AN OLD SCANDAL.

Lyttelton Times, Volume CXIV, Issue 16138, 15 January 1913, Page 8

AN OLD SCANDAL.

Memories of a half-forgotten international scandal are revived by a memorandum which has been circulated by the London Council of Foreign Bondholders. Tho States of North Carolina and Mississippi are seeking to borrow money for public purposes and the Council, which represents the interests of British investors, reminds the public that those portions of the United States share with the republics of Guatemala and Honduras the unenviable distinction of having defaulted deliberately in their obligations to their creditors. North Carolina has repudiated debts amounting, without interest, to £2,400,000, while Mississippi owes £1,400,000 to the holders of stock bearing tho State seal and, refuses to pay as .much as a cent in the dollar. The trouble arose after the Civil War, when Governments composed of what the angry Southerners called "carpet-baggers" had control of the State finances and proceeded to borrow largely for various purposes. The executives of the day had full authority to pledge the public credit and hundreds of British investors lent their money in return for signed and sealed promises of repayment. But when the " carpet-baggers" were displaced the new Governments repudiated the debts, although the holders of the debentures' had acted in good faith and could not have been expected to possess any knowledge of the details of the local quarrels. Tho Council of Foreign Bondholders demands that until North Carolina and Mississippi have done justice to the bondholders they shall be " barred from the money markets of the world," as indeed they have been during the best part of half a century. It seems strange that two wealthy States should not put .thomselves quite above reproach by paying off these old debts.