USA > Arkansas > The aftermath of the civil war, in Arkansas > Part 19
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"If we organize a party it will not be necessary to give it another name than anti-Clayton, anti-radical, and we will be sure to win. He felt safe in asserting that at the next election the Executive now in control could not get one-tenth of the vote of all classes put together. There is general disquietude throughout the State. He felt it everywhere. He could read it here. All want to know what he came here for, and he proposed to satisfy them. When he first heard of the Governor's absence he expected by every mail to receive official notification of the fact. The loyal people of his county,-whom the carpet-baggers call disloyal,-insisted on his coming to the Capital. He declined until they became clamorous. They said something was wrong, and urged him to come at once and investigate what these men were doing. There is no despot that treats his subjects as does this Gov- ernor. He came here to obey the will of the people. When he arrived he found the Governor had hastened back and was occupying the executive chair. He was glad of it, and hoped he would remain at home until he learns sufficient politeness to invite his constitutional alternate to take his place when he has another specula- tion on hand.
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"A few of us last winter made an effort to organize a more moderate party. We proposed to remove the political disabilities of the men who pay the taxes to sup- port the government. We were in the minority then; but he believed the good people would vote as a unit to remove every cause of complaint, of strife and prejudice that now exists, and do it in the name of the Republican party. At the time we proposed to do this we could do nothing beyond making a protest against the ras- calities of the radicals. Our prediction then of what would be the policy of the Republican party has been verified in the election recently held in Virginia and Tennessee. Republicans have been elected in both who stand squarely upon the national platform. As far as we can ascertain, the President himself is in favor of removing these disabilities. Men whine about your city saying these elections are Democratic or Rebel victories ; but he would say, here, as a Republican, that it was a victory to the good people of Tennessee and Virginia, to be followed by Texas and Mississippi. He believed good men could be elected all over the Southern States; and he said that it was the policy of the Republican party to remove the disabilities of everybody. It is the teach- ing of the Republican party. There are a set of office- holding men here who know they can do nothing if all the people are enfranchised, unless it is accomplished by fraud, martial law, setting aside of registration and elections, etc., and they want to resort to such means again to perpetuate their power,-but they must not do it.
"He had felt it his duty to give a history of his con- nection with the State government and the Governor's late trip. His motives would be understood. The time had come for the down-trodden people of Arkansas to raise their heads and look the men who should be their servants in the face, and be satisfied with nothing but their rights. He was sorry to see men's mouths closed, -who seem to look no higher than the throne. He pro-
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posed to look to the power behind the throne,-the peo- ple. We have nothing to expect from the Governor. The time has come for the people and the press to be free. How is it with the Republican press? Every Re- publican paper which receives the patronage dispensed by the Governor is muzzled. The radical press is not the exponent of the principles of anybody but Powell Clayton, who has many of these little thumb papers scattered throughout the State. When his spies find one of them that is ready to go down a carpet-bagger, or per- haps a Methodist preacher, says to him, 'Go to the Governor; get the public printing; go halves with him, and be his organ.' Unfortunately, unless the people sup- port honest newspapers that live on their merits, it will not be long until the Governor owns the entire press of the State. But he may have all the officers in the State, all the presses, and goods boxes of bonds, yet the people will rise up at the ballot-box and put them down. The people do know their rights, and knowing dare main- tain them.
"A Voice: How about registration ?
"The Speaker: There is a law on our statute books which requires a certain oath to be taken before an elector is qualified. Those who are not disfranchised have the right to vote on subscribing to that oath. and there seems to be no division as to the practicability of taking it."
There is no doubt but that this speech was instigated by the Democrats to furnish an incentive for my assas- sination. It placed my life in great peril, as a vacancy in the gubernatorial office would have resulted in the ac- cession of Lieut .- Gov. James M. Johnson to the executive chair, and that would have given the Democrats imme- diate control of the State Government.
In this speech Johnson showed how thoroughly his mind was turned by Democratic blarney and promises of
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aid in the accomplishment of his future purposes. It caused general alarm among the Republicans of the State, lest by the contingency of my death, or by the accomplish- ment of other devices, he might get possession of the executive chair. This feeling of alarm was justified by a later attempt to get possession of the gubernatorial office by bogus impeachment proceedings. In this speech he indorsed the course of Governors Senter, of Tennes- see, and Walker, of Virginia, in their base betrayal of the Republican party in those States.
On April 25, 1896, I received a letter from the Ar- kansas Auditor of State, C. B. Mills, dated the previous day, announcing alleged irregularities in the funding of the State Debt by me some twenty-five years before. To this letter I immediately replied, acknowledging its re- ceipt and asking for additional information, which was given in his letter of May I, upon the receipt of which I immediately instituted a thorough investigation.
The matter at first caused me some anxiety; not be- cause I felt the least shadow of doubt as to the legality of all my transactions in the premises, but because of the very large defalcations of Treasurer Churchill and Auditor Crawford, which were brought to light in the year 1881. I feared that in order to furnish vouchers for their false accounts they might in some way have used the bonds of the State that were left over in the funding process. I therefore brought Auditor Mills' letter to the attention of the former officers,-Treasurer Page, Auditor Berry, and Governor Hadley,-and re- quested such information on the subject as they might be able to give.
In the course of my investigations I took under con- sideration my message to the Legislature, delivered Janu- ary 4, 1871, giving an account of my stewardship in the funding transactions, as follows :17
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"In order to carry out the provisions of an act en- titled 'An Act to Provide for the Funding of the Public Debt of the State' I designated the American Exchange National Bank of the city of New York as the fiscal agency of the State, and placed in its possession, with proper instructions, 3,000 bonds of the State, properly sealed and attested, the same being registered in the office of the Auditor. Of this number the fiscal agent has exchanged for old bonds and accrued interest, twenty- six hundred and twelve new bonds, leaving in his pos- session to be exchanged, from time to time, as applica- tion is made, three hundred and eighty-eight bonds. I recommend that a committee of the Legislature be raised to verify the exchanges already made, and if they be found to be correct, to destroy the old bonds
After examining this message I wrote to the Ameri- can Exchange National Bank of New York City, under date of May 18, 1896, and requested such information as they possessed upon the subject, to which the bank replied by telegram on May 27 as follows :
"NEW YORK, May 27, 1896.
"POWELL CLAYTON, Eureka Springs, Ark.
"We hold receipts signed Henry Page, State Treas- urer, and the Union Trust Company of New York, dated December seventy and September seventy-one, for three hundred seventeen thousand bonds deliverd in accordance with your instructions.
"AMERICAN EXCHANGE NATIONAL BANK."
This telegram was confirmed by the following letter :
"NEW YORK, May 27, 1896.
"POWELL CLAYTON, Esq.,
"Eureka Springs, "Arkansas.
"DEAR SIR: After considerable hunting, we have discovered and, in response to your letter of the 18th
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inst., state that we hold receipts signed 'Henry Page, State Treasurer, and the Union Trust Company of New York,' for $317,000 bonds.
"The numbers are as follows :
"From 641 to 890 inclusive. "891 to 993 "2043 to 2050
"All these transactions must have been advised to you at the time, and there must be in the possession of the State full particulars in regard to the entire matter, and it would seem to us that it would have caused you much less trouble to have hunted this up at your end than to have sought the information at our end. Never- theless, we have done the best we could in the matter at the moment, and trust the information will be what you need.
"Yours respectfully, "(Signed) D. CLARK, "President."
I was about to communicate this information to Audi- tor Mills for his benefit when my attention was called to the following interview given by him to the Little Rock Democrat, May 27, 1896 :
"FRAUDULENT BONDS. STATE AUDITOR MILLS DISCOVERS A MARE'S NEST IN ARKANSAS FINANCE. BOGUS OBLI- GATIONS OF '69. TWO HUNDRED AND FORTY BONDS WERE ISSUED WITHOUT AUTHORITY DURING CLAY- TON'S TENURE OF OFFICE. SOME ONE IS RESPON- SIBLE. OUR BONDED INDEBTEDNESS APPEARS TO BE THREE QUARTERS OF A MILLION LESS THAN HAS BEEN SUPPOSED.
"State Auditor C. B. Mills has discovered a mare's nest, and if everything works out properly it will re-
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sult in the incubation of some stern facts which will prac- tically sweep away the greater part of the bonded indebt- edness of the State. Should the allegations be made plausible after a thorough investigation of certain old bond transactions dating back to reconstruction times, and should the State win in the swamp land contro- versy now pending in Congress, the bonded indebt- edness now hanging over the State will be reduced to a minimum, which will no longer be burdensome, and will be discharged with comparative ease. In the statement of the case, as presented by Auditor Mills, charges are made which it is quite possible will have a thorough airing in our courts. The first intimation that such a state of affairs exists was from the following advertisement, which appeared in the current issue of the Commercial and Financial Chronicle, of New York:
" 'STATE OF ARKANSAS-BONDS OF 1869
" 'The holders of Arkansas 6 per cent bonds of the 1869 series, Nos. 642, 707 to 722, 746 to 773, 787 to 795, 875 to 877, and 883 to 890 (sixty-five bonds) may learn something of interest to them by addressing "AUDITOR OF STATE, " 'Little Rock, Ark.'
"A Democrat reporter called on Auditor Mills and asked for an explanation. Following is his reply :
" 'The bonds referred to in that advertisement were illegally issued while Powell Clayton was Governor, under act of April 6, 1869, but not in compliance with the act. There were 192 bonds of a batch of 500, registered August 19, 1869, for which the State received no consideration ; ninety-eight of them were returned and cancelled without cost to the State except one-half year's interest on forty-six of them; thirty of them have been
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redeemed by the State at a cost of $49,740, and sixty- five are still outstanding, and have been estimated as the undisputed indebtedness of the State, and were in the last report recorded at $158,000.
" 'There were not in existence at the time State and Real Estate bank bonds sufficient to authorize the issu- ance of as many bonds under that act as were issued. While the authorities disregarded the spirit and evident intent of the law, they were doubtless originally issued under a misapprehension of the amount of outstanding State and Real Estate bank bonds, or the amount to be funded.
" 'At the date of the passage of the act 1773 of the 3030 Real Estate and State bank bonds were in the State and United States Treasury, and not subject to be funded, aggregating $3,901,410. They began to be cancelled and turned into the State Treasury as early as 1849: 1148 bonds were properly funded for 3110 bonds issued under the 1869 act. Henry Page, as treasurer, received $140,456 of the Real Estate and State bank bonds and coupons on his sinking fund account, and other treas- urers since that have received twenty-seven more, amount- ing to $81,513.15, and at least eight are still outstand- ing. I think there will be no trouble to show to any court of competent jurisdiction that there was no basis for 240 of the bonds issued under that act. The fact that 145 of them were returned and cancelled is evidence that they at least were wrongfully issued. They were not all returned at one time. Ninety-five were returned in 1875, and fifty in November, 1879. Of the thirty re- deemed fifteen were paid in on Real Estate bank lands, eight were exchanged for certificates of indebtedness, and seven for Loughborough bonds with the State board of common school commissioners.
" 'I reported 143 State and Real Estate bank bonds outstanding October, 1894, besides the bonds held by the United States government. I was governed by the face of the original record in the treasurer's office, as I pre-
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sume my predecessors since reconstruction have been, and these reports of so large a number of these old bonds outstanding led to the investigation I have made.
"'When Henry Page was treasurer he reported by numbers the outstanding Real Estate and State bank bonds, and included at least sixty bonds that were then. and had been for several years prior, and are now in the treasury vaults, while further investigation shows seventy- three more of them have been refunded and redeemed. which appear upon the register as outstanding since 1872.
" 'This will make a difference of $547,970 from my report and applies to all previous reports since 1872, except as to accruing interest.
" 'Our legal bonded indebtedness was $705,960 less than reported in 1894. I think that Messrs. Clayton and Page are, or ought to be, liable to the State for the $49,740 the State paid to redeem the thirty-five bonds illegally issued.
"'For some time I have been prosecuting the inves- tigation, and I have come to the conclusion that there is something crooked somewhere, and even if the party responsible for it cannot be discovered and held liable for such fraudulent issuance of obligations from which the State derived not one cent of benefit, the fact should be established and the people at least relieved from the burden of an unjust and wholly unauthorized dest. I have been in communication with Gen. Powell Clayton on the subject, but the correspondence has not yet been productive of results. I have been urging upon the State debt board the necessity of instituting proceedings which will bring about the needed relief. Through the advertisement in the Chronicle I have located several of the outstanding bonds in the hands of New York capi- talists and in other places, but the replies are uniformly indefinite as to number and specific nature. As soon as this may be definitely determined, I shall advise the insti- tution of a suit to enjoin the treasurer from the payment of any more of the bogus bonds.'"
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This interview, so full of false statements and un- just reflections upon my integrity in connection with the business referred to, I brought to the attention of Auditor Mills in my letter of June 8, 1896, as follows :
"My attention has been called to a purported inter- view of yours published in the Arkansas Democrat of May 27, 1896, relating to alleged irregularities in the issuance of certain Arkansas funding bonds. Although over twenty-five years have elapsed since the funding transactions occurred, your letter of April 24, 1896, con- veyed to me the first intimation of any such alleged irregularities. At the close of said letter the following language is used :
"'As this matter may be of interest to you individu- ally, I think it proper that you be made aware of the fact before publicity be given; so that if you have any means of accounting for this apparent discrepancy it may be done. I have no desire to wrong you or any one con- nected with this transaction.'
"Although I did not ask or desire that any act of mine while Governor should be for a single moment con- cealed from the public, I think from the fair and manly expressions just quoted I was warranted in expecting, pending the conveyance by me of the information your let- ter seemed to invite, that you would confine your published expressions to established facts, so far as they reflected upon my action in the premises. After the receipt of your letter referred to I wrote you at two different times for more explicit information upon which to base my inquiry, to both of which you replied. Upon the receipt of your last letter ( May 9, 1896) I proceeded to make inquiry in various directions and to hunt up and examine old documents that had slumbered peacefully for over a quarter of a century. On the 19th of May I wrote you reporting progress, as follows :
" 'Replying to your letter of May 9, 1896. although a lapse of twenty-five years had dimmed my recollection
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of the funding transaction under my administration, from access to papers and documents, and from information from individuals connected therewith, the matter now be- gins to come back to me, and I think I shall be able in a short time to fix the responsibility of official irregulari- ties, if such exist, where they belong. I know that no such responsibility rests upon me, nor do I think upon any official under my administration. I am awaiting some information from Utah, New Mexico, New York, and other places. When received, I will communicate with you upon the subject.'
"Certainly there was nothing in this letter to cause you to believe that the correspondence you had invited had closed between us, but upon the contrary, it indi- cated that I had nearly reached the time when I could 'fix the responsibility of official irregularities, if such existed, where they belong.' This as I supposed was the information you desired. A short time after the receipt of this letter, for reasons of your own, you gave a public statement to the press in which you sent broad- cast many statements which I believe the facts when made known will not justify. Since your reported interview came into my hands I waited to see if you would disavow its authenticity, but as you have not done so, I conclude it correctly reports your language.
"Lest you should have misunderstood my letter of May 18, 1896, as practically closing the correspondence between us, I write this to inform you that I shall in due time communicate to you and the public all the information I shall then possess concerning the issuance of the bonds in question.
"In view of the injustice I believe your interview has done me, I trust you will not consider my action in giving this letter to the press inappropriate. My only object in so doing is that the public may know that I shall in due time give my version of the transactions in question."
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I received no answer to this letter and as I felt abso- lutely secure in the integrity and lawfulness of my posi- tion, and was unaffected in the least by Auditor Mills' oft-repeated threats of subjecting me to a suit, I con- cluded to let him wriggle out of his perplexities without help from me. The next heard from Auditor Mills on the subject is a Gazette interview of his, as follows :
"AUGUST 2, 1896, BIG REDUCTION
"AUDITOR MILLS BACK FROM HIS DEBT-CLEARING TRIP "SHAVING OF THE STATE'S OUTSTANDING INDEBTEDNESS IS THE RESULT "OLD BONDS ACCOUNTED FOR
"State Auditor C. B. Mills returned yesterday morn- ing from New York, having carried out his mission of investigating the whereabouts of alleged illegal bonds carried on the books as part of the State's outstanding indebtedness. Auditor Mills says he went to New York assured that he would find seventy of these bonds. He found 64 of the '65 issue, and twenty-five good bonds of the '69 series, also six Holford bonds and a large amount of coupons. All except four of them had been deposited with the Union Trust Company by ex-Treasurer Henry Page in 1874, subject to the order of the treasurer of Arkansas. These bonds were all on deposit there when Governor Eagle and the State board had turned over to them in 1891 the ninety bonds funded by the United States Government. It was ascertained that the bonds were deposited by an attorney for Page. They have appeared from time to time in the official statements of the State's outstanding indebtedness. The State has paid out thirty of the alleged illegal bonds and will get back twenty-five valid bonds, and thus in the end the State will be out only about $10,000, the amount of five bonds paid. There will be a difference of $200,000 in the debt statement of Arkansas. The ferreting out of the
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invalid bonds makes a reduction in excess of that amount on the outstanding indebtedness.
"Auditor Mills says that his investigations have failed to disclose that ex-Governor Powell Clayton was in anywise connected with the issuance of the bonds re- ferred to." 18
I had long since learned that so far as I was con- cerned the amende honorable was not to be expected from any Democratic source. This admission, I suppose, was about as near as Auditor Mills dared to go. His pre- dicament was fully exposed by the following memoran- dum of the Union Trust Company, of New York, in an- swer to a letter from Eugene Lankford, Chairman of the Joint Committee of the two Houses of the Legislature, appointed to investigate the funding bonds :
"February 19, 1901.
"The Bonds of the State of Arkansas came into the possession of this Company as the financial agent of the State.
"This Trust Company conducted the exchange of bonds until July 13, 1896, when at the written request of Governor Clark all bonds, books, coupons, etc., were delivered to Mr. Ransom Gully, State Treasurer, whose receipt we hold.
"We were asked if the banking books show any of the transactions relating to the bonds of the State and answer that the books show all exchanges, but as they are in the possession of the State Officers we must refer you to them.
"Answering the question if Mr. W. P. Denkla had any connection with the exchange of bonds, our reply was that our recollection is that some of the bonds were exchanged by W. P. Denkla, and if so, the books will show it.
"In reply to the question, Why old bonds and bonds
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for which they were exchanged were both in the posses- sion of the Union Trust Company? They were placed in our possession in order to enable us to make the ex- change. This is also shown in the books of the State authorities.
"Replying to the question, If this company acted as Exchange Agent for the State Funding Bonds, what duties it had to perform? It received the old bonds and delivered the new bonds.
"We delivered all papers, books, etc., in regard to this transaction and are therefore unable to more fully describe the various transactions, but they are fully de- scribed in the books which we surrendered, and we feel sure if you will consult the funding book you will find all the information you desire."
Thus Auditor Mills, after all his trouble, was forced to take a back seat, where he is likely to remain for the rest of his life. His charges were forever set at rest much to the disappointment of the Democrats, for they had long endeavored to fix some official rascality upon me and had hailed this opportunity with delight.
It will certainly be evident to all fair-minded people that before Auditor Mills rushed into print with his false and malicious charges and threats to bring suit against me he should have exhausted every effort to ascertain the facts upon which he based such action. He should at least have examined carefully all official documents re- lating to the transaction. The message of a former Governor, charged with the funding of the debt, cer- tainly should have been considered an official document of the highest order, and should have received his first attention. If he had done that, he would not only have saved himself from subsequent retraction, but would have saved his party from the damaging disclosure that during fifteen years of administration it never had been
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