Arkansas Constitution Article 20 - "Holford" Bonds Not to Be Paid
Arkansas Constitution – Article 20: “Holford” Bonds Not to Be Paid
Full Title:
Article 20 – “Holford” Bonds Not to Be Paid
Text of Article 20:
“Neither the General Assembly nor any other authority of this State shall ever have power to levy or collect any tax, or make any appropriation, to pay either the principal or interest, or any part thereof, of the following bonds, or any pretended bonds, or pretended claims purporting to be bonds or claims issued under the pretended authority of the State, and known as the ‘Holford Bonds,’ to-wit: Bonds issued under act of the General Assembly of the State of Arkansas entitled ‘An Act to provide for the funding of the public debt of the State,’ approved April 6th, A.D. 1869, and numbered from 1 to 303, both inclusive, amounting to $996,000; also, bonds issued under act of the General Assembly of the State of Arkansas entitled ‘An Act to provide for the funding of the debts of the State,’ approved April 6th, A.D. 1869, and numbered from 1 to 2000, both inclusive, amounting to $1,680,000; also, bonds known as ‘Railroad Aid Bonds,’ being bonds issued under act of the General Assembly of the State of Arkansas entitled ‘An Act to aid in the construction of railroads,’ approved July 21st, A.D. 1868, and the act supplemental thereto, approved April 10th, A.D. 1869; also, bonds known as ‘Levee and Internal Improvement Bonds,’ being bonds issued under act of the General Assembly of the State of Arkansas entitled ‘An Act to provide for the building and repairing levees,’ approved April 23rd, A.D. 1869. And the said bonds and all other bonds, obligations or evidences of debt referred to in this article, and all claims or pretended claims to any part thereof, are hereby declared to be illegal, not binding on the State of Arkansas, and shall never be paid, directly or indirectly, out of any money belonging to the State, or any money derived from taxes, or from any other source.”
Explanation:
Article 20 of the Arkansas Constitution was created to permanently bar the state from paying a specific set of controversial and allegedly fraudulent bonds, collectively known as the “Holford Bonds.”
Background:
The Holford Bonds originated during the Reconstruction era following the Civil War.
They were associated with acts passed in 1868 and 1869 by the Arkansas General Assembly to fund public debt, railroads, levees, and internal improvements.
These bonds became controversial due to:
Allegations of fraud and corruption.
Overvaluation, mismanagement, and lack of benefit to the public.
Belief that they were issued without legitimate authority or for illegitimate purposes.
Impact of Article 20:
It voids the legal validity of these bonds and all related claims.
It prohibits the General Assembly or any state authority from:
Appropriating funds to pay them.
Levying taxes for their payment.
Honoring them in any direct or indirect form.
Declares all such bonds and claims forever illegal and non-binding.
Purpose:
To protect the financial integrity of the State of Arkansas.
To formally repudiate debt viewed as illegitimate or fraudulently incurred.
To ensure that future tax revenues are not used to repay these controversial obligations.
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