EIGHT of the sovereign States of the American Union owe large sums upon their bonds. They refuse to pay those sums, whether the face amount of the bonds or the amounts or benefits received by the States at the time they were issued, or any compromise amount. Many of these bonds, no one knows just how many, are held by British subjects, for at the time of their issue the United States was a borrowing country and many of the large-scale enterprises launched for the exploitation or development of its pioneer opportunities were financed by British capital. These holders have exhausted their efforts to find a remedy; recourse to any court, federal or state, is denied them by our constitutional provisions, and they find themselves baffled by a constitutional mechanism which foreigners cannot understand.

These bondholders ask questions which are not answered.[i] Their case is publicly presented by unofficial spokesmen, in their press and periodicals; candid and disinterested discussion of the case by American writers supports their position.[ii] The situation is not an easy one for the American conscience, a conscience which expresses itself copiously on financial matters. That conscience would be relieved and our position with our allied foreign debtors substantially strengthened if we should recognize the position of these bondholders.

The States which have repudiated and still repudiate their financial obligations are Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina and South Carolina. The face amount of debt which they thus avoid paying is about $75,000,000 of principal and about $300,000,000 of interest.

It is not true, as often asserted, that the debts are Civil War obligations, created to carry on "the war between the States" or for other purposes in that period. The Confederate war debts were payable in Confederate money, and passed into the limbo of lost chances with the currency in which they were payable. The debts in question were for the legitimate peace-time purposes of the States concerned and rested upon the credit of Federal, not of Confederate, States. They were mainly incurred for the support of enterprises -- railroads, canals, plank roads, banks, etc. -- which it was the policy of the States to foster in the periods of expansion.

Some of them, notably a part of the repudiated bonds of Florida and Mississippi, go back to the eighteen-thirties and were repudiated before 1861. The expansion of the pioneer days was checked by the panic of 1837 and a number of States became virtually bankrupt and repudiated their bond issues. The worst offenders were Pennsylvania, Indiana, Illinois, Michigan, Maryland, Mississippi, Louisiana, and the Territory of Florida. Wordsworth's brother owned some bonds and the poet expressed himself mournfully on the subject. Sydney Smith, who held Pennsylvania bonds, was more lively in a petition to Congress:

"Your Petitioner lent to the State of Pennsylvania a sum of money, for the purpose of some public improvement. The amount, though small, is to him important, and is a saving from a life income, made with difficulty and privation . . . the fraud is committed in the profound peace of Pennsylvania, by the richest State in the Union, after the wise investment of the borrowed money in roads and canals, of which the repudiators are every day reaping the advantage. It is an act of bad faith which (all its circumstances considered) has no parallel, and no excuse . . . sad is the spectacle to see you rejected by every state in Europe, as a nation with whom no contract can be made, because none will be kept; unstable in the very foundations of social life, deficient in the elements of good faith, men who prefer any load of infamy however great, to any pressure of taxation however light. . . . Your Petitioner sincerely prays that the great and good men still existing among you may, by teaching to the United States the deep disgrace they have incurred in the whole world, restore them to moral health, to that high position which they have lost, and which, for the happiness of mankind, it is so important they should ever maintain; for the United States are now working out the greatest of all political problems, and upon that confederacy the eyes of all thinking men are steadfastly fixed, to see how far the mass of mankind can be trusted with the management of their own affairs, and the establishment of their own happiness."

All of these States except Mississippi and Florida made terms with their creditors and removed their names from the bankruptcy register of history. Perhaps Florida and Mississippi would in time have taken the same course if the war and slave-emancipation had not ruined them.

The balance of these debts was incurred and was repudiated after the Civil War. It was practically all created by the "carpet bag" governments of the Southern States, under legislation which aimed at the peace-time necessities or recovery or development of the States formerly Confederate and now received back into the Union. Some of the issues were unquestionably valid, and their proceeds honestly expended: this part is on all fours with the earlier pre-war debts, and is similar to the investments made in Europe after the World War for the economic purposes of states or municipalities within the German Reich. Some of the bonds were well issued, but the proceeds in part spent fraudulently. Some of the issues may have been invalid ab initio for want of observance of the requirements prescribed by the States for the incurring of debt, but even in those cases the State may have received a substantial benefit from the issue of the bonds.

The repudiation took place after the Federal troops were withdrawn, the "carpet bag" governments spewed out, and genuine representative government reëstablished. The States were bankrupt in the sense that payment of their huge debts would be painful if not impossible on their existing economic level; nothing was said in that period about "economic recovery," on which so much expectation of German reparations payment is based. They attributed their economic and financial sufferings, severe enough in all conscience without the bitterness of political mortification, to the action of the North in slave emancipation, and to the imposition upon them of governments of officials who wasted their substance and filled their own pockets. This anger of defeat at the victorious section of the country and its measures was intelligible enough; unfortunately it found vent at the cost of innocent persons whom neither South nor North was concerned to protect.[iii]

The individual situations are indicated in an appendix. They are of course multiform, and the detailed facts could not be brought within the compass of many volumes. The efforts of the English bondholders to reach the state or federal courts have been vain, their appeals to legislatures for equitable recognition or for some modest settlement have been ignored.

Justice can be done to them by voluntary action of the Federal Government, which would be the more creditable on the American part in that no proposal on this subject has come from the British Government. The United States can offer to Great Britain to receive on account of the principal of its debt such bonds of the eight states mentioned as might be found valid, at their face and unpaid interest, under a stipulation that we should receive only such bonds as were owned by British citizens prior to the British debt settlement; it would be open to the British Government to acquire them from its own citizens, after such inquiry as would justify it in giving certification as to ownership. An impartial tribunal should be erected to consider the cases and make a final determination: for example, a Justice of the Supreme Court; Mr. Edwin B. Parker, himself a Texan, who has adjudicated $216,100,145, of claims as final umpire on the "Mixed Claims Commission, United States and Germany," with statesmanlike fairness; and Mr. John Bassett Moore. Their canons of decision should be drawn not from American municipal or "constitutional" law, but from that bundle of general practices, understandings, precedents, like legislation and common behavior which we call "international law," and from the standards of public faith which are adopted by the leading members in the Family of Nations.

If circumstances should make it inequitable to recognize the face amount of particular bonds because the State realized substantially less than the amount required to be received, and the rights of innocent purchasers have not cured the defect, an equitable figure might be allowed in such cases, with interest thereon. The British debt has been settled at $4,600,000,000, payable in instalments running over 62 years; if the amounts allowed British holders on these bond issues should be credited against the last payments (discounted) on the British debt schedule, no American taxpayer living would know any difference.

It is not suggested that the Federal Government is directly liable on the bonded obligations of the political subdivisions of the nation; the general rule is to the contrary. Its responsibility under the generally recognized principles of international intercourse comes from its complicity in the series of acts which caused the several repudiations, and in the protection which the nation as a whole now affords to the defaulting obligors.

By the 11th Amendment the United States Government, which alone has foreign relations, denies redress in its courts to foreign bondholders against the debtor States, and leaves it to those States to deny, as without exception they have done, redress in their own courts; this amendment was based on the apprehension of the States of being compelled by legal process to pay their debts, of having their complex fiscal affairs taken out of the control of State officers and placed in the hands of the Supreme Court. The Federal Government, by steadily refusing to arbitrate the rights of the foreign bondholders, has further exhibited an intention not to assist them in finding a remedy.[iv]

Senator Edmunds, in the course of the debate which resulted in the appropriation by Congress of the indemnity paid by the United States to China for damages done in 1885 by an Arkansas mob to Chinese citizens said: "One nation, as between itself and another, is not bound by the internal autonomy of that state, but it looks to the body of the nation to carry out its obligations, and, if they have not the judicial means to do it, for one reason or another, the nation that is injured is not bound by the failure of the nation whose people committed the injury." Our government, Mr. Borchard says, has in many cases maintained the doctrine that "the forcible deprivation of the property of a citizen of the United States without due process of law and a fair trial is considered a tort and the claim will be pressed on that ground regardless of its contractual origin." Although this statement refers to a franchise granted by a foreign government and the claim enforced by the United States was based upon the arbitrary act of the foreign government in cancelling the contract without first submitting to a judicial tribunal the disputed question of its right to cancel, the United States cannot afford to ignore the appeal of justice in the converse case.

The practical mind of Roosevelt saw the reciprocal. After Great Britain, Italy and Germany had in 1902 resorted to pacific reprisal by occupying Venezuelan customs houses until that state should recede from her refusal to submit to international arbitration the claims of their nationals on contract debts, the United States was in a quandary, for the Monroe Doctrine impelled it to stand between the South American states and the European powers who might as a pacific measure of coercion temporarily occupy the territory of South American debtor states which refused to arbitrate the claims of their foreign creditors, while it could not with justice oppose such measures, legal under international law, unless it could bring about a settlement of such debts. Roosevelt, in his message of December 5, 1905, to Congress, after pointing out our dilemma, went on to say: "On the one hand, this country would certainly decline to go to war to prevent a foreign government from collecting a just debt; on the other hand, it is very inadvisable to permit any foreign power to take possession, even temporarily, of the custom-houses of an American Republic in order to enforce the payment of its obligations; for such temporary occupation might turn into a permanent occupation. The only escape from these alternatives may at any time be that we must ourselves undertake to bring about some arrangement by which so much as possible of a just obligation shall be paid. It is far better that this country should put through such an arrangement, rather than allow any foreign country to undertake it."

This Venezuela episode led directly to the convention proposed by the American delegation at the Hague Conference of 1907 for the Limitation of the Employment of Force for the Recovery of Contract Debts. Article I reads as follows:

"The contracting powers agree not to have recourse to armed force for the recovery of contract debts claimed from the Government of one country by the Government of another country as being due to its nationals.

"This undertaking is, however, not applicable when the debtor state refuses or neglects to reply to any offer of arbitration. . ."

Under that convention and under the general principles of international law relative to reprisals, an aggrieved foreign state is warranted in taking pacific measures of force to compel a judicial trial, and a settlement of the amount adjudged due. If a foreign government, whose citizens hold some of these bonds, were, after refusal of the State and of the United States to arbitrate, to seize and hold property (such as vessels) belonging to nationals of the debtor State, until the latter consented to arbitrate and abide by the decision of the arbitrator, its measures would not, under international law, constitute acts of war. Measures of that sort, sanctioned by international law, are in practice used only against the weaker states in the Family of Nations. The stronger governments negotiate: that our individual States cannot do, for they have no foreign relations, and our Federal Government refuses to negotiate on their behalf.

Having thus set up a system which deprives the foreign bondholders of their property without any process of law whatever, we cannot justifiably dismiss the matter on the ground that under our internal system the Federal Government is unable to force the States to do justice and that therefore it is not internationally responsible for their wrongs. "International law," says Quincy Wright, "considers that commitments once made must be carried out. It knows nothing of constitutional restrictions making execution difficult or impossible, consequently governments are not required to know the agencies in foreign states for executing international commitments and are entitled to protest if execution fails, whatever the cause."

In its international relations our government, while disclaiming legal responsibility, has in practice frequently accepted liability for wrongs done by the individual States of the Union to aliens whose governments insisted upon redress, and has paid them substantial damages. Although the only guarantee provided by our treaties is that aliens should have the same protection under the laws and in the courts as that afforded to natives, the United States Government has nevertheless in eleven instances assumed the responsibility for making reparation for lynching or injury to aliens by mob violence, and has paid nearly a million dollars to those aliens' governments. These cases happened between 1850 and 1900, principally in the Southern and Western States and Territories. Most of the cases were the lynchings of Italians, Mexicans or Chinese who were suspected of murder, a few were accidents due to riots; in some the wrong was due to the negligence of State authorities, in others no blame could be attached. The Federal courts had no cognizance of these cases, yet an indemnity was paid each time by Congress out of "humane consideration," sometimes "without reference to the question of liability," and sometimes omitting such a phrase. Senator Lodge thought it good policy to make reparation. In 1891 Mr. Blaine said that while the injury "was not inflicted directly by the United States, the President nevertheless feels that it is the solemn duty, as well as the great pleasure, of the National Government to pay a satisfactory indemnity."

In all of these cases, as in the cases of the repudiation by States of their bonds, the United States Government was without authority to prevent the wrong or to oblige the State responsible therefor to indemnify the damaged foreigners. Nevertheless it assumed the State's obligation because, as was said by Mr. Webster, Secretary of State, in 1851, "the public faith and national honor" required that the United States should remedy the wrong to foreigners which those States were responsible for but refused to remedy. It would be a fortunate vindication of the attitude of the United States on international debts if we should deduct from the debt which Great Britain owes us an amount equal to the principal and interest of the repudiated state bonds owned by British nationals as far as they may be found valid. Briefly, the situation creates a dilemma. As a result of the 11th Amendment either the United States Government is the intermediary between these States and their debtors, or there is none, a result which both international "law" and international sense of justice refuse to contemplate. Indeed, the original provision of the Constitution extending the judicial power of the United States to "controversies . . . between a State . . . and foreign States citizens or subjects" was intended to apply the rule that there must be a remedy for breach of a State obligation, and to afford that remedy in the Federal Courts.

Although, as has been indicated, an allocation of any such credits to the last payments on our 62 year foreign debts would avoid the sacrificing of a penny by any living American taxpayer, objection might be made that the taxpayers at large should not relieve Southern debtors from their just burden. This need not be. The Federal Government could take an assignment of the bonds and fix the amount of the States' liability thereon by suit in the Supreme Court; for the Constitution does not protect the States from suit by the Federal Government. Through this means the United States possesses the power (which it lacks in the case of torts committed by a State) to compel a responsible State to fulfil its international contract obligations, and this furnishes an answer to those who might argue that the United States ought not to make a financial sacrifice to pay a State obligation.

But there are powerful reasons for the view that these particular debts ought, as a matter not of law but of statesmanlike policy, to be absorbed by the whole body of the American people. It will be sufficient to give them a brief statement.

1. The emancipation of the slaves made the Southern States insolvent. The constitutionality of Lincoln's proclamation was more than doubtful. While the 13th Amendment removed the constitutional irregularity in our domestic concerns, it made irremediable the damage which had been done to the creditors of the slave-holding states.

2. The campaigns of the Federal armies in the South destroyed assets of great value and reduced recuperative power; no "reparations" made that damage good.

3. The Southern States, in addition to paying the whole of their war costs (except what they transferred by the sale of Confederate "war-bonds" abroad), were obliged to pay the whole cost of the Federal troops of occupation.

The following table shows the effect of the three causes above mentioned on the wealth of the eight states in the decade 1860-1870.

TAXABLE BASIS OF STATES
Total assessed valuation of property for taxation*
1860 1870 Percent Decrease
Alabama $432,198,762 $155,582,545 64
Arkansas 180,211,330 94,528,843 47.5
Florida 68,929,685 32,480,843 52.9
Georgia 618,232,387 227,219,519 63.2
Louisiana 435,787,265 253,371,890 41.9
Mississippi 509,472,912 177,278,890 65.5
North Carolina 292,297,602 130,378,190 55.4
South Carolina 489,319,128 183,913,327 62.4

DEBTS
1860 1870 Highest Point of Debt
Alabama 6,700,000 8,478,018 31,952,000
Arkansas 3,092,623 3,569,551 18,287,273
Florida 4,120,000 1,288,697 5,512,268
Georgia 2,670,750 6,544,500 20,197,500
Louisiana 4,561,109 25,021,743 40,416,734
Mississippi none 1,796,230 3,226,847
North Carolina 9,699,000 29,900,045 29,900,045
South Carolina 4,046,540 7,665,909 24,782,906

4. The Southern States have had also to pay in taxes their share of the war cost of the "Union" (through the retirement of the Civil War bonds), as well as a full share of the pensions of Northern soldiers and their dependents from 1865 on. They had also as a necessary social measure to take care of their own invalided soldiers and the dependents of those killed.

5. The bonds in question were in large part issued by the "carpet bag" governments which Federal legislation had imposed on the Southern States. There was shocking extravagance, waste and corruption, and the already enfeebled resources of these States were called upon to meet payments beyond their ability on investments which had been made without a genuinely representative consent. "Carpet bag" administration was an act of Federal interference, and the chief responsibility for good and bad financing in that interval reverts to the authority which placed its agents in control.

The Reconstruction Acts, enacted and enforced by the national government, destroyed government of the Southern States by the intelligent and property-owning whites, disfranchised them for having aided or given comfort to the rebellion, and imposed upon those States governments controlled by the "carpet bag" whites and the newly enfranchised slaves. As a result of this national legislation the power of the States in question to vote appropriations and to issue the State's bonded obligations was placed under the control of a class ignorant, inexperienced in government, and susceptible to corruption; and, since the burden of taxation fell wholly upon the disfranchised whites, the legislatures were not restrained by self-interest from voting ruinous expenditures and bonded debts. Their reckless and corrupt legislation and the ensuing bankruptcy were a natural and probable consequence of the Federal Reconstruction Acts, and the foreign bondholders are the innocent victims of an American national policy. The whole shabby business is the result of a struggle -- military, political, economic -- between the two sections of the country, in which the South was financially ruined, and in consequence of which both sections have done what lay in their power to injure the South's innocent creditors.

It has been intimated that the bondholders may have bought their bonds at less than their face and interest and should not be paid in full. This argument that a debtor, sovereign or individual, is not bound to pay his debt at its face because the creditor may have acquired it at a discount, was made as to the public debt in the early days of the Republic. Hamilton dealt with the argument analytically in his "Report on Public Credit" (1790). He came to it again more briefly and scornfully in his "Funding System Vindicated" (1791). It was argued "that the debt is greater than it ought to be, because, from the state of depreciation in which the Government found it, a much less provision for it than that which was made might have sufficed. A saving of nearly one-half, it is said, might have been made by providing for it in the hands of alienees, at least at 8 s. or 10 s. in the pound, who, having come by it at a much less rate, would have been well compensated by such a provision." Hamilton replied: "To a man who entertains correct notions of public faith, and who feels as he ought to feel for the reputation and dignity of the country, it is mortifying to reflect that there are partisans enough of such a doctrine to render it worth while to combat it." The only condition admitting a departure from the principle is that, he said, of necessity, consisting either of want of ability to perform a duty, or where it could not be observed "without some manifest and great national calamity," such for example as an existing state of war. "To get rid of a particular, though a considerable evil, or to secure a partial advantage . . . would tend to dissolve all social obligations -- to render all rights precarious, and to introduce a general dissoluteness and corruption of morals."

The objection may be made to the proposal here suggested that it is not "practical politics;" accepting the connotations usually attaching to that term, the remark would seem to be true. The answer to the objection might lie in the general approval which has gone out to Mr. Mellon and the Debt Settlement Commission for their success in excluding considerations of "practical politics" from the field of debt settlement.

APPENDIX

Summary of State Debts Still Repudiated

Alabama

Some of the debt was incurred before 1830, though repudiation did not take place until the Civil War; part of these early issues were taken up in New York, part in London. After the war nearly $18,000,000 of railroad aid bonds were issued or endorsed. A funding act of 1876 took up some of the issues. The repudiated debt remains at about $13,000,000. The present per capita wealth of Alabama is $1,306, its total wealth $3,264,000,000.

Arkansas

Some of its debt goes back to 1838 when the state chartered a Real Estate Bank. Most of it was created by the issue of railroad aid or levee bonds in the reconstruction period. Some of the railroad aid bonds were declared by the Supreme Court of the State to have been unlawfully issued and to be void. A constitutional amendment was adopted in 1884 depriving the Legislature of power to recognize these bonds. The present per capita wealth of Arkansas is $1,506, the total wealth $2,832,000,000.

Florida

The earliest of the repudiated bonds were issued in the days of the Territory to provide capital for the Union Bank of Florida, and were sold in Europe between 1834 and 1839. There was another bank and an insurance and trust company which the State assisted; the aggregate of these debts was $3,900,000. When the Territory became a state it repudiated them on the ground that the State was not responsible for such debts contracted under a territorial government; the real reason was that the debt was too large for so poor a state to pay. The rest of the repudiated debt consisted of railroad aid bonds issued under the provision of the state constitution. The principal of all the debt repudiated is about $8,000,000. Florida's period of prosperity is of recent date; its present per capita wealth is $2,239, its total wealth $2,829,000,000.

Georgia

This debt arises chiefly out of railway guarantees in the post-war period. There was corruption in the government which in some instances may legally have attainted the issues, in other instances relates only to the use of the proceeds after issue. The repudiated bonds are estimated by one investigator at $9,863,500, by the Council of Foreign Bondholders at $13,500,000. The per capita wealth of Georgia is $1,403, its total wealth $4,353,000,000.

Louisiana

In 1870 the state's debt, not including the war debt, was $22,859,628.41. In 1871 it was $41,733,752. The bonds were issued to provide state funds, to aid railroads and banks, the municipality of New Orleans, etc. The finances of Louisiana are greatly complicated by its political history. At the time of the first attempt at reduction of the debt in 1872 there was a break in the government caused by the election of two governors and two legislatures -- one supported by the "carpet baggers" and "scallawags" and the other by the Democrats and liberal Republicans. The Government intervened and established the carpet bag government by martial law. In 1912 the State authorities looking forward to the maturity of its debt of $11,000,000 on January 1, 1914 and the issue of refunding bonds therefor, submitted to popular vote an amendment to the constitution which among other things provided for the settlement of some of the repudiated "Baby" bonds. The amendment was rejected by a large majority. The present per capita wealth is $1,995, the total wealth $3,791,000,000.

Mississippi

$2,000,000 of bonds were issued in 1831-3 to aid the Planters' Bank. The Bank defaulted in 1839. The validity of the bonds was never questioned, but in 1852 a proposal to raise the money for interest payments was defeated by popular vote. $5,000,000 of bonds were issued in 1838 in payment for shares in the Union Bank. The Bank failed within less than two years. The Supreme Court of the State sustained the validity of the bonds and the legislature wished to recognize them, but the Governor recommended their repudiation and a popular vote sustained him.

In 1875 the following clause was incorporated in the State constitution: "Nor shall the State assume, redeem, secure or pay any indebtedness claimed to be due by the State of Mississippi to any person, association or corporation whatsoever, claiming the same as owners, holders or assignees of any bond or bonds known as Union Bank bonds or the Planters Bank bonds."

An offer of settlement, advantageous to the State, was made by the British bondholders in 1880 but was rejected. The per capita wealth of Mississippi is $1,355, its total wealth $2,427,000,000.

North Carolina

The bonds of this State were postwar railroad aid and special tax issues. The financing was reckless, and in 1870 the interest charges alone would have entailed an annual tax of $2,500,000 on a total State assessment of $115,000,000. The technical objection to payment is that the State agent exceeded his powers. The per capita wealth of North Carolina is $1,879, its total wealth $5,284,000,000.

South Carolina

This state's repudiated issues are also post-war; some of them were postwar refundings of pre-war issues, some of them railroad aid bonds. By 1872 the debt had climbed up to more than $20,000,000. A court of claims to pass on the validity of the different issues was created and its decisions were appealed to the Supreme Court of the State. The court said, inter alia, p. 273: "The only inquiry in such cases is, whether the officer or agent has been entrusted with authority to make and issue the paper, and it is not competent to inquire into his conduct in making the issue. If he has been guilty of irregularities or frauds in exercising the power with which he has been entrusted, the loss thereby occasioned must fall upon the party who entrusted him with such power, and not upon the innocent holder, who has taken the paper in the usual course of trade. . . . We think, therefore, that the result of the cases in the Supreme Court of the United States clearly is, that when an act of the legislature authorizes the issue of bonds by a municipal corporation upon certain conditions therein named, and the bonds are issued by the proper officers of such corporation, containing a recital that they are issued under the authority conferred by such act, that such recital is conclusive in favor of the bondholder -- that all the necessary conditions named in the act have been complied with, as a purchaser is not bound to look beyond the legislative act and the recitals contained in the bonds." (Bond Debt Cases, 12 South Carolina, 200 and 263.)

The decisions held valid a large part of the debt, and left open questions for investigation as to another part. In 1873 an Act was passed repudiating the so-called "conversion" bonds, amounting to $5,965,000 on the ground that they were unauthorized, without return of the advantages received on their issue. The per capita wealth of South Carolina is $1,499, its total wealth $2,704,000,000.

[i] See the attempts to furnish an answer by a number of governors of the States in question, appended to an article on the subject by Prof. Raymond Turner of Johns Hopkins University, in Current History for January, 1926.

[ii] See articles by John F. Hume in the North American Review for December, 1884, and by Prof. Raymond Turner above cited.

[iii] The gravamen of a paper on this subject in the Virginia Quarterly Review for October, 1927, by J. G. de Roulhac Hamilton, is that the citizens of these States ought not to pay the cost of wasteful and corrupt legislation forced on them by Northern policy and administered by wastrels or rascals not of their own choosing. The paper supports the text of this article as to the responsibility being mainly on the nation rather than on the States; but a decision on that quarrel between the two sections of the country gives no solace to honest creditors.

[iv] For example, the reservation to the Taft treaty, 1911-1912, offered by Senator Bacon of Georgia, and adopted by a vote of 76 to 3, was as follows: "Provided, That the Senate advises and consents to the ratification of the said treaty with the understanding, to be made part of such ratification, that the treaty does not authorize the submission to arbitration . . . concerning the question of the alleged indebtedness or monied obligation of any state of the United States."

* These figures include the loss in slave property.

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  • CHARLES P. HOWLAND, former Chairman of the Greek Refugee Settlement Commission, Director of Research of the Council on Foreign Relations
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