt bonds are next. Two hundred and seventy-five thousand of these were issued when only three miles of the road had been completed. Then the old president of this road wag turn ed out. H. L Kimball was made pres ident, the name of the company was changed to the Cherokee railroad, and $300,000 more of bonds were endorsed on the same railroad. Governor Bul lock placed them in Mr. Kimball’s hands. Os this Col. N. J. Hammond in a speech before the attorney-gen eral of New York on the Bullock bonds said: “Kimball applied to Clews to give up the Cartersville and Van Wirt bonds, which he held as treasurer of that road, and he declined. On the 27th of December, 1875, Governor Conley seized that road under the au thority granted by the statute for failure to pay its debt, and ordered the receiver of the state to take charge of it. He found it levied on by a con stable for some small debt. .He could not take charge of it for that rea son. It was sold by that process, Clews & Co. filed a bill in the Unit ed States court against the purchaser at that sale, and against everybody else concerned, in which they first de clared that they held these bonds and practically renounced all claim against the state by reason of it, in to substitute themselves in the state’s place and take prior lien away from the Cher okee bonds. After reciting all of these facts, they said in this bill: ‘Governor Smith has revoked the ac tion of Conley in ths premises, so that ths property is not now in any respect claimed to be in the custody of the state, etc./ as shown in the proclamation. On that he asked, the ■ state having abandoned its right to take charge of this road, which by the ; act was made the state’s security, to be subrogated to the rights of the i state as first mortgagor, so as to eut out of holders of the Cherokee rail road bonds, whose purchasers were for providing that those bonde were to be given up, and they, the Chero kee bonds, were to become first mort gages against the road. All the par ties being heard, a decree was taken by Clews in favor of the Van Wirt road bonds, Judge Woods declaring that the Cherokee bonds were invalid. And the road was sold and bid in by Clews. He could have stood off and relied on the slate’s endorsement. But he preferred to come in and take the state’s place by subrogation. He foreclosed his bonds more than ten years ago. ceased to make any claim on the state and took, charge of ths road as the man who bought it.” * Brunswick and Albany. Next in order comes the Bruns wick and Anbany railroad. Os this, Mr. Pat Calhoun, speak- . ing before the attorney-general of New York, said: “The Brunswick and Florida rail road was chartered in 1835. Prior to the war it had built sixty-five miles of its road. Some of its stockholders lived in the north, some in the south. In 1861, when Georgia seceded, she passed an ordinance in her secession convention that she would protect the property of aliens. After the war began, and after Georgia had left the union:, the stockholders that lived in the state reorganized the affairs of the company and got a charter giving them power to manage and control the old company and changed its name from the Brunswick and Florida to the Brunswick and Albany Railroad Company. Subsequently these southern stockholders passed a resolution calling upon Governor Brown for advice. The resolution de clared in its preamble that the con gress of the Confederate States, and that under the ordinance of the se cession convention, and the act chang ing the name the board of directors believed the property of the com pany could only be sequestrated by a Georgia legislature.” Whereupon the governor pro claimed : “Therefore, in pursuance of the above resolution, and considering it a military necessity that the said road should be taken possession of and controlled by the state authority as a means of public defense, I have, as governor of Georgia, commander in-chief of the army and navy of this state, and of .the militia thereof, taken charge of said railroad and to hold and manage the same.” “In the way the road, passed into the possession of the state of Georgia, Governor Brown’s action yas with out warrant of law. It was not re quested by the stockholders, they merely asked his advice. He took the property fcr war purposes, and his action can only be justified on this ground* Georgia got possession of the road the purpose of military defense; but the Confederate govern ment eame along later and she want ed some of that iron. The result was South Georgia Farms and Decatur County Tobacco Lands for sale; for descrip tive price list write to R. L. Hicks, Real Estate, Bain bridge Ga